EXHIBIT 10.9
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (this "Agreement"), is made and entered into as
of the 31st day of October, 1997, by and between XXXXX X. XXXX (the
"Executive"), and XXX RIVER INC., a Georgia corporation (the "Company");
W I T N E S S E T H:
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WHEREAS, the Executive has been employed by the Company as the Chief
Financial Officer of the Company since November, 1989; and
WHEREAS, the Company desires to continue to employ the Executive, and the
Executive desires to continue to be employed by the Company, on the terms and
conditions contained herein; and
WHEREAS, to induce the Executive to continue in the employ of the Company,
the Company wishes to enter into this Agreement;
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby agree as follows:
Section 1. Employment
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1.1. Duties. Subject to the terms hereof, the Company hereby employs the
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Executive as the Chief Financial Officer of the Company, and the Executive
hereby accepts such employment. The Executive agrees that during the employment
of the Executive pursuant to this Agreement, the Executive shall devote his full
business time and attention to the business of the Company.
1.2. Other Activities. The Executive may, without limitation, (i) serve
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on corporate, civic or charitable boards or committees, (ii) deliver lectures,
fulfill speaking engagements or teach at educational institutions and (iii)
manage personal investments, provided such activities do not materially
interfere with the performance of the Executive's responsibilities to the
Company hereunder. The parties hereto expressly understand and agree that to
the extent the Executive has engaged in any such activities prior to the date of
this Agreement, any subsequent conduct of activities similar in nature and scope
to such previous activities shall not be deemed to materially interfere with the
performance of the Executive's duties hereunder.
Section 2. Compensation; Expenses
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2.1. Salary. Commencing on the date of this Agreement, the Company shall
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pay the Executive a base salary (the "Base Salary") at a rate equal to the rate
being paid to the Executive immediately prior to the execution of this
Agreement. During the term of this Agreement, the Chief Executive Officer of
the Company shall determine the Base Salary payable to the Executive, subject to
approval by the Board.
2.2. Bonus. In addition to the Base Salary, the Company shall pay the
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Executive, for each fiscal year ending during the term of this Agreement, an
annual bonus (the "Bonus") pursuant to the MIP in existence as of the date
hereof, or any comparable or successor plan. The Bonus shall be payable in cash
promptly after the date on which the audited financial statements of the Company
are first available for the fiscal year for which the Bonus is awarded, unless
the Executive shall otherwise timely elect to defer the receipt of such Bonus
under any deferred compensation plan of the Company then in effect. Under no
circumstances shall the MIP, as in effect as of the date hereof, including,
without limitation, any performance targets that have been established with
respect thereto, be amended during the term of this Agreement without the
consent of the Executive, which consent shall be evidenced by a writing to such
effect or the affirmative vote by the Executive at the Board meeting approving
any such amendment to the MIP.
2.3. Expenses. The Executive shall be reimbursed promptly for all
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reasonable business-related expenses incurred by the Executive in accordance
with the policies and procedures of the Company applicable to other senior
executives thereof.
Section 3. Term; Termination of Agreement
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3.1. Term; Termination. This Agreement shall become effective if and only
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if the Company consummates an initial public offering of the Company's Common
Stock on or before January 31, 1998. Provided that the Executive is employed on
the date the initial public offering is consummated as provided above, the
employment of the Executive pursuant to this Agreement shall continue for a
period of five (5) years from such date or, if earlier, the occurrence of any of
the following events:
(a) the death or total disability of the Executive (total disability
meaning the failure of the Executive to perform his normal required services
hereunder for a period of six consecutive months during the term hereof by
reason of the Executive's mental or physical disability) (a "Disability
Termination Event");
(b) termination by the Company of the Executive's employment hereunder for
"Good Cause," which shall exist upon the occurrence of any of the following: (i)
the Executive is convicted of, pleads guilty to, or confesses to any felony or
any
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act of fraud, misappropriation or embezzlement, (ii) the Executive engages in a
fraudulent act to the material damage or prejudice of the Company, or (iii) the
Executive otherwise fails to comply with the terms of this Agreement, breaches
any obligation or violates any duty to the Company under applicable law or
deviates from any written policies or directives of the Board, in any such case
to the material detriment of the Company, and, within 30 days after written
notice from the Board of such failure, breach, violation or deviation, the
Executive has not corrected such failure (in any such case, a "Good Cause
Termination Event");
(c) termination by the Company of the Executive's employment hereunder for
any reason other than as a result of a Good Cause Termination Event (a "No Cause
Termination Event");
(d) termination by the Executive of the Executive's employment hereunder
for "Good Reason", which shall mean (i) the assignment to the Executive of any
duties inconsistent in any material respect with the Executive's position
(including status, offices, titles and reporting requirements), authority or
duties or responsibilities as contemplated by Section 1 hereof or any other
action by the Company that results in a material diminishment in such position
(including, without limitation, reduction in the Executive's Base Salary from
that in effect on the date hereof), authority, duties or responsibilities, other
than action or inaction on the part of the Company that is corrected by the
Company within 30 days after receipt of written notice thereof given by the
Executive, (ii) any material failure by the Company to comply with the terms of
this Agreement, including, without limitation, Sections 2 and 5 hereof, which is
not corrected by the Company within 30 days after receipt of written notice
thereof given by the Executive, (iii) the Company's requiring the Executive to
be based at any office or location more than 40 miles away from that at which
the Executive is based as of the date of this Agreement, except for travel
reasonably required consistent with past practices, in the performance of the
Executive's responsibilities, or (iv) any purported termination by the Company
of the Executive's employment pursuant to this Agreement other than as permitted
herein, in each such case without the prior written consent of the Executive (in
any such case, a "Good Reason Termination Event"); or
(e) voluntary termination by the Executive of the Executive's employment
hereunder other than for "Good Reason" (as defined above) (a "Voluntary
Termination Event"):
(f) the occurrence of a "Change in Control" in respect of the Company,
which shall mean any event or series of events which result in any "Person" (as
hereinafter defined) and its "Affiliates" (as hereinafter defined) or any group
of Persons (as the term "group" is used in Section 13(d) of the Securities
Exchange Act of 1934, as amended, and the rules thereunder), other than Xxxxxx
X. Xxxxxx, Xx. and Metropolitan Life Insurance
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Company and his or its Affiliates as a group, owning or controlling capital
stock of the Company possessing the voting power (under ordinary circumstances)
to elect a majority of the Board (a "Control Termination Event"). For purposes
of this Agreement, "Person" shall mean an individual, a partnership, a
corporation, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization or a governmental entity or any department, agency
or political subdivision thereof. For purposes of this Agreement, "Affiliate"
shall mean (i) with respect to any particular natural Person, such Person's
spouse, descendants (whether natural or adopted) and other relatives, and (ii)
with respect to any particular Person, any other Person, controlling, controlled
by or under common control with such particular Person.
3.2. Notice of Termination. Any termination of the Executive's employment
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hereunder by the Company or the Executive (other than by reason of death) shall
be communicated by a Notice of Termination to the other party hereto given in
accordance with the requirements of Section 7.10 of this Agreement and in the
case of terminations contemplated by Sections 3.1(a) and (b) of this Agreement,
no termination shall become effective sooner than 10 days after the date of
delivery of the Notice of Termination. For purposes of this Agreement, a
"Notice of Termination" means a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, and (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated.
Section 4. Result of Termination
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4.1. Termination As Result Of Voluntary or Good Cause Termination Events.
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If the Executive's employment hereunder is terminated prior to the fifth
anniversary of the date hereof as a result of the occurrence of a Voluntary
Termination Event or a Good Cause Termination Event, as of the date of the
termination of Executive's employment hereunder, the Company shall have no
further obligation to pay to the Executive any Base Salary, Bonus or any other
benefits pursuant to this Agreement; provided, however, that the Company shall
pay to the Executive any vested compensation previously deferred by the
Executive and not paid as of the date of such termination; provided, further,
however, that the Company shall have the right to deduct from any such deferred
compensation any amounts owed to the Company by the Executive pursuant to any
promissory notes or Company advances. If such termination occurs prior to the
end of any pay period, the Executive shall be entitled to receive a portion of
the Base Salary and Bonus for such pay period prorated to the date on which the
Executive's employment is terminated.
4.2. Termination As Result of No Cause, Control or Good Reason Termination
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Event. If the Executive's employment hereunder is terminated as a result of the
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occurrence of a No
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Cause Termination Event, a Control Termination Event or a Good Reason
Termination Event, the Company shall pay to the Executive (a) an amount equal to
100% of the aggregate Base Salary then in effect that would have been payable to
the Executive pursuant to this Agreement if the Executive had remained employed
by the Company for the twenty-four consecutive months immediately following the
termination of his employment hereunder, (b) if such termination occurs prior to
the end of any pay period, a portion of the Base Salary and Bonus for such pay
period prorated to the date on which the Executive's employment is terminated,
(c) any vested compensation previously deferred by the Executive and not yet
paid, and (d) all reasonable business-related expenses incurred by the Executive
prior to such termination for which the Executive would have been reimbursed
pursuant to Section 2.5 hereof (the amounts referred to in clauses (a), (b), (c)
and (d) being the "Severance Payments"). The Severance Payments shall be paid
by the Company to the Executive within 10 days after such termination. In
addition to the Severance Payments, the Company shall continue to provide to the
Executive all benefits set forth in Section 5.1 for twenty-four consecutive
months following such termination (the "Severance Benefits"). To the extent
that all or any portion of the Severance Payments and the Severance Benefits is
subject to excise tax under Section 280G and 4999 of the Internal Revenue Code
of 1986, as amended, the Company shall pay to the Executive any amounts
necessary to reimburse the Executive in full for any such excise tax payable by
the Executive in respect of the Severance Payments and the Severance Benefits
and for any income taxes payable by the Executive in respect of such payments by
the Company to the Executive (the "Tax Reimbursement"). Upon the written
request of the Executive at any time within one year after the date of the
termination of the Executive's employment hereunder as a result of the
occurrence of a No Cause Termination Event, a Control Termination Event or a
Good Reason Termination Event, the Company shall reimburse any reasonable
expenses incurred by the Executive in relocating the Executive and his
dependents to any location within the 48 contiguous United States that is more
than 40 miles from the Executive's residence on the date of such termination to
the extent any such expenses are not reimbursed by a new employer of the
Executive (the "Relocation Expenses"), and the Company shall also pay to the
Executive such additional amounts necessary to reimburse the Executive in full
for any taxes payable with respect to Relocation Expenses paid by the Company to
the Executive (the "Relocation Tax Expense"). Other than the Severance
Payments, the Severance Benefits, the Tax Reimbursement, the Relocation Expenses
and the Relocation Tax Expense, the Company shall have no further obligation to
pay the Executive the Base Salary, Bonus or any other benefits pursuant to this
Agreement.
4.3. Termination As Result of Disability Termination Event. If the
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Executive's employment hereunder is terminated as a result of a Disability
Termination Event, as of the date of the termination of the Executive's
employment hereunder, the Company shall have no further obligation to pay the
Executive any Base
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Salary, Bonus or any other benefits pursuant to this Agreement; provided,
however, that the Company shall pay to the Executive any vested compensation
previously deferred by the Executive and not paid as of the date of such
termination. If such termination occurs prior to the end of any pay period, the
Executive shall be entitled to receive a portion of the Base Salary and Bonus
for such pay period prorated to the date on which the Executive's employment is
terminated. Notwithstanding the foregoing, if this Agreement is terminated as a
result of the (a) death of the Executive, the Executive's family shall be
entitled to receive benefits at least equal to those provided by the Company to
surviving families of senior executives of the Company under such plans,
programs and policies relating to family death benefits, if any, in effect on
the date of the Executive's death, or (b) total disability of the Executive as
described in Section 3.1(a), in addition to the benefits contemplated by Section
5.2, the Executive shall be entitled to receive disability and other benefits at
least equal to those provided by the Company to disabled employees and their
families in accordance with such plans, programs and policies relating to
disability, if any, in effect on the date of the Executive's total disability.
Section 5. Additional Employment Benefits
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5.1. Benefits. The Company shall provide the Executive with such
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medical, dental, life and disability insurance as the Board shall authorize from
time to time for the benefit of senior executives of the Company generally. In
addition, the Executive shall have the right to participate in all incentive,
savings and retirement plans available to senior executives of the Company
generally and to receive such additional fringe benefits as the Board shall
authorize from time to time for the benefit of senior executives of the Company
generally.
5.2. Vacation. The Executive shall receive at least four (4) weeks of
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paid vacation time each calendar year during the term of his employment
hereunder, which vacation shall be prorated if the Executive's employment
hereunder is terminated prior to December 31 of any year.
Section 6. Covenants
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6.1. Confidential Information. Other than in connection with performing
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his duties in good faith hereunder, the Executive hereby agrees that he will
hold in confidence any confidential information relating to the business or
operations of the Company ("Confidential Information") and that he will not use
or disclose the same to any third party for any reason (unless disclosure is
compelled by judicial or administrative process, or in the reasonable opinion of
the Executive's counsel, by other requirements of law). Confidential
Information shall not include information (a) known by the Executive prior to
his
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employment by the Company in any capacity, (b) ascertained by the Executive
other than in his capacity as the Chief Financial Officer of the Company, (c)
ascertainable or obtained from public or published sources, or (d) that is or
becomes known to the public (other than through a breach of this Agreement).
6.2. Nonsolicitation. If the Executive's employment hereunder is
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terminated as a result of the occurrence of a Voluntary Termination Event or a
Good Cause Termination Event, the Executive agrees that he shall not, during the
two year period after the date of such termination, without the Company's prior
written consent, directly or indirectly, knowingly solicit or encourage to leave
the employment of the Company, any salaried employee of the Company or hire any
salaried employee (other than the personal secretary of the Executive or a
relative of the Executive) who has left the employment of the Company within one
year of such termination of the Executive's employment; provided, however, that
the Executive shall not be prohibited from hiring any employee of the Company
whose employment has been terminated by the Company without good cause.
Section 7. Miscellaneous
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7.1. Indemnification. The Company shall indemnify and hold the Executive
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harmless to the fullest extent permitted under applicable law as it presently
exists or may hereafter be amended (but, in the case of any such amendment, only
to the extent that such amendment permits the Company to provide broader
indemnification rights than said law permitted prior to such amendment) against
all expense, liability and loss (including attorneys' fees, judgements, fines,
ERISA excise taxes or penalties and amounts to be paid in settlement) incurred
in connection with any asserted or threatened action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that he was an officer, director or employee of the Company or its former
parent, Braelan Corp. ("Braelan") or was serving at the request of the Company
or Braelan as an officer, director, employee, fiduciary or agent of another
corporation or other entity. In the event that the Executive shall receive
written notice of any claim or proceeding against him that, if successful, might
result in a claim under this Section 7.1, the Executive shall give written
notice to the Company of such claim or proceeding and shall permit the Company
to participate in the defense of such claim or proceeding by counsel of the
Company's own choosing and at the expense of the Company. In addition, upon the
written request of the Company, the Company may assume at its own expense the
defense of any such claim or proceeding, provided that the Executive may
participate at his expense in any such defense to the extent he may deem
necessary or appropriate to protect his interests. Upon the final determination
of any such claim or proceeding, the defense of which has been assumed by the
Company, the Company shall fully discharge at its own expense all liability of
the Executive and shall be entitled at its own expense, but without any
liability
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of the Executive therefor, to compromise or settle any such claim or proceeding
upon terms reasonably satisfactory to both the Company and the Executive.
7.2. No Disclosure. Each party hereto agrees that if the Executive's
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employment by the Company is terminated for any reason whatsoever, each party
hereto will keep confidential and not make any public disclosures concerning the
circumstances relating to such termination.
7.3. No Litigation. The Executive represents and warrants to the Company
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that there are no litigation proceedings pending or, to his knowledge,
threatened against the Executive in his individual capacity or in any capacity
that might give rise to a claim for indemnification under Section 7.1 hereof.
7.4. Binding Effect. This Agreement shall inure to the benefit of and
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shall be binding upon the Executive and his executor, administrator, heirs,
personal representative and assigns, and the Company and its respective
successors and assigns; provided, however, that the Executive shall not be
entitled to assign or delegate any of his rights or obligations hereunder
without the prior written consent of the Company.
7.5. No Mitigation. In no event shall the Executive be obligated to seek
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employment in mitigation of amounts payable to the Executive pursuant to Section
4 hereof, and, other than as specifically provided in Section 4.2, the
employment of the Executive after the termination of the Executive's employment
by the Company shall not affect in any way or offset any amounts payable to the
Executive pursuant to this Agreement.
7.6. Fees. The Company agrees to pay to the Executive to the fullest
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extent permitted by law all fees and expenses (including reasonable attorneys'
fees) incurred by the Executive in seeking to enforce any provision of this
Agreement, provided that the Executive shall refund such fees and expense
payments if it is finally judicially determined that the Executive is not
entitled to any relief.
7.7. Governing Law. This Agreement shall be deemed to be made in, and in
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all respects shall be interpreted, construed and governed by and in accordance
with, the laws of the State of Georgia, without reference to principles of
conflict of laws. No provision of this Agreement or any related document shall
be construed against or interpreted to the disadvantage of any party hereto by
any court or other governmental or judicial authority by reason of such party
having or being deemed to have structured or drafted such provision.
7.8. Survival of Certain Agreements. The agreements and covenants set
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forth in Section 6.1 hereof shall survive the termination of the Executive's
employment under this Agreement for any reason.
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7.9. Headings. The section and paragraph headings contained in this
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Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
7.10. Notices. Unless otherwise agreed to in writing by the parties
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hereto, all communications provided for hereunder shall be in writing and shall
be deemed to be given when delivered in person or five (5) business days after
being sent by first class mail, certified, return receipt requested, and
addressed as follows:
(a) If to the Executive, addressed to:
Xx. Xxxxx X. Xxxx
000 Xxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
(b) If to the Company, addressed to:
Xxx River Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Board of Directors
c/o Corporate Secretary
or to such other person or address as shall be furnished in writing by any party
to the other prior to the giving of the applicable notice or communication.
7.11. Counterparts. This Agreement may be executed in two or more
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counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
7.12. Entire Agreement. This Agreement is intended by the parties hereto
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to be the final expression of their agreement with respect to the subject matter
hereof and is the complete and exclusive statement of the terms thereof,
notwithstanding any representations, statements or agreements to the contrary
heretofore made. This Agreement may be modified only by a written instrument
signed by each of the parties hereto.
7.13. Non-exclusivity of Rights. Nothing in this Agreement shall prevent
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or limit the Executive's continuing or future participation in any benefit,
bonus, incentive or other plan or program provided by the Company or any of its
Affiliates for which the Executive may qualify, nor shall anything herein limit
or otherwise affect such rights as the Executive may have under any other
agreements with the Company or any of its Affiliates. Amounts which are vested
benefits or which the Executive is otherwise entitled to receive under any plan
or program of the Company or any of its Affiliates at or subsequent
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to the date on which his employment hereunder is terminated shall be payable in
accordance with such plan or program.
7.14. Severability. In the event that any provision of this Agreement
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shall be deemed invalid or unenforceable, the remaining provisions of this
Agreement shall remain in full force and effect.
7.15. Prior Agreement. Subject to the conditions set forth in the
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introductory paragraph of Section 3.1 above, this Agreement succeeds an
Employment Agreement dated September 3, 1996. Should the aforementioned
conditions remain unsatisfied, the September 3, 1996 agreement shall remain in
full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
THE COMPANY
XXX RIVER INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
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Xxxxxx X. Xxxxxx, Xx.
Chairman and CEO
[CORPORATE SEAL]
ATTEST:
By: /s/ Xxxxx X. Xxxxxxxx
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Title: Secretary
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THE EXECUTIVE:
/s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx
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