Exhibit 10.23
EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into effective as of this 1st day of February,
2001 (the "Effective Date"), by and between IMCO Management Partnership L.P., a
Texas limited partnership (the "Company"), IMCO Recycling Inc., a Delaware
corporation ("IMCO") and Xxxxxxx X. Xxxx residing at 0000 Xxxxxxxx Xx., Xxxxxx,
Xxxxx (the "Executive").
WITNESS
WHEREAS, the Company performs management and administrative services for
IMCO Recycling Inc. ("IMCO") and IMCO's subsidiaries and affiliates (hereinafter
IMCO and IMCO's subsidiaries and affiliates are collectively referred to as the
"IMCO Group") pursuant to management services agreements (the "IMCO
Engagement");
WHEREAS, the Company has employed the Executive to devote his full time,
attention and energies in performing the specific duties assigned to him with
respect to the IMCO Engagement and such other duties as the Company may assign
him to perform;
WHEREAS, as part of the IMCO Engagement, the Executive has been assigned
the duties and elected to the position of Executive Vice President of IMCO and
President - Specialty Alloys Unit;
WHEREAS, the Company and IMCO consider an agreement related to the
employment of the Executive to be in the best interests of the Company and vital
to the IMCO Engagement;
WHEREAS, if the Executive's employment is terminated during the Term of
this Agreement, the Company also desires to retain the Executive's services in
an advisory and consulting capacity and to prevent any other business
competitive with IMCO, the IMCO Group or the Company from securing his services
and utilizing his experience, background and expertise during the post
employment period the Executive's services are retained;
WHEREAS, the Executive considers an agreement related to his employment
with the Company and the IMCO Engagement including the period during which his
post employment services are retained by the Company to be in his best
interests; and
WHEREAS, the Company, IMCO and Executive desire that the Executive's
employment with the Company and his service as an executive officer of IMCO be
in accordance with the provisions contained in this Agreement.
NOW, THEREFORE, in consideration of the premises and the respective
covenants and agreements set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged and
confessed, the Company, IMCO and Executive agree as follows:
ARTICLE I
EMPLOYMENT
1.1 Statement of Employment. Commencing on the Effective Date hereof, the
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Company and Executive agree that Executive's employment by the Company and the
performance of his duties and obligations as an executive officer of IMCO is
governed by and subject to the agreements, representations, terms, warranties,
covenants, conditions and other provisions contained herein.
1.2 Term. Subject to the provisions of Articles V and IX below, this
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Agreement shall commence on the Effective Date, and, shall continue for a two
year period until February 1, 2003, and thereafter, the term will be
automatically extended for successive periods of one year, unless prior to the
end of the original two-year period (or, if applicable, any successive one-year
period) the Company gives the Executive at least ninety (90) days prior written
notice that the Company has decided not to extend this Agreement's term.
However, if there is a Change in Control (as defined in Section 5.1(f)), an
additional two (2) year period will be automatically added to the end of the
term during which the Change in Control occurs to correspond to the restriction
period of the grant of shares of restricted common stock of IMCO pursuant to
Section 6.7. Notwithstanding the foregoing, the Term of this Agreement (as that
term is defined in Section 5.1(g)) shall not extend past that day which is the
fifth (5th) anniversary date of the Effective Date; provided, that in the event
that this Agreement has not sooner terminated, the Company and the Compensation
Committee of the Board of Directors of IMCO will review this Agreement regarding
any additional renewal thereof during that period beginning on that day which is
the fourth anniversary date of the date of the Effective Date, and that date
which is ninety (90) days before the fifth anniversary date of the Effective
Date.
1.3 Duties and Obligations. The Executive agrees he must devote his best
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efforts and all of his business time and attention to the business and affairs
of IMCO, the IMCO Group and the Company and that he will perform his duties as
an executive officer of IMCO to the reasonable satisfaction of (i) the President
and/or the Chief Executive Officer ("CEO") of IMCO or any other individual who
is designated as his superior by the CEO or the Board of Directors of IMCO (the
"Board of Directors") (hereafter the individual(s) the Executive reports to will
be referred to individually and collectively as the "Supervising Officer") and
(ii) the Board of Directors. Subject to the direction of the Supervising
Officer, the Executive has the responsibilities and must perform such duties and
exercise such power and authority as required by the Bylaws of IMCO for the
position he holds with IMCO and including, without limitation, performing such
duties and holding such positions within the IMCO Group as may be assigned by
the Supervising Officer. The Executive agrees that he must not delegate any or
all of his responsibilities or obligations under this agreement except as may be
authorized by the Company, the Supervising Officer or the Board of Directors.
ARTICLE II
SALARY
2.1 Annual Base Salary. The Executive shall receive an annual base salary
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from the Company with the amount established based on a determination made by
the Company and approved
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by the Board of Directors, provided, however, the annual base salary will not be
less than $300,000 per year. The annual base salary will be payable in equal
semi-monthly installments less applicable withholding) in accordance with the
customary payroll practices of the Company for the payment of executives. It is
expressly understood and agreed that the Executive will not be entitled to
director's fees for his service on the Board of Directors or any of the boards
of directors of the other companies in the IMCO Group.
2.2 Salary Adjustments. If the Executive's annual base salary is
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increased at any time, it shall not thereafter be decreased during the Term of
this Agreement.
ARTICLE III
BONUSES AND INCENTIVE PAYMENTS
3.1 Plan Bonuses and Incentive Payments. The Executive is eligible to
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receive bonuses and other incentive payments in an amount calculated in
accordance with the provisions contained in the executive incentive plans of the
Company and IMCO, including IMCO's Annual Incentive Compensation Plan adopted in
1999 and the Performance Share Unit Plan adopted in 2000 or any successor plans
(hereafter individually and collectively referred to as the "Incentive Plans").
3.2 Additional Bonuses and Incentive Payments. The Company or IMCO may,
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in its sole and absolute discretion, grant bonuses and other incentive payments
to the Executive in addition to those granted under the Incentive Plans.
ARTICLE IV
OTHER EXECUTIVE BENEFITS AND REIMBURSEMENTS
4.1 Benefits Plan. The Executive is entitled to full participation as a
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senior manager in IMCO's Benefits Plan, as amended from time to time, subject to
the terms and conditions of IMCO's Benefits Plan's documents governing the
various plans that are included within IMCO's Benefits Plan and applicable law
(hereinafter referred to as " IMCO's Benefits Plan"); provided, however, that
nothing contained in this Section 4.1 will be construed to obligate IMCO or the
Company to provide any benefits other than those generally provided to senior
managers under the IMCO's Benefits Plan. As of the date hereof, the benefits
provided to the Executive under the IMCO's Benefits Plan include: a Group Life
and Accidental Death and Dismemberment Insurance Program for Senior Management,
a Group Long Term Disability Insurance Program, a Section "125" Plan, a
Retirement Savings Plan, a major medical plan including hospital, physicians,
prescription drugs and dental benefits, an educational assistance program, a
vacation policy, a relocation expense policy, a restricted duty policy, a leave
of absence policy and the other benefit policies identified in IMCO's Human
Resources' Manual that are generally available to senior managers. Subject to
Section 4.8 and Section 4.9 hereof, nothing contained herein shall affect the
ability of the Company, IMCO or the IMCO Group, to terminate any IMCO Benefit
Plan, or modify or amend the terms thereof.
4.2 Stock Option Plans. The Executive is entitled to receive the benefits
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of and to participate in IMCO's 1992 Stock Option Plan, as amended from time to
time, and the Annual
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Incentive Plan of IMCO adopted in 1996, subject to the terms and conditions that
govern these plans (hereinafter collectively referred to as the "Stock Option
Plans").
4.3 Vacation. The Executive is entitled to a fully paid annual vacation
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leave of four (4) weeks in the aggregate or, if the benefits are greater, the
paid vacation leave as provided for by IMCO's vacation policies that are
applicable to executive officers.
4.4 Additional Life Insurance. The Executive is entitled to a split-
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dollar life insurance policy on Executive's life, which shall pay $1,000,000
upon the death of Executive to such beneficiary or beneficiaries, as Executive
shall designate. The aforementioned insurance policy shall be in addition to
the insurance benefits the Executive is entitled to under IMCO's Group Life and
Accidental Death and Dismemberment Insurance Program and is subject to a
separate agreement between the Executive and IMCO.
4.5 Annual Physical. The Executive shall be required to complete a
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mandatory annual physical at the Xxxxxx Clinic in Dallas or at a comparable
facility. Final payment of the annual bonus will be subject to completion of
the annual physical.
4.6 Tax Preparation and Financial Planning. The Executive shall also be
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entitled to receive tax preparation and financial planning services to be paid
by the Company in an amount not to exceed $9,600 over the Term of this
Agreement.
4.7 Expense Reimbursement. The Executive shall be entitled to
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reimbursement of reasonable out of pocket expenses relating to the Company's
business in accordance with policies in effect for executives generally.
4.8 Generally. On a basis commensurate with his position with the Company
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and in accordance with the terms of the designated plan, the Executive shall be
entitled to receive such benefits and to participate fully in all other plans of
life, accident, medical payment, health and disability insurance, stock options
or other long-term incentive compensation awards, stock ownership, retirement,
pension, perquisites and other benefit plans which generally are made available
to executives of the Company or IMCO, subject to and in accordance with the
terms of such plans or awards. In the event there is a Change in Control (as
defined in Section 5.1(f)), the Executive's benefits and participation in
incentive, savings, welfare benefit (life, accident, medical payment, health and
disability insurance, etc.), fringe benefit, pension, retirement and other
benefit plans after the Change in Control shall be at least equal to the
benefits and participation applicable to the Executive under the Company or IMCO
plans that were in effect during the 120-day period prior to the Change in
Control. The Executive specifically agrees that the rights and benefits granted
to the Executive in the preceding sentence of this Section 4.8 when there is a
Change in Control do not apply to the Stock Option Plans or any option,
performance share unit, restricted stock, share appreciation or similar plan
that may be adopted after a Change in Control.
4.9 Limitations. Nothing in this Agreement, including the provisions
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contained in Articles V and VI hereof, shall limit in any way Executive's
participation in, or termination of distributions and vested rights under, any
pension, profit sharing, insurance, annual incentive plan,
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long-term incentive plan or other employee benefit plan of IMCO or the Company
to which the Executive is entitled pursuant to the terms of such plans.
ARTICLE V
TERMINATION OF EMPLOYMENT
5.1 Certain Definitions. The following terms have the respective meanings
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when utilized in this Agreement:
(a) "Salary" means, as of a given date, the Executive's current annual
base salary as provided for in Article II and "Bonus" means, as of a given date,
(1) any bonuses and incentive payments as provided in Article III that are due
and payable to the Executive pursuant to the terms of such incentive payments
and/or outstanding grants, and (2) the Executive's portion (segregated or
allocated share) of any bonuses and incentive payments that have been accrued by
the Company or IMCO with respect to the plans or grants as provided for in
Article III.
(b) "Confidential Information" means all proprietary information of a
special unique nature and value to IMCO, the IMCO Group, or the Company and all
other information of any kind, nature, type, or description that is important,
confidential or otherwise concerns any material matter affecting or relating to
the business of IMCO, the IMCO Group, or the Company, whether or not developed,
devised or otherwise created in whole or in part by the efforts of the
Executive, including, without limiting the generality of the foregoing,
information regarding and relating to rotary furnaces, sortation technologies,
process flow technologies, strategic initiatives, technological summaries, trade
secrets, improvements or know-how, concepts, ideas, discoveries, applications,
inventions, patents, patentable information and data, software, source code,
processes, products, services, plans, programs, systems, procedures, manuals,
employment agreements, confidential reports, contracts, customers, sales,
distribution, marketing, methods of operation, manufacturing, purchasing,
suppliers, research and development, engineering, financing, buyouts, joint
ventures, mergers, acquisitions, litigation and other legal matters, and
accounting and other financial information that concerns IMCO, the IMCO Group,
or the Company. When used or referred to in this Agreement, Confidential
Information does not include any information that is now in, or hereafter comes
into, the public domain through no act or omission of the Executive; any
information that at the time of disclosure to the Executive by IMCO, the IMCO
Group, or the Company is, or thereafter becomes, through no act or omission of
the Executive, generally known in the industry in which IMCO, the IMCO Group, or
the Company is or may be engaged as evidenced by general public knowledge in an
integrated form; or any information that is already known to the Executive from
a source other than IMCO, the IMCO Group, or the Company as of the date of the
disclosure.
(c) "Cause" means (i) a willful failure or refusal by the Executive to
follow the reasonable instructions of the Supervising Officer or the Board of
Directors; (ii) a theft, embezzlement, or a willful commission by the Executive
of any other acts that are dishonest and materially injurious to IMCO or the
IMCO Group; (iii) the commission by the Executive of a major criminal offense;
(iv) an intentional wrongful disclosure of Confidential Information; (v) a gross
neglect of the Executive's duties; or, (vi) a material breach or violation by
the Executive of any or
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all of the covenants, warranties, agreements and obligations set forth in this
Agreement; provided that the Company has first notified the Executive in writing
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of such action or omission by the Executive, specifying in reasonable detail the
facts supporting such determination by the Company, and the Executive has not
cured the particular action or omission complained of (provided that such
particular action or omission is so capable of being cured) within a reasonable
period of time following the date of the notice.
(d) "Total Disability" means any mental or physical illness, condition,
disability or incapacity that prevents the Executive from reasonably discharging
his duties and responsibilities to the Company or as an executive officer of
IMCO. The Board of Directors, in its sole discretion, will determine whether the
Executive suffers from a Total Disability. If there is a disagreement or dispute
between the Board of Directors and the Executive as to whether the Executive
suffers from a Total Disability, the Executive must submit to a physical and/or
mental examination by a physician licensed under the laws of the State of Texas,
who will be selected by the Board of Directors, and such physician will make the
determination whether the Executive suffers from a Total Disability. In the
absence of fraud or bad faith, the determination of such physician will be final
and binding on the Company, IMCO and the Executive. The entire cost of any such
examination will be borne by the Company. Also, failure to comply with the Board
of Directors' request to submit to a physical and/or mental examination shall
prevent the Executive from challenging the Board of Directors' decision that the
Executive suffers from a Total Disability.
(e) "Resigns for Good Reason" means an Executive resignation caused by and
within ninety (90) days following the occurrence of any one of the following:
(i) a transfer or proposed transfer of Executive for a consecutive period in
excess of six months to a location outside the Dallas/Fort Worth, Texas
metropolitan area, without the Executive's prior written consent; (ii) the
Company (A) reduces the annual base salary of the Executive, or (B) modifies in
any respect the formula or method of calculation of the "target incentive award"
(or any successor equivalent amount) for the Executive (as previously determined
for the Executive for that particular fiscal year) which modification would
result in such target incentive award amount or any such equivalent amount being
reduced, in either case without the Executive's prior written consent; (iii) the
failure of the Company or IMCO to obtain the express written assumption and
agreement to timely perform the Company's obligations under this Agreement by
any successor to the Company as required by Article IX; or (iv) without limiting
the generality or effect of the foregoing, the Company's or IMCO's failure to
materially comply with any of its principal obligations hereunder, unless such
failure is caused by Executive's breach of the terms of this Agreement, or
unless such failure to comply is waived in writing by the Executive.
Notwithstanding anything else to the contrary herein, the Executive may not
Resign for Good Reason for the occurrences identified in this Section 5.1(e)(i),
(ii), or (iv), unless the Company has failed to cure the violation after the
Executive has given the Company written notice identifying the violation. The
Company shall have five (5) days from receipt of the written notice to cure the
violation or, if the violation requires a longer period to cure, the Company
pursues a course of action that causes the default to be cured within a
reasonable period of time.
(f) "Change in Control" means the occurrence of any of the following
events:
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(i) An acquisition of any voting securities of IMCO (the "Voting
Securities") by any "person" (as the term person is used for purposes of
Section 13(d) or Section 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), immediately after which such Person has
"Beneficial Ownership" (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of twenty-five percent (25%) or more of the combined
voting power of IMCO's then outstanding Voting Securities; provided,
however, in determining whether a Change in Control has occurred, Voting
Securities which are acquired in a "Non-Control Acquisition" (as
hereinafter defined) shall not constitute an acquisition which would cause
a Change in Control. A "Non-Control Acquisition" shall mean an acquisition
by (1) an employee benefit plan (or a trust forming a part thereof)
maintained by (A) IMCO or (B) any corporation or other Person of which a
majority of its voting power or its voting equity securities or equity
interest is owned, directly or indirectly, by IMCO (for purposes of this
definition, a "Subsidiary") (2) IMCO or its Subsidiaries, or (3) any Person
in connection with a "Non-Control Transaction" (as hereinafter defined);
(ii) The individuals who, as of date agreement is approved by the
Board of Directors are members of the Board of Directors (the "Incumbent
Board"), cease for any reason to constitute at least two-thirds of the
members of the Board of Directors; provided, however, that if the election,
or nomination for election by IMCO's common stockholders, of any new
director was approved by a vote of at least two-thirds of the Incumbent
Board, such new director shall, for purposes of this Plan, be considered as
a member of the Incumbent Board; provided further, however, that no
individual shall be considered a member of the Incumbent Board if such
individual initially assumed office as a result of either an actual or
threatened "Election Contest" (a solicitation by any Person for the purpose
of opposing a solicitation by the Board of Directors with respect to the
election or removal of directors at any annual or special meeting of
stockholders of IMCO) or other actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than the Board of Directors
(a "Proxy Contest") including by reason of any agreement intended to avoid
or settle any Election Contest or Proxy Contest; or
(iii) Approval by the stockholders of IMCO of:
(1) A merger, consolidation or reorganization involving IMCO, unless
such merger, consolidation or reorganization is a "Non-Control
Transaction." A "Non-Control Transaction" shall mean a merger,
consolidation or reorganization of IMCO where:
(A) the stockholders of IMCO, immediately before such
merger, consolidation or reorganization, own directly or indirectly
immediately following such merger, consolidation or reorganization, at
least fifty-five percent (55%) of the combined voting power of the
outstanding voting securities of the corporation resulting from such
merger or consolidation or reorganization (the "Surviving
Corporation") in substantially the same proportion as their ownership
of the Voting Securities immediately before such merger, consolidation
or reorganization,
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(B) the individuals who were members of the Incumbent Board
immediately prior to the execution of the agreement providing for such
merger, consolidation or reorganization constitute at least two-thirds
of the members of the board of directors of the Surviving Corporation,
or a corporation beneficially directly or indirectly owning a majority
of the Voting Securities of the Surviving Corporation, and
(C) no Person other than (i) IMCO, (ii) any Subsidiary,
(iii) any employee benefit plan (or any trust forming a part thereof)
maintained by IMCO, the Surviving Corporation, or any Subsidiary, or
(iv) any Person who, immediately prior to such merger, consolidation
or reorganization had Beneficial Ownership of twenty-five percent
(25%) or more of the then outstanding Voting Securities), has
Beneficial Ownership of twenty-five percent (25%) or more of the
combined voting power of the Surviving Corporation's then outstanding
voting securities.
(2) A complete liquidation or dissolution of IMCO; or
(3) An agreement for the sale or other disposition of all or
substantially all of the assets of IMCO and its Subsidiaries (considered on
a consolidated basis) to any Person (other than a transfer to a
Subsidiary).
Notwithstanding the foregoing, a Change in Control shall not be deemed to
occur solely because any Person (the "Subject Person") acquired Beneficial
Ownership of more than the permitted amount of the then outstanding Voting
Securities as a result of the acquisition of Voting Securities by IMCO which, by
reducing the number of Voting Securities then outstanding, increases the
proportional number of shares Beneficially Owned by the Subject Persons,
provided that if a Change in Control would occur (but for the operation of this
sentence) as a result of the acquisition of Voting Securities by IMCO, and after
such share acquisition by IMCO, the Subject Person becomes the Beneficial Owner
of any additional Voting Securities which increases the percentage of the then
outstanding Voting Securities Beneficially Owned by the Subject Person, then a
Change in Control shall occur. For purposes of this Agreement, Change in
Control shall also be deemed to include the earlier of the execution and
delivery of a binding agreement to effect a Change in Control or the actual
occurrence as set forth above which results in the Change in Control.
(g) "Term of this Agreement" shall mean the period commencing with the
Effective Date and ending on the Termination Date.
(h) "Termination Date" means the earlier of February 1, 2003 (as such date
may be extended by any extensions hereof); or the date of the Executive's death;
or the date designated in this Agreement after the Company or the Executive
gives the required notice; or as otherwise provided in this Article V or in
Article VI.
5.2 Death of the Executive. In the event the Executive dies during the
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Term of this Agreement, the Executive's employment with the Company will
automatically terminate on the date of the Executive's death. Notwithstanding
the provisions of Article I above, in the event the
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Executive dies during the Term of this Agreement, within ninety (90) days after
the Termination Date, the Executive's estate, heirs, or beneficiaries, as the
case may be, will receive an amount in cash payable in a lump sum equal to the
sum of (a) the Executive's Salary and Bonus due and payable to the Executive on
or before the Termination Date, (b) an amount equal to the product of (i) one-
twelfth (1/12th) of Executive's Salary as in effect as of the Termination Date
times (ii) the lesser of (A) the number of months remaining prior to the end of
the Term of this Agreement, or (B) twelve (12), and (c) the value of all other
outstanding obligations of the Company or IMCO to the Executive (e.g., deferred
incentive payments or stock ownership rights) without regard as to whether they
would otherwise be due and payable as of the Termination Date. The Executive's
estate, heirs or beneficiaries, as the case may be, will also receive any
benefits that are payable to them under the plans, policies and other provisions
set forth in Article IV and Section 6.7.
5.3 Employment Terminated by the Company. Notwithstanding any other
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provision of this Agreement, the Company may only terminate the Executive's
employment during the Term of this Agreement in accordance with the provisions
set forth below:
(a) The Company may terminate the Executive's employment for Cause only if
the determination to terminate the Executive's employment for Cause is made by
an affirmative vote of at least 75% of the entire Board of Directors (not
including, for this purpose, the Executive). If the Board of Directors makes
such a determination, the Company may then terminate the Executive's employment
for Cause. The Termination Date will be that date which is five (5) days after
the Company has notified the Executive of the Board of Directors' decision to
terminate the Executive's employment for Cause.
(b) The Company may terminate the Executive's employment if he suffers
from a Total Disability for a period of more than one hundred twenty (120)
consecutive days during any twelve-month period. The Termination Date will be
thirty (30) days after the Company has notified the Executive of the Board of
Directors' decision to terminate the Executive due to a Total Disability.
(c) The Company, in its sole discretion, may terminate the Executive's
employment by giving him not less than thirty (30) days advance written notice
of the termination. A termination by the Company under this Section 5.3(c)
(i.e., for any reason other than those covered under Sections 5.3(a) and (b))
shall be referred to for all purposes as being "Terminated Without Cause."
If the Executive's employment is terminated by the Company, the Company in
the ordinary and normal course of its business is obligated to continue to pay
to the Executive, the Executive's Salary and Bonus (less applicable withholding)
that are due and payable to the Executive on or before the Termination Date.
Any unpaid amount of the Executive's Salary and Bonus will be due and payable as
of the Termination Date. The Executive will also receive the benefits and all
other amounts that he is entitled to receive pursuant to the provisions
contained in Article IV, and any amounts that the Executive is entitled to
receive pursuant to the provisions that apply to the Executive's situation in
Article VI.
5.4 Resignation (i.e., Termination of Employment) by Executive. If the
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Executive Resigns for Good Reason after a Change in Control, the Executive's
employment with the Company
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will terminate twenty-one (21) days after the Executive has notified the Company
of his resignation. If the Executive Resigns for Good Reason other than a
situation involving a Change in Control, the Executive's employment with the
Company will terminate forty five (45) days after the Executive has notified the
Company of his resignation. If the Executive resigns his employment for any
other reason (including retirement), the Executive's employment with the Company
will terminate sixty (60) days after the Executive has notified the Company that
he is terminating his employment. If the Executive terminates his employment,
the Company in the ordinary and normal course of its business is obligated to
continue to pay to the Executive, the Executive's Salary and Bonus (less
applicable withholding) due and payable to the Executive on or before the
Termination Date. The Executive will also receive the benefits and all other
amounts that he is entitled to receive pursuant to the provisions contained in
Article IV and any amounts that the Executive is entitled to receive pursuant to
the provisions that apply to the Executive's situation in Article VI.
5.5 No Right to Set Off. Except as specifically provided in Section 6.8,
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the Company shall not be entitled to set off against the amount payable to the
Executive any amounts earned by the Executive from other employment after the
Termination Date or any amounts which might have been earned by the Executive in
other employment had he sought such other employment. The amounts payable to
the Executive under this Agreement shall not be treated as damages but as
compensation to which the Executive is entitled by reason of termination of his
employment in the circumstances contemplated by this Agreement.
5.6 Executive's Remedies. In the event this Agreement is terminated
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pursuant to any of the provisions contained in this Article V, the Company, IMCO
and the IMCO Group will be discharged from all of their obligations to the
Executive upon the payment to the Executive of the amounts required to be paid
in accordance with the provisions of the particular Sections of this Article V
under which the termination occurs. The Executive's sole and exclusive remedy
for the termination of this Agreement prior to the end of the Term of this
Agreement regardless of whether the termination is initiated by the Company or
by the Executive, and regardless whether the termination is for Cause, will be
the payment to the Executive of the amounts required to be paid in accordance
with the provisions of the particular Section of this Article V under which such
termination occurs.
5.7 Testimony and Participation Before or After Termination. The
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Executive agrees that both during and following the Term of this Agreement he
will be available to testify and/or participate in any proceeding (governmental
or otherwise) involving the Company, IMCO and/or the IMCO Group regarding any
subject matter occurring prior to the Termination Date or of which he otherwise
has actual knowledge; provided that the foregoing shall not require the
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Executive to provide testimony in any respect which testimony may, in
Executive's good faith belief, self-incriminate the Executive. The Company
agrees to reimburse the Executive for the reasonable costs he incurs in
connection with his testimony or participation, including reasonable attorney
fees, unless such proceeding is due to the intentional wrongdoing or willful
neglect of the Executive or to actions taken by the Executive outside of the
Executive's authority.
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ARTICLE VI
ADDITIONAL COMPENSATION FOR CERTAIN TERMINATIONS
AND POST EMPLOYMENT SERVICES
6.1 Purpose; General Summary; and Post Employment Activities.
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(a) The Company and the Executive agree that the success and value of
IMCO's, the IMCO Group's and the Company's business depend largely on the
favorable reputation and good will that have been created by superior managerial
skills, market position, product technology, good customer relations, a stable
work force and high employee morale. The Executive recognizes and expressly
acknowledges that his services are unique and extraordinary and that he plays an
integral and valuable role in sustaining and enhancing the progress, reputation
and good will of IMCO, the IMCO Group and/or the Company.
Executive acknowledges that as of the time this Agreement is entered into,
the Company, IMCO and the IMCO Group are providing to the Executive, on an
initial and ongoing basis, now and throughout the Term of this Agreement,
Confidential Information and specialized training. The Company and the Executive
also agree that access to IMCO's, the IMCO Group's and the Company's customers
and Confidential Information and such specialized training is essential for the
most efficient performance of the Executive's duties and obligations. The
Executive acknowledges and expressly confirms that in the course of his
employment by the Company and in furtherance of his duties and obligations as an
executive officer of IMCO, the Executive has developed valuable banking and
financial, customer and other key relationships and has acquired (and will
continue to acquire) valuable Confidential Information that would be useful to
IMCO's, the IMCO Group's and/or the Company's competitors and, if so disclosed,
would unreasonably harm the business of IMCO, the IMCO Group and/or the Company.
The Executive further acknowledges and specifically agrees he must at all
times act in a manner that would augment the reputation and good will of IMCO,
the IMCO Group and the Company and that it is in the best interest of the
Company and the Executive for the parties to reach a mutual agreement under
which the Executive's employment and post-employment activities are subject to
certain restrictions as a means of securing and protecting the reputation, good
will, Confidential Information and other valuable protectable interests of IMCO,
the IMCO Group and/or the Company.
(b) If the Executive resigns or terminates his employment for any reason
or the Executive's employment is terminated by the Company at any time during
the Term of this Agreement, the Company and the Executive expressly agree that
the Executive will be retained by the Company for a twenty-four month period
following the termination of his employment to provide services in an advisory
and consulting capacity and to prevent any other business competitive with IMCO,
the IMCO Group or the Company from securing his services and utilizing his
experience, background and expertise. During this period, the Executive shall
receive, as additional compensation, the payments enumerated in this Article VI
in exchange for the Executive's agreement to continue to actively promote,
support, consult with and advise the Company during the said twenty-four month
period. The Executive further agrees to abide by and be subject to the
11
restrictions as set forth in Article VII regardless of whether the Executive is
entitled to any of the payments enumerated in this Article VI.
(c) The Executive also acknowledges, agrees, and warrants for all purposes
that the restrictions imposed on his employment and post employment activities
contained in this Article VI and Article VII are reasonable and necessary for
the protection of the good will, reputation, Confidential Information and other
valuable protectable interests of IMCO, the IMCO Group and/or the Company and
that the additional compensation the Executive will receive, enumerated in this
Article VI, is fair and reasonable.
6.2 Termination Without Cause or Executive Resigns for Good Reason
--------------------------------------------------------------
Involving a Change of Control. If during the Term of this Agreement Executive
-----------------------------
is Terminated Without Cause before that date which is 90 days prior to a Change
in Control, the Executive will receive an amount equal to 2.0 times the
Executive's "Base Amount" (as that term is defined in Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code")) (the "Base Amount"),
calculated as of the Termination Date. If during the Term of this Agreement (i)
the Executive is Terminated Without Cause on or after that date which is 90 days
before a Change in Control, or (ii) the Executive Resigns for Good Reason during
the period which begins on that date which is 90 days before a Change in Control
and ends on that date which is the second anniversary date of such Change in
Control, then in either of such events, the Executive shall be entitled to
receive an amount equal to 2.99 times (x) the Executive's Base Amount calculated
as of the Termination Date.
The amounts described in this Section 6.2 shall be in addition to the
Salary and Bonus due and payable on or before the Termination Date and all other
payments and benefits the Executive is entitled to receive under this Agreement.
Except in the situation where the Executive is Terminated Without Cause, the
additional compensation will be paid in a lump sum on or before the Termination
Date in accordance with the normal payroll procedures for a lump sum payment, as
the same may be modified from time to time. If the Executive is Terminated
Without Cause (whether prior to or after a Change in Control), the additional
compensation will be paid in equal monthly installments over a twenty-three
month period following the Termination Date as if the Executive's employment had
continued hereunder payable in accordance with the normal payroll procedures, as
the same may be modified from time to time. In addition:
(a) For the lesser of (1) a period of twenty-four (24) months subsequent
to the Termination Date or (2) until the Executive obtains comparable coverage
under a subsequent employer's benefit plan or plans, IMCO will pay all of the
cost incurred by the Executive for his continued participation in IMCO's
Benefits Plan provided that his continued participation is permitted under the
general terms and provisions of the applicable plan, program and/or policy that
is included in IMCO's Benefits Plan. In the event the Executive's participation
in the Group Life and Accidental Death and Dismemberment Insurance Program for
Senior Management, the applicable Group Long Term Disability Insurance Program,
the major medical plan which includes hospital, physician, prescription drugs
and dental benefits, or any such similar plan, program, or policy is not
permitted the Company shall arrange to provide the Executive with benefits
substantially similar to those which he is entitled to receive under such plans,
programs, and policies. The benefits provided during the period of coverage
under this Section 6.2(a) shall offset any period
12
of coverage in which the Executive or his dependents may be entitled under the
Consolidated Omnibus Budget Reconciliation Act of 1985; and
(b) The Company shall promptly (and in any event within five business days
after a written request by the Executive therefor) either pay or reimburse the
Executive for the reasonable costs and expenses of any executive outplacement
firm selected by the Executive; provided, however, that the Company's liability
hereunder shall be limited to the first $20,000 of such expenses incurred by the
Executive. The Executive shall provide the Company with reasonable documentation
of the incurrence of such outplacement costs and expenses.
6.3 Resignation by Executive Not Involving a Change in Control.
----------------------------------------------------------
(a) If the Executive Resigns for Good Reason during the Term of this
Agreement (other than a resignation covered under Section 6.2 above), then, in
addition to all Salary and Bonus due and payable on or before the Termination
Date and all other payments and benefits the Executive is entitled to receive
under this Agreement, the Executive will receive an amount equal to two times
(2x) an amount equal to Executive's highest annual base salary in effect during
the Term of this Agreement plus the average of the aggregate amounts of bonus
paid or payable to the Executive during the three (3) completed fiscal years
immediately preceding the Termination Date (or such lesser period that the
Executive has been employed by the Company). This additional payment will be
paid in equal monthly installments over a twenty-three month period following
the Termination Date as if the Executive's employment had continued hereunder
payable in accordance with the normal payroll procedures, as the same may be
modified from time to time.
(b) If the Executive resigns his employment during the Term of this
Agreement in a situation other than when the Executive Resigns for Good Reason,
then, in addition to all Salary and Bonus due and payable on or before the
Termination Date and all other payments and benefits the Executive is entitled
to receive under this Agreement, the Executive will be entitled to receive as
additional compensation an amount equal to one times (1x) the Executive's
highest annual base salary in effect during the Term of this Agreement. This
additional compensation payment will be paid in equal monthly installments over
a twenty-three month period following the Termination Date as if the Executive's
employment had continued hereunder payable in accordance with the normal payroll
procedures, as the same may be modified from time to time.
6.4 Termination for Cause. If the Executive is terminated for Cause
---------------------
during the Term of this Agreement, then, in addition to all Salary and Bonus due
and payable on or before the Termination Date and all other payments and
benefits the Executive is entitled to receive under this Agreement, the
Executive will be entitled to receive an amount equal to two times (2x) his
Salary as in effect immediately prior to the Termination Date, if and only if
the Board of Directors determines in good faith and in its sole discretion that
the for Cause termination does not result from the Executive's commission of a
major criminal offense. This additional compensation payment will be paid in
equal installments over a twenty-three (23) month period following the
Termination Date as if the Executive's employment had continued hereunder
payable in accordance with the normal payroll procedures, as the same may be
modified from time to time. If the reason for the termination for Cause is that
the Executive committed a major criminal offense, the Executive shall only be
13
entitled to such amount of Salary and Bonus not paid as of the Termination Date.
It is expressly agreed that if there is a termination of the Executive's
employment for Cause under the provisions of Section 5.3, the Executive will not
be entitled to receive any additional amounts payable to the Executive under
Sections 6.2 or 6.3.
6.5 Termination due to Total Disability. If Executive's employment is
-----------------------------------
terminated due to Total Disability, then, in addition to all Salary and Bonus
due and payable on or before the Termination Date and all other payments and
benefits the Executive is entitled to receive under this Agreement, the
Executive or his legal guardian, as the case may be, will receive an amount
equal to one-twelfth (1/12th) of Executive's Salary times the lesser of (a) the
number of months remaining prior to the expiration of the Term of this Agreement
or (b) twelve (12). This additional compensation payment will be paid in a lump
sum amount within ninety (90) days after the Termination Date. It is expressly
agreed that if there is a termination of the Executive's employment due to the
Total Disability of the Executive under the provisions of Section 5.3, the
Executive will not be entitled to receive any additional amounts payable to the
Executive under Sections 6.2 or 6.3.
6.6 No Additional Payments Upon Death. It is expressly agreed that if the
---------------------------------
Executive's employment with the Company is terminated by reason of the death of
the Executive, the Executive will not be entitled to receive any additional
amounts payable to the Executive under Sections 6.2 or 6.3.
6.7 Protection and Retention. IMCO shall award Executive a grant of
------------------------
shares of restricted common stock of IMCO in accordance with the terms of the
Award Agreement evidencing such grant, a copy of which is attached hereto as
Exhibit "A".
6.8 Mitigation of Damages. In the event the Executive is entitled to any
---------------------
additional amounts provided for under this Article VI, the Executive shall not
be required to seek other employment in order to mitigate his damages hereunder,
and no compensation the Executive earns after any such termination shall be
considered to mitigate damages the Executive has incurred or to reduce any
payment the Company is obligated to make to the Executive under this Agreement,
unless the Executive violates Section 5.7, Section 6.1(b) or Article VII.
Notwithstanding anything else to the contrary contained herein, if the Executive
violates Section 5.7, Section 6.1(b) or Article VII, the Company shall be
entitled to immediately stop making any further installment payments that may be
owed under Sections 6.2, 6.3 or 6.4.
6.9 Timing of Payment and Deductions. Unless otherwise specifically
--------------------------------
provided for in this Agreement, any payments payable to the Executive under this
Agreement shall be paid on the Termination Date. The Company and IMCO shall
have the right with respect to all payments made to the Executive under this
Agreement to withhold therefrom (a) all taxes which may be required to be
deducted or withheld under any provision of applicable law (including but not
limited to state and federal income taxes, Federal Insurance Contributions Act
payments and any other required tax deduction) and (b) all other required non-
tax deductions. The Executive shall be solely responsible for the state and
federal income taxes, excise and other taxes imposed on the benefits provided
and payments made under this Agreement.
14
6.10 Gross Up Payments.
-----------------
(a) In the event that any payment or benefit (within the meaning of
Section 280G of the Code), to the Executive or for his benefit paid or payable
or distributed or distributable (at any time or from time to time) pursuant to
the terms of this Agreement or otherwise in connection with, or arising out of,
his employment with the Company or a change in ownership or effective control of
IMCO or the Company or of a substantial portion of the IMCO Group's consolidated
assets (a "Payment" or "Payments"), would be subject to the excise tax imposed
by Section 4999 of the Code or any interest or penalties are incurred by the
Executive with respect to such excise tax (such excise tax, together with any
such interest and penalties, being hereinafter collectively referred to as the
"Excise Tax"), then the Executive will be entitled to receive an additional
payment or payments, as the case may be (referred to individually or
collectively as a "Gross-Up Payment") in an amount such that after payment by
the Executive of all taxes (including any interest or penalties imposed with
respect to such taxes and the Excise Tax, other than interest and penalties
imposed by reason of the Executive's failure to file timely a tax return or pay
taxes shown due on his return), including any Excise Tax imposed upon the Gross-
Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Payments.
(b) An initial determination as to whether a Gross-Up Payment is required
pursuant to this Agreement and the amount of such Gross-Up Payment shall be made
at the Company's expense by an accounting firm selected by the Company and
reasonably acceptable to the Executive which is designated as one of the largest
national accounting firms in the United States (the "Accounting Firm"). The
Accounting Firm shall provide its determination (the "Determination"), together
with detailed supporting calculations and documentation to the Company and the
Executive within fifteen (15) days of the Date of Termination if applicable, or
such other time as requested by the Company or by the Executive (provided the
Executive reasonably believes that any of the Payments may be subject to the
Excise Tax) and if the Accounting Firm determines that no Excise Tax is payable
by the Executive with respect to a Payment or Payments, it shall furnish the
Executive with an opinion reasonably acceptable to the Executive that he has
substantial authority not to report any Excise Tax on his federal tax return
with respect to any such Payment or Payments. Within ten (10) days of the
delivery of the Determination to the Executive, the Executive shall have the
right to dispute the Determination (the "Dispute"). The Gross-Up Payment, if
any, as determined pursuant to this Section 6.10(b) shall be paid by the Company
to the Executive within five days of the receipt of the Accounting Firm's
determination. The existence of the Dispute shall not in any way affect the
Executive's right to receive the Gross-Up Payment in accordance with the
Determination. Upon the final resolution of a Dispute, the Company shall
promptly pay to the Executive any additional amount required by such resolution.
If there is no Dispute, the Determination shall be binding, final and conclusive
upon IMCO, the Company and the Executive.
(c) The Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment
hereunder of a Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten (10) business days after the Executive knows
of such claim and shall inform the Company of the nature of such claim and the
date on which such claim is requested to be paid. The Executive shall not pay
such claim prior to the expiration of the thirty (30) day period following the
date on which he gives such notice to the
15
Company (or such shorter period ending on the date that any payment of taxes
with respect to such claim is due). If the Company does not notify the Executive
in writing that it desires to contest such claim prior to the expiration of such
period, the Executive shall be paid within five (5) business days an amount
equal to the Gross-Up Payment required to be paid as a result of the claim. If
the Company notifies the Executive in writing prior to the expiration of such
period that it desires to contest such claim, the Executive shall:
(i) give the Company any information reasonably requested by the
Company relating to such claim,
(ii) take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such
claim by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order to effectively
contest such claim,
(iv) permit the Company to participate in any proceedings relating to
such claim, provided, however, that the Company shall bear and pay directly
all costs and expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify and hold the
Executive harmless, on an after-tax basis, for any Excise Tax or income
tax, including interest and penalties with respect thereto, imposed as a
result of such representation and payment of costs and expenses. Without
limitation of the foregoing provisions of this Section 6.10(c), the Company
shall control all proceedings taken in connection with such contest and, at
its sole option, may pursue or forego any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect
of such claim and may, at its sole option, either direct the Executive to
pay the tax claimed and xxx for a refund, or contest the claim in any
permissible manner, and the Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to
pay such claim and xxx for a refund, the Company shall advance the amount
of such payment to the Executive, on an interest-free basis and shall
indemnify and hold the Executive harmless, on an after-tax basis, from any
Excise Tax or income tax, including interest or penalties with respect
thereto, imposed with respect to such advance or with respect to any
imputed income with respect to such advance; and further provided that any
extension of the statute of limitations relating to payment of taxes for
the taxable year of the Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested amount.
Furthermore, the Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder
and the Executive shall be entitled to settle or contest, as the case may
be, any other issue raised by the Internal Revenue Service or any other
taxing authority.
16
(d) If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 6.10(c), the Executive becomes entitled to receive
any refund with respect to such claim, the Executive shall (subject to the
Company's complying with the requirements of Section 6.10(c)) promptly pay to
the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by the Company pursuant to Section 6.10(c), a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of thirty (30) days after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the amount of such advance
shall offset, to the extent thereof, the amount of Gross-Up Payment required to
be paid.
ARTICLE VII
CERTAIN RESTRICTIONS ON EXECUTIVE
7.1 General. In consideration of the Company entering into this contract
-------
for employment, the Company furnishing the Executive, now and throughout the
Term of this Agreement, Confidential Information and specialized training on an
initial and ongoing basis, and the covenants and obligations of the Company
contained in this Agreement, including the covenants and obligations regarding
the additional compensation set forth in Article VI, the Executive hereby
covenants, warrants and agrees to abide by and be subject to the restrictions
and agreements as set forth below in this Article VII.
7.2 Non-Disclosure of Confidential Information. The Executive hereby
------------------------------------------
covenants, warrants and specifically agrees as follows:
(a) All of the Confidential Information is a valuable asset and is, will
be, and shall at all times remain the sole and exclusive property of IMCO, the
IMCO Group or, if applicable, the sole and exclusive property of the Company.
(b) All Confidential Information disclosed to the Executive or made known
to the Executive (regardless of when or how disclosed or made known) as a result
of his employment by the Company, whether or not with the knowledge and
permission of IMCO, the IMCO Group, or the Company, will be held strictly
confidential and only utilized during the course of his employment at the
Company. The Executive shall hold the said Confidential Information in a
fiduciary capacity for the benefit of IMCO, the IMCO Group, and/or the Company
and will not use the Confidential Information in any way detrimental to IMCO,
the IMCO Group, or the Company.
(c) The Executive will not at any time during or after the Term of this
Agreement, in any fashion, form or manner, either directly or indirectly,
publish, reveal, divulge, disclose, disseminate, use (or communicate to any
individual, firm, partnership, corporation, association, enterprise,
organization, or other entity, person or business) any Confidential Information,
or otherwise make it possible for any individual, firm, partnership,
corporation, association, enterprise, organization, or other entity, person or
business to have access to any Confidential Information, except (1) with
17
the express permission of IMCO and/or the Company, (2) in performance of
Executive's duties and obligations to the Company and/or IMCO, or (3) as
otherwise required to be disclosed by law, judicial or administrative process.
If the Executive becomes legally compelled, as concluded by the written opinion
of counsel, (by oral questions, interrogatories, request for information, or
documents, subpoena, civil investigative demand or similar process) to disclose
any Confidential Information, the Executive will provide the Company with prompt
written notice so that the Company and/or IMCO may seek a protective order or
other appropriate remedy. It is further agreed that if, in the absence of a
protective order or the receipt of a waiver hereunder, the Executive is,
nonetheless, in the opinion of his counsel, compelled to disclose any
Confidential Information or else stand liable for contempt or suffer other
censure or penalty, such information which is legally required to be disclosed
may be disclosed but the Executive will exercise his best efforts to obtain
reliable assurances that confidential treatment will be accorded the
Confidential Information so disclosed.
(d) Upon termination of the Executive's employment with the Company for
Cause or Without Cause or upon the request of the Company at any time, the
Executive will promptly return to the Company, and shall retain no copies of,
all Confidential Information prepared by the Executive or coming into the
Executive's possession.
(e) IMCO, the IMCO Group and the Company derive a competitive advantage in
the marketplace by maintaining the Confidential Information and knowledge
thereof as secret and unavailable to the Company's, IMCO's and the IMCO Group's
competitors and the general public.
7.3 Non-Competition. The Executive acknowledges that at the time this
---------------
Agreement is entered into, the Company, IMCO and the IMCO Group are furnishing
the Executive, now and throughout the Term of this Agreement, Confidential
Information and specialized training on an initial and ongoing basis, and that
in consideration thereof, in addition to the other consideration and benefits
being provided to Executive as recited herein. The Executive covenants and
specifically agrees with the Company as follows:
(a) The Executive, without the prior written consent of the Company, will
not at any time, during the Term of this Agreement and for a period of two (2)
years thereafter (or for such lesser period should the Company so determine),
directly or indirectly: (i) compete with IMCO, the IMCO Group or the Company in
any manner within the United States, Germany, Wales, or within any other
country, territory or possession where IMCO, the IMCO Group, or the Company
operate (collectively the aforementioned geographic areas are hereinafter
referred to as the "Territory"); (ii) be employed by or serve as an employee,
agent, officer, representative, director of, or as a consultant to any
individual, firm, partnership, corporation, association, enterprise,
organization, or other entity, person or business (other than for IMCO, the IMCO
Group or the Company) that competes with IMCO, the IMCO Group or the Company in
any manner within the Territory; (iii) solicit, attempt to solicit, provide
goods or services to, or attempt to provide goods or services to, any of the
customers or business contacts of IMCO, the IMCO Group or the Company that exist
during the Term of this Agreement; or (iv) acquire or own in any manner any
interest in, or loan any amount to, any individual, firm, partnership,
corporation, association, enterprise, organization, or other entity, person, or
business that competes with IMCO, the IMCO Group or the Company in any manner
within the Territory, except the Executive may own up to two percent (2%) of any
class of
18
issued and outstanding securities of a competitive corporation whose shares are
regularly traded on a national securities exchange or on the over-the-counter
market.
(b) The Executive, without the prior written consent of the Company, will
not at any time, during the Term of this Agreement and for a period of two (2)
years thereafter, directly or indirectly, for himself or for any other
individual, firm, partnership, corporation, association, enterprise,
organization, or other entity, person, or business, solicit, or in any manner
attempt to influence or induce any employee of IMCO, the IMCO Group or the
Company to leave the employment of IMCO, the IMCO Group or the Company as the
case may be.
7.4 Reasonableness, Revival and Reliance.
------------------------------------
(a) The provisions contained in Sections 7.2 and 7.3 are the result of
specific negotiations between the Executive and the Company, and the Executive
hereby specifically agrees that the provisions are reasonable under the
circumstances. The Executive further agrees that if, despite the express
agreement of the parties to this Agreement, a court should hold any portion of
Sections 7.2 or 7.3 unenforceable for any reason, the maximum restrictions that
are reasonable under the circumstances, as determined by the court, will be
substituted for the restrictions held unenforceable. The Executive also
expressly agrees that in the event a court of any jurisdiction within the
Territory (other than a court with jurisdiction in the State of Texas) holds the
covenants and agreements contained in Sections 7.2 and/or 7.3 wholly
unenforceable by reason of the breadth of their scope or otherwise, it is the
intention of the parties that such determination not bar or in any way affect
the Company's right to the relief in the courts of any other jurisdiction within
the Territory, as to breaches of such covenants and agreements in such other
respective jurisdictions, the covenants and Agreements in Sections 7.2 and 7.3
as they relate to each jurisdiction within the Territory being, for this
purpose, severable into diverse and independent covenants and agreements.
(b) The Executive's covenants, warranties and agreements set forth herein
shall be revived continuously throughout the Executive's employment by the
Company.
(c) The Company is materially relying upon each of the Executive's
representations, covenants, warranties and agreements in entering into this
Agreement and as a condition for paying the additional compensation under
Article VI.
7.5 Injunctions. Without intending to limit the remedies available to the
-----------
Company, IMCO, or the IMCO Group, the Executive expressly recognizes and
acknowledges that a breach or violation by the Executive of any of the
covenants, warranties, agreements, or other provisions contained in this Article
VII will cause material irreparable injury to the Company, IMCO and/or the IMCO
Group for which there is not an adequate remedy at law, that it may not be
possible to measure damages for such injuries precisely, and that in the event
of such a breach or violation or the threat thereof, the Company, IMCO, and/or
the IMCO Group will be entitled to obtain a temporary restraining order and/or a
preliminary or permanent injunction restraining the Executive and/or his
affiliates, employees, associates, partners, or agents, either directly or
indirectly, from engaging in activities prohibited by this Article VII and/or
such other relief as may be required to specifically enforce any of the
covenants, warranties, agreements, or other provisions in this
19
Article VII. Such right to a temporary restraining order and/or injunction will
be cumulative and in addition to whatever other rights or remedies the Company,
IMCO and/or the IMCO Group may possess, at law or in equity. Nothing contained
in this Agreement will be construed to prevent the Company, IMCO, and/or the
IMCO Group from seeking and recovering for the damages suffered by any of them
or any of their employees as a result of any breach or violation by the
Executive and/or his affiliates, employees, associates, partners, or agents of
the Executive's covenants, warranties, agreements, or other provisions contained
in this Agreement. The Executive by execution of this Agreement agrees to submit
to the jurisdiction of the federal and state courts of the State of Texas.
ARTICLE VIII
INDEMNIFICATION
During the Term of this Agreement, to the fullest extent permitted by
applicable law in effect on the Effective Date of this Agreement and to such
greater extent as applicable law may hereafter from time to time permit, the
Company shall advance and be responsible for all Expenses (as that term is
defined below) and the Company specifically agrees to and shall defend,
indemnify and hold harmless the Executive and his respective employees,
attorneys, agents, advisors (including, without limitation, attorneys,
accountants, consultants and financial advisors), successors and assigns, from
and against any and all claims, losses, damages, causes of action, demands,
penalties, fines, costs, expenses, suits and other liability of every kind
(including, without limitation all expenses of litigation, court costs,
judgments and interest thereon, and attorney fees) arising out of or resulting
from all acts or decisions made by the Executive while performing his duties and
obligations in accordance with the provisions of this Agreement excepting herein
any claims, losses, damages, causes of action, demands, penalties, fines, costs,
expenses, suits or other liability of every kind that results from the
negligence or misconduct of the Executive or involves a dispute between or among
the parties to this Agreement. The Company will choose the legal counsel to
defend the Executive and will pay all attorney fees and other expenses and costs
associated with such litigation. In the event that counsel of the Company's
choice must be disqualified from representing the Company and the Executive
together, then the Executive has the right to select his own counsel, whose
reasonable fees will be paid by the Company. All agreements and obligations of
the Company contained herein shall continue for so long as the Executive shall
be, or could become, subject to any possible claim or legal proceeding in
respect of which the Executive is granted rights of indemnification or
advancement of Expenses hereunder. "Expenses" shall include all reasonable
attorneys' fees, retainers, court costs, transcript costs, fees of experts,
witness fees, travel expenses, duplicating costs, printing and binding costs,
telephone charges, postage, delivery service fees, and all other disbursements
or expenses of the types customarily incurred in connection with prosecuting,
defending, preparing to prosecute or defend or investigating claims or legal
proceedings.
ARTICLE IX
SUCCESSOR TO COMPANY
The Company and IMCO agree to require any successor, whether direct or
indirect, whether by purchase, merger, consolidation or otherwise, who succeeds
to all or most of the business or properties and assets of IMCO to execute and
deliver to the Executive a written instrument in form
20
and in substance reasonably satisfactory to the Executive and his legal counsel
pursuant to which the successor agrees to assume and to timely perform or to
cause to be timely performed all of the Company's and IMCO's covenants, and
agreements set forth in this Agreement (a ASuccessor Agreement"). The failure of
the Company or IMCO to cause any successor to execute and deliver a Successor
Agreement to the Executive (a) will constitute a breach of the provisions of
this Agreement by the Company and IMCO, and (b) the Executive, at his sole
option, may resign and thereby terminate his employment by the Company. If the
Executive resigns due to the failure of any successor to execute and deliver a
Successor Agreement, the termination of the Executive's employment will be
treated (for all purposes) as a termination where the Executive Resigns for Good
Reason after a Change in Control. As used herein, the terms "the Company" and
"IMCO" shall include any successor to their respective businesses and/or assets
as aforesaid which executes and delivers the Successor Agreement as contemplated
by this Article IX or which otherwise becomes bound by the terms and provisions
hereof by operation of law.
ARTICLE X
ARBITRATION
Except as noted below, any dispute arising out of this Agreement or the
performance of its provisions shall be settled by binding arbitration in Dallas
County, Texas in accordance with the rules of the American Arbitration
Association then in effect, and judgment may be entered upon the award by any
court having jurisdiction over the matter. The Company and the Executive
expressly agree that this Article X does not apply to any disputes that touch or
concern the provisions set forth in Section 5.7, Section 11.1, Section 11.2, or
Article VII, including any action taken by the Company, IMCO and/or the IMCO
Group to specifically enforce the provisions set forth in Article VII. Disputes
related to matters so excepted shall, in the absence of further agreement
between the parties, be resolved in a court of competent jurisdiction located in
Dallas County, Texas.
ARTICLE XI
MISCELLANEOUS
11.1 Non-Defamation. Unless authorized in writing by the Company or the
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Board of Directors, the Executive expressly agrees that he will not make or
publish any statement or make any remark or comment, either orally or in
writing, which is intended to or which reasonably may be expected to injure,
discredit, prejudice, criticize, embarrass, disparage, besmirch or defame (a)
IMCO, the IMCO Group, or the Company; (b) the stockholders, officers or
directors of IMCO; or (c) IMCO's, the IMCO Group's and/or Company's business,
reputation, method of doing business, relationships with its customers or
suppliers or relations with creditors, regardless of whether such action by
Executive would constitute a cause of action for libel, slander, false light or
defamation. Executive further agrees that he will not commit damage to the
property of IMCO, the IMCO Group or the Company, or otherwise engage in any
misconduct, which is injurious to the business or reputation of IMCO, the IMCO
Group, or the Company.
11.2 Further Assurances. The Executive agrees and assures the Company
------------------
that he will do all such further acts and things (and execute, acknowledge and
deliver all such further documents and instruments) that have not been
specifically recited in this Agreement that may be useful or
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necessary to carry out the covenants, warranties, agreements and other
provisions contained in this Agreement.
11.3 Notices. All notices, requests, demands, replies, or other
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communications (hereinafter severally and collectively called "notice") called
for or permitted to be given, made or accepted by either party must be in
writing, and shall be deemed to have been duly given when delivered personally
or when deposited in the United States mail, postage prepaid and certified or
registered and addressed to the party (or their respective heir, successor,
legal representative, or assign) to be notified, with return receipt requested,
or by a confirmed facsimile , when appropriate, addressed to the party to be
notified. Notice given in any other manner shall be effective only if and when
received by the party to be notified. For purposes of notice, the addresses of
the parties shall, until changed as herein provided, be as follows:
If the Company: IMCO Management Partnership, L.P.
0000 Xxxxx X' Xxxxxx Xxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Chief Executive Officer
If to IMCO: IMCO Recycling Inc.
0000 Xxxxx X' Xxxxxx Xxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Chief Executive Officer
If to the Executive: Xxxxxxx X. Xxxx
0000 Xxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
The parties hereto and their respective heirs, successors, legal
representatives, and assigns shall have the right from time to time and at any
time to change their respective addresses and each shall have the right to
specify as its address any other address by at least fifteen (15) days' written
notice to the other party given in the manner provided herein.
11.4 Governing Law and Venue. THE PARTIES HERETO ACKNOWLEDGE AND
-----------------------
EXPRESSLY AGREE THAT THIS AGREEMENT AND PERFORMANCE HEREUNDER, ALL SUITS AND
SPECIAL PROCEEDINGS HEREUNDER, AND ALL OTHER INSTRUMENTS EXECUTED WITH IT SHALL
BE GOVERNED BY, CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF TEXAS, THE STATE IN WHICH THE PRINCIPAL EXECUTIVE OFFICES OF THE
COMPANY ARE LOCATED, WITHOUT REGARD TO CONFLICT OF LAW RULES THAT WOULD CAUSE
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION, EXCEPT ONLY TO THE EXTENT
THAT IT IS MANDATORY THAT THE LAW OF SOME OTHER JURISDICTION MUST APPLY. THE
PARTIES EXPLICITLY AGREE THAT VENUE FOR ANY ACTION BROUGHT WITH RESPECT HERETO
WILL BE IN DALLAS COUNTY, TEXAS.
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11.5 Entire Agreement. This Agreement constitutes the entire
----------------
understanding between the parties with respect to the subject matter hereof,
superseding and merging into this Agreement (whether written or oral) all prior
discussions, negotiations, representations, promises, statements, contracts or
agreements between the parties.
11.6 Amendment, Waiver, or Modifications. NO WAIVERS, VARIATIONS,
-----------------------------------
MODIFICATIONS, CHANGES OR AMENDMENTS HEREIN OR HEREOF SHALL BE BINDING UPON ANY
PARTY HERETO UNLESS IN WRITING AND DULY EXECUTED BY THE PARTY TO BE CHARGED
THEREWITH, AND NO EVIDENCE OF WAIVER OR ANY MODIFICATION SHALL BE OFFERED OR
RECEIVED IN EVIDENCE IN ANY PROCEEDING, ARBITRATION OR LITIGATION BETWEEN THE
PARTIES HERETO ARISING OUT OF OR EFFECTING THIS AGREEMENT, OR THE RIGHTS OR
OBLIGATIONS OF ANY PARTY HEREUNDER, UNLESS SUCH WAIVER, VARIATION, MODIFICATION,
CHANGE OR AMENDMENT IS IN WRITING, DULY EXECUTED AS AFORESAID.
11.7 Successors and Assigns. Subject in all respects to the limitations
----------------------
on transferability by the Executive contained in this Section 11.7, this
Agreement and the promises, conditions, terms, covenants, representations,
warranties, rights, obligations, indemnities, agreements, and other provisions
herein contained shall extend to and be binding upon, and inure to the benefit
of, the heirs, administrators, personal representatives, successors and assigns
of each of the parties hereto. The Executive acknowledges that this Agreement
is a personal services contract and that he may not assign this Agreement or any
of the rights and obligations contained herein without the prior written consent
of the Company. Any assignment made by the Executive without such written
consent of the Company shall be void.
11.8 References, Headings, and Captions. All references to "Article(s),"
----------------------------------
and "Section(s)" contained herein are, unless specifically indicated otherwise,
references to Articles and Sections of this Agreement. The captions, Article
and Section headings in this Agreement are inserted for convenience only; are in
no way intended to define or limit the scope, extent or intent of this Agreement
or any of the provisions hereof; and shall not affect the meaning,
interpretation or construction of any provision of this Agreement.
11.9 Number, Gender and Deletions. Unless the context otherwise clearly
----------------------------
indicates, the singular shall include the plural whenever and as often as may be
appropriate and the neuter, masculine and feminine genders shall include each
other. If any language is stricken or deleted from this Agreement, such
language shall be deemed never to have appeared herein and no other implication
shall be drawn therefrom.
11.10 Deemed Jointly Drafted. This Agreement is deemed to be jointly
----------------------
drafted by the parties for all purposes and the rules of construction that a
document is to be construed most strictly against the party who prepared the
same will not be applied. Each party hereto acknowledges that they have read and
understand all parts of this Agreement, have had the opportunity to have the
benefit of counsel of the party's choice and an opportunity for the independent
advice of their chosen counsel with regard to the preparation and execution of
this Agreement.
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11.11 Third Parties. Except for IMCO and the IMCO Group, nothing in this
-------------
Agreement is intended or should be construed to create any right on behalf of
anyone not a party.
11.12 Survival of Obligations. The covenants, agreements, indemnities,
-----------------------
warranties, rights and obligations of the Company, IMCO and the IMCO Group under
this Agreement, and the covenants, agreements, indemnities, warranties, rights
and obligations of the Executive under this Agreement shall survive the
termination of this Agreement for any reason including, but not limited to, the
termination of the Executive's employment with the Company regardless of whether
the Executive's employment is terminated, voluntarily or involuntarily, by the
Company or the Executive, for Cause or Without Cause, or the Executive Resigns
for Good Reason. All covenants, agreements, indemnities, warranties, rights and
obligations contained herein shall continue for so long as necessary in order
for the Company, IMCO and/or the Executive to enforce their rights hereunder.
11.13 Severability. If any agreement, warranty, covenant, condition,
------------
term, or other provision of this Agreement is found to be illegal by a final
judgment of a court having jurisdiction, or if the application thereof to any
party or in any circumstance shall to any extent be judicially determined to be
invalid or unenforceable, (a) the remainder of this Agreement, or the
application of such agreement, warranty, covenant, condition, term, or other
provision to persons or in circumstances other than those to which it is held
invalid or unenforceable, shall not be affected thereby, and each agreement,
warranty, covenant, condition, term, and other provision of this Agreement shall
be valid and enforceable to the fullest extent permitted by law, and (b) in lieu
of such illegal, invalid, or unenforceable provision, there shall be added
automatically as a part of this Agreement a provision that comes closest to
expressing the intention of such illegal, invalid, or unenforceable provision as
may be legal, valid, and enforceable.
11.14 Attorney Fees. In the event that any litigation arises (including a
-------------
dispute that will be settled through arbitration pursuant to Article X) between
or among the parties, based, in whole or in part, on this Agreement or any or
all of the provisions contained herein, the prevailing party in the litigation
is entitled to recover from the losing party, and will be awarded by a court of
competent jurisdiction, any and all fees and disbursements of trial and
appellate counsel paid, incurred or suffered by the prevailing party as the
result of, arising from, or in connection with the litigation.
11.15 Counterparts. This Agreement may also be executed in one or more
------------
counterparts, each of which, for all purposes, shall be deemed an original and
all of such counterparts, taken together, shall constitute one and the same
Agreement.
11.16 Joint and Several Liability. Each of the obligations imposed in this
---------------------------
Agreement on the Company and/or IMCO are joint and several.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
IMCO MANAGEMENT PARTNERSHIP, L.P. EXECUTIVE
By: IMCO Recycling Inc., its General Partner
By: ____________________________ __________________________________
Xxxxxxx X. Xxxx
Title: ____________________________
IMCO RECYCLING INC.
By: ____________________________
Title: ____________________________
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