Exhibit 10.17
[Execution Copy]
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "AGREEMENT") is made
and entered into as of the 1st day of January 2006, by and between Xxxxxxxxx
International Inc., a Delaware corporation (the "EMPLOYER"), and Xxxxx X. Xxx
Xxxx (the "EXECUTIVE").
RECITALS
A. The Employer and the Executive are parties to that certain Employment
Agreement, dated January 1, 2005, between the Employer and the Executive (the
"ORIGINAL AGREEMENT"), and desire to amend and restate the Original Agreement in
its entirety to reflect the terms contained herein.
B. The Employer desires that the Executive continue to provide services for
the benefit of the Employer and the Executive desires to accept such continued
employment with the Employer.
C. The Employer and the Executive acknowledge that the Executive is, and
will continue to be, a member of the senior management team of the Employer and,
as such, has participated in and will participate in implementing the Employer's
business plan.
NOW, THEREFORE, in consideration of the above premises and the following
mutual covenants and conditions, the parties agree as follows:
1. EMPLOYMENT. The Employer shall employ the Executive as its Vice
President, General Counsel and Secretary, and the Executive hereby accepts such
employment on the following terms and conditions.
2. DUTIES. The Executive shall work for the Employer in a full-time
capacity. The Executive shall, during the term of this Agreement, have the
duties, responsibilities, powers, and authority customarily associated with the
positions of Vice President, General Counsel and Secretary. The Executive shall
report to, and follow the direction of, the President and Chief Executive
Officer of the Company. In addition to, or in lieu of, the foregoing, the
Executive also shall perform such other duties as may be assigned to him from
time to time by the President and Chief Executive Officer. The Executive shall
diligently, competently, and faithfully perform all duties, and shall devote his
entire business time, energy, attention, and skill to the performance of duties
for the Employer and will use his best efforts to promote the interests of the
Employer; provided the Executive shall be entitled to devote time to outside
boards of directors, personal investments, and professional activities to the
extent such activities do not unduly interfere with his duties hereunder.
3. TERM OF EMPLOYMENT. The term of employment under this Agreement shall be
one (1) year. The then current one-year term of employment hereunder as of any
time is referred to herein as the "CURRENT TERM". The initial term of employment
commenced on January 1, 2005 and ended on December 31, 2005, and the term of
employment has been renewed for a period of one (1) year
commencing January 1, 2006. The term of employment shall be renewed for
successive periods of one (1) year after the expiration of then Current Term,
unless the Board of Directors of the Employer (the "BOARD") provides the
Executive, or the Executive provides the Board, with written notice to the
contrary at least sixty (60) days prior to the end of the Current Term.
4. COMPENSATION.
A. Salary. The Employer shall pay the Executive an annual salary of
US$350,000 (the "BASE SALARY"), payable in substantially equal installments
in accordance with the Employer's payroll policy from time to time in
effect. The Executive's salary shall be subject to any payroll or other
deductions as may be required to be made pursuant to law, government order,
or by agreement with, or consent of, the Executive. The Base Salary is
subject to increase at the discretion of the Board, or a Committee thereof
acting under delegated authority, as appropriate.
B. Performance Bonus. The Executive shall be eligible for an annual
bonus targeted at seventy-five percent (75%) of the Executive's Base Salary
(the "TARGET BONUS"), such bonus, if any, to be paid no later than the date
which is two and one-half (2-1/2) months following the end of each calendar
year during the term hereof, beginning with calendar year 2005. The bonus
shall be based upon an annual calendar year bonus plan, to be established
by the Board prior to or as soon as reasonably practicable after the
commencement of the Current Term. The actual bonus to be paid to Executive
shall be determined by the Board, or by a committee thereof with delegated
authority, based upon such criteria as are established by the Board or such
committee and communicated to Executive. The actual bonus to be paid to
Executive may exceed or be lower than the Target Bonus, based upon
performance relative to the established criteria.
C. Long-Term Incentive Plan. The Executive shall be eligible to
receive an annual award (the "INCENTIVE AWARD") under the Employer's
Long-Term Incentive Plan (the "LTIP"). The terms of any Incentive Award,
including those relating to the vesting and payment thereof, are subject to
the terms and conditions of the LTIP, which is incorporated herein by
reference. The amount of any Incentive Award to be made to the Executive
shall be determined by the Board, or by a committee thereof with delegated
authority, in its discretion.
D. Other Compensation. Executive shall be eligible to participate in
any and all other incentive compensation programs established by Employer
in which Employer's senior executives participate or with respect to which
they are eligible. The Board, or a Committee thereof with delegated
authority, shall determine the amount of any such awards in its sole
discretion.
E. Benefits and Perquisites. Executive shall be eligible to
participate in all benefit plans and programs for which other senior
executives of Employer are eligible, and shall be entitled to such
perquisites as are available to other senior executives of Employer, and
such additional perquisites as may be approved by the Board or the
Compensation Committee thereof.
5. EXPENSES. The Employer shall reimburse the Executive for expenses in
accordance with the Employer's policies from time to time in effect.
6. TERMINATION. The Executive's services shall terminate upon the first to
occur of the following events:
A. At the end of the then Current Term of this Agreement.
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B. Upon the Executive's date of death or the date the Executive is
given written notice from the Employer that he has been determined to be
disabled. For purposes of this Agreement, the Executive shall be deemed to
be "disabled" if the Executive, as a result of illness or incapacity, shall
be unable to perform substantially his required duties for a period of
three (3) consecutive months or for any aggregate period of three (3)
months in any six (6) month period.
C. On the date the Employer provides the Executive with written notice
that he is being terminated for "cause." For purposes of this Agreement,
"CAUSE" means that Executive has: (i) been convicted of (or has pleaded
guilty or no contest to) a felony, or (ii) engaged in conduct that
constitutes willful gross neglect or willful gross misconduct with respect
to his employment duties; provided, no act or omission on Executive's part
shall be considered "willful" if conducted in good faith and with a
reasonable belief that his conduct was in the best interests of Employer.
Notwithstanding the foregoing, the Employer may not terminate Executive's
employment for cause under clause (ii) of this Paragraph 6C unless
Executive is given at least thirty (30) days to cure any such conduct (if
capable of cure), and only after Executive has received a certified copy of
a resolution of the Board terminating his employment for cause and stating
specifically the conduct that the Board believes satisfies the definition
of cause.
D. On the date the Executive terminates his employment for any reason,
provided that the Executive shall give the Employer thirty (30) days
written notice prior to such date of his intention to terminate this
Agreement.
E. On the date the Employer terminates the Executive's employment for
any reason other than in the event of Executive's death or disability or
for cause, provided that the Employer shall give the Executive sixty (60)
days written notice prior to such date of its intention to terminate this
Agreement.
7. COMPENSATION UPON TERMINATION.
A. If the Executive's services are terminated pursuant to Paragraph
6B, 6C or (except as provided in Paragraph 7C) 6D, or the Executive elects
to terminate this Agreement at the end of its term pursuant to Paragraph
6A, the Executive shall be entitled to his salary and health and welfare
benefits through his final date of active employment, plus any accrued but
unused vacation pay. The Executive shall also be entitled to any benefits
mandated under the Consolidated Omnibus Budget Reconciliation Act of 1985
("COBRA") or required under the terms of any death, insurance, or
retirement plan, program, or agreement, or any other plan or arrangement,
provided by the Employer and to which the Executive is a party or in which
the Executive is a participant, including, but not limited to, any
short-term or long-term disability plan or program, if applicable.
B. If the Executive's services are terminated by the Employer pursuant
to Paragraph 6A or 6E prior to and not in connection with a Change in
Control (as defined herein), Executive shall receive (i) a lump sum equal
to (a) the amount that would be payable as Base Salary to Executive for the
period beginning on the date immediately following termination of
Executive's services and ending one year from the end of the Current Term
(such period, the "CONTINUATION PERIOD"), plus (b) an amount equal to
Executive's Target Bonus on (1) all amounts paid pursuant to clause (i)(a)
of this Paragraph 7B and (2) all amounts paid to Executive as Base Salary
for the portion of the then Current Term ending on the date of termination
of Executive's services, plus (c) any bonus that was earned by Executive
under Paragraph 4B but not paid as of the effective date of the termination
of Executive's services, and (ii) continuation of
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health and welfare benefits during the Continuation Period. Upon
termination of the Executive's employment pursuant to this Paragraph 7B,
(i) all unvested cash Incentive Awards shall become immediately vested and
payable (if applicable) as and to the extent provided in the LTIP, and
(ii)(a) all unvested equity-based awards under the LTIP or otherwise that
would have vested under the original vesting schedule for such awards at
any time during the Continuation Period shall become immediately fully
vested and payable (if applicable) and (b) all other unvested equity-based
awards under the LTIP or otherwise shall immediately terminate. Employer's
obligations to pay the amounts and furnish the benefits as provided in this
Paragraph 7B shall be conditioned upon receipt by Employer of Executive's
written release of the Employer from all claims for additional severance
payments and benefits and otherwise. All payments described in this
Paragraph 7B shall be made to Executive in a single lump sum on a date that
is not later than ten (10) business days following the date of termination
of the Executive's services.
C. In the event of a Change in Control, and the subsequent
termination, within thirty-six (36) months after the Change in Control, of
Executive's employment by Employer without cause or by Executive for Good
Reason, the Executive shall receive (i) a lump sum amount equal to (a)
Executive's Target Bonus on the amount paid to Executive as Base Salary
from the beginning of the then Current Term to the date of termination of
Executive's services, plus (b) Executive's final Base Salary, multiplied by
two (2), plus (c) the higher of Executive's Target Bonus calculated with
respect to the amount paid pursuant to Paragraph 7C(i)(b) or two (2) times
the highest annual bonus actually received by Executive during the two most
recent years; and (ii) continuation of Executive's health and welfare
benefits for a period ending two years after the end of the then Current
Term. In addition, upon a Change in Control, all unvested Incentive Awards
shall become immediately vested and payable (if applicable) as and to the
extent provided in the LTIP, and all other unvested equity-based awards and
grants previously made to Executive under the LTIP or otherwise shall
become immediately fully vested and payable (if applicable). All payments
described in this Xxxxxxxxx 0X xxxxx xx made to Executive in a single lump
sum on a date that is not later than ten (10) business days following the
date of termination of Executive's services. "GOOD REASON" for termination
of Executive's employment by Executive shall exist if a Change of Control
has occurred and, at any time during the thirty-six (36) months thereafter,
any of the following has also occurred: Executive's title, authority, or
principal duties are reduced, diminished or eliminated; Executive's Base
Salary is reduced; Executive's benefits are diminished; Executive's
principal place of employment is relocated more than thirty-five (35) road
miles from its then-current location; or Executive's Target Bonus
opportunity is reduced. For purposes of this Xxxxxxxxx 0X, a "CHANGE IN
CONTROL" shall be deemed to have occurred upon:
(1) the acquisition after the date of this Agreement by any "person"
(as defined in Sections 13(d) and 14(d) of the Securities Exchange Act
of 1934, as amended (the "EXCHANGE ACT") (excluding for this purpose,
(i) the Employer or any subsidiary of the Employer or (ii) any
employee benefit plan of the Employer or of any subsidiary of the
Employer or any person or entity organized, appointed or established
by the Employer for or pursuant to the terms of any such plan which
acquires after the date of this Agreement beneficial ownership of
voting securities of the Employer, or (iii) RSM Xxxxxxx Inc.
("XXXXXXX"), in its capacity (but solely in its capacity) as (x)
interim receiver, receiver and manager of the assets, undertakings and
properties of Ravelston Corporation Limited ("RCL") and Ravelston
Management Inc. ("RMI") pursuant to the Receivership Order of the
Ontario Superior Court of Justice dated April 20, 2005, and (y)
monitor of RCL and RMI pursuant to the CCAA Initial Order of the
Ontario Superior Court of Justice dated April 20, 2005 (Xxxxxxx, in
its capacities as interim receiver, receiver, manager and monitor
pursuant to the foregoing orders of the Ontario Superior Court of
Justice, is
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referred to as the "RECEIVER"), and any Person which as of April 20,
2005 was a direct or indirect subsidiary of RCL or RMI (a "RAVELSTON
SUBSIDIARY"); provided, that each such Ravelston Subsidiary shall only
be deemed to be covered by this clause (iii) for so long as (A) it is
and remains a Ravelston Subsidiary, (B) Xxxxxxx remains Receiver, and
(C) Xxxxxxx, in its capacity as Receiver, beneficially owns no more
voting securities of Employer than were beneficially owned by RCL and
RMI on April 20, 2005) of beneficial ownership (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities
of the Employer representing more than fifty percent (50%) of the
combined voting power of the Employer's then outstanding securities;
provided, however, that no Change in Control will be deemed to have
occurred as a result of a change in ownership percentage resulting
solely from an acquisition of securities by the Employer; or
(2) Xxxxxxx X. Xxxx, Xxxxx X. Xxxxxxxxx, Xxxxxx Xxxxxx, Xxxxxx X.
Paris, Xxxxxx X. Xxxxxx, Xxxxxxx X.X. Xxxxx, Xxxxx X. Xxxxxxxx
(collectively, "INCUMBENT DIRECTORS") and any new directors whose
election by the Board or nomination by the Board for election by the
Employer's stockholders was approved by a vote of a least two-thirds
(2/3) of the directors then still in office who either are Incumbent
Directors or whose election or nomination for election was previously
so approved (such new directors being referred to as "SUCCESSOR
INCUMBENT DIRECTORS") ceasing for any reason to constitute at least a
majority of the Board;
(3) the adoption, enactment or effectiveness of any action (including,
without limitation, by resolution or by amendment to the Employer's
charter or bylaws) that materially limits or diminishes the power or
authority of the Employer's board of directors or any committee
thereof, if such action has not been approved by a vote of a least
two-thirds (2/3) of the directors then still in office who either are
Incumbent Directors or Successor Incumbent Directors; or
(4) the consummation of, or the execution of a definitive agreement
the consummation of which would result in, a reorganization, merger or
consolidation, or sale or other disposition of all or substantially
all of the assets of the Employer (a "BUSINESS COMBINATION"), in each
case, unless, following such Business Combination, all or
substantially all of the individuals and entities who were the
beneficial owners of outstanding voting securities of the Employer
immediately prior to such Business Combination beneficially own,
directly or indirectly, more than fifty percent (50%) of the combined
voting power of the then outstanding voting securities entitled to
vote generally in the election of directors of the entity resulting
from such Business Combination (including, without limitation, an
entity which, as a result of such transaction, owns the Employer, or
all or substantially all of the Employer's assets, either directly or
through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business
Combination, of the outstanding voting securities of the Employer; or
(5) the consummation of a complete liquidation or dissolution of the
Employer.
D. If the Executive is subject to a tax pursuant to Section 4999 of
the Code, or any successor provision that may be in effect, as a result of
"parachute payments" (as that term is defined in Section 280G(b)(2)(A) and
(d)(3) of the Code) made to Executive by the Employer, the Employer shall
pay to Executive, in advance, all sums necessary to pay any such tax, plus
an amount necessary to gross-up such payments for income and employment
taxes relating to such
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payments and such gross-up payments, plus any penalties and interest on
such taxes (to the extent caused by the Employer).
8. CONFIDENTIAL INFORMATION. Executive acknowledges that the Confidential
Information (as defined herein) obtained by him concerning the business and
affairs of the Employer and its affiliates and its and their predecessors during
the course of his performance of services for, or employment with, any of the
foregoing persons (whether or not compensated for such services) are the
property of the Employer and its affiliates. Therefore, Executive agrees that he
will not at any time (whether during or after his employment period) disclose to
any unauthorized person or, directly or indirectly, use for his own account, any
Confidential Information without the Board's consent. Executive agrees to
deliver to the Employer at the termination of his employment, or at any other
time the Employer may request in writing (whether during or after his employment
period), all memoranda, notes, plans, records, reports and other documents,
regardless of the format or media (and copies thereof), relating to the business
of the Employer and its affiliates and its and their predecessors which he may
then possess or have under his control and which contain Confidential
Information. As used herein, "CONFIDENTIAL INFORMATION" means information or
materials of a confidential or proprietary nature and includes, but is not
limited to, (a) matters of a technical nature, such as trade secrets, methods,
data and know-how, inventions, designs, machines, computer programs or
printouts, and documentation and similar items or research projects, and (b)
matters of a business nature, such as information about past, present, or future
company performance, correspondence, notes, reports, files, financial
information, sales figures and projections, budgets, marketing plans, price
lists, strategies, and lists of actual or potential customers, partners, or
investors. Notwithstanding the foregoing, Confidential Information shall not
include information that is generally ascertainable from public or published
information or trade sources.
9. NOTICES. Any and all notices required in connection with this Agreement
shall be deemed adequately given only if in writing and (a) personally
delivered, or sent by first class, registered, or certified mail, postage
prepaid, return receipt requested or by recognized overnight courier, (b) sent
by facsimile, provided a hard copy is mailed on that date to the party for whom
such notices are intended, or (c) sent by other means at least as fast and
reliable as first class mail. A written notice shall be deemed to have been
given to the recipient party on the earlier of (a) the date it shall be
delivered to the address required by this Agreement; (b) the date delivery shall
have been refused at the address required by this Agreement; (c) with respect to
notices sent by mail or overnight courier, the date as of which the Postal
Service or overnight courier, as the case may be, shall have indicated such
notice to be undeliverable at the address required by this Agreement; or (d)
with respect to a facsimile, the date on which the facsimile is sent and receipt
of which is confirmed. Any and all notices referred to in this Agreement, or
which either party desires to give to the other, shall be addressed to his
residence in the case of the Executive, or to its principal office in the case
of the Employer.
10. WAIVER OF BREACH. A waiver by the Employer of a breach of any provision
of this Agreement by the Executive shall not operate or be construed as a waiver
or estoppel of any subsequent breach by the Executive. No waiver shall be valid
unless in writing and signed by an authorized officer of the Employer.
11. ASSIGNMENT. The Executive acknowledges that the services to be rendered
by him are unique and personal. Accordingly, the Executive may not assign any of
his rights or delegate any of his duties or obligations under this Agreement.
The rights and obligations of the Employer under this Agreement shall inure to
the benefit and shall be binding upon the successors and assigns of the
Employer. Employer covenants and agrees that it will secure the assumption by or
the agreement of any successor or assignee of this Agreement to the terms
hereof.
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12. ENTIRE AGREEMENT. This Agreement sets forth the entire and final
agreement and understanding of the parties and contains all of the agreements
made between the parties with respect to the subject matter hereof. This
Agreement supersedes any and all other agreements, either oral or in writing,
between the parties hereto, with respect to the subject matter hereof; provided,
however, that this Agreement does not supersede any stock option or other equity
grants provided to the Executive under the terms of any stock option or
long-term incentive program or agreement. No change or modification of this
Agreement shall be valid unless in writing and signed by the Employer and the
Executive. If any provision of this Agreement shall be found invalid or
unenforceable for any reason, in whole or in part, then such provision shall be
deemed modified, restricted, or reformulated to the extent and in the manner
necessary to render the same valid and enforceable, or shall be deemed excised
from this Agreement, as the case may require, and this Agreement shall be
construed and enforced to the maximum extent permitted by law, as if such
provision had been originally incorporated herein as so modified, restricted, or
reformulated or as if such provision had not been originally incorporated
herein, as the case may be. The parties further agree to seek a lawful
substitute for any provision found to be unlawful; provided, that, if the
parties are unable to agree upon a lawful substitute, the parties desire and
request that a court or other authority called upon to decide the enforceability
of this Agreement modify those restrictions in this Agreement that, once
modified, will result in an agreement that is enforceable to the maximum extent
permitted by the law in existence at the time of the requested enforcement.
13. HEADINGS. The headings in this Agreement are inserted for convenience
only and are not to be considered a construction of the provisions hereof.
14. EXECUTION OF AGREEMENT. This Agreement may be executed in several
counterparts, each of which shall be considered an original, but which when
taken together, shall constitute one agreement.
15. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without reference to its
conflict of law provisions.
16. LITIGATION EXPENSES. In the event Executive brings an action seeking to
enforce his rights under this Agreement, the Employer will pay, on a regular and
current basis, all of Executive's legal fees and expenses incurred in connection
with such action. Executive will be obligated to return all amounts so advanced
only in the event of a final judgment or arbitration determination denying in
full Executive's requested relief.
17. INDEMNIFICATION. During and after the term hereof, Executive shall be
entitled to indemnification by Employer from and against any loss, cost or
expense incurred by Executive in connection with any threatened, pending or
completed action, suit or proceeding, by reason of the fact that Executive is or
was the Vice President, General Counsel and Secretary of Employer to the fullest
extent permitted under applicable law. Executive shall be entitled to
advancement of expenses to the fullest extent permitted under applicable law.
18. CERTAIN WAIVERS. The Executive hereby waives and disclaims any claim
that the appointment of Xxxxxxx as (i) interim receiver, receiver and manager of
the assets, undertakings and properties of RCL and RMI pursuant to the
Receivership Order of the Ontario Superior Court of Justice dated April 20,
2005, and (ii) monitor of RCL and RMI pursuant to the CCAA Initial Order of the
Ontario Superior Court of Justice dated April 20, 2005, constitutes a Change in
Control for purposes of this Agreement. The Executive covenants and agrees that
he will not bring, assert or maintain any claim that the appointment of Xxxxxxx
as receiver and monitor or RCL and RMI as described above constitutes a Change
in Control for purposes of the Employment Agreement.
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[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have set their signatures on the date first
written above.
XXXXXXXXX INTERNATIONAL INC.
a Delaware corporation
By:
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Its: Xxxxx X. Xxx Xxxx
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Amended and Restated Employment Agreement
