EXHIBIT 10.3
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EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of May 29, 2007, among Xxxxxx American
Corp., a Delaware corporation ("XXXXXX AMERICAN") renamed as Xxxxxxx Xxxxxx
Holdings Corp. ("XXXXXXX XXXXXX HOLDINGS"), Scantron Corporation, a Delaware
corporation ("SCANTRON" or the "COMPANY"), and Xxxxxxx Xxxxxxxxx (the
"EXECUTIVE").
WHEREAS, on December 19, 2006, Xxxxxxx, M&F Worldwide Corp. ("MFW") and
H Acquisition Corp., a Georgia corporation and a wholly owned subsidiary of
MFW, entered into an Agreement and Plan of Merger whereby H Acquisition Corp.
merged with and into Xxxx X. Xxxxxxx Company, a Georgia corporation
("XXXXXXX"), and as a result, the separate corporate existence of H Acquisition
Corp. ceased and Xxxxxxx continued as the surviving corporation effective May
1, 2007 (the "TRANSACTION");
WHEREAS, the Company wishes to employ the Executive, and the Executive
wishes to accept such employment on the terms and conditions set forth in this
Agreement.
Accordingly, Xxxxxxx Xxxxxx Holdings, the Company and the Executive
hereby agree as follows:
1. EMPLOYMENT, DUTIES AND ACCEPTANCE.
1.1 EMPLOYMENT, DUTIES. The Company hereby employs the
Executive for the Term (as defined in Section 2.1), to render exclusive and
full-time services to the Company as President and Chief Executive Officer of
Scantron or in such other executive position as may be mutually agreed upon by
the Company and the Executive, and to perform such other duties consistent with
such position as may be assigned to the Executive by the Board of Directors of
Xxxxxxx Xxxxxx Holdings (the "BOARD"). During the Term, the Executive shall
report solely to the Board and to the Chief Executive Officer of MFW.
1.2 ACCEPTANCE. The Executive hereby accepts such
employment and agrees to render the services described above. During the Term,
the Executive agrees to serve the Company faithfully and to the best of the
Executive's ability, to devote the Executive's entire business time, energy and
skill to such employment, and to use the Executive's best efforts, skill and
ability to promote the Company's interests. The Executive further agrees to
accept election, and to serve during all or any part of the Term, as an officer
or director of the Company and of any subsidiary or affiliate of the Company,
without any compensation therefor other than that specified in this Agreement,
if elected to any such position by the shareholders or by the Board or of any
subsidiary or affiliate, as the case may be.
1.3 LOCATION. The duties to be performed by the Executive
hereunder shall be performed primarily at the offices of the Company in Irvine,
California, subject to reasonable travel requirements on behalf of the Company.
2. TERM OF EMPLOYMENT; CERTAIN POST-TERM BENEFITS.
2.1 THE TERM. This Agreement and the term of the
Executive's employment under this Agreement (the "TERM") shall become effective
as of May 2, 2007 (the "EFFECTIVE DATE") and will continue until December 31,
2010 (the "TERMINATION DATE"), subject to earlier termination pursuant to
Section 4.
2.2 END-OF-TERM PROVISIONS. Prior to the end of the Term,
the Company and the Executive shall meet to discuss whether the Term should be
extended. The Company shall have the right at any time, however, to give
written notice of non-renewal of the Term. In the event of non-renewal of the
Term by the Company and the Executive's employment is terminated after the end
of the Term, other than for Cause (as defined below), or Disability (as defined
below) following such notice of non-renewal, then such termination shall be
treated as a termination without Cause and the Restricted Period (as defined
below) shall be reduced to a period of one year post termination of employment
(the "REDUCED RESTRICTED PERIOD"). During such Restricted Period, the Executive
shall receive 50% of the payments set forth in Sections 4.4(i) and 4.4(ii),
subject to Executive's signing and not revoking the release of claims as set
forth in Section 4.6. For the avoidance of doubt, if the Company is willing to
extend the Term and Executive does not agree to extend the Term, then upon such
termination of employment at the end of the Term, the Executive shall be bound
by the restrictive covenants set forth in Section 5 below, the Restricted
Period shall not be reduced and Executive shall not be entitled to receive any
severance benefits with respect to such termination.
3. COMPENSATION; BENEFITS.
3.1 SALARY. As compensation for all services to be rendered
pursuant to this Agreement, the Company agrees to pay the Executive a base
salary, payable in accordance with the Company's normal payroll practices, at
the annual rate of not less than $500,000 less such deductions or amounts to be
withheld as required by applicable law and regulations (the "BASE SALARY"). In
the event that the Company, in its sole discretion, from time to time
determines to increase the Base Salary, such increased amount shall, from and
after the effective date of the increase, constitute "Base Salary" for purposes
of this Agreement.
3.2 INCENTIVE COMPENSATION.
3.2.1 ANNUAL BONUS. For fiscal year 2007, the
Executive's bonus, if any (the "2007 BONUS"), shall be determined in
the following manner: (a) with respect to the period from January 1,
2007 through April 30, 2007, the Executive shall receive an amount in
bonus compensation equal to what the Executive was entitled to receive
under the Xxxxxxx Senior Management Incentive Plan for such period had
such plan terminated at April 30, 2007, and (b) Xxxxxxx Xxxxxx Holdings
shall establish for the Company a bonus plan applicable to the
remaining portion of fiscal year 2007 from and after May 1, 2007, as
approved by the Compensation Committee of MFW's board of directors (the
"MFW COMPENSATION COMMITTEE") which may be, but need not be, designed
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to cause the 2007 Bonus to qualify as "performance-based compensation,"
as more fully set forth in the last sentence of the second paragraph of
this Section 3.2.1, and such bonus plan shall be calculated consistent
with the percentages set forth in the table below. Any such bonus
amounts payable with respect to 2007 pursuant to clauses (a) and (b)
shall be paid consistent with past practice in fiscal year 2008.
Commencing with the 2008 fiscal year, the Executive will be eligible to
receive a bonus with respect to 2008 and each later fiscal year ending
during the Term computed in accordance with the provisions hereafter.
If, with respect to any such fiscal year, Scantron achieves
"Consolidated EBITDA" (as defined below) of at least the percentage set
forth in the table below of its business plan for such fiscal year,
such bonus shall be the percentage set forth in the table below of Base
Salary with respect to the fiscal year for which the bonus (any such
bonus, an "ANNUAL BONUS") was earned:
PERCENTAGE OF CONSOLIDATED
EBITDA IN BUSINESS PLAN PERCENTAGE OF BASE SALARY
------------------------------- -----------------------------
89.9% and below Nil
90 - 94.9 65
95 - 99.9 70
100 - 105 75
105.1 - 110 80
110.1 - 115 85
115.1 - 120 90
120.1- 125 95
125.1 and over 100
An Annual Bonus if earned in accordance with this Agreement shall be paid no
later than the fifteenth day of the third month next following the year with
respect to which such bonus was earned, provided that, except as otherwise
specifically provided in this Agreement (including, without limitation, Section
4.4), as a condition precedent to any bonus entitlement the Executive must
remain in employment with the Company at the time that the Annual Bonus is
paid. Notwithstanding the foregoing, to the extent that Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "CODE"), may be applicable, such
Annual Bonus shall be subject to, and contingent upon, such shareholder
approval as is necessary to cause the Annual Bonus to qualify as
"performance-based compensation" under Section 162(m) of the Code and the
regulations promulgated thereunder as well as approval of this Section 3.2.1 by
the MFW Compensation Committee and any other required committees.
For the purposes of this Agreement, "CONSOLIDATED EBITDA" means for any fiscal
year of the Company, consolidated operating income for such fiscal year of
Scantron plus, without duplication, the sum of (i) depreciation and
amortization expense (excluding amounts of prepaid incentives under customer
contracts), (ii) any extraordinary non-cash expenses or losses, and (iii)
allocation of fees charged by MFW or a subsidiary to the Company relating to
the operation of Scantron, and minus (x) to the extent included in the
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statement of such consolidated net income for such period, the sum of any
extraordinary or non-recurring income or gains (including, whether or not
otherwise includable as a separate item in the statement of such consolidated
operating income for such period, gains on the sales of assets outside of the
ordinary course of business), and (y) any cash payments made during such period
in respect of items described in clause (ii) above subsequent to the fiscal
quarter in which the relevant non-cash expenses or losses were reflected as a
charge in the statement of consolidated operating income, all as determined on
a consolidated basis, all of the foregoing to be determined by the Board or the
MFW Compensation Committee, as applicable. For the purposes of determining
compensation milestones for any fiscal year, Consolidated EBITDA will be
adjusted by the Board or the MFW Compensation Committee, as applicable, as
appropriate for material acquisitions or dispositions of any business or assets
of or by Scantron or its subsidiaries for such fiscal year and thereafter.
3.2.2 LONG TERM INCENTIVE PLAN. During the Term, the
Executive shall participate in the Long Term Incentive Plan ("LTIP") of
MFW which shall be established and become effective as of January 1,
2008. The Executive will receive 80% of the "LTIP bonus pool attributed
to Scantron," as defined in, and in accordance with, the LTIP. Further
details regarding participation in the LTIP are set forth on ANNEX A
attached hereto. If the Term is extended, the Executive shall
participate in a new Long Term Incentive Plan that shall commence after
the LTIP ends. Notwithstanding the foregoing, to the extent that
Section 162(m) of the Code may be applicable, the LTIP (and any
subsequent Long Term Incentive Plan) shall be subject to, and
contingent upon, such shareholder approval as is necessary to cause the
LTIP to qualify as "performance-based compensation" under Section
162(m) of the Code and the regulations promulgated thereunder.
3.3 BUSINESS EXPENSES. The Company shall pay or reimburse
the Executive for all reasonable expenses actually incurred or paid by the
Executive during the Term in the performance of the Executive's services under
this Agreement, upon presentation of expense statements or vouchers or such
other supporting information as the Company customarily may require of its
officers PROVIDED, HOWEVER, that the maximum amount available for such expenses
during any period may be fixed in advance by the Board.
3.4 VACATION. During the Term, the Executive shall be
entitled to a vacation period or periods of four (4) weeks during any fiscal
year taken in accordance with the vacation policy of the Company during each
year of the Term. Vacation time not used by the end of a year shall be
forfeited.
3.5 FRINGE BENEFITS. During the Term, the Executive shall
be entitled to all benefits for which the Executive shall be eligible under any
qualified pension plan, 401(k) plan, group insurance or other so-called
"fringe" benefit plan which the Company provides to its executive employees
generally, which benefits may be subject to change to reflect the objectives
and requirements of the Transaction.
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3.6 RELOCATION. The Company shall provide the Executive
with reasonable and customary relocation benefits in connection with the
Executive's move from his current primary residence to California, in
accordance with the relocation policy of Xxxxxxx as in effect immediately prior
to the Transaction.
4. TERMINATION.
4.1 DEATH. If the Executive dies during the Term, the Term
shall terminate forthwith upon the Executive's death. The Company shall pay to
the Executive's estate: (i) any Base Salary earned but not paid; (ii) a pro
rated Annual Bonus based on the number of days of the fiscal year worked by the
Executive; and (iii) amounts payable under the LTIP in accordance with the
terms thereof. The Executive shall have no further rights to any compensation
(including any Base Salary or Annual Bonus) or any other benefits under this
Agreement, except to the extent already earned and vested as of the day
immediately prior to his death, or as earned, vested, or accrued by virtue of
his death.
4.2 DISABILITY. If, during the Term the Executive is unable
to perform his duties hereunder due to a physical or mental incapacity for a
period of 6 months within any 12 month period (hereinafter a "DISABILITY"), the
Company shall have the right at any time thereafter to terminate the Term upon
sending written notice of termination to the Executive. If the Company elects
to terminate the Term by reason of Disability, the Company shall pay to the
Executive promptly after the notice of termination: (i) any Base Salary earned
but not paid, (ii) a pro rated Annual Bonus based on the number of days of the
fiscal year worked by the Executive until the date of the notice of
termination, and (iii) amounts payable under the LTIP in accordance with the
terms thereof, in each case less any other benefits payable to the Executive
under any disability plan provided for hereunder or otherwise furnished to the
Executive by the Company. The Executive shall have no further rights to any
compensation (including any Base Salary or Annual Bonus) or any other benefits
under this Agreement except to the extent already earned and vested as of the
day immediately prior to his termination by reason of Disability, or as earned,
vested, or accrued by virtue of his Disability.
4.3 CAUSE. The Company may at any time by written notice to
the Executive terminate the Term for "Cause" (as defined below) and, upon such
termination, this Agreement shall terminate and the Executive shall be entitled
to receive no further amounts or benefits hereunder, except for any Base Salary
earned but not paid prior to such termination. For the purposes of this
Agreement, "CAUSE" means: (i) continued neglect by the Executive of the
Executive's duties hereunder, (ii) continued incompetence or unsatisfactory
attendance, (iii) conviction of any felony, (iv) violation of the rules,
regulations, procedures or instructions relating to the conduct of employees,
directors, officers and/or consultants of the Company, (v) willful misconduct
by the Executive in connection with the performance of any material portion of
the Executive's duties hereunder, (vi) breach of fiduciary obligation owed to
the Company or commission of any act of fraud, embezzlement, disloyalty or
defalcation, or usurpation of a Company opportunity, (vii) breach of any
provision of this Agreement, including any non-competition, non-solicitation
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and/or confidentiality provisions hereof, (viii) any act that has a material
adverse effect upon the reputation of and/or the public confidence in the
Company, (ix) failure to comply with a reasonable order, policy or rule that
constitutes material insubordination, (x) engaging in any discriminatory or
sexually harassing behavior or (xi) using, possessing or being impaired by or
under the influence of illegal drugs or the abuse of controlled substances or
alcohol on the premises of the Company or any of its subsidiaries or affiliates
or while working or representing the Company or any of its subsidiaries or
affiliates. A termination for Cause by the Company of any of the events
described in clauses (i), (ii), (iv), (ix), (x) and (xi) shall only be
effective on 15 days advance written notification, providing Executive the
opportunity to cure, if reasonably capable of cure within said 15-day period;
provided, however, that no such notification is required if the Cause event is
not reasonably capable of cure or the Board determines that its fiduciary
obligation requires it to effect a termination of Executive for Cause
immediately.
4.4 TERMINATION BY COMPANY WITHOUT CAUSE OR BY THE
EXECUTIVE FOR GOOD REASON. If the Executive's employment is terminated by the
Company without Cause (other than by reason of death or Disability) or by the
Executive for Good Reason (as defined below), the Executive shall receive: (i)
as severance pay, an amount equal to two times the Base Salary payable in
installments in accordance with the Company's normal payroll practices, (ii)
continuation for a 12-month period following the date of termination of group
health plan benefits to the extent authorized by and consistent with 29 U.S.C.
ss. 1161 et seq. (commonly known as "COBRA"), with the cost of the regular
premium for such benefits shared in the same relative proportion by the Company
and the Employee as in effect on the date of termination, (iii) pro-rated
Annual Bonus for the year in which termination occurred if the Executive would
have been eligible to receive such bonus hereunder (including due to
satisfaction by the Company of performance milestones) had the Executive been
employed at the time such Annual Bonus is normally paid, which pro-rated Annual
Bonus will be paid at the time and in the manner such Annual Bonus is paid to
other executives receiving such bonus payment, (iv) Annual Bonus for the year
prior to the year in which the Executive is so terminated if at the time of
termination the Executive has earned an Annual Bonus payment for such prior
year and has not yet been paid such due to such termination, which prior year
Annual Bonus will be paid at the time and in the manner such prior year Annual
Bonus is paid to other executives receiving such prior year Annual Bonus and
(v) amounts payable, if any, under the LTIP in accordance with the terms
thereof. The Executive shall have no further rights to any compensation
(including any Base Salary or Annual Bonus) or any other benefits under this
Agreement. For purposes of this Agreement, "GOOD REASON" means, without the
advance written consent of the Executive: (i) a reduction in Base Salary or
(ii) a material and continuing reduction in the Executive's responsibilities,
PROVIDED, that a termination by the Executive for Good Reason shall be
effective only if the Executive provides the Company with written notice
specifying the event which constitutes Good Reason within thirty (30) days
following the occurrence of such event or date Executive became aware or should
have become aware of such event and the Company fails to cure the circumstances
giving rise to Good Reason within 30 days after such notice.
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4.5 TERMINATION BY EXECUTIVE OTHER THAN FOR GOOD REASON.
The Executive is required to provide the Company with 30 days' prior written
notice of termination to the Company. Subject to Section 4.4, upon termination
of employment by the Executive, the Executive shall receive any Base Salary
earned but not paid prior to such termination and shall have no further rights
to any compensation (including any Base Salary or Annual Bonus) or any other
benefits under this Agreement, except to the extent already earned and vested
as of the day immediately prior to such termination.
4.6 RELEASE. Notwithstanding any other provision of this
Agreement to the contrary, the Executive acknowledges and agrees that any and
all payments, other than payment of any accrued and unpaid Base Salary to which
the Executive is entitled under this Section 4 are conditioned upon and subject
to the Executive's execution of a general waiver and release (for the avoidance
of doubt, the restrictive covenants contained in Section 5 of this Agreement
shall survive the termination of this Agreement) in such form as may be
prepared by the Company, of all claims, except for such matters covered by
provisions of this Agreement which expressly survive the termination of this
Agreement.
4.7 SECTION 409A. Notwithstanding the foregoing provisions
of this Section 4, if any payments or benefits due to the Executive hereunder
would cause the application of an accelerated or additional tax under Section
409A of the Code such payments or benefits shall be restructured in a manner
which does not cause such an accelerated or additional tax. Without limiting
the application of the preceding sentence, any payment of money due hereunder
which is delayed in order to avoid the application of Section 409A of the Code
(e.g., a six-month delay in the commencement of severance pay, if necessary, if
at the time of the Executive's termination of employment he is a "specified
employee," as defined in Section 409A of the Code) shall be paid as soon as
possible without causing the application of Section 409A of the Code.
5. PROTECTION OF CONFIDENTIAL INFORMATION; RESTRICTIVE COVENANTS.
5.1 From the Effective Date, the Company will share with
Executive confidential and trade secret information regarding not only the
Company but also its subsidiaries and affiliates. In view of the fact that the
Executive's work for the Company will bring the Executive into close contact
with many confidential affairs of the Company not readily available to the
public, trade secret information and plans for future developments, the
Executive agrees:
5.1.1 To keep and retain in the strictest confidence
all confidential matters of the Company, including, without limitation,
"know how", trade secrets, customer lists, pricing policies,
operational methods, technical processes, formulae, inventions and
research projects, other business affairs of the Company, and any
material confidential information whatsoever concerning any director,
officer, employee, shareholder, partner, customer or agent of the
Company or their respective family members learned by the Executive
heretofore or hereafter, and not to disclose them to anyone outside of
the Company, either during or after the Executive's employment with the
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Company, except in the course of performing the Executive's duties
hereunder or with the Company's express written consent. The foregoing
prohibitions shall include, without limitation, directly or indirectly
publishing (or causing, participating in, assisting or providing any
statement, opinion or information in connection with the publication
of) any diary, memoir, letter, story, photograph, interview, article,
essay, account or description (whether fictionalized or not) concerning
any of the foregoing, publication being deemed to include any
presentation or reproduction of any written, verbal or visual material
in any communication medium, including any book, magazine, newspaper,
theatrical production or movie, or television or radio programming or
commercial; and
5.1.2 To deliver promptly to the Company on
termination of the Executive's employment by the Company, or at any
time the Company may so request, all memoranda, notes, records,
reports, manuals, drawings, blueprints and other documents (and all
copies thereof), including data stored in computer memories or on other
media used for electronic storage or retrieval, relating to the
Company's business and all property associated therewith, which the
Executive may then possess or have under the Executive's control, and
not retain any copies, notes or summaries; PROVIDED Executive shall be
entitled to keep a copy of this Agreement and compensation and benefit
plans to which Executive is entitled to receive benefits thereunder.
5.2 In support of Executive's commitments to maintain the
confidentiality of the Company's confidential and trade secret information,
during (i) the Term, and (ii) for a period of two years following termination
of the Executive's employment for any reason (the "RESTRICTED PERIOD"), the
Executive shall not in the United States and in any non-US jurisdiction where
the Company may then do business: (a) directly or indirectly, enter the employ
of, or render any services to, any person, firm or corporation engaged in any
business competitive with the business of the Company or of any of its
subsidiaries or affiliates; (b) engage in such business on the Executive's own
account; and the Executive shall not become interested in any such business,
directly or indirectly, as an individual, partner, shareholder, director,
officer, principal, agent, employee, trustee, consultant, or in any other
relationship or capacity; (c) solicit or encourage (or cause to be solicited or
encouraged), or cause any client, customer or supplier of the Company to cease
doing business with the Company, or to reduce the amount of business such
client, customer or supplier does with the Company or (d) solicit or encourage
(or cause to be solicited or encouraged) to cease to work with the Company, or
hire (or cause to be hired), any person who is an employee of or consultant
then under contract with the Company or who was an employee of or consultant
then under contract with the Company within the six month period preceding such
activity without the Company's written consent; PROVIDED, however that this
clause (d) shall not apply during the Restricted Period to a consulting or
advisory firm which is also then currently engaged or under a retainer
relationship (in each case, without any action by the Executive, whether
directly or indirectly) by a subsequent employer of the Executive.
5.3 If the Executive commits a breach, or poses a serious
and objective threat to commit a breach, of any of the provisions of Sections
5.1 or 5.2 hereof, the Company shall have the following rights and remedies:
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5.3.1 The right and remedy to have the provisions of
this Agreement specifically enforced by any court having equity
jurisdiction, it being acknowledged and agreed that any such breach or
threatened breach will cause irreparable injury to the Company and that
money damages will not provide an adequate remedy to the Company;
5.3.2 The right and remedy to require the Executive
to account for and pay over to the Company all compensation, profits,
monies, accruals, increments or other benefits derived or received by
the Executive as the result of any transactions constituting a breach
of any of the provisions of the preceding paragraph, and the Executive
hereby agrees to account for and pay over such benefits to the Company.
Each of the rights and remedies enumerated above shall be independent
of the other, and shall be severally enforceable, and all of such
rights and remedies shall be in addition to, and not in lieu of, any
other rights and remedies available to the Company under law or in
equity; and
5.3.3 In addition to any other remedy which may be
available (i) at law or in equity, or (ii) pursuant to any other
provision of this Agreement, the payments by the Company of Base Salary
and the regular premium for group health benefits pursuant to Section
4.4 will cease as of the date on which such violation first occurs. In
addition, if the Executive breaches any of the covenants contained in
Sections 5.1 and 5.2 and the Company obtains injunctive relief with
respect thereto (that is not later reversed or otherwise terminated or
vacated by judicial order), the period during which the Executive is
required to comply with that particular covenant shall be extended by
the same period that the Executive was in breach of such covenant prior
to the effective date of such injunctive relief.
5.4 If any of the covenants contained in Sections 5.1 or
5.2, or any part thereof, hereafter are held by a court to be invalid or
unenforceable, the same shall not affect the remainder of the covenant or
covenants, which shall be given full effect, without regard to those portions
found invalid.
5.5 If any of the covenants contained in Sections 5.1 or
5.2, or any part thereof, are held to be unenforceable because of the duration
of such provision or the area covered thereby, the parties agree that the court
making such determination shall have the power to reduce the duration and/or
area of such provision and, in its reduced form, said provision shall then be
enforceable.
5.6 The Executive agrees (whether during or after the
Executive's employment with the Company) not to issue, circulate, publish or
utter any false or disparaging statements, remarks or rumors about the Company
or its affiliates or the officers, directors, managers, customers, partners, or
shareholders of the Company or its affiliates unless giving truthful testimony
under subpoena.
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5.7 For purposes of this Section 5 only, the term "Company"
includes the Company and its subsidiaries and affiliates which are related to
the businesses of Xxxxxxx Xxxxxx Holdings.
6. INVENTIONS AND PATENTS.
6.1 The Executive agrees that all processes, technologies
and inventions (collectively, "INVENTIONS"), including new contributions,
improvements, ideas and discoveries, whether patentable or not, conceived,
developed, invented or made by him during the Term shall belong to the Company,
PROVIDED that such Inventions grew out of the Executive's work with the Company
or any of its subsidiaries or affiliates, are related in any manner to the
business (commercial or experimental) of the Company or any of its subsidiaries
or affiliates or are conceived or made on the Company's time or with the use of
the Company's facilities or materials. The Executive shall further: (a)
promptly disclose such Inventions to the Company; (b) assign to the Company,
without additional compensation, all patent and other rights to such Inventions
for the United States and foreign countries; (c) sign all papers necessary to
carry out the foregoing; and (d) give testimony in support of the Executive's
inventorship.
6.2 If any Invention is described in a patent application
or is disclosed to third parties, directly or indirectly, by the Executive
within two years after the termination of the Executive's employment by the
Company, it is to be presumed that the Invention was conceived or made during
the Term.
6.3 The Executive agrees that the Executive will not assert
any rights to any Invention as having been made or acquired by the Executive
prior to the date of this Agreement, except for Inventions, if any, disclosed
to the Company in writing prior to the date hereof.
7. INTELLECTUAL PROPERTY.
The Company shall be the sole owner of all the products and proceeds of
the Executive's services hereunder, including, but not limited to, all
materials, ideas, concepts, formats, suggestions, developments, arrangements,
packages, programs and other intellectual properties that the Executive may
acquire, obtain, develop or create in connection with and during the Term, free
and clear of any claims by the Executive (or anyone claiming under the
Executive) of any kind or character whatsoever (other than the Executive's
right to receive payments hereunder). The Executive shall, at the request of
the Company, execute such assignments, certificates or other instruments as the
Company may from time to time deem necessary or desirable to evidence,
establish, maintain, perfect, protect, enforce or defend its right, title or
interest in or to any such properties.
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8. NOTICES.
All notices, requests, consents and other communications required or
permitted to be given hereunder shall be in writing and shall be deemed to have
been duly given if delivered personally, sent by overnight courier or mailed
first class, postage prepaid, by registered or certified mail (notices mailed
shall be deemed to have been given on the date mailed), as follows (or to such
other address as either party shall designate by notice in writing to the other
in accordance herewith):
If to the Company, to:
Scantron Corporation
00 Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn: Director of Human Resources
If to Xxxxxxx Xxxxxx Holdings Corp.
c/o M&F Worldwide Corp.
00 X. 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
If to the Executive, to:
Such address as shall most currently appear on the records of the
Company.
9. GOVERNING LAW; DISPUTE RESOLUTION.
9.1 It is the intent of the parties hereto that all
questions with respect to the construction of this Agreement and the rights and
liabilities of the parties hereunder shall be determined in accordance with the
laws of the State of Delaware, without regard to principles of conflicts of
laws thereof that would call for the application of the substantive law of any
jurisdiction other than the State of Delaware.
9.2 Each party irrevocably agrees for the exclusive benefit
of the other that any and all suits, actions or proceedings relating to Section
5 of this Agreement (a "PROCEEDING") shall be maintained in either the courts
of the State of Delaware or the federal District Courts sitting in Wilmington,
Delaware (collectively, the "CHOSEN COURTS") and that the Chosen Courts shall
have exclusive jurisdiction to hear and determine or settle any such Proceeding
and that any such Proceedings shall only be brought in the Chosen Courts. Each
party irrevocably waives any objection that it may have now or hereafter to the
laying of the venue of any Proceedings in the Chosen Courts and any claim that
any Proceedings have been brought in an inconvenient forum and further
irrevocably agrees that a judgment in any Proceeding brought in the Chosen
Courts shall be conclusive and binding upon it and may be enforced in the
courts of any other jurisdiction.
9.3 Each of the parties hereto agrees that this Agreement
involves at least $100,000 and that this Agreement has been entered into in
express reliance on Section 2708 of Title 6 of the Delaware Code. Each of the
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parties hereto irrevocably and unconditionally agrees (i) that, to the extent
such party is not otherwise subject to service of process in the State of
Delaware, it will appoint (and maintain an agreement with respect to) an agent
in the State of Delaware as such party's agent for acceptance of legal process
and notify the other parties hereto of the name and address of said agent, (ii)
that service of process may also be made on such party by pre-paid certified
mail with a validated proof of mailing receipt constituting evidence of valid
service sent to such party at the address set forth in Section 8 of this
Agreement, as such address may be changed from time to time pursuant hereto,
and (iii) that service made pursuant to clause (i) or (ii) above shall, to the
fullest extent permitted by applicable law, have the same legal force and
effect as if served upon such party personally within the State of Delaware.
9.4 Any controversy or claim arising out of or related to
any other provision of this Agreement shall be settled by final, binding and
non-appealable arbitration in Wilmington, Delaware by a single arbitrator.
Subject to the following provisions, the arbitration shall be conducted in
accordance with the applicable rules of JAMS then in effect. Any award entered
by the arbitrator shall be final, binding and nonappealable and judgment may be
entered thereon by either party in accordance with applicable law in any court
of competent jurisdiction. This arbitration provision shall be specifically
enforceable. The arbitrator shall have no authority to modify any provision of
this Agreement or to award a remedy for a dispute involving this Agreement
other than a benefit specifically provided under or by virtue of the Agreement.
Each party shall be responsible for its own expenses relating to the conduct of
the arbitration or litigation (including reasonable attorneys' fees and
expenses) and shall share the fees of JAMS and the arbitrator, if applicable,
equally.
9.5 In the event any party hereto institutes any
Proceedings or arbitration actions pursuant to and in accordance with this
Section 9, then the Company shall reimburse Executive for reasonable fees and
expenses incurred by legal counsel of Executive's choice and reasonable travel
and lodging expenses incurred by reason of such Proceedings or other actions,
solely with respect to any substantive and material Proceeding or action in
which Executive substantially prevails against the Company. If Executive has
acted in bad faith or been stubbornly litigious, Executive shall reimburse the
Company for its legal fees and expenses incurred in such Proceeding or action.
It is expressly acknowledged and agreed to by Executive that an arbitrator
shall have no authority to modify any provision of this Agreement or to award a
remedy for a dispute involving this Agreement other than a benefit specifically
provided under or by virtue of the Agreement (including without limitation
punitive damages and/or consequential or incidental damages).
10. GENERAL.
10.1 JURY TRIAL WAIVER. THE PARTIES EXPRESSLY AND KNOWINGLY
WAIVE ANY RIGHT TO A JURY TRIAL IN THE EVENT ANY ACTION ARISING UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR THE EXECUTIVE'S EMPLOYMENT WITH THE COMPANY
IS LITIGATED OR HEARD IN ANY COURT.
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10.2 CONTINUATION OF EMPLOYMENT. Unless the parties
otherwise agree in writing, continuation of the Executive's employment with the
Company beyond the expiration of the Term shall be deemed an employment at will
and shall not be deemed to extend any of the provisions of this Agreement, and
Executive's employment may thereafter be terminated "at will" by the Executive
or the Company and Executive will be entitled to fringe benefits which the
Executive is eligible to receive for so long as the Executive continues to be
employed with the Company and the Executive shall be eligible for severance in
accordance with the terms of the Company's severance policy then in effect.
10.3 HEADINGS. The section headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
10.4 ENTIRE AGREEMENT. This Agreement sets forth the entire
agreement and understanding of the parties relating to the Executive's
employment by the Company, and supersedes all prior agreements, arrangements
and understandings, written or oral, relating to the Executive's employment by
the Company and its affiliates including, without limitation, the employment
agreement between the Executive and Xxxxxxx, dated as of November 18, 2005 and
amended as of December 19, 2006 (with any other amendments, the "PRIOR
EMPLOYMENT AGREEMENT") and any severance, retention, change in control or
similar types of benefits, except as provided in the following sentence.
Furthermore, except for the change in control termination payment pursuant to
Section 3.2(d) of the Prior Employment Agreement to be paid at or after the
closing of the Transaction as directed by Xxxxxxx, the Executive acknowledges
and agrees that the Prior Employment Agreement is terminated in its entirety
and the Executive has no further right to any payments or benefits thereunder;
provided that the Executive's award under the Xxxxxxx 2007 Long Term Incentive
Plan in the maximum aggregate amount of $421,050 shall not be prejudiced by the
terms of this Agreement and shall be administered in accordance with the terms
of such award in effect immediately prior to the date hereof (which for the
avoidance of doubt is not accelerated as a result of the Transaction). No
representation, promise or inducement has been made by either party that is not
embodied in this Agreement, and neither party shall be bound by or liable for
any alleged representation, promise or inducement not so set forth.
10.5 ASSIGNMENT. This Agreement, and the Executive's rights
and obligations hereunder, may not be assigned by the Executive. The Company
may assign its rights, together with its obligations, hereunder (i) to any
affiliate or (ii) to third parties in connection with any sale, transfer or
other disposition of all or substantially all of the business or assets of the
Company; in any event the obligations of the Company hereunder shall be binding
on its successors or assigns, whether by merger, consolidation or acquisition
of all or substantially all of its business or assets.
10.6 WAIVER. This Agreement may be amended, modified,
superseded, canceled, renewed or extended and the terms or covenants hereof may
be waived, only by a written instrument executed by all of the parties hereto,
or in the case of a waiver, by the party waiving compliance. The failure of
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either party at any time or times to require performance of any provision
hereof shall in no manner affect the right at a later time to enforce the same.
No waiver by either party of the breach of any term or covenant contained in
this Agreement, whether by conduct or otherwise, in any one or more instances,
shall be deemed to be, or construed as, a further or continuing waiver of any
such breach, or a waiver of the breach of any other term or covenant contained
in this Agreement.
10.7 WITHHOLDING TAXES. The Company may withhold from any
amounts payable under this Agreement such federal, state, local and other taxes
as may be required to be withheld pursuant to any applicable law or regulation.
11. SUBSIDIARIES AND AFFILIATES.
11.1 As used herein, the term "SUBSIDIARY" shall mean any
corporation or other business entity controlled directly or indirectly by the
corporation or other business entity in question, and the term "AFFILIATE"
shall mean and include any corporation or other business entity directly or
indirectly controlling, controlled by or under common control with the
corporation or other business entity in question.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
SCANTRON CORPORATION
By: /s/ Xxxx X. Xxxxx
----------------------------------
Name: Xxxx X. Xxxxx
Title: Senior Vice President,
Chief Financial Officer and
Chief Operating Officer
XXXXXXX XXXXXX HOLDINGS CORP.
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President and Chief
Executive Officer
/s/ Xxxxxxx Xxxxxxxxx
----------------------------------
Xxxxxxx Xxxxxxxxx
