1
Exhibit 10(d)
Employment Agreement,
dated July 1, 1998,
between X.X. Xxxxx Corporation
and Xxxxxx Xxxxx
2
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is made this 1st day
of July, 1998, by and between X. X. Xxxxx Corporation, an Ohio corporation (the
"Company"), and Xxxxxx Xxxxx ("Executive").
W I T N E S S E T H:
WHEREAS, the Company desires to continue Executive in its
employ and Executive desires to remain in the employ of the Company, holding the
offices of Chairman of the Board, President and Chief Executive Officer of the
Company, for an extended period in accordance with the terms and conditions of
this Agreement;
NOW, THEREFORE, in consideration of the premises and of their
mutual covenants expressed in this Agreement, the parties hereto make the
following agreement, intending to be legally bound hereby:
1. Term. The Company hereby agrees to continue Executive in
its employ, and Executive hereby agrees to remain in the employ of the Company,
in accordance with the terms and conditions hereof, for the period commencing on
July 1, 1998 (the "Commencement Date"), and ending on the second anniversary of
the Commencement Date (the "Original Term"), unless sooner terminated as
hereinafter set forth; provided, however, that the term of this Agreement shall
automatically be extended for one additional, one-year term (an "Extended Term")
unless at least 60 days prior to the expiration of the Original Term the Company
or Executive shall give notice to the other that it/he does not wish to extend
the term of this Agreement. The Original Term of Executive's employment under
this Agreement, together with any Extended Term, is hereinafter sometimes
referred to as the "Employment Term." Anything contained in this Agreement to
the contrary notwithstanding, in the event that a Change of Control of the
Company (as defined in Section 9) occurs or is publicly proposed (and such
proposal is not withdrawn) prior to the end of the Employment Term, as defined
in the immediately preceding sentence of this paragraph, the Employment Term
shall be automatically extended for an additional two-year period (an "Extended
Term") commencing on the date on which the Employment Term would otherwise have
terminated pursuant to this paragraph and expiring on the second anniversary of
such date.
- 2 -
3
2. Position and Duties. (a) During the Employment Term, (i)
Executive shall serve as the Chairman, President and Chief Executive Officer of
the Company, reporting only to the Company's Board of Directors (the "Board of
Directors" or the "Board") and his authority, duties and responsibilities shall
be at least commensurate in all material respects with those held, exercised and
assigned on the Commencement Date and (ii) Executive's principal office shall be
located in Central Ohio, although he shall be allowed to travel extensively for
the Company as he may determine.
(b) Excluding periods of vacation and sick leave to which
Executive is entitled, Executive agrees to devote reasonable attention and time
during normal business hours to the business and affairs of the Company and, to
the extent necessary to discharge the responsibilities assigned to Executive
hereunder, to use Executive's reasonable best efforts to perform faithfully and
efficiently such responsibilities. Executive may (i) serve on corporate, civic,
charitable or political boards or committees, (ii) fulfill speaking engagements
and (iii) manage personal investments, so long as such activities do not
interfere in any material respect with the performance of Executive's
responsibilities hereunder. It is expressly understood and agreed that, to the
extent any such activities shall have been conducted by Executive prior to the
Commencement Date, the continued conduct of such activities or the conduct of
activities similar in nature and scope thereto subsequent to the Commencement
Date shall not, for the purposes of this Agreement, be deemed to interfere in
any material respect with the performance of Executive's responsibilities
hereunder.
3. Compensation and Other Benefits. The terms of Executive's
compensation during the Employment Term shall be as follows:
(a) BASE SALARY. During the Employment Term, Executive shall
receive a minimum annual base salary of $490,000 (the "Base Salary"), to be paid
in equal installments in accordance with the Company's normal pay schedule for
salaried employees; said Base Salary may be increased at any time and from time
to time by the Company, and the Company shall cause its Board of Directors or an
appropriate committee thereof to review annually the performance of Executive
and the results of operations and financial condition of the Company, together
with prevailing economic conditions and other relevant factors, to determine
whether or not any increase above said minimum annual salary is appropriate; and
the highest rate of salary (on an annualized basis) paid to Executive by the
Company during the Employment Term (excluding any bonus) shall be deemed to be
the Base Salary for purposes of this Agreement.
- 3 -
4
(b) BENEFITS. During the Employment Term:
(i) The Company, at its sole expense, shall provide and
maintain a policy of insurance on Executive's life from an insurance company
that is acceptable to Executive providing for a death benefit of at least
$1,000,000, payable to one or more beneficiaries designated by Executive (or to
the beneficiaries designated by Executive's assignee, if any, of such policy)
or, if Executive (or his assignee, if any) fails to so designate a beneficiary,
to Executive's estate; provided, however, that at Executive's option, the
Company shall, in lieu of providing the aforesaid life insurance, pay to
Executive for each 12-month period during the Employment Term a cash payment of
$18,000. If the life insurance provided by the Company under this Section
3(b)(i) is a whole life insurance policy or policies, Executive shall be
entitled to the cash surrender value of such policy or policies and shall have
the right to cause the Company to transfer ownership of such policy or policies
to Executive or his designee.
(ii) In addition to the insurance described in
subsection (i) above, the Company, at its expense, shall provide and maintain a
split-dollar life insurance policy on Executive's life from an insurance company
acceptable to Executive providing for a death benefit payable to Executive's
beneficiaries or estate (or to the beneficiaries designated by Executive's
assignee, if any, of his interest under this subsection (ii)), in an amount that
is not less than $1,310,000, which is the amount of coverage provided to
Executive under that certain split-dollar insurance policy on Executive's life
in effect on the Commencement Date. The Company shall be obligated to pay the
Company's portion of the premiums on such split-dollar insurance policy and
shall pay to or at the direction of Executive a cash bonus in an amount equal to
Executive's (or his assignee's) portion of such insurance premiums (i.e., the
term cost of the life insurance protection under the policy) plus the amount of
Executive's personal income tax liability resulting from the payment of such
cash bonus.
(iii) Executive shall be entitled to receive paid
vacation time during each consecutive twelve (12) month period during the
Employment Term in accordance with the vacation policy of the Company for its
senior officers in effect on the Commencement Date.
(iv) Executive shall be entitled to receive such
perquisites, fringe benefits and reimbursement of expenses historically provided
by the Company to its Chairman, President and
- 4 -
5
Chief Executive Officer, including, without limitation, the exclusive use of a
new luxury automobile and reimbursement of his initiation fees, and dues and
assessments at a country club of his choosing.
(v) Executive shall be entitled to participate in the
Company's Salaried Employees' Pension Plan (the "Pension Plan"), Supplemental
Retirement Plan (the "Supplemental Plan") and Employee Stock Ownership Plan, as
any or all of the same may be amended from time to time, or any substitute or
successor plans.
(vi) During the Employment Term, Executive shall be
entitled to participate in the Company's Short-Term Incentive Plan (STIPS), as
the same may be amended from time to time, or any substitute or successor plan,
at a maximum annual level equal to 100% of his then-current Base Salary.
(vii) Executive shall be entitled to receive all other
employee benefits, including, without limitation, medical, dental, group life
(to the extent the coverage is superior to that provided for in Section 3(b)(i)
above) and accidental death insurance benefits as are or in the future may be
provided by the Company to its key employees.
(viii) The Board of Directors of the Company will
consider annually whether additional benefits should be provided to Executive,
including, without limitation, the grant of additional shares of restricted
stock of the Company or the implementation of other stock-based incentive plans.
- 5 -
6
4. Non-Exclusivity of Rights. Nothing in this Agreement shall
prevent or limit Executive's continuing or future participation in any benefit,
bonus, incentive or other plan or program provided by the Company and for which
Executive may qualify, nor shall anything herein limit or otherwise affect such
rights as Executive may have under any stock option or other agreements with the
Company. Amounts which are vested benefits or which Executive is otherwise
entitled to receive under any plan or program of the Company at or subsequent to
the Date of Termination (as defined in Section 5 hereof) shall be payable in
accordance with such plan or program.
5. Termination. (a) DEATH OR DISABILITY. Executive's
employment shall terminate automatically upon Executive's death. The Company may
terminate Executive's employment under this Agreement, after having established
Executive's Disability (pursuant to the definition of "Disability" set forth
below), by giving to Executive written notice of its intention to terminate
Executive's employment hereunder. In such a case, Executive's employment
hereunder shall terminate effective on the 30th day after receipt of such notice
(the "Disability Effective Date"), provided that within such 30-day period,
Executive shall not have returned to full-time performance of his duties. For
purposes of this Agreement, "Disability" means a disability, which, after the
expiration of more than 6 months after its commencement, is determined to be
total and permanent by a physician selected by the Company or its insurers and
reasonably acceptable to Executive or Executive's legal representative.
(b) CAUSE. The Company may terminate Executive's
employment for "Cause." For purposes of this Agreement, termination of
employment for the following reasons (and no other reason) shall constitute
"Cause": (i) dishonest and/or immoral conduct of Executive materially
detrimental to the Company, (ii) conviction of a felony, (iii) willful and
continued failure of Executive, after receipt of written notice from the Company
setting forth the specifics of such failure, to perform the duties of his
offices with the Company unless such failure is the result of ill health or
physical or mental disability or (iv) willful and gross misconduct of Executive
materially and demonstrably injurious to the Company.
(c) GOOD REASON. Executive's employment may be
terminated by Executive for Good Reason. For purposes of this Agreement, "Good
Reason" means:
(i) (A) The assignment to Executive of any
duties inconsistent in any respect with Executive's position
- 6 -
7
(including, without limitation, his status, office and title), authority, duties
or responsibilities as contemplated by Section 2 of this Agreement or (B) any
other action by the Company which results in a material diminution in such
position, authority, duties or responsibilities, other than an insubstantial and
inadvertent action which is remedied by the Company promptly after receipt of
notice thereof given by Executive;
(ii) Any reduction in Executive's Base Salary or
any material reduction in the extent of Executive's participation in the plans
referred to in Section 3 hereof or the extent of Executive's entitlement to the
employee benefits, expenses, fringe benefits or prerequisites referred to in
Section 3;
(iii) The assignment of Executive without his
consent to a Company office located beyond a radius of 50 miles from the
Company's principal office on the Commencement Date; or
(iv) Any other failure by the Company to comply
with any provision of this Agreement, other than an insubstantial and
inadvertent failure which is remedied by the Company promptly after receipt of
notice thereof given by Executive.
For purposes of this Section 5(c) any good faith determination
of "Good Reason" made by Executive shall be conclusive. In addition, for
purposes of this Agreement, a reduction of the kind described in clause (ii) of
this Section 5(c) shall be deemed to be an "Impermissible Reduction."
(d) NOTICE OF TERMINATION. Any termination of
Executive's employment hereunder by the Company or by Executive shall be
communicated by Notice of Termination to the other party hereto given in
accordance with Section 16 of this Agreement. For purposes of this Agreement, a
"Notice of Termination" means a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive's employment under the provision so indicated and (iii)
if the Date of Termination (as defined below) is other than the date of receipt
of such notice, specifies the termination date.
(e) DATE OF TERMINATION. The term "Date of
Termination," as used in this Agreement, means the date of receipt of the Notice
of Termination or any later date specified therein (which date shall be not more
than 15 days after the giving of such notice), as the case may be. If
Executive's employment is
- 7 -
8
terminated by the Company other than for Cause or Disability, the Date of
Termination shall be the date on which the Company notifies Executive of such
termination.
6. Compensation Upon Termination of Employment or During
Disability. (a) DEATH. If Executive's employment shall be terminated by reason
of his death, the Company shall promptly make all payments which Executive's
spouse, beneficiaries or estate may be entitled to receive pursuant to any
pension or employee benefit plan, or life insurance policy maintained by the
Company. If the policy of life insurance described in Section 3(b)(ii) above is
not in force at the time of Executive's death for any reason, the Company shall
continue to pay Executive's full Base Salary at the rate in effect on the date
of his death on a monthly basis for a period of 60 months following Executive's
date of death to such person or persons as he shall have designated to the
Company or, if no such person shall have been designated, to his estate.
(b) DISABILITY. During any period during the
Employment Term that Executive fails to perform his duties hereunder as a result
of incapacity due to ill health or physical or mental disability ("Disability
Period"), Executive shall continue to receive the Base Salary for such period
until his employment is terminated for Disability pursuant to Section 5(a),
provided that payments of Base Salary shall be reduced by the sum of the
amounts, if any, payable to Executive at or prior to the time of any such Base
Salary payment under disability benefit plans of the Company and which were not
previously applied to reduce any payment of Base Salary. If Executive's
employment is terminated by reason of Executive's Disability, Executive shall
continue to receive after the Disability Effective Date his full Base Salary at
the rate then in effect under this Agreement (less any sums payable to Executive
under any disability benefit plan maintained by the Company) until Executive
reaches the age of 70. Such payments shall not be offset by Social Security
payments, if any. In addition, after any such termination of employment for
Disability, Executive (or, if applicable, his spouse, beneficiaries or estate)
shall receive all amounts to which any of them may be entitled under any
pension, deferred compensation plan or employee benefit plan maintained by the
Company or under any other agreement (said amounts to be paid in accordance with
the terms of any such plan or agreement).
(c) WITH CAUSE OR WITHOUT A GOOD REASON. If
Executive's employment shall be terminated by the Company during the Employment
Term for Cause or by Executive without Good Reason, the Company shall pay to
Executive his Base Salary through the Date of Termination at the rate then in
effect, and the Company shall have
- 8 -
9
no further obligation to Executive under this Agreement; provided, that the
Company shall not be relieved of its obligation to make any payments to which
Executive (or, if applicable, his spouse, beneficiaries or estate) are entitled
under any pension, deferred compensation or employee benefit plan or plans of
the Company or under any other agreement (which payments shall be made in
accordance with the terms of any such plan or agreement).
(d) WITHOUT CAUSE OR FOR GOOD REASON AFTER A CHANGE
OF CONTROL. If, during the Employment Term and following a Change of Control (as
defined in Section 9 of this Agreement), the Company shall terminate Executive's
employment other than for Cause or Disability, or the employment of Executive
shall be terminated by Executive for Good Reason:
(i) The Company shall pay to Executive in a lump
sum in cash within 10 days after the Date of Termination the aggregate of the
following amounts:
(A) If not theretofore paid, Executive's
Base Salary through the Date of Termination at the rate in effect on the Date of
Termination;
(B) In consideration for services rendered
to the Company prior to the Date of Termination, an amount equal to the product
of (x) the Average Bonus (as defined in Section 6(f)) and (y) the fraction
obtained by dividing (i) the number of days between the Date of Termination and
the last day of the last full fiscal year ending prior to such date by (ii) 365;
(C) In consideration of Executive's
agreement to an extended noncompetition agreement as provided in Section 12(a),
the sum of $1,375,000;
(D) In consideration of Executive's
agreement to provide the consulting services described in Section 12(b), the sum
of $1,000,000; and
(E) In the case of compensation previously
deferred by Executive, all amounts of such compensation previously deferred and
not yet paid by the Company, together with all interest accrued thereon;
(ii) The Company shall, promptly upon submission
by Executive of supporting documentation, pay or reimburse to Executive all
costs and expenses paid or incurred by
- 9 -
10
Executive which would have been payable under Section 3(b) hereof if Executive's
employment had not been terminated;
(iii) For a period ending on Executive's 70th
birthday, or until his earlier death, the Company, at its cost, shall maintain
in full force and effect, for the continued benefit of Executive and Executive's
spouse, all life, medical and dental insurance to which Executive and/or his
spouse was entitled immediately prior to the Date of Termination less any such
benefits provided to them by Medicare or similar government-funded health
insurance; provided that, in the event the participation by Executive or his
spouse in any Company employee benefit program is not possible under the terms
of such program, the Company, at its cost, shall arrange to provide Executive
and his spouse with benefits substantially similar to those which they were
entitled to receive under any such program immediately prior to the Date of
Termination (less any such benefits provided to them by Medicare or similar
government-funded health insurance).
(iv) All of Executive's executive perquisites
immediately prior to the Date of Termination shall be continued for three years
after the Date of Termination;
(v) Any stock option rights held by Executive
which were not fully exercisable on the Date of Termination shall immediately
become fully exercisable by Executive; and
(vi) After the Date of Termination, Executive
shall have no obligation to seek other employment, but shall have the right to
be otherwise employed, and any compensation of any type whatsoever received by
Executive in connection with such employment shall not be offset by the Company
against any of the obligations of the Company under this Section 6(d).
(e) WITHOUT CAUSE OR FOR GOOD REASON PRIOR TO A
CHANGE OF CONTROL. If, during the Employment Term and prior to a Change of
Control, the employment of Executive shall be terminated by the Company for any
reason other than for Cause or Disability, or the employment of Executive shall
be terminated by Executive for Good Reason, and Section 6(d) of this Agreement
shall not be applicable:
(i) The Company shall pay to Executive in a lump
sum in cash within 10 days after the Date of Termination the aggregate of the
following amounts:
- 10 -
11
(A) If not theretofore paid, Executive's
Base Salary through the Date of Termination at the rate in effect on the Date of
Termination;
(B) In the case of compensation previously
deferred by Executive, all amounts of such compensation previously deferred and
not yet paid by the Company together with all interest accrued thereon;
(C) An amount equal to the product of (x)
the Average Bonus (as defined in Section 6(f)) and (y) the fraction obtained by
dividing (i) the number of days between the Date of Termination and the last day
of the last full fiscal year ending prior to such date by (ii) 365;
(ii) Until the last day of the Employment Term
(as in effect immediately prior to the termination of employment), the Company
shall continue to pay Executive his Base Salary on a monthly basis at the rate
in effect immediately prior to the Date of Termination, plus an additional
monthly payment equal to one-twelfth of the Average Bonus (as defined in Section
6(f));
(iii) The Company shall, promptly upon
submission by Executive of supporting documentation, pay or reimburse to
Executive all costs and expenses paid or incurred by Executive which would have
been payable under Section 3(b) hereof if Executive's employment had not
terminated;
(iv) Any stock option rights held by Executive
which were not fully exercisable on the Date of Termination shall immediately
become fully exercisable by Executive;
(v) For a period ending on Executive's 70th
birthday, or until his earlier death, the Company, at its cost, shall maintain
in full force and effect, for the continued benefit of Executive and Executive's
spouse, all life, medical and dental insurance benefits to which Executive and
his spouse were entitled immediately prior to the Date of Termination; provided
that, in the event the participation by Executive or his spouse in any Company
employee benefit program is not possible under the terms of such program, the
Company, at its cost, shall arrange to provide Executive and his spouse with
benefits substantially similar to those which they were entitled to receive
under any such program immediately prior to the Date of Termination; and
(vi) After the Date of Termination, Executive
shall have no obligation to seek other employment, but shall have
- 11 -
12
the right to be otherwise employed, and any compensation of any type whatsoever
received by Executive in connection with such employment shall not be offset by
the Company against any of the obligations of the Company under this Section
6(e).
(f) For purposes of this Section 6, the "Average
Bonus" is the average annual bonus paid to Executive for the last three full
fiscal years ending prior to the Date of Termination.
(g) Anything in this Section 6 to the contrary
notwithstanding, for purposes of calculating any amount payable to or for the
benefit of the Executive and/or his family pursuant to Section 6, the effect of
any Impermissible Reduction in amounts payable pursuant to Section 5 shall be
disregarded.
7. Full Settlement. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right which
the Company may have against Executive or others. In no event shall Executive be
obligated to seek other employment by way of mitigation of the amounts payable
to Executive under any of the provisions of this Agreement. Company agrees to
pay, to the full extent permitted by law, all legal fees and expenses which
Executive may reasonably incur as a result of any contest (regardless of the
outcome thereof) by the Company or others of the validity or enforceability of,
or liability under, any provision of this Agreement or any guarantee of
performance thereof, plus interest, compounded quarterly, on the total unpaid
amount determined to be payable under this Agreement, such interest to be
calculated at a rate equal to 2% in excess of the prime commercial lending rate
announced by The Huntington National Bank, Columbus, Ohio, or its successor, in
effect from time to time during the period of such nonpayment.
8. Certain Reduction of Payments by the Company.
Notwithstanding any other provisions in this Agreement or any other agreement,
plan or arrangement, if any payment or benefit received or to be received by
Executive, whether under the terms of this Agreement or any other agreement,
plan or arrangement with the Company or an affiliate of the Company (all such
payments and benefits being hereinafter referred to as "Total Payments"), would
be subject, in whole or in part, to taxes imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code"), then the Total Payments
shall be reduced to the extent necessary so that no portion of the Total
Payments shall be subject to the parachute excise tax (the "Excise Tax") imposed
by Section 4999 of the Code
- 12 -
13
(after taking into account any reduction in the Total Payments provided by
reason of Section 280G of the Code in any other plan, arrangement or agreement).
Total Payments shall not include any amounts which are not considered a
"parachute payment" under Section 280G of the Code in the opinion of suitable
experts selected by the Company's Board of Directors and Executive. The Company
shall provide Executive with the calculation of the foregoing amounts and any
supporting materials reasonably necessary for Executive to evaluate the
calculations. Any reduction in the Total Payments in accordance with this
Section 8 shall be made in the following order:
(a) The payment under Section 6(d)(i)(B) of this
Agreement shall first be reduced (if necessary, to zero);
(b) The payment under Section 6(d)(i)(C) of this
Agreement shall next be reduced (if necessary, to zero);
(c) The payment under Section 6(d)(i)(D) of this
Agreement shall next be reduced (if necessary, to zero);
(d) The payments under Section 6(d)(i)(E) of this
Agreement shall next be reduced (if necessary, to zero);
(e) The payments (or calculated value) of the
benefits under Sections 6(d)(ii), (iii), (iv) and (v) of this Agreement shall
next be reduced (if necessary, to zero); and
(f) Any additional termination payments or benefits
provided outside this Agreement shall then be reduced as necessary.
No inference shall be drawn, however, that any of the payments
described in clauses (a) through (f) above constitute "parachute payments" under
Section 280G of the Code.
9. Change of Control. (a) For purposes of this Agreement, a
"Change of Control" shall be deemed to have occurred if: (i) any individual
(other than Executive), firm, corporation, partnership, joint venture or other
entity or any group (as the term "group" is defined in Section 13(d)(3) of the
Securities Exchange Act of 1934 (the "Exchange Act") and the rules thereunder on
the Commencement Date), other than any such entity or group in respect of which
Executive is a participant, shall hereafter acquire (or disclose the previous
acquisition of) beneficial ownership (as that term is defined in Section 13(d)
of the Exchange Act and the rules thereunder on the Commencement Date) of shares
of the outstanding stock of any class or classes of the Company which results in
such person, firm, corporation, partnership, joint venture, other entity
- 13 -
14
or group possessing more than a majority of the total voting power of the
Company's outstanding voting securities ordinarily having the right to vote for
the election of directors of the Company; or (ii) as the result of, or in
connection with, any tender or exchange offer, merger or other business
combination, sale of assets or contested election of directors, or any
combination of the foregoing transactions ("Transaction"), the persons who were
directors of the Company immediately before the Transaction shall cease to
constitute a majority of the Board of Directors of the Company or any successor
to the Company.
(b) A Change of Control shall also be deemed to have
occurred for purposes of this Agreement if the Board of Directors of the Company
shall at any time declare that one or more events have occurred or are likely to
occur which, in their sole determination, create or pose the threat of a Change
of Control and which, for that reason, make it desirable and in the best
interests of the Company to invoke those provisions of this Agreement which
become effective on or after the occurrence of a Change of Control; provided,
however, that no Director of the Company who is a party to this Agreement or an
agreement with the Company similar to this Agreement shall participate in
considering or voting upon any such resolution.
10. Nomination to Board. During the term of Executive's
employment with the Company, the Company shall cause Executive to be nominated
to membership on the Board of Directors of the Company in all applicable proxy
solicitations made to shareholders.
11. Confidential Information. Executive shall hold in a
fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any of its affiliated
companies, and their respective businesses, which shall have been obtained by
Executive during Executive's employment by the Company or any of its affiliated
companies and which shall not be public knowledge (other than by acts by
Executive or his representatives in violation of this Agreement). After
termination of Executive's employment with the Company, Executive shall not,
without the prior written consent of the Company, communicate or divulge any
such information, knowledge or data to anyone other than the Company and those
designated by it. In no event shall an asserted violation of the provisions of
this Section 11 constitute a basis for deferring or withholding any amounts
otherwise payable to Executive under this Agreement.
12. Agreement Not to Compete. (a) Executive agrees that during
the Employment Term and for a period of two (2) years thereafter (five (5) years
thereafter if Executive's employment
- 14 -
15
terminates under the circumstances described in Section 6(d)), he will not,
without the consent of the Company's Board of Directors, serve on the board of
directors of any corporation or other entity that is in competition with the
Company or any affiliate of the Company, nor allow the use of his name with
respect to any such corporation or entity, nor serve as an officer, employee,
consultant, representative or otherwise or have a substantial investment in any
such corporation or entity. In no event shall any asserted violation of the
provisions of this Section 12(a) constitute a basis for deferring or withholding
any amounts otherwise payable to Executive under this Agreement.
(b) In the event that Executive's employment
terminates under the circumstances described in Section 6(d), Executive agrees
that for a period of one (1) year he will provide consulting services to the
Company in the Central Ohio area at the request of the Company so long as he
shall not be required to spend more than six hours a month providing such
services and shall be reimbursed for all expenses incurred by him in providing
such consulting services. Such consulting services shall include (i) assisting
in the preservation of the Company's relationships with its suppliers and
customers and the attraction of new customers, (ii) assisting in keeping
available to the Company the employees of the Company, (iii) consulting on new
product proposals and (iv) providing general consulting services at the
reasonable request of the Company.
13. Retirement Benefits. In addition to any retirement
benefits to which Executive is entitled under any pension plan or other plan or
program provided by the Company and for which Executive may qualify and in
addition to any termination benefits or payments provided for in this Agreement,
upon any termination of Executive's employment with the Company (other than
termination for Cause (as defined in Section 5(b)), whether or not this
Agreement is then in effect, the Company shall provide Executive the following
retirement benefits:
(a) The Company shall continue the life insurance
benefits described in Sections 3(b)(i) and 3(b)(ii) until Executive has attained
the age of 70;
(b) For a period of five years following the date of
termination of Executive's employment with the Company, the Company shall make
available to Executive, at the Company's expense, Class A office space suitable
for Executive at the Company's headquarters in Pickerington, Ohio, or at a
different location selected by the
- 15 -
16
Company and Executive within 10 miles of Executive's principal residence in
Ohio; and
(c) For a period of one year following the date of
termination of Executive's employment with the Company, the Company, at its
cost, will make available to Executive a full-time secretary, at the location
described in Section 13(b) above.
14. Arbitration. Any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, shall be submitted to
arbitration by the American Arbitration Association in Columbus, Ohio, and the
determination of the American Arbitration Association shall be final and
absolute. The arbitration and the arbitrator shall be governed by the duly
promulgated Commercial Arbitration Rules of the American Arbitration Association
and the pertinent provisions of the laws of the State of Ohio relating to
arbitration. Any judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. Compensation and benefits
provided hereunder shall continue while any proceeding entered into pursuant to
this section is in progress. Arbitration and legal fees regarding disputes or
controversies arising under this Agreement shall be borne by the Company.
15. Successors; Binding Agreement. (a) The Company shall
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company, by agreement in form and substance satisfactory to
Executive, 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 succession had taken place. Failure of the Company to obtain such
agreement prior to the effectiveness of any such succession shall be a breach of
this Agreement and shall entitle Executive to compensation and benefits and
other rights in the same amount and on the same terms as he would be entitled
hereunder if he had terminated his employment for Good Reason immediately after
a Change of Control, except that for purposes of implementing the foregoing, the
date on which any such succession becomes effective shall be deemed the Date of
Termination. As used in this Agreement, "Company" shall mean the Company as
defined above and any successor to its business and/or assets as aforesaid which
executes and delivers the agreement provided for in this Section 15 or which
otherwise becomes bound by all the terms and provisions of this Agreement by
operation of law.
(b) This Agreement shall inure to the benefit of and
be enforceable by Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees
- 16 -
17
and legatees. If Executive should die while any amounts would still be payable
to him hereunder if he had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
his devisee, legatee or other designee or, if there be no such designee, to his
estate.
16. Notices. All notices, requests, demands, and other
communications required or permitted under this Agreement shall be deemed to
have been given if delivered by hand to the address of the recipient or mailed
by first-class certified mail return receipt requested, to the party at the
following addresses:
If to Executive: Xxxxxx Xxxxx
000 Xxxxx Xxxxxxxx
Xxxxxx, Xxxx 00000
If to the Company: X. X. Xxxxx Corporation
00000 Xxxxxxxx Xx., X. X.
Xxxxxxxxxxxx, Xxxx 00000
Attention: Corporate Secretary
Either party to this Agreement may, by notice given in accordance with this
paragraph, designate a new address for notices, requests, demands and other
communications to such party.
17. Miscellaneous. (a) This Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio, without reference to
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. This Agreement may not
be amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.
(b) The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
(c) The Company may withhold from any amounts payable
under this Agreement such federal, state or local taxes as shall be required to
be withheld pursuant to any applicable law or regulation.
(d) This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
- 17 -
18
IN WITNESS WHEREOF, this Agreement has been duly executed on
behalf of the Company by an officer duly authorized in the premises and by
Executive on the date first above written.
EXECUTIVE: COMPANY:
X. X. XXXXX CORPORATION
/s/ Xxxxxx Xxxxx By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------ -------------------------------------
Xxxxxx Xxxxx
Title: Senior Vice President - Finance
---------------------------------
- 18 -
