EXECUTIVE EMPLOYMENT AGREEMENT
EXECUTION
COPY
THIS
EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”)
is
entered into as of June 8, 2007, by and between Xxxxxx International, Inc.
(the
“Company”),
a
Delaware corporation, and Xxxxxxx X. Xxxxx (the “Executive”).
PRELIMINARY
STATEMENTS
WHEREAS,
the Company and the Executive previously entered into that certain Amended
and
Restated Executive Employment Agreement, dated as of August 31, 2007 (the
“Prior
Agreement”),
which
Prior Agreement shall terminate on September 30, 2007;
WHEREAS,
the Company desires to continue to employ the Executive, and the Executive
desires to continue to be employed by the Company, on the terms and conditions
set forth herein such that this Agreement shall supersede and replace the Prior
Agreement effective as of October 1, 2007 (the “Effective
Date”).
NOW,
THEREFORE, in consideration of the mutual promises, covenants and agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
as
follows:
AGREEMENT
Section
1. Employment.
(a) Prior
Agreements.
Effective as of the Effective Date, the Executive’s employment with the Company
and benefits upon a termination of employment shall be governed by this
Agreement, which supersedes and replaces the Prior Agreement.
(b) Offer
and Acceptance.
During
the “Employment Term” (as defined in Section
1(d)
below),
the Company agrees to employ the Executive in the position of President and
Chief Executive Officer of the Company upon the terms and subject to the
conditions set forth herein, and the Executive agrees to remain in the employ
of
the Company on such terms and conditions.
(c) Duties.
The
Executive’s duties shall include those duties that are consistent with his
position as President and Chief Executive Officer of the Company as well as
those reasonably assigned to him from time to time, in good faith, by the Board
of Directors of the Company (the “Board”).
The
Executive shall (i) devote his working hours, on a full-time basis, to his
duties under this Agreement; (ii) faithfully, industriously and loyally serve
the Company; (iii) comply in all material respects with the lawful and
reasonable directions and instructions given to him by the Board; (iv) use
his
reasonable best efforts to promote and serve the interests of the Company;
and
(v) assist the Board with succession planning. The Executive shall comply in
all
material respects with all applicable laws, rules and regulations relating
to
the performance of the Executive’s duties and responsibilities hereunder. The
Executive agrees to serve as (i) a member of the Board and on any of the board
of directors of any subsidiary or affiliate of the Company, and (ii) as an
officer of any subsidiary or affiliate of the Company, without any additional
compensation while he is employed by the Company. Upon termination of the
Executive’s employment by the Company for any reason, the Executive shall
immediately resign from the Board and any other position as a member of the
board of directors or as an officer of any such subsidiary or affiliate of
the
Company.
1
(d) Employment
Term.
The
Executive’s employment by the Company under this Agreement shall commence on the
Effective Date and shall continue thereafter and shall terminate on September
30, 2008 (the “Employment
Term”),
unless renewed by a subsequent written agreement of the parties. The Executive’s
employment by the Company shall be subject to termination at any time during
the
Employment Term as provided in subsection (f) of this Section
1.
As used
herein, the term “Employment
Term”
shall
mean the actual period of time during which the Executive is employed by the
Company under the terms and conditions of this Agreement.
(e) Compensation
and Benefits.
During
the Employment Term, the Company shall pay and provide the following
compensation and other benefits to the Executive as full compensation for all
services rendered by the Executive as an employee of the Company under the
terms
and conditions of this Agreement. All payments made to the Executive hereunder
shall be subject to appropriate payroll deductions and other withholdings
required by law.
(i) Annual
Salary.
During
the Employment Term, the Company shall pay to the Executive, in accordance
with
the then prevailing payroll practices of the Company, a base salary (the
“Annual
Salary”)
at the
annual rate of Five Hundred Twenty Thousand Dollars ($520,000) per
year.
(ii) Bonuses.
During
the Employment Term, the Executive shall be eligible to receive an annual bonus
based upon the achievement by the Company of specific performance requirements
(e.g. earnings per share, EBITDA benchmarks and working capital targets) which
shall be determined by the Compensation Committee of the Board (the
“Committee”)
in its
sole and absolute discretion prior to or at the commencement of the Employment
Term (the “Bonus”).
The
target amount for the Bonus shall be eighty percent (80%) of the Annual Salary
(the “Target
Bonus”);
provided, however, the Executive shall be eligible to receive a minimum Bonus
in
an amount equal to forty percent (40%) of the Annual Salary if threshold
performance requirements are achieved and a maximum Bonus in an amount equal
to
one hundred twenty percent (120%) of the Annual Salary if maximum performance
requirements are achieved. The Bonus, if any, shall be paid to the Executive
by
the Company no later than December 15, 2008.
(iii) Benefits.
During
the Employment Term, the Executive shall be eligible to participate in all
employee health and welfare benefit plans in which senior executives of the
Company are entitled to participate, but participation shall be subject to
all
of the terms and conditions of such plans applicable to all such senior
executives, including all waiting periods, eligibility requirements,
contributions, exclusions and other similar conditions or limitations. In the
case of any disability plan, the Company agrees that such plan will provide
the
benefits contemplated by Section
1(e)(iv)
or in
lieu of such plan participation, the Company will provide to the Executive
the
disability insurance coverage contemplated by Section
1(e)(iv).
2
(iv) Insurance.
During
the Employment Term, the Executive shall be entitled to receive long-term
disability insurance coverage and the amount of the benefit payments under
such
insurance coverage shall be not less than sixty percent (60%) of the Annual
Salary then in effect (the “Disability
Insurance”).
The
Company shall pay all premiums related to the Disability Insurance as long
as
the Executive is employed by Company hereunder. In addition, the Company shall
provide the Executive with a life insurance policy in a face amount equal to
five (5) times the Annual Salary then in effect (the “Life
Insurance”),
which
policy shall be convertible to an individual policy at the election of the
Executive upon termination of the Executive’s employment by the Company. The
Company shall be the owner of the Life Insurance and shall pay all premiums
related thereto prior to termination of the Executive’s employment by the
Company.
(v) Expenses.
The
Company shall reimburse the Executive, in accordance with the then prevailing
reimbursement practices of the Company, for all reasonable and customary
business expenses incurred by the Executive in connection with his employment
by
the Company, including, but not limited to, all reasonable and customary
travel-related expenses incurred in connection with periodic trips to Syracuse,
New York, provided, in any case, that the Executive complies with the standard
reporting and reimbursement policies as may be established by the Company from
time to time.
(vi). Vacation.
The
Executive shall be entitled to five (5) weeks of vacation, measured on a
calendar year basis. The Executive shall schedule vacation periods at reasonable
times in accordance with the Company’s vacation policy for senior executives.
The Executive shall accrue and receive full compensation and benefits during
his
vacation periods. Unused vacation leave time shall not entitle the Executive
to
any additional compensation and may not be carried over to a subsequent calendar
year.
(vii) SERP.
The
Executive shall be entitled to participate in the Company’s Supplemental
Executive Retirement Plan on the terms and conditions as set forth in the
Participation Agreement entered into by and between the Executive and the
Company dated December 13, 2002 as amended as of the date hereof (the
“SERP”).
(viii) Company
Car.
During
the Employment Term, the Company shall provide the Executive with the use of
an
automobile owned or leased by the Company at its expense for Company-related
purposes (the “Company
Car”).
The
Company shall pay or reimburse the Executive for all expenses incurred in
connection with the Executive’s use of the Company Car, including, but not
limited to, insurance, gasoline, registration taxes and maintenance. The Company
Car shall be a Buick Lucerne or an automobile of a similar class. The Executive
agrees that the use of the Company Car for personal-related matters will result
in imputed income to the Executive and at the end of each calendar year, the
Company and its accountants shall reasonably determine the amount of such income
to be included in the Executive’s compensation in connection with the personal
use of the Company Car and the Executive agrees that he shall be responsible
for
any and all taxes imposed on such imputed income.
3
(ix) Country
Club Membership.
During
the Employment Term, the Company shall reimburse the Executive for all regular
monthly membership dues and business-related charges incurred by the Executive
in connection with his membership at a country club. The Executive agrees that
he shall be responsible for any and all taxes imposed on the reimbursements
made
pursuant to the preceding sentence.
(x) Options.
On
March 30, 2007, the Executive was granted options to acquire 24,000 shares
of
the Company’s common stock pursuant to the terms of the Company’s 2007 Stock
Option Plan and the grant letter pursuant to which such options were
granted.
(xi) Death
Benefit Plan.
During
the Employment Term, the Executive shall be eligible to participate in the
Company’s Death Benefit Plan, as amended, pursuant to the terms and conditions
set forth in such plan.
(f) Termination
of Employment.
Subject
to the terms of Section 1(g) below, the Executive’s employment by the Company
may be terminated as follows:
(i) Termination
upon the Expiration of the Employment Term.
The
Executive’s employment shall terminate on September 30, 2008 unless terminated
earlier pursuant to this Section
1(f).
In the
event that the Executive’s employment terminates upon the expiration of the
Employment Term, then the Executive shall be entitled to receive the
compensation and benefits set forth in Section
1(g)(i).
(ii) Termination
for Cause.
The
Company may immediately terminate, at any time, Executive’s employment by the
Company for “Cause”. A termination for “Cause”
means
a
termination by reason of the Board’s good faith determination that the Executive
(i) continually failed to substantially perform his duties with the Company
(other than a failure resulting from the Executive’s medically documented
incapacity due to physical or mental illness) including, without limitation,
repeated refusal to follow the reasonable directions of the Board, knowing
violation of the law in the course of performance of the Executive’s duties with
the Company, repeated absences from work without a reasonable excuse, or
intoxication with alcohol or illegal drugs while on the Company’s premises
during regular business hours, (ii) engaged in conduct which constituted a
material breach of Section
2
or
Section
3
of this
Agreement, (iii) was indicted (or equivalent under applicable law), convicted
of, or entered a plea of nolo contendere to the commission of a felony or crime
involving dishonesty or moral turpitude, or (iv) engaged in conduct which is
demonstrably and materially injurious to the financial condition, business
reputation, or otherwise of the Company or its subsidiaries or affiliates,
or
(v) perpetuated a fraud or embezzlement against the Company or its subsidiaries
or affiliates, and in each case the particular act or omission was not cured,
if
curable, in all material respects by the Executive within thirty (30) days
after
receipt of written notice from the Board which shall set forth in reasonable
detail the nature of the facts and circumstances which constitute Cause.
Notwithstanding the foregoing, the Executive shall not be deemed to have been
terminated for Cause unless there shall have been delivered to the Executive
a
copy of a resolution duly adopted by the Board. If the Company has reasonable
belief that the Executive has committed any of the acts described above, it
may
suspend the Executive (with or without pay) while it investigates whether it
has
or could have Cause to terminate the Executive. The Company may terminate the
Executive for Cause prior to the completion of its investigation; provided,
that, if it is ultimately determined that the Executive has not committed an
act
which would constitute Cause, the Executive shall be treated as if he were
terminated without Cause.
4
(iii) Termination
Without Cause.
The
Company, may, at any time, terminate the Executive’s employment by Company
without Cause by providing prior written notice thereof to the
Executive.
(iv) Resignation
for Good Reason.
The
Executive may terminate his employment by the Company for Good Reason (as
defined below) by providing written notice thereof to the Company (the
“Resignation
Notice”)
at
least forty-five (45) days prior to the effective date of the resignation,
which
notice shall set forth in reasonable detail the nature of the facts and
circumstances which constitute Good Reason and the Company shall have thirty
(30) days after receipt of the Resignation Notice to cure in all material
respects the facts and circumstances which constitute Good Reason. For purposes
of this Agreement, “Good
Reason”
shall
mean the occurrence, during the Employment Term, of any of the following actions
or failures to act, but in each case only if it is not consented to by the
Executive in writing: (a) a material adverse change in the Executive’s duties,
reporting responsibilities, titles or elected or appointed offices as in effect
immediately prior to the effective date of such change; (b) a material reduction
by the Company in the Executive’s Base Salary or annual bonus opportunity in
effect immediately prior to the effective date of such reduction, not including
any reduction resulting from changes in the market value of securities or other
instruments paid or payable to the Executive; or (c) any change of more than
50
miles in the location of the principal place of employment of the Executive
immediately prior to the effective date of such change. For purposes of this
definition, none of the actions described in clauses (a) and (b) above shall
constitute “Good Reason” with respect to the Executive if it was an isolated and
inadvertent action not taken in bad faith by the Company and if it is
remedied
by the Company within thirty (30) days after receipt of written notice thereof
given by the Executive (or, if the matter is not capable of remedy within thirty
(30) days, then within a reasonable period of time following such thirty (30)
day period, provided that the Company has commenced such remedy within said
thirty (30) day period); provided that “Good Reason” shall cease to exist for
any action described in clauses (a) and (b) above on the sixtieth
(60th)
day
following the later of the occurrence of such action or the Executive’s
knowledge thereof, unless the Executive has given the Company
written notice thereof prior to such date.
5
(v) Resignation
Without Good Reason.
The
Executive may, at any time, terminate the Executive’s employment by the Company
without Good Reason by providing thirty (30) days’ prior written notice thereof
to the Company.
(vi) Death;
Disability or Retirement.
The
Executive’s employment shall terminate immediately upon the Executive’s death,
Disability, or Retirement (each as defined below). For purposes of this
Agreement, “Disability”
means
the Executive is totally and permanently disabled as defined in the Company’s
Pension Plan and “Retirement”
means
a
resignation by the Executive after having reached age fifty-five (55), but
in no
event prior to September 30, 2008.
(g) Effect
of Termination
(i) Termination
upon the Expiration of the Employment Term.
Upon
the termination of the Executive’s employment pursuant to Section
1(f)(i),
the
Executive will be entitled to (A) payment of that portion of the Executive’s
then effective Annual Salary which has been earned but not yet paid through
and
including the last day of the Executive’s employment (the “Termination
Date”);
(B)
payment of any Bonus earned by the Executive under the terms and conditions
of
this Agreement prior to the Termination Date that remains unpaid; (C)
reimbursement of any reimbursable business expenses under Section
1(e)(v),
which
were incurred by the Executive through and including the Termination Date;
(D)
continuation of benefits to which the Executive is entitled under Section
1(e)(iii)
and
Section
1(e)(iv)
through
and including the Termination Date and; (E) the SERP that the Executive is
entitled to under Section
1(e)(vii)
(collectively, the “Accrued
Benefits”).
(ii) Termination
for Cause or Resignation Without Good Reason.
Upon
the Company’s termination of the Executive’s employment for Cause pursuant to
Section
1(f)(ii)
or the
Executive’s resignation without Good Reason pursuant to Section
1(f)(v),
Executive will be entitled to the Accrued Benefits.
Termination
Without Cause or Resignation for Good Reason.
Upon
the Company’s termination of the Executive’s employment without Cause pursuant
to Section
1(f)(iii)
or the
Executive’s resignation for Good Reason pursuant to
Section
1(f)(iv),
the
Executive shall be entitled to receive the Accrued Benefits and a lump sum
payment equal to (A) the amount of the Annual Base Salary the Executive would
have earned if he had continued to be employed with the Company during the
period commencing on the day following the Termination Date and ending on the
expiration of the Employment Term (the “Severance
Period”)
plus
(B) the Target Bonus.
The
Executive shall also be entitled to receive continuation of medical and
hospitalization benefits to which the Executive is entitled under Section
1(e)(iii)
during
the Severance Period; provided, however, that such benefits shall terminate
to
the extent that the Executive obtains comparable benefits coverage from another
employer during the Severance Period.
6
(iii) Death;
Disability or Retirement.
Upon
termination of the Executive’s employment pursuant to Section
1(f)(vi),
the
Executive or the Executive’s heirs, estate, personal representative or legal
guardian, as appropriate, will be entitled to receive the Accrued
Amounts.
(iv) Timing
of Payment and Release.
As a
condition of receiving from the Company the payments and benefits provided
for
under this Section
1(g)
which
the Executive otherwise would not be entitled to receive, the Executive
understands and agrees that, on the Termination Date, he will be required to
execute (and not revoke) a release of all claims against the Company in
substantially the form attached hereto as Exhibit 1 (the “Release”)
as may
be modified by the Company in good faith to reflect changes in law or its
employment practices. The Executive acknowledges that he has been advised in
writing to consult with an attorney prior to executing the Release. The
Executive agrees that he will consult with his attorney prior to executing
the
Release. The
Executive and the Company agree that the Executive has a period of seven (7)
days following the execution of the Release within which to revoke the Release.
The parties also acknowledge and agree that the Release shall not be effective
or enforceable until the seven (7) day revocation period expires. The date
on
which this seven (7) day period expires shall be the effective date of the
Release (the “Release
Effective Date”).
The
Company shall make all payments required under this Agreement, except to the
extent that such payments are to be made over time, within five (5) business
days following the Release Effective Date. In the event of a termination for
Cause or by reason of the Executive’s death, the Company shall make any payments
under this Section
1(g)
within
five (5) business days of the Termination Date, except to the extent that such
payments are to be made over time. The Executive understands that as used in
this Section
1(g)(iv),
the
“Company” includes its past, present and future officers, directors, trustees,
shareholders, employees, agents, subsidiaries, affiliates, distributors,
successors, and assigns, any and all employee benefit plans (and any fiduciary
of such plans) sponsored by the Company, and any other person related to the
Company.
Except
as
specifically provided in this Section
1(g)
or
required under applicable law, the Executive will not be eligible to receive
any
salary, bonus or other compensation or benefits described in Section
1(e)
with
respect to any future periods after the Termination Date; provided, however,
the
Executive shall have the right to receive all compensation and benefits to
which
he is entitled under any benefit plans of the Company to the extent he is fully
vested as of the effective date of the termination of the Executive’s employment
by the Company pursuant to the terms and conditions of such employee benefit
plans.
Section
2. Confidentiality.
For
purposes of this Section
2,
the
term “Company” shall include, in addition to the Company, its affiliates,
subsidiaries and any of their respective predecessors, successors and assigns.
The term “Company’s Business” shall mean the business of developing,
manufacturing, selling or distributing high-performance alloys for service
in
severe corrosion and high temperature applications.
7
(a) Confidential
Information.
As used
in this Agreement, “Confidential
Information”
means
any and all confidential, proprietary or other information, whether or not
originated by the Executive or the Company, which is in any way related to
the
past or present Company’s Business and is either designated as
confidential or not generally known by or available to the public. Confidential
Information includes, but is not limited to (whether or not reduced to writing
or designated as confidential) (i) information regarding the Company’s existing
and potential customers and vendors; (ii) any contacts (including the existence
and contents thereof and parties thereto) to which the Company is a party or
is
bound; (iii) information regarding products and services being purchased or
leased by or provided to the Company; (iv) information received by the Company
from third parties under an obligation of confidentiality, restricted,
disclosure or restricted use; (v) personnel and financial information of the
Company; (vi) information with respect to the Company’s products, services,
facilities, business methods, systems, trade secrets, technical know-how, and
other intellectual property; (vii) marketing and developmental plans and
techniques, price and cost data, forecasts and forecast assumptions, and
potential strategies of the Company; and (viii) any other information relating
to the Company which was obtained by the Executive in connection with his
employment by the Company, whether before, on or after the Effective
Date.
(b) Non-Disclosure
and Non-Use of Confidential Information.
The
Executive acknowledges that the Confidential Information of the Company is
a
valuable, unique asset of the Company and the Executive’s unauthorized use or
disclosure thereof could cause irreparable harm to the Company for which no
remedy at law could be adequate. Accordingly, the Executive agrees that he
shall
hold all Confidential Information of the Company in strict confidence and solely
for the benefit of the Company, and that, he shall not, directly or indirectly,
disclose or use or authorize any third party to disclose or use any Confidential
Information except (i) as required for the performance of the Executive’s duties
hereunder, (ii) with the express written consent of the Company, (iii) to the
extent that any such information is in or becomes in the public domain other
than as a result of the Executive’s breach of any of his obligations hereunder,
or (iv) where required to be disclosed by court order, subpoena or other
government process and in such event, the Executive shall cooperate with the
Company in attempting to keep such information confidential. The Executive
shall
follow all Company policies and procedures to protect all Confidential
Information and take any additional precautions necessary to preserve and
protect the use or disclosure of any Confidential Information at all times.
The
Company shall reimburse the Executive for all reasonable expenses and costs
he
may incur as a result of cooperating under this Section
2(b),
upon
receipt of proper documentation.
(c) Ownership
of Confidential Information.
The
Executive acknowledges and agrees that all Confidential Information is and
shall
remain the exclusive property of the Company, whether or not prepared in whole
or in part by the Executive and whether or not disclosed to or entrusted to
the
custody of the Executive. Upon the termination or resignation of his employment
by the Company, or at any other time at the request of the Company, the
Executive shall promptly deliver to the Company all documents, tapes, disks,
or
other storage media and any other materials, and all copies thereof in whatever
form, in the possession of the Executive pertaining to the Company’s Business,
including, but not limited to, any containing Confidential
Information.
(d) Survival.
The
Executive’s obligations set forth in this Section
2,
and the
Company’s rights and remedies with respect hereto, shall indefinitely survive
the termination of this Agreement and the Executive’s employment by the Company,
regardless of the reason therefor.
8
Section
3. Restricted
Covenants.
For
purposes of this Section
3,
the
term “Company” shall include, in addition to the Company, its affiliates,
subsidiaries and any of their respective predecessors, successors and
assigns.
(a) Non-Competition.
During
the Restricted Period and within the Restricted Area (each as defined in
subsection (c) below), the Executive shall not, directly or indirectly, perform
on behalf of any Competitor (as defined in subsection (c) below) the same or
similar services as those that the Executive performed for the Company during
the Executive’s employment by the Company or otherwise. In addition, the
Executive shall not, during the Restricted Period or within the Restricted
Area,
directly or indirectly engage in, own, manage, operate, join, control, lend
money or other assistance to, or participate in or be connected with (as an
officer, director, member, manager, partner, shareholder, consultant, employee,
agent, or otherwise), any Competitor.
(b) Non-Solicitation.
During
the Restricted Period, the Executive shall not, directly or indirectly, for
himself or on behalf of any Person (as defined in subsection (c) below), (i)
solicit or attempt to solicit any Customers (as defined in subsection (c) below)
or prospective Customers with whom the Executive had contact at any time during
the Executive’s employment by the Company; (ii) divert or attempt to divert any
business of the Company to any other Person; (iii) solicit or attempt to solicit
for employment, endeavor to entice away from the Company, recruit, hire, or
otherwise interfere with the Company’s relationship with, any Person who is
employed by or otherwise engaged to perform services for the Company (or was
employed or otherwise engaged to perform services for the Company, as of any
given time, within the immediately preceding twenty-four (24) month period);
(iv) cause or assist, or attempt to cause or assist, any employee or other
service provider to leave the Company; or (v) otherwise interfere in any manner
with the employment or business relationships of the Company or the business
or
operations then being conducted by the Company.
(c) Definitions.
For
purposes of this Section
3,
the
following definitions have the following meanings:
(i) “Competitor”
means
any Person that engages in a business that is the same as, or similar to, the
Company’s Business.
(ii) “Customer”
means
any Person which, as of any given date, used or purchased or contracted to
use
or purchase any services or products from Company within the immediately
preceding twenty-four (24) month period.
(iii) “Person”
means
any individual, corporation, partnership, joint venture, association, limited
liability company, joint-stock company, trust or unincorporated organization,
or
any governmental agency, officer, department, commission, board, bureau, or
instrumentality thereof.
9
(iv) “Restricted
Area”
means,
because the market for the Company’s Business is global or has the potential of
being global, and is not dependent upon the physical location or presence
of the Company, the Executive, or any individual or entity that may be in
violation of this Agreement, the broadest geographic region enforceable by
law
(excluding any location where this type of restriction is prohibited by law)
as
follows: (A) everywhere in the world that has access to the Company’s Business
because of the availability of the Internet; (B) everywhere in the world that
the Executive has the ability to compete with the Company’s Business through the
Internet; (C) each state, commonwealth, territory, province and other political
subdivision located in North America; (D) each state, commonwealth, territory
and other political subdivision of the United States of America; (E) Indiana
and
any state in which the Executive has performed any services for the Company;
(F)
any geographical area in which the Company has performed any services or sold
any products; (G) any geographical area in which the Company or any of its
subsidiaries have engaged in the Company’s Business which has resulted in
aggregate sales revenue of at least $25,000 during any year in the five (5)
year
period immediately preceding the commencement of the Restricted Period; (H)
any
state or other jurisdiction where the Company had an office at any time during
the Executive’s employment by the Company; (I) within one hundred (100) miles of
any location in which the Company had an office at any time during the
Executive’s employment by the Company; and (J) within one hundred (100) miles of
any location in which the Executive provided services for the
Company.
(v) “Restricted
Period”
means
the period of time during the Executive’s employment by the Company plus a
period of twelve (12) months from the Termination Date. In the event of a breach
of this Agreement by the Executive, the Restricted Period will be extended
automatically by the period of the breach.
(d) Survival.
The
Executive’s obligations set forth in this Section
3,
and the
Company’s rights and remedies with respect thereto, will remain in full force
and effect during the Restricted Period and until full resolution of any dispute
related to the performance of the Executive’s obligations during the Restricted
Period.
(e) Public
Company Exception.
The
prohibitions contained in this Section
3
do not
prohibit the Executive’s ownership of stock which is publicly traded provided
that (1) the investment is passive, (2) the Executive has no other involvement
with the company, (3) the Executive’s interest is less than five percent (5%) of
the shares of the company, and (4) the Executive makes full disclosure to the
Company of the stock at the time that the Executive acquires the shares of
stock.
Section
4. Assignment
of Inventions.
Any and
all inventions, improvements, discoveries, designs, works of authorship,
concepts or ideas, or expressions thereof; whether or not subject to patents,
copyrights, trademarks or service xxxx protections, and whether or not reduced
to practice, that are conceived or developed by the Executive while employed
with the Company and which relate to or result from the actual or anticipated
business, work, research or investigation of the Company (collectively,
“Inventions”),
shall
be the sole and exclusive property of the Company. The Executive shall do all
things reasonably requested by the Company to assign to and vest in the Company
the entire right, title and interest to any such Inventions and to obtain full
protection therefor. Notwithstanding the foregoing, the provisions of this
Agreement do not apply to an Invention for which no equipment, supplies,
facility, or Confidential Information of the Company was used and which
was developed entirely on the Executive’s own time, unless (a) the Invention
relates (i) to the Company’s Business, or (ii) or the Company’s actual or
demonstrably anticipated research or development, or (b) the Invention results
from any work performed by the Executive for the Company.
10
Section
5. General
(a) Reasonableness.
The
Executive has carefully considered the nature, extent and duration of the
restrictions and obligations contained in this Agreement, including, without
limitation, the geographical coverage contained in Section
3,
and the
time periods contained in Section
2
and
Section
3,
and
acknowledges and agrees that such restrictions are fair and reasonable in all
respects to protect the legitimate interests of the Company and that these
restrictions are designed for the reasonable protection of the Company’s
Business.
(b) Remedies.
The
Executive recognizes that any breach of this Agreement shall cause irreparable
injury to the Company, inadequately compensable in monetary damages.
Accordingly, in addition to any other legal or equitable remedies that may
be
available to the Company, the Executive agrees that the Company shall be able
to
seek and obtain injunctive relief in the form of a temporary restraining order,
preliminary injunction, or permanent injunction, in each case without notice
or
bond, against the Executive to enforce this Agreement. The Company shall not
be
required to demonstrate actual injury or damage to obtain injunctive relief
from
the courts. To the extent that any damages are calculable resulting from the
breach of this Agreement, the Company shall also be entitled to recover damages,
including, but not limited to, any lost profits of the Company and/or its
affiliates or subsidiaries. For purposes of this Agreement, lost profits of
the
Company shall be deemed to include all gross revenues resulting from any
activity of the Executive in violation of this Agreement and all such revenues
shall be held in trust for the benefit of the Company. Any recovery of damages
by the Company shall be in addition to and not in lieu of the injunctive relief
to which the Company is entitled. In no event will a damage recovery be
considered a penalty in liquidated damages. In addition, in any action at law
or
in equity arising out of this Agreement, the prevailing party shall be entitled
to recover, in addition to any damages caused by a breach of this Agreement,
all
costs and expenses, including, but not limited to, reasonable attorneys’ fees,
expenses, and court costs incurred by such party in connection with such action
or proceeding. Without limiting the Company’s rights under this Section
5(b)
or any
other remedies of the Company, if a court of competent jurisdiction determines
that the Executive breached any of the provisions of Section
2
or
Section
3,
Company
will have the right to cease making any payments or providing any benefits
otherwise due to the Executive under the terms and conditions of this
Agreement.
(c) Claims
by Executive.
The
Executive acknowledges and agrees that any claim or cause of action by the
Executive against the Company shall not constitute a defense to the enforcement
of the restrictions and covenants set forth in this Agreement and shall not
be
used to prohibit injunctive relief.
(d) Amendments.
This
Agreement may not be modified, amended, or waived in any manner except by an
instrument in writing signed by both parties to this Agreement.
11
(e) Waiver.
The
waiver by either party of compliance by the other party with any provision
of
this Agreement shall not operate or be construed as a waiver of any other
provision of this Agreement (whether or not similar), or a continuing waiver,
or
a waiver of any subsequent breach by a party of any provision of this
Agreement.
(f) Governing
Law; Jurisdiction.
The
laws of the State of New York shall govern the validity, performance,
enforcement, interpretation, and other aspects of this Agreement,
notwithstanding any state’s choice of law provisions to the contrary. The
parties intend the provisions of this Agreement to supplement but not displace,
their respective obligations and responsibilities under the New York and Indiana
Uniform Trade Secrets Act. Any proceeding to enforce, interpret, challenge
the
validity of, or recover for the breach of any provision of, this Agreement
may
be filed in the courts of the State of Indiana or the United States District
Court sitting in Indianapolis, Indiana, and the parties hereto expressly waive
any and all objections to personal jurisdiction, service of processor venue
in
connection therewith.
(g) Complete
Agreement; Release.
This
Agreement constitutes a complete and total integration of the understanding
of
the parties with respect to the subject matter hereof and thereof and supersedes
all prior or contemporaneous negotiations, commitments, agreements, writings,
and discussions with respect to the subject matter of this Agreement, including
but not limited to the Prior Agreement. The Executive hereby unconditionally
releases and discharges the Company from any and all claims, causes of action,
demands, lawsuits or other charges whatsoever, known or unknown, directly or
indirectly related to the Prior Agreement.
(h) Severability.
If a
court having proper jurisdiction holds a particular provision of this Agreement
unenforceable or invalid for any reason, that provision shall be modified only
to the extent necessary in the opinion of such court to make it enforceable
and
valid and the remainder of this Agreement shall be deemed valid and enforceable
and shall be enforced to the greatest extent possible under the then existing
law. In the event the court determines such modification is not possible, the
provision shall be deemed severable and deleted, and all other provisions of
this Agreement shall remain unchanged and in full force and effect.
(i) Enforceability
in Jurisdictions.
The
parties hereto intend to and xxxxx xxxxxx jurisdiction to enforce the covenants
contained in Section
2 and 3
above
upon the courts of any state within the geographical scope of such covenants.
If
the courts of any one or more of such states shall hold any of the previous
covenants unenforceable by reason of the breadth of such scope or otherwise,
it
is the intention of the parties hereto that such determination not bar or in
any
way affect the Company’s rights to the relief provided above in the courts of
any other states within the geographical scope of such covenants, as to breaches
of such covenants in such other respective jurisdictions, the above covenants
as
they relate to each state being, for this purpose, severable into diverse and
independent covenants.
(j) Fair
Dealing.
The
Executive acknowledges that the Company has negotiated this Agreement in good
faith and has been fair in its dealing with the Executive. The Executive shall
not raise any defense and expressly waives any defense against the Company
based
upon any alleged breach of good faith or fair dealing by the Company in
connection with this Agreement.
12
(k) Counterparts.
This
Agreement may be executed in two (2) counterparts, each of which shall be deemed
an original but both of which together shall constitute one and the same
Agreement. Facsimile transmission of the executed version of this Agreement
or
any counterpart hereof shall have the same force and effect as the
original.
(l) Executive
Warranties.
The
Executive warrants and represents to the Company that the execution and
performance of this Agreement does not and shall not violate any express or
implied obligations of the Executive to any other person and that all Executive
shall inform any prospective employer about the existence of this Agreement
before accepting employment by such employer.
(m) Headings.
The
heads of the Sections of this Agreement are inserted for convenience only and
shall not be deemed to constitute part of this Agreement or to affect the
construction of this Agreement.
(n) Third
Party Beneficiaries.
The
Company’s affiliates and subsidiaries are expressly made third party
beneficiaries of this Agreement.
(o) Notices.
Any
notice required or permitted hereunder shall be personally delivered or mailed
by certified mail, return receipt requested, to the addresses of the parties
set
out on the signature page hereto, or as changed from time to time by notice
as
provided herein.
(p) Successors
and Assigns.
The
Executive shall not assign or transfer any of his rights or obligations under
this Agreement to any individual or entity. The Company may assign its rights
hereunder to any of its affiliates or to any individual or entity who or that
shall acquire or succeed to, by operation of law, or otherwise, all or
substantially all of the assets of the Company or the Company’s Business. All
provisions of this Agreement are binding upon, shall inure to the benefit of,
and are enforceable by or against, the parties and their respective heirs,
executors, administrators or other legal representatives and permitted
successors and assigns.
(q) OPPORTUNITY
TO CONSUULT COUNSEL.
THE
EXECUTIVE ACKNOWLEDGES THAT HE HAS CAREFULLY READ THIS AGREEMENT AND HAS BEEN
GIVEN ADEQUATE OPPORTUNITY, AND HAS BEEN ENCOURAGED BY THE COMPANY, TO CONSULT
WITH LEGAL COUNSEL OF HIS CHOICE CONCERNING THE TERMS HEREOF BEFORE EXECUTING
THIS AGREEMENT.
[SIGNATURE
PAGE FOLLOWS].
13
IN
WITNESS WHEREOF,
the
parties have entered into this Agreement as of the date first written
above.
|
XXXXXX
INTERNATIONAL, INC.
|
||
|
By:
|
/ss/
Xxxx
X. Xxxxx
|
|
|
Name:
Xxxx X. Xxxxx
Title:
Chairman, Board of Directors
|
||
|
EXECUTIVE
|
||
|
By:
|
/ss/
Xxxxxxx
X. Xxxxx
|
|
|
Xxxxxxx
X. Xxxxx
|
||
|
0000
Xxxxxxx Xxxx
|
||
|
Xxxxxxxx,
XX 00000
|
||
14
