SALARY CONTINUATION AGREEMENT
THIS SALARY CONTINUATION AGREEMENT ("Agreement") is made and entered
into as of June 28, 1995, by and between XXXXXXX LABORATORIES, INC., a
California corporation ("Company"), and XXXXXX X. XXXXXXX ("Key Employee").
RECITALS
A. Key Employee has been employed by the Company in a capacity of
responsibility and by reason thereof has acquired experience and knowledge of
considerable value to the Company.
B. The Company desires to offer an inducement to Key Employee to
remain in its employ by compensating him beyond his regular salary for services
which Key Employee has rendered, or will hereafter render, to the Company.
C. The provisions of this Agreement are to be operative if Key
Employee continues on the employ of the Company until his retirement, death,
total disability or termination by the Company for other than cause, subject
only to the exceptions noted herein.
TERMS AND CONDITIONS
NOW, THEREFORE, the parties hereto agree as follows:
II.. EMPLOYMENT OF KEY EMPLOYEE. The Company hereby agrees to
continue the employment of Key Employee in a capacity of responsibility
commencing as of the date of this Agreement, and Key Employee hereby accepts
such continued employment by the Company.
III..COMPENSATION OF KEY EMPLOYEE. As compensation for his services,
the Company hereby agrees to pay Key Employee, and Key Employee hereby agrees to
accept from the Company, an annual salary to be determined by the Company in its
sole and absolute discretion and the other employee benefits referred to
elsewhere in this Agreement.
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IV.. RETIREMENT BENEFITS. If Key Employee remains in the continuous,
full-time employ of the Company until his retirement, Key Employee shall,
subject to the provisions of Section 9 hereof, be entitled to receive from the
Company an amount equal to $100,000, payable in 120 equal monthly installments
of $833.33 each, without interest, commencing on the first day of the calendar
month following the month in which the Key Employee retires and continuing on
the first day of each month thereafter for the next 119 months. In the event
that Key Employee dies before or while receiving payments pursuant to this
Section 3, the Company shall commence or continue, as the case may be, making
such payments to Key Employee's Beneficiary (as defined in Section 7 hereof).
Said Beneficiary shall be entitled to receive all payments which Key Employee
would have been entitled to receive hereunder had Key Employee not died.
V.. DEATH BENEFITS. In the event that Key Employee dies while in the
full-time employ of the Company, the Company agrees to pay to Key Employee's
Beneficiary an amount equal to $100,000. Said death benefits shall be payable
by the Company to Key Employee's Beneficiary in 120 equal monthly installments
of $833.33 each, without interest, commencing on the first day of the calendar
month following the month in which Key Employee dies and continuing on the first
day of each month thereafter for the next 119 months.
VI.. DISABILITY BENEFITS. In the event that Key Employee becomes
Totally Disabled (as defined in Section 8 hereof) while in the full-time employ
of the Company, the Company agrees, subject to the provisions of Section 9
hereof, to pay Key Employee an amount equal to $100,000. Said disability
benefits shall be payable in 120 equal monthly installments of $833.33 each,
without interest, commencing on the first day of the calendar month following
the month in which Key Employee first becomes Totally Disabled and continuing on
the first day of each month thereafter for the next 119 months. In the event
that Key Employee dies before or while receiving payments pursuant to this
Section 5, the Company shall commence or continue, as the case may be, making
such payments to Key Employee's Beneficiary. Said Beneficiary shall be entitled
to receive all payments which Key Employee would have been entitled to receive
hereunder had Key Employee not died.
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VII.. TERMINATION BENEFITS. In the event that Key Employee's
employment with the Company shall be terminated by the Company for any reason
other than for due and just cause, the Company agrees, subject to the provisions
of Section 9 hereof, to pay Key Employee an amount equal to $100,000. Said
termination benefits shall be payable in 120 equal monthly installments of
$833.33 each, without interest, commencing on the first day of the calendar
month following the month in which Key Employee's employment with the Company is
terminated for any reason other than for due and just cause. In the event that
Key Employee dies before or while receiving payments pursuant to this Section 6,
the Company shall commence or continue, as the case may be, making such payments
to Key Employee's Beneficiary. Said Beneficiary shall be entitled to receive
all payments which Key Employee would have been entitled to receive hereunder
had Key Employee not died.
VIII.. DEFINITION OF BENEFICIARY. The term "Beneficiary" shall
mean the person or persons designated by Key Employee in a writing delivered to
the Company to receive payments otherwise due Key Employee under this Agreement
in the event Key Employee dies prior to the payment of all amounts due
hereunder. Key Employee shall be entitled to change his Beneficiary from time
to time; provided, however, that any such change shall not become effective
until received by the Company in writing from Key Employee. If the Employee is
married and does not name his spouse as his Beneficiary, Key Employee will
provide the Company with a written consent signed by his spouse consenting and
agreeing to such Beneficiary designation in a form deemed acceptable by the
Company. If the Employee is unmarried or becomes unmarried and later marries or
re-marries, as the case may be, and does not name his new spouse as Beneficiary,
Key Employee will provide the Company with a written consent signed by his
spouse consenting and agreeing to such Beneficiary designation in a form deemed
acceptable by the Company.
IX.. DEFINITION OF TOTALLY DISABLED. For purposes of this Agreement,
the term "Totally Disabled" shall have the same meaning as that term is used in
the Company's long term disability plan in effect at the time of a need for a
determination of whether or not a Key Employee is Totally Disabled for the
purposes hereof. In the event the Company does not have a long-term disability
plan at the time that a determination of whether or not a Key Employee is
"Totally Disabled" is to be made, the definition will be based on the definition
in the long-term disability plan
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of the Company most recently in effect. In the event the Company has never had
a long-term disability plan in effect, the term "Totally Disabled" shall mean
that Key Employee is unable or unwilling to perform Key Employee's normal duties
on behalf of the Company by reason of any medically determinable physical or
mental impairment for a continuous period of at least 180 days or for at least
270 days within any 18-month period.
X.. FORFEITURE OF BENEFITS. In consideration of the receipt by him
of the benefits otherwise payable to him hereunder and as a condition precedent
to the receipt of any such benefits hereunder, Key Employee agrees that he will
not, at any time within a period of 120 months from and after the date that Key
Employee retires, becomes Totally Disabled or is terminated by the Company for
any reason other than due or just cause, directly or indirectly, engage in or
have any interest in, any person, firm, corporation or other business entity
(whether as an employee, officer, director, agent, securityholder, creditor,
consultant or otherwise) that engages in any activity in any of the counties
within the State of California or within the United States where the Company is
conducting, or has conducted, its business, which activity is the same as,
similar to or competitive with any activity engaged in by the Company. In the
event that Key Employee breaches the foregoing noncompetition covenant, the
Company may, in its sole and absolute discretion, upon written notice to Key
Employee, cause all further benefits otherwise payable to such Key Employee
under this Agreement to be suspended. Thereafter, if the Company shall find
that Key Employee has continued to violate his noncompetition covenant, the
Company may permanently cancel the payment of all further benefits otherwise
payable hereunder to Key Employee and all rights of Key Employee under this
Agreement shall be deemed to have been forfeited and cancelled.
XI.. RIGHT OF COMPANY TO TERMINATE EMPLOYMENT. Nothing contained in
this Agreement shall confer upon Key Employee any right to be continued in the
employ of the Company or shall interfere in any way with the right of the
Company to terminate the employment of Key Employee at any time.
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XII.. NO EFFECT ON OTHER EMPLOYEE BENEFITS. The benefits provided by
this Agreement shall be in addition to Key Employee's annual salary as
determined by the Company in its sole and absolute discretion and shall not
affect the right of Key Employee to participate in any current or future profit
sharing plan, pension plan, retirement plan or other similar plan of the Company
or in any supplemental compensation arrangement between the Company and Key
Employee which constitutes a part of the Company's regular compensation
structure.
XIII..NONALIENATION OF BENEFITS. No right or benefit under this
Agreement shall be subject to anticipation, alienation, assignment, pledge,
encumbrance or charge, and any attempt to anticipate, alienate, sell, assign,
pledge, encumber or charge the same shall be null and void. No right or benefit
under this Agreement shall in any manner be liable for or subject to the debts,
contracts, liabilities or torts of the person entitled to receive such benefits.
If Key Employee or his Beneficiary shall become bankrupt or attempts to
anticipate, alienate, sell, assign, pledge, encumber or charge any right or
benefit hereunder, then such right or benefit shall, in the sole and absolute
discretion of the Company, cease and determine and, in such event, the Company
may hold or apply the same or any part thereof to the benefit of Key Employee or
his Beneficiary in such amount and in such proportion as the Company may deem
proper.
XIV..INSURANCE OR ANNUITY POLICIES. If the Company shall acquire an
insurance policy or annuity contract or any other asset in connection with the
funding of its liabilities hereunder, it is expressly understood and agreed that
neither Key Employee nor his Beneficiary shall have any right with respect to,
or claim against, such policy or other asset, except as expressly provided by
the terms of such policy or in the title to such other asset. Such policy or
asset shall not be deemed to be held under any trust for the benefit of Key
Employee or his Beneficiary or to be held in any way as collateral security for
the fulfillment of the Company's obligations under this Agreement, except as may
be expressly provided by the terms of such policy or title to such other asset.
Except as expressly provided by the terms of such policy or title to such asset,
such policy or other asset shall be and remain in general an unpledged and
unrestricted asset of the Company.
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XV.. ASSUMPTION OF OBLIGATIONS UPON MERGER OR SALE OF COMPANY. The
Company agrees that it will not merge or consolidate with any other corporation
or organization or permit its business to be sold to any other corporation or
organization unless and until the succeeding or continuing company or other
organization shall expressly assume all of the Company's obligations and
liabilities hereunder.
XVI..GENERAL PROVISIONS.
XVI.A. NOTICES. Any notice sent hereunder shall be deemed
given if served personally upon the party for whom intended, or if mailed
postage prepaid by certified or registered mail, return receipt requested, to
the address of the party for whom intended as hereinafter set forth, or as
otherwise designated by such party in writing:
Company: 0000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, President
Key Employee: 0000 Xxxxxxx
Xx Xxxxxxx, XX 00000
XVI.B. ASSIGNMENT. The rights and obligations of the Company
under this Agreement shall inure to the benefit of the Company, its successors
and assigns, and shall be binding upon the successors and assigns of the
Company. This Agreement, being personal to Key Employee, cannot be assigned by
Key Employee.
XVI.C. WAIVER. Failure to insist on compliance with any of
the terms, covenants or conditions hereof shall not be deemed a waiver of such
terms, covenants or conditions, nor shall any waiver or relinquishment of any
right or power hereunder at any one time or more times be deemed a waiver or
relinquishment of such rights or powers at any other time or times.
XVI.D. GOVERNING LAW. The parties hereto agree that this
Agreement has been executed in the State of California and shall be governed by
the laws thereof.
XVI.E. EFFECT OF HEADINGS. The headings of the Sections of
this Agreement are included for purposes of
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convenience only and shall not affect the construction or interpretation of any
of the provisions of this Agreement.
XVI.F. SEVERABILITY. In the event that any provision of this
Agreement or any part of any provision of this Agreement shall be determined to
be illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall not affect the legality, validity or enforceability of
any other provision or part hereof.
XVI.G. MODIFICATION. This Agreement constitutes the entire
agreement among the parties hereto pertaining to the subject matter hereof and
supersedes any and all prior and contemporaneous agreements, understandings,
negotiations and discussions, whether oral or written, of the parties. No
supplement, modification, waiver or termination of this Agreement or any
provisions hereof shall be binding unless executed in writing by the party or
parties to be bound thereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
"Company" "Key Employee"
XXXXXXX LABORATORIES, INC.
By:
----------------------------- -------------------------------
Xxxxxx X. Xxxxxx, President Xxxxxx X. Xxxxxxx
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