EXHIBIT 10
AGREEMENT
AGREEMENT made as of this 1st day of August, 2009 by and between XXXXXX
INDUSTRIES, INC., a Delaware corporation, with its principal office located at
000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxxxxxxxxxxx 00000 (the "Company") and
Xxxxxxx X. Xxxxxx, residing at 00 Xxx Xxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxx 00000
("Xxxxxx").
WHEREAS, the Company and Xxxxxx entered into an employment agreement dated
as of May 30, 2007, which, inter alia, employed him as Chief Operating Officer
of the Company (the "Employment Agreement"); and
WHEREAS, the Board of Directors of the Company, after consideration and
evaluation of the Company's result of operations, on a Company wide and
operating unit basis, has determined that it is planning to reorganize the
Company's management structure; and
WHEREAS, a Special Committee of the Board of Directors, consisting solely
of independent directors, has been appointed to evaluate Xx. Xxxxxx'x existing
Employment Agreement and its proposed termination; and
WHEREAS, the Special Committee has retained independent counsel to assist
in this evaluation; and
WHEREAS, under the Employment Agreement, the only basis for termination by
the Company of Xxxxxx'x employment, would be "without cause" which would result
in an immediate lump sum payment to Xxxxxx of $1,531,661 in addition to other
benefits; and
WHEREAS, after negotiations between the Special Committee and Xxxxxx,
Xxxxxx has agreed to accept termination of the Employment Agreement on terms
more beneficial to the Company than otherwise mandated under its terms.
WHEREAS, this agreement shall be effective at 12:01 A.M. Eastern time as of
August 1, 2009 ("Effective Date").
NOW, THEREFORE, based upon the mutual covenants contained herein and for
other good and valuable consideration, the sufficiency of which is hereby
acknowledged, the Company and Xxxxxx agree as follows:
1. In full satisfaction of all prior, current and future obligations to
Xxxxxx under the Employment Agreement or otherwise, whether accrued or otherwise
(except for rights of, or obligations to, Xxxxxx or his affiliates in connection
with his or their ownership of the Company's equity securities "Ownership
Rights") the parties hereby agree as follows:
1
(a) Within five days after execution hereof, Xxxxxx shall receive a lump
sum payment in the sum of $1,350,000.
(b) Xxxxxx and his spouse shall continue to receive medical care
reimbursement, in accordance with the terms of paragraphs 9(b) of the Employment
Agreement.
(c) Xxxxxx shall have the use of the automobile leased for his benefit
during his actual employment term, with payment by Xxxxxx of the automobile
lease payments and insurance payments thereon until expiration of the lease
(approximately 11 months).
(d) All outstanding unvested stock options shall vest immediately.
2. (a) Xxxxxx covenants, represents and agrees that the provisions of
paragraph 12 of the Employment Agreement shall survive this agreement and
continue in full force and effect.
(b) Xxxxxx covenants, represents and agrees that during the period he
receives payments hereunder, including payments under paragraph 2(e) hereof, and
provided the Company is not in breach of this agreement, he shall abide by and
fully comply with the provisions of paragraph 13 of the Employment Agreement,
which is hereby modified by deleting subsection (c)(i) thereof.
(c) The provisions of Paragraphs 14 (Remedies/Sanctions), 15
(Beneficiaries/References), 17 (Indemnification and Liability Insurance) and 19
(Assignability; Binding Nature) of the Employment Agreement shall survive this
agreement and are fully incorporated by reference herein and made applicable to
the provisions herein.
(d) The provisions of Paragraph 16 (Taxes) of the Employment Agreement
shall survive this agreement and are fully incorporated by reference herein and
made applicable to all or any portion of the payments to be made to Xxxxxx under
this agreement and/or any other payments and benefits that Xxxxxx receives or is
entitled to receive from the Company.
(e) The provisions of Section 11 (Consulting Period) of the Employment
Agreement (other than Sections 11(a) and 11(c)) shall survive this Agreement and
are fully incorporated by reference herein and are made applicable to the
provisions herein except that, (i) the Consulting Period shall be a period of
three years commencing on the Effective Date, (ii) Xxxxxx shall receive the sum
of $66,667 annually, with monthly payments on the first day of each month
commencing August 1, 2009, (iii) Section 11(d) is modified to eliminate "in
accordance with Section 11(c)" and substituting in its place "payable
thereunder".
2
3. (a) Subject only to the performance of and compliance by the Company
with the provisions of this agreement, and except for the Company's continuing
indemnification obligations under applicable law, the Employment Agreement and
the Indemnification Agreement, Xxxxxx hereby waives, remits, releases and
forever discharges the Company, its past, present and future Board members,
officers, directors, stockholders, employees, agents, attorneys, subsidiaries,
servants, successors, insurers, affiliates and their successors and assignees,
from any and all manner of action, claims, liens, demands, liabilities, causes
of action, charges, complaints, suits (judicial, administrative, or otherwise),
damages, debts, demands, obligations of any other nature, past or present, known
or unknown, whether in law or in equity, whether founded upon contract
(expressed or implied), tort (including, but not limited to, defamation),
statute or regulation (State, Federal or local), common law and/or any other
theory or basis, from the beginning of the world to the date hereof, including,
but not limited to, any claim that Xxxxxx has asserted, now asserts or could
have asserted. This includes, but is not limited to, claims for compensation or
benefits, tortious claims arising out of the consulting relationship, claims of
an expressed or implied contract of employment, claims under the Family and
Medical Leave Act, claims arising under Federal, State or local laws prohibiting
employment or other discrimination or claims growing out of any legal
restrictions on the Company's rights to terminate its employees, including
without limitation any claims arising under Title VII of the United States Code,
and the Age Discrimination in Employment Act. It is expressly understood by
Xxxxxx that among the various rights and claims being waived by him in this
release are those arising under the Age Discrimination in Employment Act of 1967
(29 U.S.C. ss. 621, et seq.).
(b) Subject only to the performance of, and compliance with, the provisions
of this agreement, and except as prohibited under applicable law, the Company,
hereby waives, remits, releases and forever discharges Xxxxxx and his successors
and assignees, from any and all manner of action, claims, liens, demands,
liabilities, causes of action, charges, complaints, suits (judicial,
administrative, or otherwise), damages, debts, demands, obligations of any other
nature, past or present, known or unknown, whether in law or in equity, whether
founded upon contract (expressed or implied), tort (including, but not limited
to, defamation), statute or regulation (State, Federal or local), common law
and/or any other theory or basis, from the beginning of the world to the date
hereof.
4. The Company and Xxxxxx respectively represent and warrant that each is
fully authorized and empowered to enter into this agreement and that the
performance of its or his obligations, as the case may be, under this agreement
will not violate any agreement between such party and any other person, firm or
organization. The Company represents and warrants that this agreement has been
duly authorized by all necessary corporate action and is valid, binding and
enforceable in accordance with its terms. Xxxxxx further represents that he has
been afforded the opportunity to be represented by counsel of his choosing with
respect to this agreement.
5. Except to the extent otherwise provided herein, this agreement contains
the entire understanding and agreement between the Company and Xxxxxx concerning
the subject matter hereof and supersedes any prior agreements, whether written
3
or oral, between the parties concerning the subject matter hereof, including
without limitation the Employment Agreement.
6. No provision in this agreement may be amended unless such amendment is
agreed to in writing and signed by both Xxxxxx and an authorized officer of the
Company. No waiver by either party of any breach by the other party of any
condition or provision contained in 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 or any prior or subsequent time. Any waiver must be in writing and
signed by the party to be charged with the waiver. No delay by either party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof.
7. In the event that any provision or portion of this agreement shall be
determined to be invalid or unenforceable for any reason, in whole or in part,
the remaining provisions of this agreement shall be unaffected thereby and shall
remain in full force and effect to the fullest extent permitted by law.
8. This agreement shall be governed by and construed and interpreted in
accordance with the laws of Delaware, without regard to its governing conflicts
of law principles.
9. Any notice given to either party shall be in writing and shall be deemed
to have been given when delivered either personally, by overnight delivery
service (such as Federal Express) or sent by certified or registered mail
postage prepaid, return receipt requested, duly addressed to the party concerned
at the address indicated below or to such changed address as the party may
subsequently give notice of.
If to Xxxxxx or the Board:
Xxxxxx Industries, Inc.
000 Xxxxx Xxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Fax No. 000-000-0000
Attn: Xxxxx Xxxxxxxxx, Chairman
With a copy to:
Xxxxxxx, Xxxxxxxxx & Xxxxxxxx, LLP
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxxx, Esq.
Fax No. 000-000-0000
If to Xxxxxx:
Xxxxxxx X. Xxxxxx
00 Xxx Xxxx Xxxxx
Xxxxxx, XX 00000
4
10. The headings of the sections contained in this agreement are for
convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this agreement.
11. This agreement may be executed in counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts together
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this agreement as of
August 1, 2009.
XXXXXX INDUSTRIES, INC.
By: /s/ Xxxxxxx Xxxxxxx
----------------------
Xxxxxxx Xxxxxxx, CEO
/s/ Xxxxxxx X. Xxxxxx
----------------------
Xxxxxxx X. Xxxxxx
