Exhibit 10.07
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") dated as of November 6,
2001, between Xxxxx Xxxxxxxx (the "Executive") and Xxxxx Industries, Inc., a
Delaware corporation (the "Company").
W I T N E S S E T H:
WHEREAS, the Company desires to employ the Executive as its President
and Chief Executive Officer and wishes to define the terms of the Executive's
employment with the Company and the Executive desires to accept such employment,
for the term and upon the other conditions hereinafter set forth; and
WHEREAS, the parties desire to enter into this Agreement setting forth
the terms and conditions of the employment relationship of the Executive with
the Company;
NOW, THEREFORE, the parties agree as follows:
1. Employment. The Company hereby employs the Executive, and the
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Executive hereby accepts employment with the Company, upon the terms and subject
to the conditions set forth herein.
2. Term. This Agreement shall commence on the date hereof (the
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"Effective Date") and shall continue during the period in which the Executive
remains employed by the Company (the "Term"). The Executive shall be considered
an at-will employee and his employment may be terminated by either party subject
to the obligations of the parties upon such termination as may be set forth
hereinafter.
3. Position. During the Term, the Executive shall serve as President
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and Chief Executive Officer of the Company.
4. Duties and Reporting Relationship. The Executive shall have
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duties and responsibilities commensurate with his title and status as President
and Chief Executive Officer. He shall at all times be the highest-ranking
officer of the Company, reporting to the Board of Directors of the Company (the
"Board"). During the Term, the Executive shall, on a full time basis, use the
Executive's skills and render services to the best of the Executive's abilities
in supervising and conducting the operations of the Company and, except for his
continuing to serve as a member of the Board of Directors of Champion
Enterprises, Inc and on any committees thereof and as a member of the Board of
Directors of Tavant, Inc., the Executive shall not engage in any other business
activities except with the prior written approval of the Board or its duly
authorized designee. The Executive agrees to be employed by the Company in such
capacity for the Term, subject to all the covenants and conditions hereinafter
set forth.
5. Place of Performance. The Executive shall perform his duties and
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conduct his business at the principal executive offices of the Company, except
for required travel on the Company's business. Executive agrees to relocate his
family to the Athens or Atlanta, Georgia area as soon as practicable after the
Effective Date, but in no event later than six (6) months following the
Effective Date.
6. Salary and Annual Bonus.
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(a) Base Salary. The Executive's base salary hereunder shall
be $575,000 a year, payable no less frequently than monthly and
prorated for any partial year of employment. The Board shall review
such base salary at least annually and may increase, but not decrease,
such base salary as it may deem advisable.
(b) Annual Bonus. The Company shall provide the Executive with
an opportunity to earn upon achievement of target performance goals
established by the Compensation Committee of the Board, an annual bonus
of up to one hundred percent (100%) of the Executive's base salary (the
"Target Bonus").
7. Vacation, Holidays and Sick Leave. During the Term, the Executive
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shall be entitled to paid vacation, paid holidays and sick leave in accordance
with the Company's standard policies for its senior executive officers; provided
however, that in no event shall the Executive be entitled to less than four (4)
weeks of vacation per year.
8. Business Expenses. The Executive shall be reimbursed for all
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ordinary and necessary business expenses incurred by the Executive in connection
with the Executive's employment upon timely submission by the Executive of
receipts and other documentation as required by the Internal Revenue Code and in
conformance with the Company's normal procedures.
9. Pension and Welfare Benefits. During the Term, the Executive
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shall be eligible to participate fully in all health benefits, insurance
programs, pension and retirement plans and other employee benefit and
compensation arrangements available to senior executive officers of the Company
generally. In addition, the Executive shall be entitled to use a new Company
paid automobile (Buick Park Avenue or equivalent) and the Company will pay
initiation and monthly dues for the Executive at the Athens Country Club or
another country club of his choice which is reasonably acceptable to the Board
of Directors of the Company.
10. Relocation Benefits. The Executive shall be entitled to
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relocation benefits in accordance with the Company's relocation policy. In
addition and notwithstanding the relocation policy:
(a) The Company shall gross-up any portion of such relocation
benefits which are taxable to the Executive for all state,
federal and local income taxes based on the Executive's
highest marginal income tax rates, which amount shall be
considered additional relocation benefits;
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(b) The Company will pay for the Executive's temporary living
expenses for up to six months; and
(c) The Executive will not be obligated to return all relocation
benefits unless prior to the first anniversary of the
Effective Date, the Executive voluntarily terminates his
employment with the Company without Good Reason (as defined
below) or is terminated by the Company for Cause (as defined
below).
11. Stock Options On the Effective Date, the Company shall grant to
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the Executive, pursuant to the terms of the Company's 2000 Stock Incentive Plan
(the "Stock Incentive Plan") and the Company's 1991 Stock Option Plan (the
"Stock Option Plan"), options to purchase in the aggregate 200,000 shares of
common stock of the Company having an exercise price equal to the fair market
value of the Company's common stock as of the Effective Date and which shall
have such other terms and be subject to such conditions as are set forth in the
form of Stock Option Agreement typically used by the Company under the Stock
Incentive Plan and the Stock Option Plan, respectively; provided, however, that
of the aggregate 200,000 shares subject to the options, 50,000 shall be vested
on the Effective Date, 50,000 shares shall vest in equal one-third increments on
each of the first three anniversaries of the Effective Date, provided that the
Executive is employed by the Company as of the dates of vesting, and the balance
of the shares shall vest in equal one-fifth increments on each of the first five
anniversaries of the Effective Date, provided that the Executive is employed by
the Company as of the dates of vesting. In the event the Executive's employment
is terminated by the Company without Cause (as defined below) or the Executive
resigns with Good Reason (as defined below), then that portion of any option
(including any additional options that may be granted to the Executive after the
Effective Date) that would have vested at the next anniversary of the Effective
Date following the Date of Termination shall be and become fully vested on the
Date of Termination and, notwithstanding any provision to the contrary in the
applicable Stock Option Agreement, any option held by the Executive to the
extent then vested, may be exercised and shall not expire until the earlier of
(A) the expiration of the option term as set forth in the Stock Option Agreement
or (B) the expiration of the severance period set forth in Section 13(e)(ii). In
addition to the grant set forth in this Section, the Board or the Compensation
Committee thereof may grant to the Executive such other and additional awards
under the Stock Incentive Plan (or any successor plan) as may from time to time
be deemed appropriate.
12. Termination of Employment.
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(a) General. The Executive's employment hereunder may be
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terminated only under the circumstances described in this Section 12.
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(b) Death or Disability.
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(i) The Executive's employment hereunder shall
automatically terminate upon the death of the Executive.
(ii) If, as a result of the Executive's incapacity due to
physical or mental illness, the Executive is unable to perform
the essential functions of his job for one hundred eighty (180)
days (whether or not consecutive) during any period of eighteen
(18) consecutive months, and no reasonable accommodation can be
made that will allow Executive to perform his essential
functions, the Company may terminate the Executive's employment
hereunder for any such incapacity (a "Disability").
(c) Termination by the Company. The Company may terminate the
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Executive's employment hereunder at any time, whether or not for Cause.
For purposes of this Agreement, "Cause" shall mean (i) the continuous
and willful failure or refusal by the Executive to perform the
Executive's duties hereunder (other than any such failure resulting
from the Executive's incapacity due to physical or mental illness),
which has not ceased within ten (10) days after a written demand for
substantial performance is delivered to the Executive by the Company,
which demand identifies with particularity the manner in which the
Company believes that the Executive has not performed such duties, (ii)
the engaging by the Executive in willful misconduct which is materially
injurious to the Company, monetarily or otherwise (including, but not
limited to, conduct which violates Section 16 hereof) or an act of
moral turpitude which is materially injurious to the Company,
monetarily or otherwise (including, but not limited to, conduct which
violates Section 16 hereof) or (iii) the conviction of the Executive
of, or the entering of a plea of nolo contendere by, the Executive with
respect to a felony.
For purposes of this provision, no act or failure to act, on the
part of Executive shall be considered "willful" unless it is done, or
omitted to be done, by Executive in bad faith or without reasonable
belief that the Executive's action or omission was in the best
interests of the Company. Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board of
Directors or based upon the advice of counsel for the Company shall be
conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the Company. The
cessation of employment of the Executive shall not be deemed to be for
Cause unless prior to such termination there shall have been delivered
to the Executive a copy of a resolution duly adopted by the affirmative
vote of not less than a majority of the disinterested membership of the
Board of Directors at a meeting of such Board of Directors called and
held for such purpose (after reasonable notice is provided to the
Executive and the Executive is given an opportunity to be heard before
such Board of Directors), finding, that, in the good faith opinion of
the Board of Directors, the Executive is guilty of the conduct
described in clause (i), (ii) or (iii) above.
(d) Termination by the Executive for Good Reason. The
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Executive shall be entitled to terminate his employment hereunder for
Good Reason. For purposes of this
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Agreement, "Good Reason" shall mean any one of the following acts by
the Company, or failures by the Company to act, unless, in the case of
any act or failure to act described below, such act or failure to act
is corrected prior to the Date of Termination specified in the Notice
of Termination given in respect thereof or unless Executive has
otherwise consented thereto in writing:
(i) any material diminution in the Executive's authorities
or responsibilities (including reporting responsibilities) or
from his status, title, position or responsibilities (including
reporting responsibilities) without the Executive's express
written consent to accept any such change; the assignment to him
of any duties or work responsibilities which are inconsistent
with such status, title, position or work responsibilities; or
any removal of the Executive from, or failure to reappoint or
reelect him to any of such positions, except if any such changes
are because of Disability, retirement, death or Cause;
(ii) a reduction by the Company in the Executive's base
salary or Target Bonus as in effect on the date hereof or as the
same may be increased from time to time;
(iii) the relocation of the Executive's office at which the
Executive is to perform the Executive's duties, to a location
more than fifty (50) miles from the location at which the
Executive previously performed the Executive's duties hereunder,
except for required travel on the Company's business;
(iv) the failure by the Company to comply with any material
provision of this Agreement, which failure has not been cured
within ten (10) days after notice of such noncompliance has been
given by the Executive to the Company; or
(v) any purported termination of the Executive's
employment by the Company which is not effected pursuant to a
Notice of Termination satisfying the requirements of Section
12(f) below.
The Executive's continued employment for 6 months following any act or
failure to act constituting Good Reason hereunder without the delivery
of a Notice of Termination shall constitute consent to, and a waiver of
rights with respect to, such act or failure to act.
(e) Voluntary Resignation. Should the Executive wish to resign
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from his position with the Company or terminate his employment for
other than Good Reason during the Term, the Executive shall give sixty
(60) days written notice to the Company ("Notice Period"), specifying
the date as of which his resignation is to become effective. During the
Notice Period, the Executive shall cooperate fully with the Company in
an effort to achieve a smooth transition of the Executive's duties and
responsibilities to such person(s) as may be designated by the Company.
The Company reserves the right to accelerate the Date of Termination by
giving the Executive notice, but the Company shall
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in that case pay and provide the Executive with all payments and benefits
he would otherwise have been entitled to (other than disability benefits)
had he remained employed through the end of the Notice Period, including
payment of amounts due to the Executive under Section 6(a) and, to the
extent applicable, Section 6(b) for the balance of the Notice Period. The
Company's obligation to continue to employ the Executive or to continue
payment of the amounts described in the preceding sentence shall cease
immediately if: (1) the Executive has not satisfied his obligations to
cooperate fully with a smooth transition or (2) the Company has grounds to
terminate the Executive's employment immediately for Cause. Conversely, if
during the Notice Period the Executive comes to have grounds to resign with
Good Reason (other than the grounds described in Section 12(d)(i) or, only
to the extent related to the matters covered in Section 12(d)(i), Section
12(d)(iv)), then Executive may, by notice, deem the resignation to be with
Good Reason, in which case the rights and obligations set forth herein for
a Good Reason termination shall govern.
(f) Notice of Termination. Any purported termination of the
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Executive's employment by the Company or by the Executive shall be
communicated by written Notice of Termination to the other party hereto in
accordance with Section 19. "Notice of Termination" shall mean a notice
that shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated.
(g) Date of Termination. "Date of Termination" shall mean (i) if the
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Executive's employment is terminated because of death, the date of the
Executive's death, (ii) if the Executive's employment is terminated for
Disability, the date Notice of Termination is given, (iii) if the
Executive's employment is terminated pursuant to Subsection (c) or (e)
hereof or for any other reason (other than death or Disability, Good Reason
or Cause), the date specified in the Notice of Termination which shall not
be less than sixty (60) days from the date such Notice of Termination is
given (iv) if the Executive's employment is terminated pursuant to
Subsection (c) for reasons of Cause, immediately upon delivery the Notice
of Termination and (v) if the Executive's employment is terminated pursuant
to Subsection (d) hereof, the date specified in the Notice of Termination
which shall not be less than thirty (30) days from the date such Notice of
Termination is given.
(h) Change in Control. For purposes of this Agreement, a Change in
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Control of the Company shall have occurred if:
(i) any "Person" (as defined in Section 3(a)(9) of the
Securities Exchange Act of 1934 (the "Exchange Act") as modified and
used in Sections 13(d) and 14(d) of the Exchange Act) other than (1)
the Company or any of its subsidiaries, (2) any trustee or other
fiduciary holding securities under an employee benefit plan of the
Company or any of its subsidiaries, (3) an underwriter temporarily
holding securities pursuant to an offering of such securities, (4) any
creditor of the Company (but not any transferee of such creditor
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even if such transferee shall also be a creditor) who is issued shares
of the Company's common stock in connection with the implementation of
the Company's plan of reorganization which shall be effective as of
the Effective Date, or (5) any corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of the Company's common stock), is
or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company
representing more than 40% of the combined voting power of the
Company's then outstanding voting securities;
(ii) during any period of not more than two (2) consecutive
years, not including any period prior to the Effective Date,
individuals who at the beginning of such period constitute the Board,
and any new director (other than a director designated by a person who
has entered into an agreement with the Company to effect a transaction
described in clause (i), (iii), or (iv) of this Section 12(h)) whose
election by the Board or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds (2/3) of
the directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election
was previously so approved, cease for any reason to constitute at
least a majority thereof;
(iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than
(A) a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving or parent entity)
50% or more of the combined voting power of the voting securities of
the Company or such surviving or parent entity outstanding immediately
after such merger or consolidation or (B) a merger or consolidation in
which no person acquires 40% or more of the combined voting power of
the Company's or such surviving or parent entity's then outstanding
securities; or
(iv) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of the Company's assets or
all or substantially all of its and its subsidiaries' assets, taken as
a whole, (or any transaction having a similar effect).
(i) Return of Property. When the Executive ceases to be employed by
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the Company, the Executive will promptly surrender to the Company all
Company property, including without limitation, all records and other
documents belonging to the Company that were obtained by him or entrusted
to him during the course of his employment with the Company provided,
however, that the Executive may retain copies of such documents as
necessary for the Executive's personal records for federal income tax
purposes.
13. Compensation During Disability, Death or Upon Termination.
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(a) During any period that the Executive fails to perform his duties
hereunder as a result of incapacity due to a Disability ("Disability
Period"), the Executive shall continue to receive his base salary at the
rate then in effect for such period until his employment is terminated
pursuant to Section 12(b)(ii) hereof, provided that payments so made to the
Executive during the Disability Period shall be reduced by the sum of the
amounts, if any, payable to the Executive with respect to such period under
disability benefit plans of the Company or under the Social Security
disability insurance program, and which amounts were not previously applied
to reduce any such payment.
(b) If the Executive's employment is terminated by his death or
Disability, the Company shall pay (i) any base salary due to the Executive
under Section 6(a) through the date of such termination (ii) any earned but
unpaid bonus from any prior fiscal year of the Company (iii) all other
unpaid amounts, if any, to which the Executive is entitled as of the Date
of Termination under any compensation plan or program of the Company, at
the time such payments are due, and (iv) an amount equal to the Target
Bonus he would have received for the fiscal year that ends on or
immediately after the Date of Termination, assuming the Company achieved
the target level for which a bonus is paid under the plan described in
Section 6(b), prorated for the period beginning on the first day of the
fiscal year in which occurs the Date of Termination through the Date of
Termination.
(c) If the Executive's employment is terminated by the Company for
Cause or by the Executive for other than Good Reason, the Company shall pay
the Executive (i) his base salary through the Date of Termination at the
rate in effect at the time Notice of Termination is given, (ii) any earned
but unpaid bonus from any prior fiscal year of the Company and (iii) all
other unpaid amounts, if any, to which the ExeuctiveExecutive is entitled
as of the Date of Termination under any compensation plan or program of the
Company, at the time such payments are due, and the Company shall have no
further obligations to the Executive under this Agreement.
(d) If within one (1) year following a Change in Control, either the
Company terminates the Executive's employment without Cause or the
Executive terminates his employment for Good Reason, then
(i) the Company shall pay the Executive (I) his base salary
through the Date of Termination at the rate in effect at the time
Notice of Termination is given, (II) any earned but unpaid bonus from
any prior fiscal year of the Company, and (III) all other unpaid
amounts, if any, to which the Executive is entitled as of the Date of
Termination under any compensation plan or program of the Company, at
the time such payments are due;
(ii) in lieu of any further salary or other payments to the
Executive for periods subsequent to the Date of Termination, the
Company shall pay as liquidated damages to the Executive an aggregate
amount equal to the product of (A) the sum of (1) the Executive's base
salary at the rate in effect of the Date of
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Termination and (2) the greater of (I) the average of the annual
bonuses actually paid to the Executive by the Company with respect to
the two (2) fiscal years which immediately precede the year in which
the Date of Termination occurs (provided if there was a bonus paid to
the Executive with respect only to one fiscal year that immediately
precedes the year in which the Date of Termination occurs, then such
single year's bonus shall be utilized in the calculation pursuant to
this subclause (I)) and (II) the bonus the Executive would earn based
on the Target Bonus applicable for the year of termination and (B) the
number two (2.0);
(iii) the Company shall pay the Executive an amount equal to the
prorated Target Bonus (prorated in the same manner set forth in
Section 13(b) hereof) that would have been paid for the period
beginning on the first day of the fiscal year in which the Date of
Termination occurs;
(iv) the Company shall continue coverage for the Executive, on
the same terms and conditions as would be applicable if the Executive
were an active Employee, under the Company's life insurance, medical,
health and similar welfare benefit plans (other then group disability
benefits) for a period of twenty-four (24) months; provided, however,
that if the Company is unable under the terms of any such plan to
provide such benefits, then in lieu of such continued coverage, the
Company shall pay to the Executive the economic equivalent of such
benefit (based on premium costs to the Company). Benefits otherwise
receivable by the Executive pursuant to this Section 13(d)(iv) shall
be reduced to the extent comparable benefits are actually received by
the Executive from a subsequent employer during the period during
which the Company is required to provide such benefits, and the
Executive shall report to the Company any such benefits actually
received by him;
(v) all options, shares of restricted stock, performance shares
and any other equity based awards shall be and become fully vested as
of the Date of Termination and, notwithstanding any provision to the
contrary in the applicable Stock Option Agreement, any such options
may be exercised and shall not exprie until the earlier of (I) the
expiration of the option term as set forth in the Stock Option
Agreement or (II) the second anniversary of the Date of Termination;
and
(vi) the payments provided for in this Section 13(d) (other than
Section 13(d)(iv)) shall be made not later than the thirtieth (30th)
day following the Date of Termination.
(e) If either following the first anniversary of or prior to a Change
of Control, the Executive terminates his employment for Good Reason or the
Company terminates the Executive's employment without Cause, then
(i) the Company shall pay the Executive (I) his base salary
through the Date of Termination at the rate in effect at the time
Notice of Termination is
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given, (II) any earned but unpaid bonus from any prior fiscal year of
the Company, and (III) all other unpaid amounts, if any, to which the
Executive is entitled as of the Date of Termination under any
compensation plan or program of the Company, at the time such payments
are due;
(ii) the Company shall pay to the Executive the Executive's base
salary in effect as of the date the Notice of Termination is given for
a period of twenty-four (24) months from the Date of Termination;
(iii) the Company shall pay the Executive his Target Bonus
prorated (in the manner set forth in Section 13(b) hereof) for the
period beginning on the first day of the fiscal year in which occurs
the Date of Termination through the Date of Termination;
(iv) the Company shall continue coverage for the Executive, on
the same terms and conditions as would be applicable if the Executive
were an active employee, under the Company's life insurance, medical,
health, and similar welfare benefit plans (other then group
disability) for a period not to exceed the number of months the
Executive will be paid under Section 13(e)(ii) beginning on the Date
of Termination; provided, however, that if the Company is unable under
the terms of any such plan to provide such benefits, then in lieu of
such continued coverage, the Company shall pay to the Executive the
economic equivalent of such benefit (based on premium costs to the
Company);
(v) benefits otherwise receivable by the Executive pursuant to
clause (iv) of this Section 13(e) shall be reduced to the extent
comparable benefits are actually received by the Executive from a
subsequent employer during the period which the Company is required to
provide such benefits, and the Executive shall report to the Company
any such benefits actually received by him.
(f) The Executive shall not be required to mitigate the amount of any
payment or benefit provided for in this Section 13 by seeking other
employment or otherwise, and, except as provided in Sections 13(d)(iv) and
13(e)(iv) and (v) hereof, the amount of any payment or benefit provided for
in this Section 13 shall not be reduced by any compensation or benefits
earned by the Executive as the result of employment by another employer or
by retirement benefits or from any other source.
(g) Release. Prior to making any payment pursuant to Sections
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13(e)(ii) and 13(e)(iii), the Company shall have the right to require the
Executive to sign, and the Executive hereby agrees to sign, an agreement to
be bound by the terms of Section 16 of this Agreement and a waiver, in the
form attached hereto as Exhibit A, of all claims the Executive may have
(including any claims under the Age Discrimination in Employment Act), and
the Company may withhold payment of such amount until the period during
which the Executive may revoke such waiver (normally seven days) has
elapsed.
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14. Representations and Covenants.
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(a) The Company represents and warrants that this Agreement has been
authorized by all necessary corporate action of the Company and is a valid
and binding agreement of the Company enforceable against it in accordance
with its terms.
(b) The Executive represents and warrants that he is not a party to
any agreement or instrument that would prevent him from entering into or
performing his duties in any way under this Agreement. The Executive agrees
and covenants that he will obtain, and submit to, such physical
examinations as may be necessary to facilitate the Company obtaining an
insurance policy for its benefit insuring the life of the Executive.
15. Successors; Binding Agreement.
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(a) This Agreement is not assignable by the Company except to a
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, provided that such successor expressly assumes and agrees 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 had taken
place.
(b) This Agreement is a personal contract and the rights and interests
of the Executive hereunder may not be sold, transferred, assigned, pledged,
encumbered, or hypothecated by him, except as otherwise expressly permitted
by the provisions of this Agreement. This Agreement shall inure to the
benefit of and be enforceable by the Executive and his personal or legal
representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Executive should die while any
amount would still be payable to him hereunder had the Executive 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 is no such designee, to his estate.
16. Confidentiality and Non-Competition Covenants.
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(a) The Executive covenants and agrees that he will not at any time
during or at any time after the end of the Term, directly or indirectly,
use for his own account, or disclose to any person, firm or corporation,
other than authorized officers, directors and employees of the Company or
its subsidiaries, Confidential Information (as hereinafter defined) that is
treated as trade secrets by the Company and will not at any time during or
for five years following the Date of Termination, directly or indirectly,
use for his own account, or disclose to any person, firm or corporation,
other than authorized officers, directors and employees of the Company or
its subsidiaries, any other Confidential Information. As used herein,
"Confidential Information" of the Company means information of any kind,
nature or description which is disclosed to or otherwise known to the
Executive as a direct or indirect consequence of his association with the
Company, which information is not generally known to the public or in the
business in which the
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Company is engaged or which information relates to specific opportunities
within the scope of the Company's business which were considered by the
Executive or the Company during the term of this Agreement. Confidential
Information that is treated as confidential trade secrets by the Company
shall include, but not be limited to, strategic operating plans and
budgets, policy and procedure manuals, computer programs, financial forms
and information, patient or resident lists and accounts, supplier
information, accounting forms and procedures, personnel policies,
information pertaining to the salaries, positions and performance reviews
of the Company's employees, information on the methods of the Company's
operations, research and data developed by or for the benefit of the
Company and information relating to revenues, costs, profits and the
financial condition of the Company. Confidential Information does not
include any information that (i) is generally known to the public or the
buinsessbusiness in which the Company engages other than as a result of
unauthorized disclosure by the Executive, (ii) can be discovered, compiled
or ascertained by a third party without substantial burden or expense, or
(iii) was known to the Executive prior to accepting employment with the
Company. During the Term and for a period of two (2) years following the
termination of the Executive's employment, the Executive shall not,
directly or indirectly, solicit or induce any person who is then an
employee of the Company or its subsidiaries to terminate his or her
employment by the Company or its subsidiaries in order to obtain employment
by any person, firm or corporation affiliated with the Executive and the
Executive shall not or cause any other person, firm or corporation
affiliated with the Executive to hire any employee of the Company or its
subsidiaries or any other person who was an employee of the Company or its
subsidiaries within the twelve (12) month period prior to the Executive's
Date of Termination.
(b) The Executive covenants and agrees that any information,
materials, ideas, discoveries, techniques or programs developed or
discovered by the Executive in connection with the performance of his
duties hereunder shall remain the sole and exclusive property of the
Company and, to the extent it constitutes Confidential Information, shall
be subject to the covenants contained in the preceding paragraph.
(c) The Executive covenants and agrees that during the Term and for a
period of one (1) years following the termination of the Executive's
employment, the Executive shall not, directly or indirectly, own an
interest in, operate, join, control, or participate as a partner, director,
principal, officer, or agent of, enter into the employment of, or act as a
consultant to, in any case in which he has control or supervision over a
significant portion of any entity which competes with the Company and whose
principal business is designing, manufacturing and distributing specialty
industrial controls, fluid handling and analytical instrumentation
products. Notwithstanding anything herein to the contrary, the foregoing
provisions of this Section 16(c) shall not prevent the Executive from
acquiring securities representing not more than 5% of the outstanding
voting securities of any publicly held corporation.
(d) Without limiting the right of the Company to pursue all other
legal and equitable remedies available for violation by the Executive of
the covenants contained in this Section 16, it is expressly agreed by the
Executive and the Company that such other
12
remedies cannot fully compensate the Company for any such violation and
that the Company shall be entitled to injunctive relief, without the
necessity of proving actual monetary loss, to prevent any such violation or
any continuing violation thereof. Each party intends and agrees that if in
any action before any court or agency legally empowered to enforce the
covenants contained in this Section 16, any term, restriction, covenant or
promise contained herein is found to be unreasonable and accordingly
unenforceable, then such term, restriction, covenant or promise shall be
deemed modified to the extent necessary to make it enforceable by such
court or agency. The covenants contained in Section 16 shall survive the
conclusion of the Executive's employment by the Company.
17. Entire Agreement. This Agreement contains all the understandings
----------------
between the parties hereto pertaining to the matters referred to herein, and on
the Effective Date shall supersede all undertakings and agreements, whether oral
or in writing, previously entered into by them with respect thereto. The
Executive represents that, in executing this Agreement, he does not rely and has
not relied upon any representation or statement not set forth herein made by the
Company with regard to the subject matter, bases or effect of this Agreement or
otherwise.
18. Amendment or Modification. Waiver. No provision of this Agreement may
---------------------------------
be amended or waived unless such amendment or waiver is agreed to in writing,
signed by the Executive and by a duly authorized officer of the Company. No
waiver by any party hereto of any breach by another party hereto of any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of a similar or dissimilar condition or provision at
the same time, any prior time or any subsequent time.
19. Notices. Any notice to be given hereunder shall be in writing and shall
-------
be deemed given when delivered personally, sent by courier or telecopy or
registered or certified mail, postage prepaid, return receipt requested,
addressed to the party concerned at the address indicated below or to such other
address as such party may subsequently give notice of hereunder in writing:
To Executive at: Xxxxx Xxxxxxxx
0000 Xxxxxxx Xxxxx,
Xxxxxxxxxxxx, XX 00000
With a copy to: Xxxxx Xxxxxxx, Esq.
000 Xxxx Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000
To the Company at: Xxxxx Industries, Inc.
000 Xxx Xxxxxx Xxxx
Xxxxxx, Xxxxxxx 00000
Attn: Chairman of the Board of Directors
13
With a copy to: Xxxxxx X. XxXxxxx, Esq.
Powell, Goldstein, Xxxxxx & Xxxxxx
00/xx/ Xxxxx
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Any notice delivered personally or by courier under this Section 19 shall
be deemed given on the date delivered and any notice sent by telecopy or
registered or certified mail, postage prepaid, return receipt requested, shall
be deemed given on the date telecopied or mailed.
20. Severability. If any provision of this Agreement or the application of
------------
any such provision to any party or circumstances shall be determined by any
court of competent jurisdiction to be invalid and unenforceable to any extent,
the remainder of this Agreement or the application of such provision to such
person or circumstances other than those to which it is so determined to be
invalid and unenforceable, shall not be affected thereby, and each provision
hereof shall be validated and shall be enforced to the fullest extent permitted
by law.
21. Survivorship. The respective rights and obligations of the parties
------------
hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations.
22. Governing Law: Attorney's Fees.
------------------------------
(a) This Agreement will be governed by and construed in accordance
with the laws of the State of Georgia, without regard to its conflicts of
laws principles.
(b) The prevailing party in any dispute arising out of this Agreement
shall be entitled to be paid its reasonable attorney's fees and litigation
expenses incurred in connection with such dispute from the other party to
such dispute.
23. Dispute Resolution. The Executive and the Company shall not initiate
------------------
legal proceedings relating in any way to this Agreement or to the Executive's
employment or termination from employment with the Company until thirty (30)
days after the party against whom the claim is made ("respondent") receives
written notice from the claiming party of the specific nature of any purported
claims and the amount of any purported damages attributable to each such claim.
The Executive and the Company further agree that if respondent submits the
claiming party's claim to the CPR Institute for Dispute Resolution,
JAMS/Endispute, or other local dispute resolution service for nonbinding
mediation prior to the expiration of such thirty (30) day period, the claiming
party may not institute legal proceedings against respondent until the earlier
of: (a) the completion of good-faith mediation efforts or (b) 90 days after the
date on which the respondent received written notice of the claimant's claim(s);
provided, however, that nothing in this Section 23 shall prohibit either party
from pursuing injunctive or other equitable relief against the other party in
circumstances in which such relief is appropriate, prior to, contemporaneous
with, or subsequent to invoking or participating in these dispute resolution
14
processes. In all events, the Company shall pay the cost of the mediator,
regardless of whether the dispute was or was not resolved or settled through
mediation.
24. Headings. All descriptive headings of sections and paragraphs in this
--------
Agreement are intended solely for convenience, and no provision of this
Agreement is to be construed by reference to the heading of any section or
paragraph.
25. Withholdings. All payments to the Executive under this Agreement shall
------------
be reduced by all applicable withholding required by federal, state or local tax
laws.
26. 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 parties hereto have executed this Agreement as of
the date first above written.
XXXXX INDUSTRIES, INC.
BY:_________________________________________
NAME:_______________________________________
TITLE:______________________________________
EXECUTIVE
____________________________________________
Xxxxx Xxxxxxxx
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