COLLEXIS HOLDINGS, INC. FIRST RESTATEMENT AND AMENDMENT OF SENIOR EXECUTIVE EMPLOYMENT AGREEMENT
Exhibit
10.7
FIRST
RESTATEMENT AND AMENDMENT OF
SENIOR
EXECUTIVE EMPLOYMENT AGREEMENT
THIS FIRST RESTATEMENT AND AMENDMENT
OF SENIOR EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) is entered into as
of the 20th day of August 2009, by and between Collexis Holdings, Inc., a Nevada
corporation (“Company”), and Xxxxxxx X. Xxxxxx, a resident of the State of South
Carolina (“Executive”). Capitalized terms and phrases shall have the
meaning ascribed thereto in this Agreement.
RECITALS
WHEREAS, Company and Executive
entered into an agreement on the 25th day of
January 2006 pursuant to which Company agreed to employ Executive and Executive
agreed to be employed for the purpose of performing the duties described therein
(the “Original Agreement”);
WHEREAS, each of the parties
to the Original Agreement desire to amend and restate the Original Agreement by
entering into this Agreement, which, among other things, would amend the
definition of the phrase “Initial Term,” such that the Expiration Date would be
extended by an additional three
(3) years, and increase Executive's Base Salary and Severance Payments
(in the case where the same should become due and payable);
WHEREAS, Company’s board of
directors (the “Board”) has determined that it is in Company’s best interest to
enter into this Agreement with Executive; and
WHEREAS, Executive desires to
accept the terms and conditions of this Agreement in exchange for the benefits
offered hereunder.
AGREEMENT
NOW, THEREFORE, in
consideration of the premises and the mutual covenants and promises contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
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1.
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EMPLOYMENT TERMS AND
CONDITIONS.
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1.1 Employment. Upon
and coincident with the Effective Date (as defined below), Company agrees to
employ and Company hereby employs Executive, and Executive hereby accepts
employment by Company, upon the terms and conditions set forth in this
Agreement.
1.2 Duties.
(a) In
General. Executive shall serve as Company's Chief Operating
Officer (“COO”).
In his capacity as Company’s COO, Executive shall report directly to the
Company’s Chief Executive Officer. In such capacity, Executive shall
(i) perform the duties and responsibilities customarily performed by an
individual with such titles and as may otherwise be reasonably assigned to him
from time to time. Except as otherwise agreed upon by Company,
Executive shall devote all of Executive's business time, energy and skill to
performing the Services, shall not be otherwise employed and shall perform the
Services diligently, faithfully and to the best of Executive's
abilities.
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Exhibit
10.7
(b) Other
Activities. Notwithstanding the above, Executive may (i) serve
as a director or trustee of other organizations, or (ii) engage in charitable,
civic, and/or governmental activities, provided that any such services and
activities do not interfere with Executive's ability to perform his duties under
this Agreement and that Executive obtains written consent for all such
activities from Company, which consent will not be unreasonably
withheld. Consistent with the foregoing, Executive may engage in
personal activities, including, without limitation, personal investments,
provided that such activities described under this Section 1.2(b) do not
interfere with Executive's performance of the Services or any other of
Executive's written agreements with Company.
(c) Compliance with
Policies. Subject to the terms of this Agreement, during the
Term, Executive shall comply in all material respects with all Company policies
and procedures applicable to employees of Company generally and Executive
specifically. In connection with and as a condition to this
Agreement, Executive and Company shall enter into as of the Effective Date that
certain Statement of Additional Terms and Conditions Relating to Employment
Agreement substantially in the form attached hereto as Exhibit “A,” which is
incorporated herein and made a part hereof (together, the
“Statement”).
1.3 Employment
Term. Company agrees to employ Executive pursuant to the terms
of this Agreement, and Executive hereby accepts employment with Company, upon
the terms set forth in this Agreement, for the period commencing upon and
coincident with the 25th day of
January 2006 (the “Effective Date”) and ending upon the earlier
of:
(a) Expiration
Date. That date which coincides with the last day of the later
of the Initial Term (as defined below) or the Renewal Term (as defined
below)(such date shall be referred to as the “Expiration Date”) (For purposes of
this Agreement, the phrase “Initial Term” shall mean that period from the
Effective Date through and including the sixth (6th) anniversary of the
Effective Date (the “Initial Term Expiration Date”); and the phrase “Renewal
Term” shall mean each consecutive twelve month period immediately following the
Initial Term, during which period this Agreement shall automatically renew on
the same terms and conditions hereof and without any further act on the part of
either party; provided, however, that in no
event shall the term of this Agreement be renewed hereunder if and to the extent
either party delivers to the other written notice of his or its intent to not
renew this Agreement at least one hundred and twenty
(120) days prior to the end of the Initial Term or any succeeding Renewal Term
(as the case may be) (the “Notice of Nonrenewal”)); or
(b) Termination
Date. The Termination Date (as such phrase is defined in
Section 1.5 of this Agreement).
The
period from the Effective Date to the earlier to occur of either the Expiration
Date or Termination Date shall be hereinafter referred to as the “Employment
Term.”
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Exhibit
10.7
1.4 Compensation and
Benefits.
(a) Base
Salary. In consideration of the Services rendered to Company
by Executive and Executive's covenants under this Agreement, Company agrees to
pay Executive during the Employment Term a salary at the annual rate of Two
Hundred and Fifty Thousand Dollars ($250,000) (the “Base Compensation”), subject
to upward adjustments as may from time to time be determined by Company’s Board,
less statutory deductions and withholdings, payable in accordance with Company's
regular payroll practices.
(b) Bonus. In
addition to the Base Salary, during the Employment Term, Executive shall be
entitled to such Bonuses (as defined below) as may from time to time be
determined by the Board, which may be described in that certain schedule
entitled “Bonuses,” attached hereto, marked as Exhibit “B,” and made a part
hereof or evidenced under a separate writing.
(c) Benefits
Package. Company has adopted and maintains for its employees
generally an employee health and welfare benefit and retirement
plan. Subject to Company’s continued maintenance of such plans and
satisfaction of applicable participation requirements, Employee shall be
entitled to participate in the following such plans and such other plans as the
right to participate may be extended, from time to time, to other members of
Company’s senior management team: 401(k) Plan
and medical, life, disability and dental
insurance.
(d) Vacation and Personal
Leave. Executive shall be entitled to twenty one (21) business
days paid vacation, in accordance with the vacation accrual schedule, if any,
set forth in Company's personnel policies or, if any, employee
handbook. Additionally, Executive shall be entitled to take personal
leave up to a maximum of seven (7) business days for each year of this
Agreement, such days being utilized for observance of religious holidays or sick
leave, which days may not be accrued or otherwise carried over from year to
year.
(e) Reimbursement of Company
Business Expenses. Company shall within ninety (90) days of
its receipt from Executive of supporting receipts to the extent required by
applicable income tax regulations and Company’s reimbursement policies,
reimburse Executive for all out-of-pocket 409A Permitted Business
Expenses; provided, however, that if such
reimbursement would jeopardize the ability of the Company to continue as a going
concern, Company’s obligation to make such reimbursement shall be deferred until
such date as any such reimbursement would no longer have such
effect. For purposes of this Agreement, the phrase “409A Permitted
Business Expenses” shall mean those reasonably and actually incurred expenses
that are incurred by Executive in connection with his employment hereunder and
consistent with Company policies and could otherwise be deducted by Executive
under Code Section 162 or 167 as business expenses incurred in connection with
the performance of services (ignoring any applicable limitation based on
adjusted gross income). Reimbursement of any and all 409A Permitted
Business Expenses is conditioned on Executive submitting his request for
reimbursement and supporting substantiation within sixty (60) of the date on
which any such expenses shall have been incurred.
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Exhibit
10.7
1.5
Termination of Agreement.
(a) Termination
Date. Executive's employment and this Agreement (except as
otherwise provided hereunder) shall terminate upon the first to occur of any of
the following, at the time set forth therefore (the “Termination
Date”):
(i) Mutual
Termination. At any time by the mutual written agreement of
Company and Executive;
(ii) Death or
Disability. Immediately upon the death of Executive or,
subject to applicable law, if any, a determination by Company that Executive is
or has become Disabled (termination pursuant to this Section being referred to
herein as termination for “Death or Disability”)(For purposes of this Agreement,
the term “Disabled” or “Disability” shall mean one of the following (A)
Executive has ceased to be able to perform the essential functions of his
duties, with or without reasonable accommodation, for a period of not less than
ninety (90) consecutive days, by reason of any medically determinable physical
or mental impairment or other incapacity that can be expected to result in death
or can be expected to last for a continuous period of not less than ninety (90)
days
(iii) Voluntary Termination By
Executive. Thirty (30) days following Executive's
written notice to Company of his termination of employment; provided, however, that Company
may waive all or a portion of such notice period and accelerate the effective
date of such termination (termination pursuant to this Subsection being referred
to herein as “Voluntary” termination);
(iv) Termination For Cause By
Company. Immediately following notice of termination for
“Cause” (as defined below) given by Company and failure by Executive to Cure (as
defined below), if applicable, with such notice specifying such Cause
(termination pursuant to this Subsection being referred to herein as termination
for “Cause”)(As used herein, “Cause” means (A) Executive being convicted of or
entering a plea of guilty or nolo contendere for any crime
constituting a felony in the jurisdiction in which committed, any crime
involving moral turpitude (whether or not a felony), or any other violation of
criminal law involving dishonesty or willful misconduct that materially injures
Company (whether or not a felony); (B) subject to applicable law, if any,
Executive's substance abuse that in any manner interferes with the performance
of his duties and Executive’s failure to Cure; (C) Executive's material
breach of this Agreement or any other agreement entered into with Company in
connection with Company's confidential information, trade secrets or other
property and Executive's failure to Cure the same; or (E) misconduct by
Executive that has or could result in Company’s material discredit or diminution
in value and Executive's failure to Cure the same.)(For purposes hereof the term
“Cure” shall mean that conduct or refrain from conduct that shall be required to
remedy within thirty (30) days of any such notice thereof any act or omission on
the part of Executive that is the subject of the clam hereunder by Company to
terminate Executive for Cause; provided, however, that (I)
Executive shall have only one opportunity during the Term to exercise such right
to Cure, (II) any such remedial conduct or refrain thereof shall be to Company’s
reasonable satisfaction and (III) Company shall have the right to suspend
Executive’s duties under this Agreement during any such period.);
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Exhibit
10.7
(v) Termination Without Cause By
Company. Notwithstanding any other provision in this Agreement
to the contrary, including, but not limited to Section 1.3 above, Company may
terminate for reasons other than Cause or for no reason Executive's employment
under this Agreement upon and coincident with any delivery of written notice
thereof; provided, however, that if and
to the extent Company determines to provide less than thirty calendar days
notice of its intent to terminate Executive (the “Optional Notice Period”), then
in such event the Severance Payments (as such phrase is defined below) shall be
extended by that number of days that the period between the delivery date of any
such notice and the Termination Date is less than such Optional Notice
Period. Notwithstanding the foregoing, if Company elects to provide
an Optional Notice Period, then at any time during such period, Company may
elect to immediately either suspend, with no reduction in pay or benefits,
Executive from all or any part of his duties as set forth in this Agreement
(including, without limitation, Executive's position as COO, as the case may be,
and his Services relating thereto) or terminate this Agreement in accordance
with this subsection (termination pursuant to this Subsection being referred to
herein as termination “Without Cause”) or in accordance with any other
applicable subsection under this Section 1.5(a) if and to the extent grounds for
any such determination should exist;
(vi) Termination For Good Reason
by Executive. Subject to the notice and cure provisions
described below, Executive may terminate this Agreement for Good Reason so long
as the Termination Date relating to such Separation From Service (as such phrase
is defined in Internal Revenue Code, as amended (the “Code”) Section 409A;
Treas. Reg. Section 1.409A-1(h)) occurs not later than ninety (90) days
following the initial existence thereof. A “Good Reason” shall be
deemed to occur on account of any one of the following events so long as such
act or omission occurred without Executive’s consent:
(A) A
material diminution in Executive’s Base Compensation without his prior written
consent; or
(B) A
material diminution in Executive’s authority, duties or
responsibility;
(C) A
material change in Executive's Employment Base must perform his services (for
purposes of this subsection, a material change shall mean Executive’s Employment
Base is relocated more than fifty (50) miles outside of the Employment Base
without Executive's prior written consent);
(D) Any
other action or inaction that constitutes a material breach by Company of this
Agreement;
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Exhibit
10.7
(E)
Any act or omission on the part of any shareholder or any person who is a
Related Person (within the meaning of Treas. Reg. Section 1.409A-1(f)(2)(ii)) of
any such shareholder that could reasonably constitute either a breach of this
Agreement or conduct for which Company or such person (or both) could be charged
with a felony under any applicable state or federal law; provided, however, that in no
event may Executive rely upon this clause (E) for the purpose of terminating
this Agreement for Good Reason if and to the extent he has engaged in any act or
omission in association with such person to cause or otherwise contribute to
such breach or violation of law; or
(F)
Any repeated request to act or refrain from acting by any shareholder or any
person who is a Related Person of any such shareholder which if complied with by
any of member of Company’s senior executive team or board of directors could
reasonably constitute either a breach of this Agreement or conduct for which
Company or such person (or both) could be charged with a felony under any
applicable state or federal law; provided, however, that in no
event may Executive rely upon this clause (F) for the purpose of terminating
this Agreement for Good Reason if and to the extent he has engaged in any act or
omission in association with such person to cause or otherwise contribute to an
actual or possible breach of this Agreement or violation of law.
Notwithstanding
the foregoing, Executive’s right to terminate this Agreement for Good Reason
shall be conditioned upon and may in no event be exercised until and unless
Executive shall have provided Company written notice within thirty (30) days of
the initial existence of any such condition, upon notice of which Company shall
thereafter have forty five (45) days within which it may remedy the
condition. For purposes of clauses (E) and (F), any such remedy may
include either Company or any person acting on its behalf making demand on or
taking any reasonably appropriate legal action to cause such shareholder or
Related Person to cease and desist from the act or omission described in
Executive’s written notice.
(b) Other
Remedies. Termination pursuant to Section 1.5(a)(iv) above
shall be in addition to and without prejudice to any other right or remedy to
which Company may be entitled at law, in equity, or under this
Agreement.
1.6
Payment Upon Separation From Service or Change in Control Event.
(a) Voluntary Termination,
Termination for Cause, or Termination for Death or
Disability. In the case of a termination of Executive's
employment by mutual agreement under Section 1.5(a)(i) above, on account of
Executive’s Death or Disability under Section 1.5(a)(ii) above, or by
Executive's Voluntary termination under Section 1.5(a)(iii) above, or by Company
for Cause in accordance with Section 1.5(a)(iv) above, (i) Company shall pay to
Executive (or his estate or guardian, as the case may be) and Executive (or his
estate or guardian, as the case may be) shall be entitled to be paid the
following as and to the extent the same shall have been earned through the
Termination Date: (A) Base Salary earned, but unpaid; (B) in the case
of death or Disability, accrued, but unpaid Bonuses; (C) accrued but unused
vacation or personal leave days to the extent convertible into cash under
Company's policies; (D) vested benefits under any employee benefit or stock
option plan or agreement; and (E) any 409A Permitted Reimbursements so long as
any such reimbursement request shall be submitted not later than ninety (90)
days following Executive’s Separation From Service and paid not later than
ninety (90) days thereafter; provided, however, that in no
event shall Executive be entitled to receive payment of, and Company shall have
no obligation to pay, any severance or similar compensation attributable to such
termination, and (ii) Company's obligations under this Agreement shall
immediately cease.
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Exhibit
10.7
(b) Termination Without Cause by
Company or For Good Reason by Executive.
(i) In
General. Subject to the provisions set forth in this Agreement,
including, without limitation, Section 1.6 (d), (e), (f) and (g) below, in the
case of a termination of Executive's employment hereunder Without Cause in
accordance with Section 1.5(a)(v) or for Good Reason by Executive in accordance
with Section 1.5(a)(vi) above,
(A) Base
Salary, Bonuses and Health Benefits.
(I)
Company shall continue to pay to Executive (or, in the case of death or
Disability, his estate or guardian, as the case may be) his Base Salary (in the
case where Executive’s employment is terminated by him for Good Reason due to a
reduction in his Base Salary without his consent, then Base Salary in this
circumstance shall mean that amount paid as such prior to any such reduction);
and
(II)
Subject to the terms and conditions of any existing health and welfare plan
adopted by Company, Company shall extend to Executive and Executive shall have
the right to continue his and that of his eligible family members’ participation
in and coverage under any such plans; except, however, that in no
event shall Company have any such obligation under this Subsection if comparable
benefits are offered under any plan or arrangement offered by third parties, in
which case Executive shall have an obligation to report to Company the existence
of any such offer or coverage,
with any
such Base Salary and participation and coverage being paid or extended, as the
case may be, on the same terms and conditions as was made available immediately
prior to Executive’s Separation From Service for the Severance Period; provided, however, that
if Executive elects to continue his health benefits coverage under COBRA, the
Company will pay such amount as shall equal the premiums for himfor
any such continuation coverage for the Severance Period; provided, further, that in no
event shall any such increase continue beyond that period for which Executive
would have otherwise been entitled to such continuation coverage under Code
Section 4980B (“COBRA”).
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Exhibit
10.7
(ii) Definitions. For
purposes of this Agreement, the following phrases shall have the meaning
ascribed thereto:
(A) “Severance
Period” shall mean that period as would coincide with either (1) the first
anniversary of the Termination Date in the case where the Termination Date
occurs during the Initial Term or (2) the last day of the twelfth (12th)
consecutive month following the Termination Date in the case where the
Termination Date occurs during any Renewal Term.
(B) “Severance
Payment.” Severance Payment shall mean the Base Salary, Bonuses and
any increase thereof if and to the extent required under Section 1.6(b)(i)(II)
above, on account of Company’s policies on health and welfare
benefits or COBRA continuation.
(iii) Bonuses. Company
shall pay within 30 days of the Termination Date to Executive (or, in the case
of death or Disability, his estate or guardian, as the case may be) his accrued
or earned, but unpaid Bonuses (together with the continuation of Base Salary and
reimbursement of taxable medical benefits under the immediately preceding
subparagraphs (A) and (B), the “Severance Payments”).
(iv) 409A
Reimbursements. Company shall pay within 30 days of the Termination
Date to Executive (or, in the case of death or Disability, his estate or
guardian, as the case may be) his 409A Permitted Reimbursements; provided, however, that any
such reimbursement request shall be submitted not later than 90 days following
Executive’s Separation From Service and paid not later than 90 days
thereafter.
(v) Other
Compensation. Except as may otherwise be expressly stated to the
contrary in any applicable agreement or stock option plan, all unvested stock
options, restricted stock or other equity-based compensation held by Executive
shall immediately vest; provided, however, that no
equity-based award shall vest to the extent such vesting would cause the award
to fail to satisfy the requirements of Code Section 409A.
(vi) Timing of Severance
Payments.
(A) In
General. Except as otherwise provided in this Section 1.6, any such
Severance Payments shall be payable in installments in accordance with Company's
normal payroll practices and subject to the tax withholding specified in Section
1.4(a) above, as full, final and complete satisfaction of such obligations under
this Agreement; provided, however, that
Executive shall have no further claims against Company for any further
compensation whatsoever, other than the payment of Permitted 409A Reimbursements
and the continuation of any employee welfare benefits as may be and to the
extent required by law.
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Exhibit
10.7
(B) Severance
Payments to Specified Employees. Notwithstanding any other provision
in this Agreement to the contrary, if Executive is considered a “Specified
Employee” (within the meaning of Code Section 409A(a)(2)(B)(i)) as of the date
of any Separation From Service, then any payment under this Agreement that would
otherwise be permitted under Treas. Reg. Section 1.409A-3(a)(1) may not be made
to Executive before the date that is six (6) months after the date of
Executive’s Separation From Service with Company or, if earlier than the end of
such six month period, Executive’s date of death. Company shall have the
discretion to elect whether to accumulate the amount to which Executive would
otherwise be entitled to be paid under this Section but for his classification
as a Specified Employee” and pay such amount in a lump sum as of the first day
of the seventh (7th) month
following the Separation From Service or if each payment to which Executive
would be otherwise entitled upon a Separation From Service is delayed by six
months. The amount of any such Severance Payment that is deferred
under this subsection shall accrue interest at the rate of eight percent (8%)
until the same shall have been paid in full.
(c) Change in Control
Event.
(i)
In General. Upon the occurrence of a Change in Control Event (as defined
below)(the “Change in Control Event Date”) during the Term, Company shall become
and be obligated to pay, and Executive shall be entitled to be paid an amount
equal to two times Executive’s Base Salary as determined on the Change in
Control Event Date (the “Change in Control Payment”);provided, however, that any
such payments under this Section shall in no event become due and payable until
(i) such time as the occurrence of a Change in Control Event has been confirmed
or otherwise certified by the compensation committee of Company’s Board or, if
none, Company’s Board and (ii) the executive has not been offered comparable
employment with a successor or related Company as defined below:
(ii)
Comparable employment is defined as:
(A)
Similar authority, duties or responsibilities as a COO of a comparable sized or
larger, public entity or a
position reporting to the chief executive / managing director / general
manager of a substantial subsidiary or division of a company;
(B) Base
Salary which is at least 90% of the Executive’s Base Salary immediately prior to
the Change in Control Event Date;
(C)
Executive is provided with comparable or better benefits than his existing
benefits immediately prior to the Change in Control Event Date including but not
limited to severance; and
(C) A
material change in Executive's Employment Base where he must perform his
services (for purposes of this subsection), a material change shall mean
Executive’s Employment Base is relocated more than fifty (50) miles outside of
the Employment Base immediately p[rior to the Change in Control Event
Date.
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Exhibit
10.7
A Change
in Control Event means, except as otherwise provided in Treas. Reg. Section
1.409A-3(i)(5), any of the following transactions:
(A) A
change in ownership of Company as defined in Treas. Reg. Section
1.409A-3(i)(5)(v), which provides, inter alia, that a change in
ownership of a corporation occurs on the date that any one person, or more than
one person acting as a group (as defined in paragraph (i)(5)(v)(B) of this
section), acquires ownership of stock of the corporation that, together with
stock held by such person or group, constitutes more than 50 percent of the
total fair market value or total voting power of the stock of such corporation,
excluding
Pillar Investment Group;
(B) A
change in the effective control of the Board as defined in Treas. Reg. Section
1.409A-3(i)(5)(vi)(A)(2)(but not (i)(5(vi)(A)(i)), which provides, inter alia, that such change
occurs on the date a majority of members of the corporation’s board of directors
is replaced during any 12-month period by directors whose appointment or
election is not endorsed by a majority of the members of the corporation’s board
of directors before the date of the appointment or election, provided that for
purposes of this paragraph (i)(5)(vi)(A) the term corporation refers solely to
the relevant corporation identified in paragraph (i)(5)(ii) of this section for
which no other corporation is a majority shareholder for purposes of that
paragraph; or
A change
in the ownership of a substantial portion of a corporation’s assets as defined
in Treas. Reg. Section 1.409A-3(i)(5)(vii), which, as modified herein for
Company, provides, inter
alia, that such change occurs on the date that any one person, or more
than one person acting as a group (as determined in paragraph (i)(5)(v)(B) of
this section), acquires (or has acquired during the 12-month period ending on
the date of the most recent acquisition by such person or persons) assets from
the corporation that have a total gross fair market value equal to or more than
70 percent of the total gross fair market value of all of the assets for the
corporation immediately before such acquisition or acquisitions.
(iii)
Limitation on Parachute Payments. Notwithstanding the foregoing, if the
total of all “parachute payments” (as defined under Code Section 280G) to
Executive (at a time when he or she is a “disqualified individual” within the
meaning of Code Section 280G) exceeds an amount equal to the three times
Executive’s average gross taxable compensation from Company for the five (fewer
than five years if Executive has not worked for Company for at least five years)
calendar year period preceding the calendar year in which the Change in Control
(where such phrase for this purpose is defined under Code Section 280G) occurs,
then the amount of payments to be made under this Agreement that are considered
“parachute payments” shall be decreased to an amount such that all parachute
payments do not exceed 2.99 times Executive’s Base Amount (as such phrase is
defined in Code Section 280G).
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Exhibit 10.7
(iv)
Form and Timing of Payment. The Change in Control Payment shall be paid to
Executive in lump sum at any time between the Change in Control Event Date and
the earlier of (A) the last date of Executive’s taxable year during which any
such Change in Control Event occurred or (B) the 15th day of
the third calendar month following Change in Control Event Date, as determined
in Company’s sole discretion. Notwithstanding any other provision in this
Agreement to the contrary, Executive shall be entitled to only one Change in
Control Payment, regardless of the number of times during the Term there should
occur a Change in Control Event.
(d)
Payments Conditioned
on Release of Claims. Unless it otherwise elects to waive any such
condition precedent, Company's obligation to provide Executive with either the
Severance Payment or Change in Control Payment set forth in this Section 1.6 is
contingent upon Executive's and Company's execution of that certain Form of
Release, a copy of which is attached hereto and marked as Exhibit “C” (the
“Release”). If Executive fails to sign the Release within twenty-one (21)
days of receipt of notice of termination pursuant to Section 1.5, or
subsequently rescinds the Release, Executive shall not be entitled to either the
Severance Payments or Change in Control Payment.
(e) Interest on Severance or
Change of Control Payments: Payment of Severance or Change of
Control under this agreement will accrue interest to Executive at a rate of 8%
beginning 10 days after the date of Severance or the Change of Control Event
Date, unless otherwise specified in this agreement. No Severance of Change
of Control payments to Executive will be delayed beyond 6 months from the date
of Severance or Change of Control Event Date without the expressed written
permission of Executive.
2. EXECUTIVE’S
REPRESENTATIONS AND WARRANTIES.
Executive
represents and warrants to Company that (a) this Agreement is valid and binding
upon and enforceable against him in accordance with its terms, (b) Executive is
not bound by or subject to any contractual or other obligation that would be
violated by his execution or performance of this Agreement, including, but not
limited to, any non-competition agreement presently in effect, and (b) Executive
is not subject to any pending or, to Executive's knowledge, threatened claim,
action, judgment, order, or investigation that could adversely affect his
ability to perform his obligations under this Agreement or the business
reputation of Company. Executive has not entered into, and agrees
that he will not enter into, any agreement either written or oral in conflict
herewith.
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3.
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MISCELLANEOUS.
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3.1 Notices. All
notices, requests, and other communications hereunder must be in writing and
will be deemed to have been duly given only if delivered personally against
written receipt or by facsimile transmission with answer back confirmation or
mailed (postage prepaid by certified or registered mail, return receipt
requested) or by overnight courier to the parties at the following addresses or
facsimile numbers:
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Exhibit
10.7
If to the
Executive, to:
Xxxxxxx
X. Xxxxxx
000
Xxxxxx Xxxxx
Xxxxxxxxxx,
XX 00000
If to
Company, to the Board at the following address:
0000 Xxxx
Xxxxxx, Xxxxx 000
Xxxxxxxx,
XX 00000
Attn: Board
of Directors
With copy
to:
Xxxxx
XxXxxxxx, Esq.
XxXxxxxx
& Xxxxx, LLP
XX Xxx
000000
Xxxxxxxx,
Xxxxxxx 00000-0000
All such
notices, requests and other communications will (a) if delivered personally to
the addresses as provided in this Section be deemed given upon delivery, (b) if
delivered by facsimile transmission to the facsimile number as provided in this
Section be deemed given upon receipt, and (c) if delivered by mail in the manner
described above to the addresses as provided in this Section be deemed given
upon receipt (in each case regardless of whether such notice, request, or other
communication is received by any other person to whom a copy of such notice,
request or other communication is to be delivered pursuant to this
Section). Any party from time to time may change its address,
facsimile number, or other information for the purpose of notices to that party
by giving written notice specifying such change to the other parties
hereto.
3.2 Authorization to be
Employed. This Agreement, and Executive's employment
hereunder, is subject to Executive providing Company with legally required proof
of Executive's authorization to be employed in the United States of
America.
3.3 Entire
Agreement. This Agreement, together with the Statement (both
of which being entered into by and between Company and Executive of even date
herewith), supersedes any and all prior discussions and agreements between the
parties with respect to the subject matter hereof and contains the sole and
entire agreement between the parties hereto with respect thereto, including,
without limitation, that certain Employment Agreement entered into by and
between Executive and Company as of the 25th day of
January 2006, which agreement is terminated as of the Effective Date hereof and
is of no further force and effect.
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Exhibit
10.7
3.4 Survival. The
parties hereby acknowledge and agree that, notwithstanding any provision of this
Agreement to the contrary, their respective obligations pursuant to Sections 1.6
2, 3 and the Statement shall survive the termination of this Agreement, the
Employment Term and/or the Executive's employment with Company.
3.5 Waiver. Any term or
condition of this Agreement may be waived at any time by the party that is
entitled to the benefit thereof, but no such waiver shall be effective unless
set forth in a written instrument duly executed by or on behalf of the party
waiving such term or condition. No waiver by any party hereto of any
term or condition of this Agreement, in any one or more instances, shall be
deemed to be or construed as a waiver of the same or any other term or condition
of this Agreement on any future occasion. All remedies, either under
this Agreement or by law or otherwise afforded, will be cumulative and not
alternative.
3.6 Amendment. This
Agreement may be amended, supplemented, or modified only by a written instrument
duly executed by or on behalf of each party hereto.
3.7 Recovery of Attorney's
Fees. In the event of any litigation arising from or relating
to this Agreement, the prevailing party in such litigation proceedings shall be
entitled to recover, from the non-prevailing party, the prevailing party's
reasonable costs and attorney's fees, in addition to all other legal or
equitable remedies to which it may otherwise be entitled.
3.8 No Third Party
Beneficiary. The terms and provisions of this Agreement are
intended solely for the benefit of each party hereto and Company's successors or
assigns, and it is not the intention of the parties to confer third-party
beneficiary rights upon any other person.
3.9 No Assignment; Binding
Effect. This Agreement shall inure to the benefit of any
successors or assigns of Company. Company may assign this agreement
to a controlled subsidiary (as such term is defined under the final regulations
promulgated pursuant to Internal Revenue Code Section 409A). Executive shall not
be entitled to assign his obligations under this Agreement.
3.10 Headings. The
headings used in this Agreement have been inserted for convenience of reference
only and do not define or limit the provisions hereof.
3.11 Severability. Company
and Executive intend all provisions of this Agreement to be enforced to the
fullest extent permitted by law. Accordingly, if a court of competent
jurisdiction determines that the scope and/or operation of any provision of this
Agreement is too broad to be enforced as written, Company and Executive intend
that the court should reform such provision to such narrower scope and/or
operation as it determines to be enforceable. If, however, any
provision of this Agreement is held to be illegal, invalid, or unenforceable
under present or future law, and not subject to reformation, then (a) such
provision shall be fully severable, (b) this Agreement shall be construed and
enforced as if such provision was never a part of this Agreement, and (c) the
remaining provisions of this Agreement shall remain in full force and effect and
shall not be affected by illegal, invalid, or unenforceable provisions or by
their severance.
Page
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Exhibit
10.7
3.12 Governing Law and Jury
Trial. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF SOUTH CAROLINA APPLICABLE TO CONTRACTS
EXECUTED AND PERFORMED IN SUCH STATE WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS
PRINCIPLES. BECAUSE DISPUTES ARISING IN CONNECTION WITH COMMERCIAL MATTERS,
INCLUDING EMPLOYMENT AGREEMENTS, ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY
AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND
FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT
THEIR DISPUTES (IF ANY) BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS.
THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL
SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHTS TO TRIAL BY JURY
IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER
ARISING IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE PARTIES ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THEM IN CONNECTION WITH THIS EMPLOYMENT AGREEMENT OR MATTERS RELATED
HERETO.
3.13 Jurisdiction. The
parties hereby consent to the personal jurisdiction and venue of any court
physically located within the County of Richland, South Carolina, in connection
with any legal or equitable action between the parties arising out of or in
connection with this Agreement.
3.14 Counterparts. This
Agreement may be executed in any number of counterparts and by facsimile, each
of which will be deemed an original, but all of which together will constitute
one and the same instrument.
3.15 Opportunity to Obtain
Counsel. In connection with the preparation of this Agreement,
Executive acknowledges and agrees that: (a) this Agreement was prepared by legal
counsel to Company (the “Law Firm”) solely on behalf of Company and not on
behalf of Executive; (b) Executive has been advised that his interests may be
opposed to the interests of Company and, accordingly, the Law Firm's
representation of Company in the preparation of this Agreement may not be in the
best interests of Executive; and (c) Executive has been advised to retain
separate legal counsel. Executive warrants and agrees that he has had
a reasonable opportunity to obtain independent legal counsel with regard to the
terms and conditions of this Agreement, and has read and fully understands the
terms and conditions of this Agreement. If Executive elects not to
consult with any such counsel, he has done so freely and of his own
volition. By signing this Agreement, Executive is affirming that he has freely and of
Executive's own volition acknowledged and agreed to all terms and conditions
contained in this Agreement.
3.16 Construction and
Interpretation. Should any provision of this Agreement require
judicial interpretation, the parties hereto agree that the court interpreting or
construing the same shall not apply a presumption that the terms hereof shall be
more strictly construed against one party by reason of the rule of construction
that a document is to be more strictly construed against the party that itself,
or through its agent, prepared the same, and it is expressly agreed and
acknowledged that Company and Executive and each of his and its representatives,
legal and otherwise, have participated in the preparation
hereof.
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Exhibit
10.7
3.17 Code Section 409A.
Notwithstanding anything to the contrary contained herein, this Agreement is
intended to satisfy the requirements of Code Section
409A. Accordingly, all provisions herein, or incorporated by
reference, shall be construed and interpreted to satisfy the requirements of
Code Section 409A. Further, for purposes of Code Section 409A, each
payment of compensation under this Agreement shall be treated as a separate
payment of compensation. Any reimbursements or in-kind benefits
provided under this Agreement shall be made or provided in accordance with the
requirements of Code Section 409A, including, where applicable, the requirement
that (a) any reimbursement is for expenses incurred during the period of time
specified in this Agreement, (b) the amount of expenses eligible for
reimbursement, or in kind benefits provided, during a calendar year may not
affect the expenses eligible for reimbursement, or in kind benefits to be
provided, in any other calendar year, (c) the reimbursement of an eligible
expense will be made no later than the last day of the calendar year following
the year in which the expense is incurred, and (d) the right to reimbursement or
in kind benefits is not subject to liquidation or exchange for another
benefit. All references to “Separation From Service” contained in
this Agreement shall mean “separation from service” as determined in accordance
with Treasury Regulation Section 1.409A-1(h).
IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed on the date first set
forth above.
|
COMPANY
|
|
|
Signature:
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/s/ Xxxxxxx X. Xxxxxxxx
|
|
Printed Name:
|
Xxxxxxx X. Xxxxxxxx
|
|
Title:
|
CEO
|
|
EXECUTIVE
|
|
|
Signature:
|
/s/ Xxxxxxx X. Xxxxxx
|
|
Printed
Name:
|
Xxxxxxx X.
Xxxxxx
|
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Exhibit
10.7
EXHIBIT
A
Statement
of Additional Terms and Conditions Relating to Employment
Agreement
Page
16
EXHIBIT
B
Bonus
EXHIBIT
C
FORM
OF RELEASE
Page
2
