EXHIBIT 10.1
------------
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of May 29, 2007, among Xxxxxx American
Corp., a Delaware corporation ("XXXXXX American") renamed as Xxxxxxx Xxxxxx
Holdings Corp. ("XXXXXXX XXXXXX HOLDINGS"), Xxxx X. Xxxxxxx Company, a Georgia
corporation ("XXXXXXX") reconstituted as Xxxxxxx Xxxxxx Corp., a Delaware
corporation (the "COMPANY"), and Xxxxxxx Xxxxxx (the "EXECUTIVE").
WHEREAS, on December 19, 2006, Xxxxxxx, M&F Worldwide Corp. ("MFW") and
H Acquisition Corp., a Georgia corporation and a wholly owned subsidiary of MFW
entered into an Agreement and Plan of Merger whereby H Acquisition Corp. merged
with and into Xxxxxxx and as a result, the separate corporate existence of H
Acquisition Corp. ceased and Xxxxxxx continued as the surviving corporation
effective May 1, 2007 (the "TRANSACTION");
WHEREAS, on January 16, 2007, Xxxxxx American, MFW and the Executive
modified the terms of the Executive's employment agreement with Security
Printing, Inc. and CA Investment Corp. (both predecessor companies of Xxxxxx
American and CA Investment Corp. a wholly owned subsidiary of MFW), dated
October 31, 2005 and effective as of December 15, 2005 (the "MODIFIED EMPLOYMENT
AGREEMENT"); and
WHEREAS, Xxxxxxx Xxxxxx Holdings, the Company and the Executive wish to
modify the terms of employment set forth in the Modified Employment Agreement
effective as of the Effective Date (as hereinafter defined).
Accordingly, Xxxxxxx Xxxxxx Holdings, the Company and the Executive
hereby agree as follows:
1. EMPLOYMENT, DUTIES AND ACCEPTANCE.
1.1 EMPLOYMENT, DUTIES. The Company hereby employs the
Executive for the Term (as defined in Section 2.1), to render exclusive and
full-time services to the Company as President and Chief Executive Officer of
the "Xxxxxxx Xxxxxx Business" or in such other executive position as may be
mutually agreed upon by the Company and the Executive, and to perform such other
duties consistent with such position as may be assigned to the Executive by the
Board of Directors of Xxxxxxx Xxxxxx Holdings (the "BOARD"). During the Term,
the Executive shall report solely to the Board and to the Chief Executive
Officer of MFW. For purposes of this Agreement, the term "Xxxxxxx Xxxxxx
Business" shall mean the business of the provision of checks and related
products, direct marketing and contract center services to financial and
commercial institutions and individuals, and any future businesses from time to
time included in or added to such businesses.
1.2 ACCEPTANCE. The Executive hereby accepts such employment
and agrees to render the services described above. During the Term, the
Executive agrees to serve the Company faithfully and to the best of the
Executive's ability, to devote the Executive's entire business time, energy and
skill to such employment, and to use the Executive's best efforts, skill and
ability to promote the Company's interests. The Executive further agrees to
accept election, and to serve during all or any part of the Term, as an officer
or director of the Company and of any subsidiary or affiliate of the Company,
without any compensation therefor other than that specified in this Agreement,
if elected to any such position by the shareholders or by the Board or of any
subsidiary or affiliate, as the case may be.
1.3 LOCATION. The duties to be performed by the Executive
hereunder shall be performed primarily at the offices of the Company in San
Antonio, Texas, subject to reasonable travel requirements on behalf of the
Company.
2. TERM OF EMPLOYMENT; CERTAIN POST-TERM BENEFITS.
2.1 THE TERM. This Agreement and the term of the Executive's
employment under this Agreement (the "TERM") shall become effective as of May 2,
2007 (the "EFFECTIVE DATE") and will continue until December 31, 2010 (the
"TERMINATION DATE"), subject to earlier termination pursuant to Section 4.
2.2 END-OF-TERM PROVISIONS. Prior to the end of the Term,
the Company and the Executive shall meet to discuss whether the Term should be
extended. The Company shall have the right at any time, however, to give written
notice of non-renewal of the Term. In the event of non-renewal of the Term by
the Company and the Executive's employment is terminated after the end of the
Term, other than for Cause (as defined below), or Disability (as defined below)
following such notice of non-renewal, then such termination shall be treated as
a termination without Cause and the Restricted Period (as defined below) shall
be reduced to a period of one year post termination of employment (the "REDUCED
RESTRICTED PERIOD"). During such Restricted Period, the Executive shall receive
50% of the payments set forth in Sections 4.4(i) and 4.4(ii), subject to
Executive's signing and not revoking the release of claims as set forth in
Section 4.6. For the avoidance of doubt, if the Company is willing to extend the
Term and Executive does not agree to extend the Term, then upon such termination
of employment at the end of the Term, the Executive shall be bound by the
restrictive covenants set forth in Section 5 below, the Restricted Period shall
not be reduced and Executive shall not be entitled to receive any severance
benefits with respect to such termination.
3. COMPENSATION; BENEFITS.
3.1 SALARY. As compensation for all services to be rendered
pursuant to this Agreement, the Company agrees to pay the Executive a base
salary, payable in accordance with the Company's normal payroll practices, at
the annual rate of not less than $850,000 (effective January 1, 2007) less such
deductions or amounts to be withheld as required by applicable law and
regulations (the "BASE SALARY"). In the event that the Company, in its sole
discretion, from time to time determines to increase the Base Salary, such
increased amount shall, from and after the effective date of the increase,
constitute "Base Salary" for purposes of this Agreement.
2
3.2 INCENTIVE COMPENSATION.
3.2.1 ANNUAL BONUS. For fiscal year 2007, the
Executive's bonus, if any (the "2007 BONUS"), shall be determined in the
following manner: (a) with respect to the period from January 1, 2007
through April 30, 2007, the Executive shall receive an amount in bonus
compensation equal to what the Executive was entitled to receive under
the Xxxxxx American senior management bonus plan for such period had
such plan terminated at April 30, 2007, and (b) Xxxxxxx Xxxxxx Holdings
shall establish for the Company a bonus plan applicable to the remaining
portion of fiscal year 2007 from and after May 1, 2007, as approved by
the Compensation Committee of MFW's board of directors (the "MFW
COMPENSATION COMMITTEE") which may be, but need not be, designed to
cause the 2007 Bonus to qualify as "performance-based compensation," as
more fully set forth in the last sentence of the second paragraph of
this Section 3.2.1, and such bonus plan shall be calculated consistent
with the percentages set forth in the table below. Any such bonus
amounts payable with respect to 2007 pursuant to clauses (a) and (b)
shall be paid consistent with past practice in fiscal year 2008.
Commencing with the 2008 fiscal year, the Executive will be eligible to
receive a bonus with respect to 2008 and each later fiscal year ending
during the Term computed in accordance with the provisions hereafter.
If, with respect to any such fiscal year, the Xxxxxxx Xxxxxx Business
achieves "Consolidated EBITDA" (as defined below) of at least the
percentage set forth in the table below of its business plan for such
fiscal year, such bonus shall be the percentage set forth in the table
below of Base Salary with respect to the fiscal year for which the bonus
(any such bonus, an "ANNUAL BONUS") was earned:
PERCENTAGE OF CONSOLIDATED
EBITDA IN BUSINESS PLAN PERCENTAGE OF BASE SALARY
----------------------------- ---------------------------
89.9% and below Nil
90 - 94.9 90
95 - 99.9 95
100 - 105 105
105.1 - 110 110
110.1 - 115 115
115.1 - 120 120
120.1 - 125 125
125.1 - 130 130
130.1 - 135 135
135.1 - 140 140
140.1 - 145 145
145.1 and over 150
An Annual Bonus if earned in accordance with this Agreement shall be paid no
later than the fifteenth day of the third month next following the year with
respect to which such bonus was earned, provided that, except as otherwise
specifically provided in this Agreement (including, without limitation, Section
4.4), as a condition precedent to any bonus entitlement the Executive must
remain in employment with the Company at the time that the Annual Bonus is paid.
3
Notwithstanding the foregoing, to the extent that Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "CODE"), may be applicable, such Annual
Bonus shall be subject to, and contingent upon, such shareholder approval as is
necessary to cause the Annual Bonus to qualify as "performance-based
compensation" under Section 162(m) of the Code and the regulations promulgated
thereunder as well as approval of this Section 3.2.1 by the MFW Compensation
Committee and any other required committees.
For the purposes of this Agreement, "CONSOLIDATED EBITDA" means for any fiscal
year of the Company, consolidated operating income for such fiscal year of the
Xxxxxxx Xxxxxx Business plus, without duplication, the sum of (i) depreciation
and amortization expense (excluding amounts of prepaid incentives under customer
contracts), (ii) any extraordinary non-cash expenses or losses, (iii) any costs
and expenses incurred in connection with the Transaction, (iv) allocation of
fees charged by MFW or a subsidiary to the Company relating to the operation of
the Xxxxxxx Xxxxxx Business and (v) all restructuring costs (as defined under
U.S. generally accepted accounting principles), in the case of clauses (i)
through (v) above, solely with respect to the Xxxxxxx Xxxxxx Business, and minus
(x) to the extent included in the statement of such consolidated net income for
such period, the sum of any extraordinary or non-recurring income or gains
(including, whether or not otherwise includable as a separate item in the
statement of such consolidated operating income for such period, gains on the
sales of assets outside of the ordinary course of business), and (y) any cash
payments made during such period in respect of items described in clause (ii)
above subsequent to the fiscal quarter in which the relevant non-cash expenses
or losses were reflected as a charge in the statement of consolidated operating
income, in the case of clauses (x) and (y) above, solely with respect to the
Xxxxxxx Xxxxxx Business, all as determined on a consolidated basis, all of the
foregoing to be determined by the Board or the MFW Compensation Committee, as
applicable. For the purposes of determining compensation milestones for any
fiscal year, Consolidated EBITDA will be adjusted by the Board or the MFW
Compensation Committee, as applicable, as appropriate for material acquisitions
or dispositions of any business or assets of or by the Xxxxxxx Xxxxxx Business
or its subsidiaries for such fiscal year and thereafter.
3.2.2 NEW LONG TERM INCENTIVE PLAN. During the Term,
the Executive shall participate in the Long Term Incentive Plan ("LTIP")
of MFW which shall be established and become effective as of January 1,
2008. The Executive will receive 35% of the "LTIP bonus pool attributed
to the Xxxxxxx Xxxxxx Business," as defined in, and in accordance with,
the LTIP. Further details regarding participation in the LTIP are set
forth on ANNEX A attached hereto. If the Term is extended, the Executive
shall participate in a new Long Term Incentive Plan that shall commence
after the LTIP ends. Notwithstanding the foregoing, to the extent that
Section 162(m) of the Code may be applicable, the LTIP (and any
subsequent Long Term Incentive Plan) shall be subject to, and contingent
upon, such shareholder approval as is necessary to cause the LTIP to
qualify as "performance-based compensation" under Section 162(m) of the
Code and the regulations promulgated thereunder.
4
3.2.3 EXISTING LONG TERM INCENTIVE PLAN. The
Executive's existing Long Term Incentive Plan Award pursuant to the MFW
2005 Long Term Incentive Plan (the "PRIOR LTIP") shall be cancelled in
exchange for the cash payments in the next sentence. For fiscal year
2006, Executive shall receive a cash payment of $1,461,787 (based on
reported results for 2006) and for fiscal year 2007 Executive shall
receive a cash payment in an amount to be determined by the MFW
Compensation Committee (collectively, the "PRIOR LTIP PAYMENTS"). The
Prior LTIP Payments shall be paid to Executive as soon as practicable in
order to avoid application of an additional or accelerated tax under
Section 409A of the Code (as more fully set forth in Section 4.7 herein)
but no later than January 30, 2008. For the avoidance of doubt, after
Executive receives the Prior Plan Payments, Executive shall have no
further right to any payment in respect of his Award under the Prior
LTIP and the Prior LTIP shall be cancelled, effective not later than
December 31, 2007.
3.3 BUSINESS EXPENSES. The Company shall pay or reimburse
the Executive for all reasonable expenses actually incurred or paid by the
Executive during the Term in the performance of the Executive's services under
this Agreement, upon presentation of expense statements or vouchers or such
other supporting information as the Company customarily may require of its
officers PROVIDED, HOWEVER, that the maximum amount available for such expenses
during any period may be fixed in advance by the Board.
3.4 VACATION. During the Term, the Executive shall be
entitled to a vacation period or periods of four (4) weeks during any fiscal
year taken in accordance with the vacation policy of the Company during each
year of the Term. Vacation time not used by the end of a year shall be
forfeited.
3.5 FRINGE BENEFITS. During the Term, the Executive shall be
entitled to all benefits for which the Executive shall be eligible under any
qualified pension plan, 401(k) plan, group insurance or other so-called "fringe"
benefit plan which the Company provides to its executive employees generally,
which benefits may be subject to change to reflect the objectives and
requirements of the Transaction.
4. TERMINATION.
4.1 DEATH. If the Executive dies during the Term, the Term
shall terminate forthwith upon the Executive's death. The Company shall pay to
the Executive's estate: (i) any Base Salary earned but not paid; (ii) a pro
rated Annual Bonus based on the number of days of the fiscal year worked by the
Executive; and (iii) amounts payable under the LTIP in accordance with the terms
thereof. The Executive shall have no further rights to any compensation
(including any Base Salary or Annual Bonus) or any other benefits under this
Agreement, except to the extent already earned and vested as of the day
immediately prior to his death, or as earned, vested, or accrued by virtue of
his death.
5
4.2 DISABILITY. If, during the Term the Executive is unable
to perform his duties hereunder due to a physical or mental incapacity for a
period of 6 months within any 12 month period (hereinafter a "DISABILITY"), the
Company shall have the right at any time thereafter to terminate the Term upon
sending written notice of termination to the Executive. If the Company elects to
terminate the Term by reason of Disability, the Company shall pay to the
Executive promptly after the notice of termination: (i) any Base Salary earned
but not paid, (ii) a pro rated Annual Bonus based on the number of days of the
fiscal year worked by the Executive until the date of the notice of termination,
and (iii) amounts payable under the LTIP in accordance with the terms thereof,
in each case less any other benefits payable to the Executive under any
disability plan provided for hereunder or otherwise furnished to the Executive
by the Company. The Executive shall have no further rights to any compensation
(including any Base Salary or Annual Bonus) or any other benefits under this
Agreement except to the extent already earned and vested as of the day
immediately prior to his termination by reason of Disability, or as earned,
vested, or accrued by virtue of his Disability.
4.3 CAUSE. The Company may at any time by written notice to
the Executive terminate the Term for "Cause" (as defined below) and, upon such
termination, this Agreement shall terminate and the Executive shall be entitled
to receive no further amounts or benefits hereunder, except for any Base Salary
earned but not paid prior to such termination. For the purposes of this
Agreement, "CAUSE" means: (i) continued neglect by the Executive of the
Executive's duties hereunder, (ii) continued incompetence or unsatisfactory
attendance, (iii) conviction of any felony, (iv) violation of the rules,
regulations, procedures or instructions relating to the conduct of employees,
directors, officers and/or consultants of the Company, (v) willful misconduct by
the Executive in connection with the performance of any material portion of the
Executive's duties hereunder, (vi) breach of fiduciary obligation owed to the
Company or commission of any act of fraud, embezzlement, disloyalty or
defalcation, or usurpation of a Company opportunity, (vii) breach of any
provision of this Agreement, including any non-competition, non-solicitation
and/or confidentiality provisions hereof, (viii) any act that has a material
adverse effect upon the reputation of and/or the public confidence in the
Company, (ix) failure to comply with a reasonable order, policy or rule that
constitutes material insubordination, (x) engaging in any discriminatory or
sexually harassing behavior, or (xi) using, possessing or being impaired by or
under the influence of illegal drugs or the abuse of controlled substances or
alcohol on the premises of the Company or any of its subsidiaries or affiliates
or while working or representing the Company or any of its subsidiaries or
affiliates. A termination for Cause by the Company of any of the events
described in clauses (i), (ii), (iv), (ix), (x) and (xi) shall only be effective
on 15 days advance written notification, providing Executive the opportunity to
cure, if reasonably capable of cure within said 15-day period; provided,
however, that no such notification is required if the Cause event is not
reasonably capable of cure or the Board determines that its fiduciary obligation
requires it to effect a termination of Executive for Cause immediately.
6
4.4 TERMINATION BY COMPANY WITHOUT CAUSE OR BY THE EXECUTIVE
FOR GOOD REASON. If the Executive's employment is terminated by the Company
without Cause (other than by reason of death or Disability) or by the Executive
for Good Reason (as defined below), the Executive shall receive: (i) as
severance pay, an amount equal to two times the Base Salary payable in
installments in accordance with the Company's normal payroll practices, (ii)
continuation for a 12-month period following the date of termination of group
health plan benefits to the extent authorized by and consistent with 29 U.S.C.
ss. 1161 et seq. (commonly known as "COBRA"), with the cost of the regular
premium for such benefits shared in the same relative proportion by the Company
and the Employee as in effect on the date of termination, (iii) pro-rated Annual
Bonus for the year in which termination occurred if the Executive would have
been eligible to receive such bonus hereunder (including due to satisfaction by
the Company of performance milestones) had the Executive been employed at the
time such Annual Bonus is normally paid, which pro-rated Annual Bonus will be
paid at the time and in the manner such Annual Bonus is paid to other executives
receiving such bonus payment, (iv) Annual Bonus for the year prior to the year
in which the Executive is so terminated if at the time of termination the
Executive has earned an Annual Bonus payment for such prior year and has not yet
been paid such due to such termination, which prior year Annual Bonus will be
paid at the time and in the manner such prior year Annual Bonus is paid to other
executives receiving such prior year Annual Bonus and (v) amounts payable, if
any, under the LTIP in accordance with the terms thereof. The Executive shall
have no further rights to any compensation (including any Base Salary or Annual
Bonus) or any other benefits under this Agreement. For purposes of this
Agreement, "GOOD REASON" means, without the advance written consent of the
Executive: (i) a reduction in Base Salary or (ii) a material and continuing
reduction in the Executive's responsibilities, PROVIDED, that a termination by
the Executive for Good Reason shall be effective only if the Executive provides
the Company with written notice specifying the event which constitutes Good
Reason within thirty (30) days following the occurrence of such event or date
Executive became aware or should have become aware of such event and the Company
fails to cure the circumstances giving rise to Good Reason within 30 days after
such notice.
4.5 TERMINATION BY EXECUTIVE OTHER THAN FOR GOOD REASON. The
Executive is required to provide the Company with 30 days' prior written notice
of termination to the Company. Subject to Section 4.4, upon termination of
employment by the Executive, the Executive shall receive any Base Salary earned
but not paid prior to such termination and shall have no further rights to any
compensation (including any Base Salary or Annual Bonus) or any other benefits
under this Agreement, except to the extent already earned and vested as of the
day immediately prior to such termination.
4.6 RELEASE. Notwithstanding any other provision of this
Agreement to the contrary, the Executive acknowledges and agrees that any and
all payments, other than payment of any accrued and unpaid Base Salary to which
the Executive is entitled under this Section 4 are conditioned upon and subject
to the Executive's execution of a general waiver and release (for the avoidance
of doubt, the restrictive covenants contained in Section 5 of this Agreement
shall survive the termination of this Agreement), in such form as may be
prepared by the Company, of all claims, except for such matters covered by
provisions of this Agreement which expressly survive the termination of this
Agreement.
7
4.7 SECTION 409A. Notwithstanding the foregoing provisions
of this Section 4, if any payments or benefits due to the Executive hereunder
would cause the application of an accelerated or additional tax under Section
409A of the Code such payments or benefits shall be restructured in a manner
which does not cause such an accelerated or additional tax. Without limiting the
application of the preceding sentence, any payment of money due hereunder which
is delayed in order to avoid the application of Section 409A of the Code (e.g.,
a six-month delay in the commencement of severance pay, if necessary, if at the
time of the Executive's termination of employment he is a "specified employee,"
as defined in Section 409A of the Code) shall be paid as soon as possible
without causing the application of Section 409A of the Code.
5. PROTECTION OF CONFIDENTIAL INFORMATION; RESTRICTIVE COVENANTS.
5.1 From the Effective Date, the Company will share with
Executive confidential and trade secret information regarding not only the
Company but also its subsidiaries and affiliates. In view of the fact that the
Executive's work for the Company will bring the Executive into close contact
with many confidential affairs of the Company not readily available to the
public, trade secret information and plans for future developments, the
Executive agrees:
5.1.1 To keep and retain in the strictest confidence
all confidential matters of the Company, including, without limitation,
"know how", trade secrets, customer lists, pricing policies, operational
methods, technical processes, formulae, inventions and research
projects, other business affairs of the Company, and any material
confidential information whatsoever concerning any director, officer,
employee, shareholder, partner, customer or agent of the Company or
their respective family members learned by the Executive heretofore or
hereafter, and not to disclose them to anyone outside of the Company,
either during or after the Executive's employment with the Company,
except in the course of performing the Executive's duties hereunder or
with the Company's express written consent. The foregoing prohibitions
shall include, without limitation, directly or indirectly publishing (or
causing, participating in, assisting or providing any statement, opinion
or information in connection with the publication of) any diary, memoir,
letter, story, photograph, interview, article, essay, account or
description (whether fictionalized or not) concerning any of the
foregoing, publication being deemed to include any presentation or
reproduction of any written, verbal or visual material in any
communication medium, including any book, magazine, newspaper,
theatrical production or movie, or television or radio programming or
commercial; and
5.1.2 To deliver promptly to the Company on
termination of the Executive's employment by the Company, or at any time
the Company may so request, all memoranda, notes, records, reports,
manuals, drawings, blueprints and other documents (and all copies
thereof), including data stored in computer memories or on other media
used for electronic storage or retrieval, relating to the Company's
business and all property associated therewith, which the Executive may
then possess or have under the Executive's control, and not retain any
8
copies, notes or summaries; PROVIDED Executive shall be entitled to keep
a copy of this Agreement and compensation and benefit plans to which
Executive is entitled to receive benefits thereunder.
5.2 In support of Executive's commitments to maintain the
confidentiality of the Company's confidential and trade secret information,
during (i) the Term, and (ii) for a period of two years following termination of
the Executive's employment for any reason (the "RESTRICTED PERIOD"), the
Executive shall not in the United States and in any non-US jurisdiction where
the Company may then do business: (a) directly or indirectly, enter the employ
of, or render any services to, any person, firm or corporation engaged in any
business competitive with the business of the Company or of any of its
subsidiaries or affiliates; (b) engage in such business on the Executive's own
account; and the Executive shall not become interested in any such business,
directly or indirectly, as an individual, partner, shareholder, director,
officer, principal, agent, employee, trustee, consultant, or in any other
relationship or capacity; (c) solicit or encourage (or cause to be solicited or
encouraged) or cause any client, customer or supplier of the Company to cease
doing business with the Company, or to reduce the amount of business such
client, customer or supplier does with the Company or (d) solicit or encourage
(or cause to be solicited or encouraged) to cease to work with the Company, or
hire (or cause to be hired), any person who is an employee of or consultant then
under contract with the Company or who was an employee of or consultant then
under contract with the Company within the six month period preceding such
activity without the Company's written consent, provided however that this
clause (d) shall not apply during the Restricted Period to a consulting or
advisory firm which is also then currently engaged or under a retainer
relationship (in each case, without any action by the Executive, whether
directly or indirectly) by a subsequent employer of the Executive.
5.3 If the Executive commits a breach, or poses a serious
and objective threat to commit a breach, of any of the provisions of Sections
5.1 or 5.2 hereof, the Company shall have the following rights and remedies:
5.3.1 The right and remedy to have the provisions of
this Agreement specifically enforced by any court having equity
jurisdiction, it being acknowledged and agreed that any such breach or
threatened breach will cause irreparable injury to the Company and that
money damages will not provide an adequate remedy to the Company;
5.3.2 The right and remedy to require the Executive to
account for and pay over to the Company all compensation, profits,
monies, accruals, increments or other benefits derived or received by
the Executive as the result of any transactions constituting a breach of
any of the provisions of the preceding paragraph, and the Executive
hereby agrees to account for and pay over such benefits to the Company.
Each of the rights and remedies enumerated above shall be independent of
the other, and shall be severally enforceable, and all of such rights
and remedies shall be in addition to, and not in lieu of, any other
rights and remedies available to the Company under law or in equity; and
9
5.3.3 In addition to any other remedy which may be
available (i) at law or in equity, or (ii) pursuant to any other
provision of this Agreement, the payments by the Company of Base Salary
and the regular premium for group health benefits pursuant to Section
4.4 will cease as of the date on which such violation first occurs. In
addition, if the Executive breaches any of the covenants contained in
Sections 5.1 and 5.2 and the Company obtains injunctive relief with
respect thereto (that is not later reversed or otherwise terminated or
vacated by judicial order), the period during which the Executive is
required to comply with that particular covenant shall be extended by
the same period that the Executive was in breach of such covenant prior
to the effective date of such injunctive relief.
5.4 If any of the covenants contained in Sections 5.1 or
5.2, or any part thereof, hereafter are held by a court to be invalid or
unenforceable, the same shall not affect the remainder of the covenant or
covenants, which shall be given full effect, without regard to those portions
found invalid.
5.5 If any of the covenants contained in Sections 5.1 or
5.2, or any part thereof, are held to be unenforceable because of the duration
of such provision or the area covered thereby, the parties agree that the court
making such determination shall have the power to reduce the duration and/or
area of such provision and, in its reduced form, said provision shall then be
enforceable.
5.6 The Executive agrees (whether during or after the
Executive's employment with the Company) not to issue, circulate, publish or
utter any false or disparaging statements, remarks or rumors about the Company
or its affiliates or the officers, directors, managers, customers, partners, or
shareholders of the Company or its affiliates unless giving truthful testimony
under subpoena.
5.7 For purposes of this Section 5 only, the term "Company"
includes the Company and its subsidiaries and affiliates which are related to
the businesses of Xxxxxxx Xxxxxx Holdings.
6. INVENTIONS AND PATENTS.
6.1 The Executive agrees that all processes, technologies
and inventions (collectively, "INVENTIONS"), including new contributions,
improvements, ideas and discoveries, whether patentable or not, conceived,
developed, invented or made by him during the Term shall belong to the Company,
PROVIDED that such Inventions grew out of the Executive's work with the Company
or any of its subsidiaries or affiliates, are related in any manner to the
business (commercial or experimental) of the Company or any of its subsidiaries
or affiliates or are conceived or made on the Company's time or with the use of
the Company's facilities or materials. The Executive shall further: (a) promptly
disclose such Inventions to the Company; (b) assign to the Company, without
additional compensation, all patent and other rights to such Inventions for the
United States and foreign countries; (c) sign all papers necessary to carry out
the foregoing; and (d) give testimony in support of the Executive's
inventorship.
10
6.2 If any Invention is described in a patent application or
is disclosed to third parties, directly or indirectly, by the Executive within
two years after the termination of the Executive's employment by the Company, it
is to be presumed that the Invention was conceived or made during the Term.
6.3 The Executive agrees that the Executive will not assert
any rights to any Invention as having been made or acquired by the Executive
prior to the date of this Agreement, except for Inventions, if any, disclosed to
the Company in writing prior to the date hereof.
7. INTELLECTUAL PROPERTY.
The Company shall be the sole owner of all the products and proceeds of
the Executive's services hereunder, including, but not limited to, all
materials, ideas, concepts, formats, suggestions, developments, arrangements,
packages, programs and other intellectual properties that the Executive may
acquire, obtain, develop or create in connection with and during the Term, free
and clear of any claims by the Executive (or anyone claiming under the
Executive) of any kind or character whatsoever (other than the Executive's right
to receive payments hereunder). The Executive shall, at the request of the
Company, execute such assignments, certificates or other instruments as the
Company may from time to time deem necessary or desirable to evidence,
establish, maintain, perfect, protect, enforce or defend its right, title or
interest in or to any such properties.
8. NOTICES.
All notices, requests, consents and other communications required or
permitted to be given hereunder shall be in writing and shall be deemed to have
been duly given if delivered personally, sent by overnight courier or mailed
first class, postage prepaid, by registered or certified mail (notices mailed
shall be deemed to have been given on the date mailed), as follows (or to such
other address as either party shall designate by notice in writing to the other
in accordance herewith):
If to the Company, to:
Xxxxxxx Xxxxxx Corp.
00000 Xxxxxxxx Xxxxx
Xxx Xxxxxxx, XX 00000
Attn: Director of Human Resources
If to Xxxxxxx Xxxxxx Holdings Corp.
c/o M&F Worldwide Corp.
00 X. 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
11
If to the Executive, to:
Such address as shall most currently appear on the records of the
Company.
9. GOVERNING LAW; DISPUTE RESOLUTION.
9.1 It is the intent of the parties hereto that all
questions with respect to the construction of this Agreement and the rights and
liabilities of the parties hereunder shall be determined in accordance with the
laws of the State of Delaware, without regard to principles of conflicts of laws
thereof that would call for the application of the substantive law of any
jurisdiction other than the State of Delaware.
9.2 Each party irrevocably agrees for the exclusive benefit
of the other that any and all suits, actions or proceedings relating to Section
5 of this Agreement (a "PROCEEDING") shall be maintained in either the courts of
the State of Delaware or the federal District Courts sitting in Bexar County,
Texas or Wilmington, Delaware (collectively, the "CHOSEN COURTS") and that the
Chosen Courts shall have exclusive jurisdiction to hear and determine or settle
any such Proceeding and that any such Proceedings shall only be brought in the
Chosen Courts. Each party irrevocably waives any objection that it may have now
or hereafter to the laying of the venue of any Proceedings in the Chosen Courts
and any claim that any Proceedings have been brought in an inconvenient forum
and further irrevocably agrees that a judgment in any Proceeding brought in the
Chosen Courts shall be conclusive and binding upon it and may be enforced in the
courts of any other jurisdiction.
9.3 Each of the parties hereto agrees that this Agreement
involves at least $100,000 and that this Agreement has been entered into in
express reliance on Section 2708 of Title 6 of the Delaware Code. Each of the
parties hereto irrevocably and unconditionally agrees (i) that, to the extent
such party is not otherwise subject to service of process in the State of
Delaware, it will appoint (and maintain an agreement with respect to) an agent
in the State of Delaware as such party's agent for acceptance of legal process
and notify the other parties hereto of the name and address of said agent, (ii)
that service of process may also be made on such party by pre-paid certified
mail with a validated proof of mailing receipt constituting evidence of valid
service sent to such party at the address set forth in Section 8 of this
Agreement, as such address may be changed from time to time pursuant hereto, and
(iii) that service made pursuant to clause (i) or (ii) above shall, to the
fullest extent permitted by applicable law, have the same legal force and effect
as if served upon such party personally within the State of Delaware.
9.4 Any controversy or claim arising out of or related to
any other provision of this Agreement shall be settled by final, binding and
non-appealable arbitration in Bexar County, Texas or Wilmington, Delaware by a
single arbitrator. Subject to the following provisions, the arbitration shall be
conducted in accordance with the applicable rules of JAMS then in effect. Any
award entered by the arbitrator shall be final, binding and nonappealable and
judgment may be entered thereon by either party in accordance with applicable
law in any court of competent jurisdiction. This arbitration provision shall be
specifically enforceable. The arbitrator shall have no authority to modify any
provision of this Agreement or to award a remedy for a dispute involving this
12
Agreement other than a benefit specifically provided under or by virtue of the
Agreement. Each party shall be responsible for its own expenses relating to the
conduct of the arbitration or litigation (including reasonable attorneys' fees
and expenses) and shall share the fees of JAMS and the arbitrator, if
applicable, equally.
10. GENERAL.
10.1 JURY TRIAL WAIVER. THE PARTIES EXPRESSLY AND KNOWINGLY
WAIVE ANY RIGHT TO A JURY TRIAL IN THE EVENT ANY ACTION ARISING UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR THE EXECUTIVE'S EMPLOYMENT WITH THE COMPANY IS
LITIGATED OR HEARD IN ANY COURT.
10.2 CONTINUATION OF EMPLOYMENT. Unless the parties otherwise
agree in writing, continuation of the Executive's employment with the Company
beyond the expiration of the Term shall be deemed an employment at will and
shall not be deemed to extend any of the provisions of this Agreement, and
Executive's employment may thereafter be terminated "at will" by the Executive
or the Company and Executive will be entitled to fringe benefits which the
Executive is eligible to receive for so long as the Executive continues to be
employed with the Company and the Executive shall be eligible for severance in
accordance with the terms of the Company's severance policy then in effect.
10.3 HEADINGS. The section headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
10.4 ENTIRE AGREEMENT. This Agreement sets forth the entire
agreement and understanding of the parties relating to the Executive's
employment by the Company, and supersedes all prior agreements, arrangements and
understandings, written or oral, relating to the Executive's employment by the
Company and its affiliates including, without limitation, effective as of the
Effective Date, the Modified Employment Agreement and any severance, retention,
change in control or similar types of benefits. No representation, promise or
inducement has been made by either party that is not embodied in this Agreement,
and neither party shall be bound by or liable for any alleged representation,
promise or inducement not so set forth.
10.5 ASSIGNMENT. This Agreement, and the Executive's rights
and obligations hereunder, may not be assigned by the Executive. The Company may
assign its rights, together with its obligations, hereunder (i) to any affiliate
or (ii) to third parties in connection with any sale, transfer or other
disposition of all or substantially all of the business or assets of the
Company; in any event the obligations of the Company hereunder shall be binding
on its successors or assigns, whether by merger, consolidation or acquisition of
all or substantially all of its business or assets.
13
10.6 WAIVER. This Agreement may be amended, modified,
superseded, canceled, renewed or extended and the terms or covenants hereof may
be waived, only by a written instrument executed by all of the parties hereto,
or in the case of a waiver, by the party waiving compliance. The failure of
either party at any time or times to require performance of any provision hereof
shall in no manner affect the right at a later time to enforce the same. No
waiver by either party of the breach of any term or covenant contained in this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be, or construed as, a further or continuing waiver of any such
breach, or a waiver of the breach of any other term or covenant contained in
this Agreement.
10.7 WITHHOLDING TAXES. The Company may withhold from any
amounts payable under this Agreement such federal, state, local and other taxes
as may be required to be withheld pursuant to any applicable law or regulation.
11. SUBSIDIARIES AND AFFILIATES.
11.1 As used herein, the term "SUBSIDIARY" shall mean any
corporation or other business entity controlled directly or indirectly by the
corporation or other business entity in question, and the term "AFFILIATE" shall
mean and include any corporation or other business entity directly or indirectly
controlling, controlled by or under common control with the corporation or other
business entity in question.
[Remainder of Page Intentionally Left Blank]
14
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
XXXXXXX XXXXXX CORP.
By: /s/ Xxxx X. Xxxxxx
--------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President,
Secretary and General
Counsel
XXXXXXX XXXXXX HOLDINGS CORP.
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President and Chief
Executive Officer
/s/ Xxxxxxx Xxxxxx
--------------------------------
Xxxxxxx Xxxxxx
