EXECUTIVE EMPLOYMENT AGREEMENT
Exhibit
10.1
THIS
AGREEMENT, effective as of May 5, 2008, by and between LAPOLLA INDUSTRIES, INC. a
Delaware corporation (the “Company”) and XXXXXXX X. XXXXXX (the
“Executive”).
WHEREAS,
Executive is currently employed as President and Chief Executive Officer of the
Company; and
WHEREAS,
Company and Executive previously entered into an Executive Employment Agreement
effective as of July 25, 2005 (the “Prior Agreement”); and
WHEREAS,
Company and Executive have determined that it would be in each of their best
interests to amend certain provision of the Prior Agreement and to enter into a
new agreement subject to the terms and conditions hereinafter set forth in place
of the Prior Agreement; and
WHEREAS,
the Company has determined to provide the Executive with compensation and other
benefits on the terms and conditions set forth in this Agreement (the
“Agreement”), and the Executive is willing to accept such terms and conditions
and to continue to perform services for the Company on the terms and conditions
hereinafter set forth.
NOW
THEREFORE, in consideration of the respective agreements of the parties
contained herein, it is agreed as follows:
1. EMPLOYMENT
TERM. Subject to the provisions of Section 4 hereof, this
agreement shall be effective commencing on May 5, 2008 and ending on December
31, 2010 (the “Term”).
2. POSITIONS;
DUTIES.
2.1. The
Company agrees to employ the Executive, and the Executive agrees to serve during
the term hereof, as President and Chief Executive Officer of the
Company.
2.2 While
employed, the Executive agrees to devote all of his working time and efforts
(excluding any periods of vacation and sick leave and any other permitted
absences), using his ability, experience and talent, to the performance of
services, duties and responsibilities in connection with the positions named
above. The Executive shall perform such duties and exercise such powers,
commensurate with his position, and shall be subject to such restrictions, as
the Chairman of the Board and Board of Directors of the Company shall from time
to time assign to him or impose. Provided, however, Executive’s
duties, powers and responsibilities shall at all times be consistent with the
duties, powers and responsibilities of a President and Chief Executive
Officer.
2.3 Nothing
in this Agreement shall preclude the Executive from (a) engaging in charitable
and community affairs (including serving on the board of any not-for-profit
organization) so long as, in the reasonable determination of the Board of
Directors, such activities do not interfere with his duties and responsibilities
hereunder; (b) managing any passive investment made by him in publicly traded
equity securities or other property (provided that no such investment may exceed
5% of the equity of any entity without the prior approval of the Board of
Directors); or (c) serving, subject to the prior approval of the Board of
Directors, as a member of corporate boards of directors or as a trustee of any
other corporation, association or entity.
3. COMPENSATION AND RELATED
MATTERS.
3.1 Base
Compensation. The Company shall pay the Executive a base
salary (“Base Salary”) calculated at an annual rate of $350,000. The Base Salary
may be increased in the discretion of the Board during the Employment Term and,
as so increased, shall not be decreased and shall constitute “Base Salary”
hereunder.
3.2 Annual
Bonus. As determined by the Compensation Committee of the
Board of Directors, Executive shall be eligible for bonus consideration
(“Bonus”) as and if bonuses are paid to other Executives on an annual
basis.
3.3 Transaction
Bonus. In addition to his Base Salary, provided Executive is
still employed by the Company upon the consummation of a Change in Control (as
defined in Section 4.7 below), or in the event Executive’s employment is
terminated within one year immediately preceding the consummation of a Change in
Control (other than by the Company for “Cause” as defined below or by Executive
without “Good Reason” as defined below), the Executive shall be entitled to
receive a bonus (the “Transaction Bonus”) in addition to any other payments or
benefits applicable thereto under this Agreement. The Transaction Bonus shall be
in an amount equal to six percent (6%) of the “Transaction Value”, which means
the total amount of consideration paid in respect of the transaction that
resulted in the Change in Control. The Transaction Bonus shall be
paid at the same time and in the same form of consideration (e.g., cash, stock
in the acquiring company, promissory note or a combination thereof) as is the
consideration received by the holders of the majority of the outstanding voting
securities of the Company who participate in the transaction. In the
Company’s sole and absolute discretion, it may pay in cash all or any portion of
the Transaction Bonus that would otherwise be paid in a form of consideration
other than cash pursuant to this Section. Upon request and at his
sole expense, Executive shall be entitled to have the Company’s outside auditors
prepare a full and complete accounting of the calculation of the Transaction
Value and the Transaction Bonus.
3.4 Automobile. During
the Employment Term, Executive shall be entitled to the use of an automobile and
the Company shall reimburse the Executive for all reasonable automobile expenses
incurred by him.
3.5 Employee Benefit Programs,
Plans and Practices. During the Term, the Executive shall be
entitled to participate in all employee pension, welfare and fringe benefit
programs, plans and practices (including, without limitation, the Company’s
vacation plan under which Executive is entitled to three (3) weeks of paid
vacation time per year, up to seven (7) days of which may be carried over to the
following year without the written consent of the Company), and any incentive
compensation plans, all in accordance with the terms thereof and subject to the
changes that may be made to them during the Term, which the Company makes
available to its executives.
3.6 Expenses. The
Executive is authorized to incur reasonable expenses in carrying out his duties
and responsibilities under this Agreement, including, without limitation,
expenses for travel and similar items related to such duties and
responsibilities. The Company will reimburse the Executive for all such expenses
upon presentation by the Executive from time to time of appropriately itemized
and approved (consistent with the Company’s policy) accounts of such
expenditures.
3.7 Withholding
Taxes. The Company shall have the right to deduct or withhold
from all payments due to Executive hereunder any and all sums required for any
and all federal, social security, state and local taxes, assessments or charges
now applicable or that may be enacted and become applicable in the
future.
4. TERMINATION OF
EMPLOYMENT.
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4.1 Termination by Company
Without Cause or by Executive with Good Reason During the
Term. If this Agreement and the Executive’s employment
hereunder are terminated during its term by the Company without “Cause” (as
defined below) or by the Executive with “Good Reason” (as defined below), the
Executive shall be entitled to the following compensation and
benefits:
(a) A
severance amount equal to the lesser of (i) twenty-four (24) months Base Salary;
or (ii) Base Salary for the remainder of the Term, paid in equal monthly
installments. The amount of any severance otherwise payable to
Executive shall be reduced by the amount of earned income to which Executive
shall be entitled for services performed during the severance payment period for
other than the Company;
(b) The
product of (i) the Value (as defined below), as of the last day of the calendar
year containing the Termination Date, of any equity or equity based awards
granted under any plans or other arrangements, if any, they may be adopted or
implemented by Company after May 5, 2008, which Executive can show that he
reasonably would have received had he remained employed by the Company through
the end of the calendar year containing the Termination Date, or four (4) months
after the Termination Date, whichever is greater, multiplied by (ii) a fraction,
the numerator of which is the number of days in the calendar year in which the
Date of Termination occurs through the Termination Date and the denominator of
which is 365, but only to the extent not previously vested, exercised and/or
paid. For purposes of this paragraph, the Value of any equity or
equity based awards shall be determined by the Company’s independent
accountants, whose determination shall be final; and
(c) Reimbursement
for reasonable and necessary expenses incurred by the Executive on behalf of the
Company during the period ending on the Termination Date;
(d) To
the extent not theretofore paid or otherwise provided for under this Agreement,
Company shall timely pay or provide to Executive, any other amounts or benefits
which Executive is then entitled to receive through the Termination Date under
any plan, program, policy or practice or contract or agreement maintained by the
Company for the benefit of Executive, including any unused vacation that is
accrued and unpaid as of the Termination Date; and
(e) Health
benefits. For twelve (12) months from the Termination Date, continued
participation in any plan(s) providing medical, hospitalization and dental
coverage for Executive as of the Termination Date, subject to the same terms and
conditions, including but not limited to those requiring contributions by
Executive, as were applicable to Executive immediately prior to the Termination
Date. Any coverage to be provided for Executive under this paragraph
shall be conditioned upon his timely election of COBRA or any other laws
providing for continuation of coverage upon employment termination, effective as
of the Termination Date. If, for any reason, Company’s plan(s) do not
permit such coverage subsequent to termination of employment, Company will, to
the extent it is able to do so, provide Executive with similar coverage (with
the same after tax effect) outside of such plan(s).
4.2 Except
as otherwise provided in this Agreement, all payments required to be paid by the
Company to the Executive pursuant to Section 4.1 are payable on the Termination
Date or as soon thereafter as is practical based upon the nature of the
payment.
4.3 Termination by Company For
Cause or by Executive Without Good Reason. If the
Company hereunder terminates Executive’s employment at any time for Cause (as
defined below) or Executive terminates his employment without Good Reason,
Executive shall have no right to any bonuses, salaries, benefits or other
compensation other than those accrued through the date of employment termination
or required by law to be provided.
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4.4 Termination On Account of
Death or Disability. Company shall treat termination of
Executive’s employment on account of his Death or Disability as a Termination
without Cause for purposes of this Agreement. In the event of
Executive’s Death, the Termination Date shall be his date of
death. In the event of Executive’s Disability, the Termination Date
shall be the date that is five (5) days after the date on which Company gives
Executive written notice of termination of employment on account of his
Disability. Such written notice may be given by Company at any time
after Executive has suffered a physical or mental illness that renders him
incapable of fulfilling his obligations under this Agreement, and such physical
or mental illness existed and rendered him incapable of fulfilling his
obligations for a period of at least ninety (90) days within a consecutive one
hundred and eighty (180) day period. The Company’s determination that
Executive is incapable of fulfilling his obligations under this Agreement shall
be final and binding in the absence of fraud.
4.5 As
used herein, the term “Cause” shall mean (i) willful malfeasance or willful
misconduct by Executive in connection with his employment, (ii) continuing
refusal by Executive to perform his duties hereunder or follow any lawful
direction of the Board, (iii) any material breach of the provisions of Sections
12 or 13 of this Agreement by Executive, (iv) engaging in conduct detrimental to
the interest or reputation of the Company, without regard to whether such
conduct was in connection with the Executive’s employment, or (v) the
Executive’s conviction of, or plea of nolo contendere to, a felony (other than a
traffic violation), which, in each event in (i), (ii) or (iii), actually has a
material effect on the Company and its business. The cessation of employment of
the Executive shall not be deemed to be for Cause unless and until there shall
have been delivered to the Executive a copy of a resolution duly adopted by the
affirmative vote of the Board at a meeting of the Board called and held for such
purpose (after reasonable notice is provided to the Executive and the Executive
is given an opportunity, together with counsel, to be heard before the Board),
finding that, based upon a reasonable good faith determination of the Board, the
Executive is guilty of the conduct described above, and specifying the
particulars thereof in detail. The Executive shall have ten (10) days after the
date that such written notice has been given to the Executive in which to cure
such conduct, to the extent such cure is possible.
4.6 As
used herein, the term “Good Reason” shall mean (i) a reduction in the
Executive’s Base Salary; (ii) a substantial diminution of the Executive’s duties
and responsibilities; or (iii) a relocation of the Executive’s primary workplace
that is not agreed to by him and is to a location that is greater than fifty
(50) miles from Executive’s primary workplace as of the date of this
Agreement. The Company’s employment of another officer in a
newly created position or otherwise, at a position beneath that of the
Executive, shall not be deemed to constitute, or result in, a substantial
diminution of the Executive’s duties or responsibilities for purposes of this
Agreement.
4.7 Termination following a
Change in Control. If the Company or any successor terminates
this Agreement at any time during the Term following a “Change in Control” (as
defined below) of the Company: (i) Executive shall be entitled to an
amount equal to the Base Salary which would otherwise be payable over the
remaining term of this Agreement, payable in a lump sum; and (ii) any
outstanding Awards (including substituted shares of the acquiring or surviving
Company in the case of a merger or acquisition) held by Executive or other
benefits under any Company plan or program, which have not vested in accordance
with their terms will become fully vested and exercisable at the time of such
termination. “Change in Control” means an Ownership Change Event or
series of related Ownership Change Events (collectively, a “Transaction”) in which the
stockholders of the Company immediately before the Transaction do not retain
immediately after the Transaction, direct or indirect beneficial ownership of
more than fifty percent (50%) of the total combined voting power of the
outstanding voting securities of the Company, or in the event of an ownership
Change Event, the entity to which the assets of the Company were
transferred. An “Ownership Change Event”
shall be deemed to have occurred if any of the following occurs with respect to
the Company: (i) the direct or indirect sale or exchange by the stockholders of
the Company of all or substantially all of the voting stock of the Company; (ii)
a merger or consolidation in which the Company is a party; (iii) the sale,
exchange, or transfer of all or substantially all of the assets of the Company
(other than a sale, exchange or transfer to one or more subsidiaries of the
Company); or (iv) a liquidation or dissolution of the Company. The
sole exception to Change in Control and Ownership Change Event as described
above shall be any Change in Control or Ownership Change Event that may result
from the death or incapacity of Xxxxxxx X. Xxxxx wherein his interest is
transferred to his heirs only. In such event for the purposes hereof,
no Change in Control or Ownership Change Event shall be deemed to have
occurred.
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4.8 Release of
Claims. Upon good and valuable consideration, the receipt of
which the Executive and the Company each hereby acknowledge, upon termination of
the Executive’s employment for any reason set forth in Section 4, with the
exception of the reasons for termination provided under Section 4.3, the Company
and the Executive agree to execute a release of claims, substantially in the
form attached hereto as Exhibit A, with
respect to claims that arise on or prior to the date of the execution of the
release. The Executive’s execution of such release shall be a condition
precedent to the payment of any of the compensation and benefits referred to in
this Section 4.
4.9 NOTICE OF
TERMINATION. Any purported termination by the Company or by
the Executive shall be communicated by written notice of termination to the
Executive or the Company, respectively, delivered on or prior to the effective
date of such termination.
5. TERMINATION
DATE. “Termination Date” shall mean, in the case of the
Executive’s death, his date of death and, in all other cases, the last day of
the Executive’s employment with the Company hereunder.
6. SUCCESSORS; BINDING
AGREEMENT.
6.1 This
Agreement shall be binding upon and shall inure to the benefit of the Company,
its successors and assigns and, at the time of any such succession or
assignment, the Company shall require any successor or assign to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession or
assignment had taken place. The term the “Company” as used herein shall include
such successors and assigns. The term “successors and assigns” as used herein
shall mean a corporation or other entity acquiring ownership, directly or
indirectly, of all or substantially all the assets and business of the Company
(including this Agreement) whether by operation of law or
otherwise.
6.2 Neither
this Agreement nor any right or interest hereunder shall be assignable or
transferable by the Executive, his beneficiaries or legal representatives,
except by will or by the laws of descent and distribution. This Agreement shall
inure to the benefit of and be enforceable by the Executive’s legal personal
representative.
7. NOTICE. For
the purpose of this Agreement, notices and all other communications provided for
in the Agreement (including a notice of termination of employment) shall be in
writing and shall be deemed to have been duly given when personally delivered or
sent by certified mail, return receipt requested, postage prepaid, addressed to
the respective addresses last given by each party to the other, provided that
all notices to the Company shall be directed to the attention of the Board with
a copy to the secretary of the Company. All notices and communications shall be
deemed to have been received on the date of delivery thereof or on the third
business day after the mailing thereof, except that notice of change of address
shall be effective only upon receipt.
8. NON-EXCLUSIVITY OF
RIGHTS. Nothing in this Agreement shall prevent or limit the
Executive’s continuing or future participation in any benefit, bonus, incentive
or other plan or program provided by the Company and for which the Executive may
qualify, nor shall anything herein limit or reduce such rights as the Executive
may have under any other agreements with the Company. Amounts which
are vested benefits or which the Executive is otherwise entitled to receive
under any plan or program of the Company shall be payable in accordance with
such plan or program.
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9. MISCELLANEOUS. No
provision of this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing and signed by the
Executive and the Company. No waiver by either party hereto at any
time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreement or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by either party which are not expressly set forth in this
Agreement. No additional compensation provided under any benefit or compensation
plans to the Executive shall be deemed to modify or otherwise affect the terms
of this Agreement or any of the Executive’s entitlements hereunder.
10. GOVERNING
LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware, without reference
to principles of conflicts of laws.
11. SEVERABILITY. The
provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof.
12. NONSOLICITATION;
NONCOMPETITION
12.1 The
Executive hereby covenants and agrees that at all times during the period of his
employment with the Company and for two years thereafter (the “Restriction
Period”), he shall not, either directly or indirectly, for himself or for or
through any third-party, without the prior written consent of the Board, (i)
solicit or take any action to willfully or intentionally cause the solicitation
of any person who as of the Termination Date, or at any time during the two year
period immediately preceding the Termination Date, is a “Client” of the Company
(as hereinafter defined) to transact any business with a “Competitive
Enterprise” (as hereinafter defined) or discontinue business, in whole or in
part with the Company; (ii) willfully or intentionally interfere with or damage
any relationship between a Client and the Company, or (iii) solicit any person
employed by, or performing services in any other capacity, including but not
limited to as an independent contractor or distributor, on the Termination Date
or at any time within the immediately preceding two year period, for the Company
or any of its subsidiaries, to apply for or accept employment with, or perform
services in any other capacity for, a Competitive Enterprise or otherwise
encourage or entice such person to leave is position with the Company or any of
its subsidiaries.
12.2 The
Executive hereby covenants and agrees that during the Restriction Period, the
Executive shall not, either directly or indirectly, for himself or for or
through any third party, (a) accept business which is substantially similar to
the business of the Company from any individual or entity that obtained the
goods or services of, or purchased goods or services from, the Company during
the two (2) year period immediately prior to the Termination Date; (b) accept
business from any Client of the Company (the identity of and information
concerning which constitute trade secrets and Confidential Information of the
Company) on behalf of any individual or entity in connection with any business
substantially similar to the business of the Company, or (c) make known the
names and addresses of such customers or any information relating in any manner
to the Company’s trade or business relationships with such customers, other than
in connection with the performance of Executive’s employment with
Company.
12.3 The
Executive hereby covenants and agrees that, except as otherwise provided in this
section, at all times during the Restriction Period, he shall not, without the
prior written consent of the Board, be engaged in or have a financial interest
in any business that is a Competitive Enterprise, or otherwise engage in any
activity that is a Competitive Enterprise. Notwithstanding the
foregoing, in the event the Executive is terminated without Cause or resigns for
Good Reason, the restrictions on competition contained in this Section 12.3
shall only apply during the period for which he is entitled to severance
payments under Section 4.1 hereof.
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Upon the
expiration of the term of this Agreement or any renewal thereof, the
restrictions on competition contained in this Section 12.3 shall not apply if
the Company, in its discretion, elects not to offer Executive continued
employment upon terms and conditions substantially equivalent to those that were
in effect immediately prior to the expiration of the term of this Agreement or
any renewal thereof.
12.4. For
purposes of this Agreement, the term “Competitive Enterprise” shall mean any
business which is in competition with a business engaged in by the Company or
any of its subsidiaries or affiliates in any state of the United States or in
any foreign country in which any of them are engaged in business at the time of
such termination of employment for as long as they carry on a business therein.
Notwithstanding the preceding sentence, the Executive shall not be prohibited
from owning less than five (5%) percent of any publicly traded
corporation.
12.5. For
purposes of this Agreement, “Client” shall mean (a) an existing client or
customer of the Company or any of its subsidiaries; or (b) an intended client or
customer of the Company or any of its subsidiaries with whom the Company has
devoted a substantive amount of resources pursuing, and as a direct result there
from has a reasonable belief that there will be an imminent purchase order or
other agreement to purchase Company’s goods and/or services.
12.6 The
Executive acknowledges, agrees and confirms that the restrictions contained in
this Section are necessary to protect the legitimate business interests of the
Company and shall be enforceable to the fullest extent permitted by applicable
law. Therefore, to the extent any court of competent jurisdiction
shall determine that any portion of the foregoing restrictions is excessive,
such provision shall not be entirely void, but rather shall be limited or
revised only to the extent necessary to make it enforceable. Specifically, if
any court of competent jurisdiction should hold that any portion of the
foregoing description is overly broad as to one or more states of the United
States or one or more foreign jurisdictions, then that state or states or
foreign jurisdiction or jurisdictions shall be eliminated from the territory to
which the restrictions of this Section 12 applies and the restrictions shall
remain applicable in all other states of the United States and foreign
jurisdictions.
13. CONFIDENTIAL
INFORMATION. The Executive agrees to keep secret and retain in
the strictest confidence all confidential matters which relate to the Company,
its subsidiaries and affiliates, including without limitation, customer lists,
client lists, trade secrets, pricing policies and other business affairs of the
Company, its subsidiaries and affiliates learned by him from the Company or any
such subsidiary or affiliate or otherwise before or after the date of this
Agreement, and not to disclose any such confidential matter to anyone outside of
the Company or any of its subsidiaries or affiliates, whether during or after
his period of service with the Company, except (i) as such disclosure may be
required or appropriate in connection with his work as an employee of the
Company or (ii) when required to do so by a court of law, by any governmental
agency having supervisory authority over the business of the Company or by any
administrative or legislative body (including a committee thereof) with apparent
jurisdiction to order him to divulge, disclose or make accessible such
information. The Executive agrees to give the Company advance written notice of
any disclosure pursuant to clause (ii) of the preceding sentence and to
cooperate with any efforts by the Company to limit the extent of such
disclosure. Upon request by the Company, the Executive agrees to deliver
promptly to the Company upon termination of his services for the Company, or at
any time thereafter as the Company may request, all Company, subsidiary or
affiliate memoranda, notes, records, reports, manuals, drawings, designs,
computer files in any media and other documents (and all copies thereof)
relating to the Company’s or any subsidiary’s or affiliate’s business and all
property of the Company or any subsidiary or affiliate associated therewith,
which he may then possess or have under his direct control, other than personal
notes, diaries, rolodexes and correspondence.
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14. OWNERSHIP OF DEVELOPMENTS
AND OTHER RIGHTS. All copyrights, patents, trade secrets, or
other intellectual property rights associated with any ideas, concepts,
techniques, inventions, formulations, processes or works of authorship, or other
property or rights of a similar nature, developed or created by Executive during
the Term or at any other time while performing services for on or behalf of the
Company, directly or indirectly, shall belong exclusively to the
Company.
15. REMEDY. Should
the Executive engage in or perform, either directly or indirectly, any of the
acts prohibited by Sections 12 or 13 hereof, or treats as his own any
developments belonging to Company pursuant to Section 14 hereof, it is agreed
that the Company shall be entitled to full injunctive relief, to be issued by
any competent court of equity, enjoining and restraining the Executive and each
and every other person, firm, organization, association, or corporation
concerned therein, from the continuance of such violative acts. The foregoing
remedy available to the Company shall not be deemed to limit or prevent the
exercise by the Company of any or all further rights and remedies, which may be
available to the Company hereunder or at law or in equity.
16. ENTIRE AGREEMENT; WAIVER OF
CLAIMS. This Agreement constitutes the entire agreement
between the parties hereto with respect to the terms of the Executive’s
employment with the Company and supersedes the Prior Agreement and all other
prior agreements, if any, understandings and arrangements, oral or written,
between the parties hereto with respect to such subject matter, and the terms
and conditions of the Executive’s employment with the Company shall be governed
solely pursuant to the terms of this Agreement (which shall include the plans or
programs referred to in this Agreement).
17. COUNTERPARTS. This
Agreement may be executed in counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument.
18. CONSULTATION AND REVIEW BY
INDEPENDENT COUNSEL. Executive represents to Company that he
has consulted with and been advised by independent counsel of his own choosing
in connection with the negotiation of the form and substance of this Agreement
prior to its execution.
19. INDEMNIFICATION. The
Company shall indemnify the Executive against all lawsuits, losses, claims,
expenses, or other liabilities of any nature by reason of the fact that he (a)
is or was an officer, director, employee, or agent of the Company or any of its
subsidiaries or affiliates, or (b) while he is or was a director, officer,
employee or agent of the Company, the Company or any of their subsidiaries or
affiliates, is or was servicing at the request of the Company as a director,
officer, partner, venture, proprietor, trustee, employee, agent or similar
functionary of another corporation, partnership, joint venture, trust, employee
benefit plan or other entity.
20. NON-BINDING
MEDIATION. In the event of a dispute under this Agreement,
each Party agrees to submit to non-binding mediation prior to the commencement
of any legal or administrative proceeding against the other for any alleged
violation of the Agreement. If the parties are unable to agree upon
an individual to serve as mediator, they shall each select an attorney or other
individual recognized as an approved mediator, and those two individuals
selected shall jointly agree upon the selection of a third individual who shall
alone serve as mediator. If such parties are also unable to agree
upon an individual to serve as mediator, the requirement of each party to submit
to non-binding mediation under this Agreement shall be waived.
IN
WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
duly authorized representative and the Executive has executed this Agreement as
of the day and year first above written.
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XXXXXXX
INDUSTRIES, INC.
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By:
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/s/ Xxxxxxx X.
Xxxxx
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Xxxxxxx
X. Xxxxx, Chairman of the Board
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EXECUTIVE:
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/s/ Xxxxxxx X.
Xxxxxx
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Xxxxxxx
X. Xxxxxx
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EXHIBIT
A
MUTUAL RELEASE
(a)
Xxxxxxx X. Xxxxxx (the “Releasor”), for and
in consideration of benefits provided pursuant to the Employment and Severance
Agreement (the “Agreement”), dated as
of May 5, 2008, by and between the Releasor and XxXxxxx Industries, Inc. (the
“Company”),
does for himself and his, heirs, executors, administrators, successors and
assigns, hereby now and forever, voluntarily, knowingly and willingly release
and discharge the Company and its parents, subsidiaries and affiliates
(collectively, the “Company Group”),
together with their respective present and former partners, officers, directors,
employees and agents, and each of their predecessors, heirs, executors,
administrators, successors and assigns (but as to any partner, officer,
director, employee or agent, only in connection with, or in relationship to, his
or its capacity as a partner, officer, director, employee or agent of the
Company and its subsidiaries or affiliates and not in connection with, or in
relationship to, his or its personal capacity unrelated to the Company or its
subsidiaries or affiliates) (collectively, the “Company Releasees”)
from any and all charges, complaints, claims, promises, agreements,
controversies, causes of action and demands of any nature whatsoever, known or
unknown, suspected or unsuspected, which against the Company Releasees, jointly
or severally, Releasor or Releasor’s heirs, executors, administrators,
successors or assigns ever had or now have by reason of any matter, cause or
thing whatsoever arising from the beginning of time to the time Releasor
executes this release arising out of or relating in any way to Releasor’s
employment relationship with the Company, including but not limited to, any
rights or claims arising under any statute or regulation, including the Age
Discrimination in Employment Act of 1967, Title VII of the Civil
Rights Act of 1964, the Civil Rights Act of 1991, the Americans with
Disabilities Act of 1990, or the Family and Medical Leave Act of 1993, each as
amended, or any other federal, state or local law, regulation, ordinance or
common law, or under any policy, agreement, understanding or promise, written or
oral, formal or informal, between any Company Releasee and
Releasor. Releasor shall not seek or be entitled to any recovery, in
any action or proceeding that may be commenced on Releasor’s behalf in any way
arising out of or relating to the matters released under this Release.
Notwithstanding the foregoing, nothing herein shall release any Company Releasee
from any claim or damages based on (i) the Releasor’s rights under the
Agreement, (ii) any right or claim that arises after the date the Releasor
executes this release, (iii) the Releasor’s eligibility for indemnification in
accordance with applicable laws or the certificate of incorporation or by-laws
of the Company (or any affiliate or subsidiary) or any applicable insurance
policy, with respect to any liability the Releasor incurs or incurred as an
officer or employee of the Company or any affiliate or subsidiary (including as
a trustee or officer of any employee benefit plan) or (iv) any right the
Releasor may have to obtain contribution as permitted by law in the event of
entry of judgment against the Releasor as a result of any act or failure to act
for which the Releasor and the Company or any affiliate or subsidiary are held
jointly liable.
(b) The
Releasor has been advised to consult with an attorney of the Releasor’s choice
prior to signing this release, has done so and enters into this release freely
and voluntarily.
(c) The
Releasor has had in excess of twenty-one (21) calendar days to consider the
terms of this release. Once the Releasor has signed this release, the
Releasor has seven (7) additional days to revoke the Releasor’s consent and may
do so by writing to the Company. The eighth day after the Releasor
shall have executed this release shall be referred to herein as the Revocation
Date.
10
(d) The
Company, for and in consideration of the Releasor’s covenants under the
Agreement, on behalf of itself and the other members of the Company Group and
any other Company Releasee, their respective successors and assigns, and any and
all other persons claiming through any member of the Company Group or such other
Company Releasee, and each of them, does hereby now and forever, voluntarily,
knowingly and willingly release and discharge, the Releasor and dependents,
administrators, agents, executors, successors, assigns, and heirs, from any and
all charges, complaints, claims, promises, agreements, controversies, causes of
action and demands of any nature whatsoever, known or unknown, suspected or
unsuspected, which against the Releasor, jointly or severally, the Company and
each other member of the Company Group or any other Company Releasee, their
respective successors and assigns, and any and all other persons claiming
through any member of the Company Group or such other Company Releasee ever had,
now have or hereafter can, shall or may have by reason of any matter, cause or
thing whatsoever arising from the beginning of time to the time the Company
executes this release arising out of or relating to the Releasor’s employment
relationship with the Company, including, but not limited to, any claim, demand,
obligation, liability or cause of action arising under any federal, state or
local employment law or ordinance, tort, contract or breach of public policy
theory or alleged violation of any other legal
obligation. Notwithstanding the foregoing, nothing herein shall
release the Releasor and his dependents, administrators, agents, executors,
successors, assigns, and heirs, (i) in respect of the Company’s rights under the
Agreement, including, without limitation, with respect to the Company’s rights
under Section 14 of the Agreement to enforce the Releasor’s obligations under
Section 12 and Section 13 of the Agreement, or (ii) from any claims or damages
based on any right or claim that arises after the date the Company executes this
release. This release shall not apply to any claim relating to fraud, willful
misconduct or breach of fiduciary duty by the Releasor arising from any fact
first learned by the Company, excluding the Releasor’s knowledge, subsequent to
the Company’s execution of this release.
(e) The
Company’s release shall become effective on the Revocation Date, assuming that
the Releasor shall have executed this release and returned it to the Company and
has not revoked the Releasor’s consent to this release prior to the Revocation
Date.
(f)
In the event that any one or more of the provisions of this release shall be
held to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remainder of this release shall not in any way be affected
or impaired thereby.
The law
of the State of Delaware shall govern this release without reference to its
choice of law rules.
|
XXXXXXX
INDUSTRIES, INC.
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||
|
By:
|
/s/ Xxxxxxx X. Xxxxx
|
|
|
Xxxxxxx
X. Xxxxx, Chairman of the Board
|
||
|
Dated: 5/5/2008
|
||
|
/s/ Xxxxxxx X. Xxxxxx
|
||
|
Xxxxxxx X. Xxxxxx
|
||
|
Dated: 5/6/2008
|
||
11
