EXECUTIVE EMPLOYMENT AGREEMENT
This
Executive Employment Agreement (the “Agreement”) is entered into by and between
American
Reprographics Company,
a
Delaware corporation (“ARC”)
as the
employer; and Xxxxxxxx
Xxxxxx,
a
resident of California, an individual (“Executive”),
as
the employee, on November 29, 2006. ARC and Executive may be referred to
collectively in this Agreement as the “Parties” and individually as a
“Party.”
RECITALS
ARC
has
agreed to employ Executive and Executive has agreed to accept such employment,
subject to the terms and conditions set forth herein.
Now,
therefore, in consideration of the promises, covenants and agreements set forth
in this Agreement, the Parties agree as follows:
1. Position
and Duties
(a) ARC
hereby employs Executive as its Chief Financial Officer (“CFO”), and Executive
agrees to serve ARC in such capacity, commencing December 4, 2006, upon the
terms and conditions set forth herein.
(b) Executive
shall report to ARC’s Chief Executive Officer (“CEO”). Executive’s primary
responsibilities shall be to keep or cause to be kept the books of account
of
ARC in a thorough and proper manner and shall render statements of the financial
affairs of ARC in such form and as often as reasonably required by the Board
of
Directors or ARC’s CEO, in accordance with US Generally Accepted Accounting
Principles. Executive, in his capacity as CFO, subject to the order of the
Board
of Directors, shall have the custody of all funds and securities of ARC, and
shall attest to financial statements, shall be responsible for ARC’s compliance
with financial reporting and disclosure laws and rules, and shall perform other
duties commonly incident to the office of CFO, and shall also perform such
other
duties and have such other powers, consistent with his position, as the Board
of
Directors or ARC’s CEO shall designate from time to time. Executive shall have
the authority generally incident and necessary to perform such duties. Executive
will be a member of the executive team, and Executive’s principal office shall
be located at ARC’s Glendale, California headquarters or such other site
(subject to Section 10(e)(vi) below) at which ARC maintains its headquarters
during the term of this Agreement.
(c) During
the term of this Agreement, Executive will devote all of his employment time
and
attention to the affairs of ARC and use his best efforts to promote the business
and interests of ARC. Executive owes a fiduciary duty of loyalty, fidelity
and
allegiance to act at all times in the best interests of ARC, and not to do
any
act which would injure the business, interests, or reputation of ARC or any
of
its subsidiaries or affiliates.
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2. Term
The
term
of this Agreement and of Executive’s employment hereunder shall commence on the
Effective Date hereof and continue until the third (3rd) anniversary of the
Effective Date unless otherwise terminated in accordance with the provisions
hereof; provided, however, that this Agreement will automatically be extended
on
a year-to-year basis on the terms and conditions set forth herein, including
the
bonus provisions of Section 3(b), unless either party gives written notice
to
the other at least one hundred twenty (120) days prior to the expiration of
the
term of this Agreement, which includes any extensions, that this Agreement
shall
terminate at the end of such term, or extension thereof.
3. Direct
Compensation
In
consideration of the services to be provided by Executive, Executive shall
receive compensation, less all applicable taxes, social security payments and
other items that ARC is required by law to withhold or deduct therefrom, as
follows:
(a) Base
Salary.
Executive’s annual Base Salary shall be $360,000, paid in installments in
accordance with ARC’s customary payroll procedures.
(b) Incentive
Bonus.
During
the term of this Agreement, Executive shall be eligible to receive an annual
Incentive Bonus (“Incentive Bonus”) in an amount equal to sixty percent (60%) of
Executive’s Base Salary per year upon successful completion of all performance
criteria to be established by ARC’s CEO in consultation with Executive. The
Incentive Bonus shall be paid no later than sixty (60) days following the close
of each fiscal year, in cash or ARC common stock, or partly in each, as elected
by Executive at least twenty (20) days before the date such Incentive Bonus
is
paid. To the extent that such Incentive Bonus is paid in ARC common stock,
such
stock shall be valued using the average of the closing prices of ARC common
stock on the New York Stock Exchange for the ten (10) trading days immediately
preceding the date of issuance of ARC common stock in payment of the Incentive
Bonus. Such shares will be issued forthwith after the approval of the
calculation of the number of shares to be issued to Executive by the
Compensation Committee of the Board of Directors at its first meeting following
the valuation date, but in no event will such shares be issued later than two
and one-half (2 ½) months after the close of such fiscal year; provided,
however, that as a condition to receiving ARC common stock Executive must
deposit with ARC on the date of issuance cash in the amount, if any, by which
the total of employee withholding taxes required to be withheld with respect
to
the entire Incentive Bonus exceeds the cash portion of the Incentive Bonus
available for withholding. To be eligible to receive a bonus, Executive must
have been employed by ARC during the entire fiscal year to which such Incentive
Bonus relates. Subject to the foregoing, and to possible repayment if the
Incentive Bonus is, in fact, not earned, or if Executive’s employment terminates
prior to the end of a fiscal year, the parties will make a reasonable estimate
of the probable amount of the Incentive Bonus to be earned for a particular
year
on or about August 1 of each such fiscal year, and forty percent (40%) of the
amount of such estimate shall be paid to Executive on or about August 15 of
such
fiscal year. A final reconciliation of the actual amount of Executive’s
Incentive Bonus against the amount paid in August of such fiscal year shall
be
made at the time that the Incentive Bonus, if any, is due, as above provided,
and at that time ARC shall pay the remaining amount due, or Executive shall
refund the excess previously paid, as the case may be.
(c) Additional
Bonuses.
ARC
may
from time to time, in its absolute discretion, establish additional bonus
programs for Executive.
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4. General
Benefits
During
the term of this Agreement, Executive shall be entitled to other benefits
provided by ARC to its senior executives from time to time on a no less
favorable basis than such other senior executives (other than the CEO and
President), including but not limited to, 401(k) and other retirement plans,
deferred compensation, paid holidays, sick leave and other similar benefits.
Executive shall be entitled to four (4) weeks paid vacation each calendar year
accrued and vested in accordance with ARC’s vacation policy applicable to senior
management.
5. Stock
Plans
Executive
shall be granted an option to purchase 150,000 shares of ARC’s common stock,
subject to the terms and conditions of ARC’s customary form of Stock Option
Agreement to be executed by Executive and ARC, except that the option shall
not
immediately terminate if Executive is terminated for “Cause” as such term is
defined in ARC’s 2005 Stock Plan (the “Stock Option Agreement”), which option
shall vest over a four (4) year period, with twenty-five (25%) percent of the
option vesting on the first anniversary of Executive’s employment commencement
date and one-forty-eighth (1/48th)
of the
option vesting monthly for three (3) years thereafter, at an exercise price
equal to the closing price of ARC’s common stock on the date Executive commences
his employment hereunder. In the sole discretion of the Board of Directors
of
ARC, Executive shall be eligible to participate in additional stock option,
stock purchase, stock bonus and similar plans of ARC (“Stock Plans”) established
from time to time by ARC.
6. Group
Insurance or Benefit Plans
During
the term of this Agreement, Executive shall be automatically covered by ARC
group insurance programs (including any self-insured programs sponsored by
ARC),
including medical, dental, vision, disability, and life, if any, on a no less
favorable basis than applies to other senior executives (other than the CEO
and
President). Executive’s spouse and children who are eligible for coverage may
join the insurance programs, subject to ARC’s policies and applicable laws. The
premiums for all insurance programs for Executive and Executive’s spouse and
eligible children shall be paid by ARC.
7. Reimbursement
of Business Related Expenses
Executive
shall be entitled to receive prompt reimbursement for reasonable expenses
incurred by him in performing services hereunder during the term of this
Agreement in accordance with the policies and procedures then in effect and
established by ARC for its employees. Executive shall also be entitled to
reimbursement of Executive membership dues and related ongoing costs of
appropriate professional organizations which are approved by ARC’s Chief
Executive Officer. Executive shall also receive reimbursement for up to $5,000
in attorney’s fees for reviewing and negotiating this Agreement and related
documentation.
8. Obligations
and Restrictive Covenants
(a) Obligations.
During
the term of this Agreement, Executive shall not engage in any other employment,
occupation or consulting activity for any direct or indirect remuneration.
This
obligation shall not preclude Executive from: (i) serving in any volunteer
capacity with any professional, community, industry, civic, educational or
charitable organization; (ii) serving as a member of corporate boards of
directors, provided that ARC’s CEO has given written consent, and these
activities or services do not materially interfere or conflict with Executive’s
responsibilities or ability to perform his duties under this Agreement; or
(iii)
engaging in personal investment activities for himself and his family which
do
not interfere with the performance of his duties and obligations hereunder.
(b) Non-Competition;
Non-Solicitation.
The
Parties hereto recognize that Executive’s services are unique and the
restrictive covenants set forth in this Section 8 are essential to protect
the
business (including trade secret and other confidential information disclosed
by
ARC to, learned by, or developed by, Executive during the course of employment
by ARC) and the goodwill of ARC. For purposes of this Section 8, all references
to “ARC” shall include ARC’s predecessors, subsidiaries and affiliates. As part
of the consideration for the compensation and benefits to be paid to Executive
hereunder, during the term of this Agreement Executive shall not:
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(i) Engage
in
any business similar or related to or competitive with the business conducted
by
ARC described from time to time in ARC’s Annual Report on Form 10-K to its
shareholders and Board of Directors (the “Core Business of ARC”);
(ii) Render
advice or services to, or otherwise assist, any other person, association,
corporation, or other entity that is engaged, directly or indirectly, in any
business similar or related to, or competitive with, the Core Business of ARC;
(iii) Transact
any business in any manner with or pertaining to suppliers or customers of
ARC
which, in any manner, would have, or is likely to have, an adverse effect upon
the Core Business of ARC; or
(iv) Induce
any employee of ARC to terminate his or her employment with ARC, or hire or
assist in the hiring of any such employee by any person or entity not affiliated
with ARC.
For
purposes of this Agreement, “affiliate” shall mean any entity which owns or
controls, is owned or controlled by, or is under common ownership or control,
with ARC.
9. Confidentiality
Executive
acknowledges that it is the policy of ARC to maintain as secret and confidential
all valuable and unique information heretofore or hereafter acquired, developed
or used by ARC relating to the business, operations, employees and customers
of
ARC, which information gives ARC a competitive advantage in the industry, and
which information includes technical knowledge, know-how or trade secrets and
information concerning operations, sales, personnel, suppliers, customers,
costs, profits, markets, pricing policies, and other confidential information
and materials (the “Confidential Information”).
(a) Non-Disclosure.
Executive recognizes that the services to be performed by Executive are special
and unique, and that by reason of his duties he will be given, acquire or learn
Confidential Information. Executive recognizes that all such Confidential
Information is the sole and exclusive property of ARC. Executive shall not,
either during or after his employment by ARC, disclose the Confidential
Information to anyone outside ARC or use the Confidential Information for any
purpose whatsoever, other than for the performance of his duties hereunder,
except as authorized by ARC in connection with performance of such duties.
(b) Return
of Confidential Information.
Executive shall deliver promptly upon termination of employment with ARC, or
at
any time requested by ARC, all memos, notes, records, reports, manuals,
drawings, and any other documents, whether in electronic form or otherwise,
containing any Confidential Information, including without limitation all copies
of such materials in any format which Executive may then possess or have under
his control.
(c) Ownership
of Inventions; Assignment of Rights.
Executive agrees that all information, inventions, intellectual property, trade
secrets, copyrights, trademarks, content, know-how, documents, reports, plans,
proposals, marketing and sales plans, client lists, client files and materials
made by him or by ARC (the “Work Product”) are the property of ARC and shall not
be used by him in any way adverse to the interests of ARC. Executive assigns
to
ARC any and all rights of every nature which Executive may have in any such
Work
Product; provided, however, that such assignment does not apply to any right
which qualifies fully under California Labor Code Section 2870. This section
shall survive any termination of this Agreement and the employment relationship
between Executive and ARC. Executive shall not deliver, reproduce or in any
way
allow such documents or things to be delivered or used by any third party
without specific direction or consent of the Board of Directors. Likewise,
Executive shall not disclose to ARC, use in ARC’s business, or cause ARC to use,
any information or material that is a trade secret of others.
(d) Predecessors,
Subsidiaries and Affiliates.
For
purposes of this Section 9, references to ARC include its predecessors,
subsidiaries and affiliates.
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10. Termination
Notwithstanding
any other term or provision contained in this Agreement, this Agreement and
the
employment hereunder will terminate prior to the expiration of the term of
this
Agreement under the following circumstances:
(a) Death.
Upon
Executive’s death.
(b) Disability.
Upon
Executive becoming “Permanently Disabled”, which, for purposes of this
Agreement, shall mean Executive’s incapacity due to physical or mental illness
or cause, which, in the written opinion of Executive’s regular licensed
physician, results in the Executive being unable to perform his duties on a
full-time basis for six (6) months during a period of twelve (12) months.
(c) Termination
by ARC for Cause.
Upon
written notice to Executive, ARC may terminate this Agreement for “Cause,”
which, for purposes of this Agreement, shall mean termination by ARC in its
reasonable discretion because of Executive’s:
(i) willful
refusal without proper cause to perform (other than by reason of physical or
mental disability or death) the duties set forth in this Agreement or delegated
from time to time in writing by the Board of Directors or ARC’s CEO that are
lawful and consistent with this Agreement, which remains uncorrected for thirty
(30) days following written notice to Executive by ARC’s CEO specifying the
duties willfully refused by Executive; or
(ii) gross
negligence, self dealing intended to result in Executive’s personal enrichment
or willful misconduct of Executive in connection with the performance of his
duties hereunder, including, without limitation, misappropriation of funds
or
property of ARC or its affiliates, securing or attempting to secure personally
any profit in connection with any transaction entered into on behalf of ARC
or
its affiliates, or any willfully improper act or gross negligence having the
effect of injuring the reputation, business or business relationships of ARC
or
its affiliates; or
(iii) fraud,
dishonesty or misappropriation of ARC business and assets, in each case intended
to result in Executive’s personal enrichment; or
(iv) habitual
insobriety at the workplace or use of illegal drugs; or
(v) conviction
of any felony or entry into any felony guilty plea (in either case, other than
traffic-related offenses not involving personal injury) that negatively reflects
on Executive’s fitness to perform the duties or xxxxx the reputation or business
or ARC or its affiliates; or
(vi) any
material breach of any covenants under this Agreement or other material written
policy of ARC that has previously been provided to Executive, other than under
clauses (i) through (vii) of this Section 10(c), which remains uncorrected
for
thirty (30) days following written notice to Executive by ARC’s CEO specifying
the grounds for the purported material breach.
(d) Termination
by ARC without Cause.
Upon
written notice to Executive, ARC may terminate this Agreement at any time
without any Cause or reason whatsoever.
(e) Termination
by Executive with Good Reason.
Upon
written notice to ARC of any of the following “Good Reasons,” and the failure of
ARC to correct the reduction, change or breach within thirty (30) days after
receipt of such notice, Executive may terminate this Agreement after the
occurrence of:
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(i) a
material change by ARC or its successor in the nature of Executive’s title,
duties, authorities or responsibilities set forth in this Agreement without
Executive’s express consent; or
(ii) a
reduction in Executive’s compensation as established under this Agreement, other
than as expressly permitted in this Agreement, without Executive’s express
consent; or
(iii) a
change
in the officers (other than a change in the persons who occupy such positions)
to whom Executive reports without Executive’s express consent; or
(iv) a
material breach by ARC or its successor of any material sections of this
Agreement, other than as set forth in clauses (i) through (iii) of this Section
10(e); or
(v) a
Change
of Control, as defined in Section 10(g), as a result of which Executive is
not
offered the position of Chief Financial Officer of the acquirer, or is offered
such position but within twelve (12) months after Executive accepts such
position, Executive’s employment is terminated either without Cause or for a
Good Reason; or
(vi) relocation
of Executive’s principal office with ARC or its successor or acquirer to a site
greater than fifty (50) miles from Glendale, California.
(f) Termination
by Executive without Good Reason.
Upon
thirty (30) days prior written notice to ARC, Executive may terminate this
Agreement and resign from Executive’s employment hereunder without any Good
Reason.
(g) Change
of Control.
(i) For
purposes of this Agreement, “Change of Control” shall mean:
(A) ARC
merges or consolidates with any other corporation (other than one of ARC’s
affiliates), as a result of which ARC is not the surviving company, or the
shares of ARC voting stock outstanding immediately after such transaction do
not
constitute, become exchanged for or converted into, more than fifty percent
(50%) of the Voting Shares of the merged or consolidated company (as defined
below);
(B) In
one
(1) or a series of related transactions, ARC sells or otherwise transfers or
disposes of all or substantially all of its assets;
(C) Any
third
person or entity shall become the Beneficial Owner, as defined by Rule 13(d)-3
under the Securities Exchange Act of 1934, in one (1) transaction or a series
of
related transactions, of at least fifty percent (50%) of the Voting Shares
of
ARC’s then outstanding voting securities.
(ii) For
purposes of this Agreement, “Voting Shares” shall mean the combined voting
securities entitled to vote in the election of directors of a corporation,
including ARC, or the merged, consolidated or surviving company, if other than
ARC.
(h) Expiration.
For
purposes of this Agreement, the expiration of this Agreement at the end of
its
term, including any extensions, does not constitute a termination, unless ARC
delivers notice of non-renewal to Executive pursuant to Section 2.
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11. Severance
Benefits
(a) Basic
Benefits.
Upon
expiration or termination of this Agreement for any reason, and subject to
the
provisions of Section 11(e), Executive will be entitled to: (i) payment for
all
Base Salary and unused vacation accrued and prorated, but unpaid, provided
that
such payment will be made to Executive no later than thirty (30) days after
the
effective date of termination, (ii) payment, when due, of any earned but unpaid
Incentive Bonus for the preceding fiscal year, (iii) any unreimbursed business
expenses authorized by this Agreement, provided that such reimbursement will
be
paid to Executive no later than thirty (30) days after the effective date of
termination, (iv) continuation of any benefits under Section 6 as required
by
applicable law (e.g., COBRA), and (v) such rights as then exist with respect
to
then vested stock options, restricted stock or other rights under similar plans.
(b) Termination
by ARC for Cause or by Executive without Good Reason.
If this
Agreement and Executive’s employment hereunder is terminated by ARC for Cause
pursuant to Section 10(c), or by Executive without Good Reason pursuant to
Section 10(f), Executive shall not be entitled to any additional payments or
benefits hereunder.
(c) Termination
by ARC without Cause; Termination by Executive with Good
Reason.
If this
Agreement and Executive’s employment hereunder is terminated by ARC without
Cause pursuant to Section 10(d), ARC notifies Executive of non-renewal of this
Agreement pursuant to Section 2, or this Agreement is terminated by Executive
for Good Reason as defined in Section 10(e), subject to Executive’s compliance
with the provisions of Section 14 below, Executive shall receive the following
additional payments or benefits:
(i) Executive’s
Base Salary for nine (9) months following the effective date of such
termination, paid as and when due as if this Agreement had not been
terminated;
(ii) Continuation
of coverage and premium payments by ARC under ARC’s group insurance programs for
Executive and his eligible family members under Section 6 for the period during
which Base Salary is paid under Section 11(c)(i) above;
(iii) In
the
event such termination occurs less than twelve (12) months following Executive’s
commencement of employment hereunder, all unvested stock options, restricted
stock or similar rights granted to Executive that would have vested as of the
first anniversary of Executive’s employment shall accelerate and become vested,
and shall be exercisable in accordance with the post-termination provisions
of
the Stock Option Agreement, immediately as of the effective date of
termination;
(iv) In
the
event such termination occurs more than twelve (12) months following Executive’s
commencement of employment hereunder, all unvested stock options, restricted
stock or similar rights granted to Executive shall accelerate and become vested,
and shall be exercisable in accordance with the post-termination provisions
of
the Stock Option Agreement, immediately as of the effective date of
termination;
(v) A
pro-rated Incentive Bonus, in an amount equal to 100% of the annual Incentive
Bonus for the fiscal year in which Executive’s employment is terminated
multiplied by a fraction, the numerator of which is the number of days in the
ARC fiscal year Executive worked for ARC, and the denominator of which is three
hundred and sixty-five, paid within thirty (30) days of such
termination.
(d) Termination
because of Death or Disability of Executive.
If this
Agreement and Executive’s employment hereunder is terminated under Sections
10(a) or (b) by reason of Executive’s death or by reason of being Permanently
Disabled, Executive or his family shall be entitled to continuation of coverage
and premium payments by ARC under ARC’s group insurance programs for Executive
and his eligible family members under Section 6 for a period of twelve (12)
months after the termination of employment.
(e) Parachute
Payments.
In the
event that the severance, acceleration of stock options and other benefits
provided for in this Agreement or otherwise payable to Executive (i) constitute
"parachute payments" within the meaning of Section 280G (as it may be amended
or
replaced) of the Internal Revenue Code of 1986, as amended or replaced (the
“Code”), and (ii) but for this Section 11(e), would be subject to the excise tax
imposed by Section 4999 (as it may be amended or replaced) of the Code (the
"Excise Tax"), then Executive's benefits hereunder shall be either:
(i) provided
to Executive in full; or
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(ii) provided
to Executive only as to such lesser extent which would result in no portion
of
such benefits being subject to the Excise Tax, whichever of the foregoing
amounts, taking into account the applicable federal, state and local income
taxes and the Excise Tax, results in the receipt by Executive on an after-tax
basis, of the greatest amount of benefits, notwithstanding that all or some
portion of such benefits may be taxable under the Excise Tax. Unless ARC and
Executive otherwise agree in writing, any determination required under this
Section 11(e) shall be made in writing in good faith by ARC’s independent public
accountants (the "Accountants"). In the event of a reduction in benefits
hereunder, Executive shall be given the choice of which benefits to reduce.
For
purposes of making the calculations required by this Section 11(e), the
Accountants may make reasonable assumptions and approximations concerning
applicable taxes and may rely on reasonable, good faith interpretations
concerning the application of the Code. ARC and Executive shall furnish to
the
Accountants such information and documents as the Accountants may reasonably
request in order to make a determination under this Section 11(e). ARC shall
bear all costs the Accountants may reasonably incur in connection with any
calculations contemplated by this Section 11(e).
(f) 409A
Compliance.
(i) Six
(6) Month Delay Rule. Except
as
provided in paragraph (ii) below, in the event that Executive is a “specified
employee” (as defined in Section 409A(a)(2)(B)(i) of the Code and regulations
thereunder) at the time of the termination of his employment with ARC, payment
of all amounts subject to Section 409A of the Code that would otherwise be
made
under Section 11 of this Agreement, including any installments, may not be
paid
before a date that is six (6) months and two (2) days after the date of
termination of employment (including death). Such amounts that otherwise would
have been paid during such six (6) month period will be paid as of the date
that
is six (6) months and two (2) says after the date of employment
termination.
(ii) Exception. In
the
event that payment of amounts under Section 11 of this Agreement at the time(s)
of payment specified under its terms (without regard to this Section 11(f))
does
not cause any amount of the payment to fail to comply with the provisions of
Section 409A, and does not result in any excise tax or additional tax penalty
under Section 409A, then the six (6) month delay rule of paragraph (i) above
will not apply and payment of such amounts will be made at the time(s) specified
under the applicable terms of Section 11 of this Agreement without regard to
this Section 11(f).
(iii) General
Compliance. During
the term of this Agreement, ARC and Executive agree to modify and administer
this Agreement to the extent possible to comply with Section 409A and to avoid
incurring any excise and other additional tax liability that might be imposed
on
Executive or ARC.
12. Arbitration
and Equitable Relief
(a) Arbitration.
In
consideration of Executive’s employment with ARC, its promise to arbitrate all
employment-related disputes, and Executive’s receipt of the compensation paid to
Executive by ARC, at present and in the future, Executive agrees that any and
all controversies, claims, or disputes with anyone (including ARC and any
employee, officer, director, shareholder or benefit plan of ARC in their
capacity as such or otherwise) arising out of, relating to, or resulting from
Executive’s employment with ARC or the termination of that employment with ARC,
including any provision of this Agreement, shall be subject to binding
arbitration under the arbitration rules set forth in the California Code of
Civil Procedure Sections 1280 through 1294.2, including section 1283.05
collectively (the “Rules”) and pursuant to California law. Disputes which
Executive agrees to arbitrate, and hereby agrees to waive any right to a trial
by jury, include without limitation, any common law claims, statutory claims
under Title VII of the Civil Rights Act of 1964, the Americans With Disabilities
Act of 1990, the Age Discrimination In Employment Act of 1967, the Older Workers
Benefit Protection Act, the California Fair Employment And Housing Act, the
California Labor Code (except for workers compensation or unemployment insurance
claims), or ERISA, claims of harassment, discrimination or wrongful termination
and any other statutory claims under state or federal law.
(b) Procedure.
Any
arbitration will be administered by JAMS and a neutral arbitrator will be
selected in a manner consistent with its rules for the resolution of employment
disputes. The arbitrator shall have the power to decide any motions brought
by
any party to the arbitration, including motions for summary judgment and/or
adjudication and motions to dismiss and demurrers, prior to any arbitration
hearing. The arbitrator shall have the power to award any remedies, including
attorneys’ fees and costs, available under applicable law. ARC will pay for any
administrative or hearing fees charged by the arbitrator or JAMS except that
Executive shall pay the first $200.00 of any filing fees associated with any
arbitration Executive initiates. The arbitrator shall administer and conduct
any
arbitration in a manner consistent with the Rules. To the extent that the JAMS
rules for the resolution of employment disputes conflict with the Rules, the
Rules shall take precedence. The decision of the arbitrator shall be in writing.
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(c) Remedy.
Except
as provided by the Rules and this Agreement, arbitration shall be the sole,
exclusive and final remedy for any dispute between ARC and Executive.
Accordingly, except as provided for by the Rules and this Agreement, neither
ARC
nor Executive will be permitted to pursue court action regarding claims that
are
subject to arbitration. The arbitrator will not have the authority to disregard
or refuse to enforce any lawful ARC policy, and the arbitrator shall not order
or require ARC to adopt a policy not otherwise required by law which ARC has
not
adopted.
(d) Availability
of Injunctive Relief.
In
addition to the right under the Rules to petition the court for provisional
relief, ARC may also petition the court for injunctive relief, notwithstanding
any provision in this Agreement requiring arbitration, where ARC alleges or
claims a violation of this Agreement, or any separate agreement between
Executive and ARC regarding trade secrets, confidential information or
non-solicitation, or California Labor Code Section 2870. No bond shall be
required of ARC. Executive understands and agrees that any breach or threatened
breach of this Agreement or of any such separate agreement will cause
irreparable injury to ARC or its affiliates and that money damages will not
provide an adequate remedy therefore, and Executive hereby consents to the
issuance of an injunction. In the event either Party seeks injunctive relief,
the prevailing Party shall be entitled to recover reasonable costs and
attorneys’ fees related thereto.
(e) Administrative
Relief.
This
Agreement does not prohibit Executive from pursuing an administrative claim
with
a local, state or federal administrative body such as the Department of Fair
Employment and Housing, the Equal Employment Opportunity Commission or the
Workers’ Compensation Board. This Agreement does, however, preclude Executive
from pursuing court action regarding any such claim.
(f) Voluntary
Nature of Agreement.
Executive acknowledges and agrees that he is executing this Agreement
voluntarily and without any duress or undue influence by ARC or anyone else.
Executive further acknowledges and agrees that he has carefully read this
Agreement, that he has asked any questions needed for him to understand the
terms, consequences and binding effect of this Agreement, and that he fully
understands this Agreement, including
that he is waiving his right to a jury trial.
Finally, Executive acknowledges that he has been provided an opportunity to
seek
the advice of an attorney of his choice before signing this Agreement.
13. Governing
Law
This
Agreement shall be governed by and construed and interpreted in accordance
with
the laws of the State of California without regard to California conflict of
laws principles.
14. Release
In
exchange for the benefits and other consideration under this Agreement to which
Executive would not otherwise be entitled, Executive shall enter into and
execute a release substantially in the form attached hereto as Exhibit
A
(the
"Release") upon his termination of employment. Unless the Release is executed
by
Executive and delivered to ARC within thirty (30) days after the termination
of
Executive's employment with ARC, Executive shall receive only the basic
severance benefits provided under Section 11(a) of this Agreement and no
additional benefits under Section 11.
15. Notices
Any
notices or other communications desired or required under this Agreement shall
be in writing, signed by the Party making the same, and shall be deemed
delivered when personally delivered or on the second business day after the
same
is sent by certified or registered mail, postage prepaid, addressed as follows
(or to such other address as may be designated by like written notice):
| If to Executive: | At the last residential address known by ARC | ||
| If to ARC: |
000
Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx,
XX 00000
Attn.:
Chief Executive Officer
|
9
16. Severability
In
the
event that any provision of this Agreement becomes or is declared by a court
of
competent jurisdiction to be illegal, unenforceable or void, this Agreement
shall continue in full force and effect without said provision.
17. Assignment
Except
as
otherwise specifically provided herein, neither Party shall assign this
Agreement or any rights hereunder without the consent of the other Party, and
any attempted or purported assignment without such consent shall be void;
provided that Executive’s consent under this Agreement shall not be required
hereby for any of the transactions involving a Change of Control. This Agreement
shall otherwise bind and inure to the benefit of the Parties hereto and their
respective successors, assigns, heirs, legatees, devisees, executors,
administrators and legal representatives.
18. Entire
Agreement
This
Agreement, the Stock Option Agreement and the indemnification agreement entered
into by and between Executive and ARC contain the entire agreement of the
Parties and supersedes all prior or contemporaneous negotiations,
correspondence, understandings and agreements between the Parties regarding
the
subject matter of this Agreement. Any prior employment agreement, bonus
agreement or other compensation agreement between Executive and ARC or any
predecessor, or affiliate of ARC, is hereby terminated on and as of the
Effective Date. This Agreement may not be amended or modified except in writing
signed by both Parties.
19. Waiver
If
either
Party waives any breach of any provisions of this Agreement, he or it shall
not
thereby be deemed to have waived any preceding or succeeding breach of the
same
or any other provision of this Agreement.
20. Counterparts
This
Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first hereinabove set forth.
| AMERICAN REPROGRAPHICS COMPANY, a Delaware corporation | EXECUTIVE | |||
| By: | /s/ Xxxxxxxxxxxxx Xxxxxxxxxxxx | By: | /s/ Xxxxxxxx Xxxxxx | |
|
Xxxxxxxxxxxxx Xxxxxxxxxxxx |
Xxxxxxxx
Xxxxxx
|
|||
| Title: | CEO | |||
10
EXHIBIT
A
RELEASE
AGREEMENT
I
understand that my position with American Reprographics Company (“ARC”)
terminated effective _______________ (the “Separation Date”). ARC has agreed
that if I choose to sign this Agreement, ARC will pay me severance benefits
(minus the standard withholdings and deductions) pursuant to the terms of the
Executive Employment Agreement entered into on November __, 2006 between myself
and ARC (the “Severance Benefits”). I understand that I am not entitled to the
Severance Benefits unless I sign this Agreement. I understand that in addition
to the Severance Benefits, ARC will pay me all of my accrued salary and
vacation, to which I am entitled by law.
In
consideration for the Severance Benefits I am receiving under this Agreement,
I
agree not to use or disclose any of ARC's proprietary information without
written authorization from ARC, to immediately return all Company property
and
documents (including all embodiments of proprietary information) and all copies
thereof in my possession or control, and to release ARC and its officers,
directors, agents, attorneys, employees, shareholders, and affiliates from
any
and all claims, debts, liabilities, demands, causes of action, attorneys' fees,
damages, or obligations of every kind and nature, whether they are known or
unknown, arising at any time prior to the date I sign this Agreement. This
general release includes, but is not limited to: all federal and state statutory
and common law claims, claims related to my employment or the termination of
my
employment or related to breach of contract, tort, wrongful termination,
discrimination, wages or benefits, or claims for any form of compensation.
This
release is not intended to release any claims I have or may have against any
of
the released parties for (a) indemnification as a director, officer, agent
or
employee under applicable law, charter document or agreement, (b) Severance
Benefits and other termination benefits under my employment agreement and any
related written documents, (c) health or other insurance benefits based on
claims already submitted or which are covered claims properly submitted in
the
future, (d) vested rights under pension, retirement or other benefit plans,
or
(e) in respect of events, acts or omissions occurring after the date of this
Release Agreement.
In
releasing claims unknown to me at present, I am waiving all rights and benefits
under Section 1542 of the California Civil Code, and any law or legal principle
of similar effect in any jurisdiction:
| "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor." |
I
acknowledge that I am knowingly and voluntarily waiving and releasing any rights
I may have under the federal Age Discrimination in Employment Act of 1967,
as
amended ("ADEA"). I also acknowledge that the consideration given for the waiver
in the above paragraph is in addition to anything of value to which I was
already entitled. I have been advised by this writing, as required by the ADEA
that: (a) my waiver and release do not apply to any claims that may arise after
my signing of this Agreement; (b) I should consult with an attorney prior to
executing this release; (c) I have twenty-one (21) days within which to consider
this release (although I may choose to voluntarily execute this release
earlier); (d) I have seven (7) days following the execution of this release
to
revoke the Agreement; (e) this Agreement will not be effective until the eighth
(8th)
day
after this Agreement has been signed both by me and by ARC; and I will not
be
paid any of the Severance Benefits until this Agreement has become
effective.
This
Agreement constitutes the complete, final and exclusive embodiment of the entire
agreement between ARC and me with regard to the subject matter hereof I am
not
relying on any promise or representation by ARC that is not expressly stated
herein. This Agreement may only be modified by a writing signed by both me
and a
duly authorized officer of ARC. I accept and agree to the terms and conditions
stated above:
| AMERICAN REPROGRAPHICS COMPANY, a Delaware corporation | EXECUTIVE | |||
| By: | By: | |||
|
|
Xxxxxxxx
Xxxxxx
|
|||
| Title: |
|
|||
11
