EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into as of September 8, 2006
by and between Xxxxxxx Company, a Michigan corporation (together with its
Affiliates, as defined below, the "Company"), and Xxxxxx X. Xxxx (the
"Executive") (the "Agreement"). The Company and the Executive may be referred to
in this Agreement individually as a "party" or collectively as the "parties".
WHEREAS, the Company and Executive desire to enter into this Agreement
pertaining to the Company's employment of the Executive, which will commence on
October 9, 2006 (the "Effective Date").
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth below and other good and valuable consideration, the receipt of which is
acknowledged, the Executive and the Company agree as follows:
1. DUTIES AND SCOPE OF EMPLOYMENT.
(a) Subject to the terms of this Agreement, the Company agrees to employ
the Executive as its President and Chief Executive Officer during the
Employment Term (as defined in Section 2 below), and the Executive agrees
to remain in the employ of the Company during the Employment Term.
(b) The Executive shall be appointed as a member of the Board of Directors
of the Company (the "Board") at the first regularly scheduled Board meeting
coincident with or next following the Executive's commencement of
employment with the Company, and the Board shall use its best efforts to
cause the Executive to continue as a member of the Board during the
Employment Term.
(c) The Executive agrees that he shall perform his duties faithfully and
efficiently subject to the direction of the Board. The Executive's duties
shall include providing services for both the Company and its Affiliates,
as determined by the Board; provided that the Executive shall not, without
his consent, be assigned any material tasks that would be inconsistent with
those of President and Chief Executive Officer. The Executive will have
such authority, power, responsibilities and duties as are inherent to his
position (and the undertakings applicable to his position) and necessary to
carry out his responsibilities and the duties required of him hereunder.
For purposes of this Agreement, the term "Affiliate" shall mean any
corporation, partnership, joint venture, business or other entity in which
at least a fifty percent interest in such entity is owned, directly or
indirectly, by the Company or any successor to the Company.
(d) While Executive is employed by the Company, Executive shall devote his
full time (reasonable sick leave and vacations excepted) and best efforts,
energies and talents to serving the Company; provided, however, that during
the Employment Term, the Executive may devote reasonable time to pursue
activities other than those required under this Agreement, including
activities involving professional, charitable, educational, religious and
similar types of organizations, speaking engagements, serving on the board
of directors of other profit or not-for-profit organizations (subject to
the Board's approval), and other similar activities, to the extent that
such other activities do not, in the judgment of the Board, inhibit or
prohibit the performance of the
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Executive's duties under this Agreement or conflict in any material way
with the Company's business.
(e) Notwithstanding anything to the contrary, this Agreement and the
commencement of the Executive's employment with the Company shall be
contingent on the Company's receipt of an acceptable background
investigative report that has been approved by the Chair of the Board's
Compensation Committee (the "Compensation Committee"). The General Counsel
of the Company shall notify the Executive in writing when the Compensation
Committee Chair has approved the background report.
2. EMPLOYMENT TERM. This Agreement shall govern the terms and conditions of
Executive's employment and any termination thereof from the Effective Date until
the second anniversary of the Effective Date (the "Employment Term").
Thereafter, the Agreement shall automatically be extended for additional
12-month periods unless either party to this Agreement provides written notice
of non-renewal to the other party at least 120 days before the last day of the
Employment Term. The term "Employment Term" shall also include any renewal
period under the foregoing provisions of this paragraph 2.
3. COMPENSATION AND BENEFITS. Subject to the terms of this Agreement and during
the Employment Term, the Company shall compensate the Executive for his services
as follows:
(a) Base Salary. The Executive shall receive base salary at an annual rate
of $700,000, payable in substantially equal semi-monthly installments (the
"Salary"). Commencing in or around August 2007, the Executive's Salary
shall be reviewed by the Board and the Compensation Committee. Any
adjustment in salary will take effect on October 1, 2007. Thereafter
Executive's salary will be subject to an annual review pursuant to the
Company's normal review process for Executive Committee members. The
Executive's Salary shall not be reduced, except pursuant to an across the
board reduction in base salary for executive employees.
(b) Annual Bonus. The Executive shall be entitled to participate in the
Management Incentive Bonus ("MIB") Plan administered by the Compensation
Committee, or any successor annual bonus plan or arrangement generally made
available to the executive officers of the Company. The MIB shall provide
the Executive with a target bonus opportunity of not less than 100% of
annual Salary for each fiscal year of the Company; provided that the
Executive shall be guaranteed a minimum bonus under the MIB for the fiscal
year ending June 30, 2007 of 100% of Executive's pro-rated target bonus for
such fiscal year. Any bonus payable under this paragraph 3(b) shall be paid
in accordance with the terms of the MIB plan.
(c) Long Term Incentive Compensation.
(i) Initial Stock Award. On the Effective Date, the Executive shall be
granted an award (the "Initial Award") consisting of: (x) an option to
purchase shares of common stock of the Company, the number of which
shall be determined by dividing $605,000 by the Black-Scholes value of
a Company stock option on the date of the grant and the exercise price
of which shall be the average price of the stock on the Effective
Date; (y) shares of service-based restricted stock, the number of
which shall be determined by dividing $2,166,000 by the average price
of the Company's common stock on the Effective Date; and (z) shares of
performance-based restricted stock, the number of which shall be
determined by dividing $309,000 by the average price of the Company's
common stock on
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the Effective Date. The Initial Award shall be subject to the terms
and conditions of a Long-Term Incentive Award Agreement, which shall
provide, among other things, that the restrictions on one half of the
service-based restricted shares will expire on October 1, 2007 and
that the restrictions on the remaining one half of the service-based
restricted shares will expire on October 1, 2008 based on continued
employment.
(ii) Beginning with the Company's next regular annual equity grant in
August 2007, the Executive shall be entitled to receive additional
annual stock-based awards with a value of 100% of Executive's targeted
annual cash compensation (Salary plus target MIB bonus).
(d) Deferred Compensation. The parties agree and acknowledge that Executive
may make payments and contributions in certain deferred compensation plans
maintained by and through the Company.
(e) Employee Benefits. During the Employment Term, Executive shall be
eligible to participate in all employee welfare and retirement benefit
plans and programs provided by the Company to its senior executives,
subject to the terms of those plans or programs as they may be modified
from time to time, including without limitation any profit sharing plan,
any life, accident, medical, hospital or similar group insurance plans, and
any other fringe benefit plan. Executive will be eligible for four weeks of
vacation in accordance with the Company's policy each year.
(f) Business Expenses. During the Employment Term, and upon submission of
appropriate documentation in accordance with the Company's policies in
effect from time to time, the Company will pay or reimburse the Executive
for all reasonable business expenses that the Executive incurs in
performing the Executive's duties under this Agreement, including, but not
limited to, travel, entertainment, professional dues, and subscriptions in
accordance with the Company's policies.
(g) Temporary Housing and Moving Expenses. For a period of up to ninety
days following the Effective Date, the Executive shall be entitled to
reimbursement for temporary housing expenses, air travel and other
out-of-pocket travel expenses in connection with commuting from his
residence in New Jersey to his temporary residence in western Michigan,
including reimbursement of expenses relating to family travel for purposes
of locating permanent housing in Michigan. Expenses related to the
Executive's relocation to Michigan shall be fully reimbursed, subject to
the terms of the Company's relocation policy for executives that has
previously been given to and received by the Executive. All reimbursements
under this paragraph 3(g) shall be subject to the Executive's presenting
supporting documentation of such expenses as may be reasonably required by
the Company.
4. TERMINATION. The Executive's employment with the Company during the
Employment Term may be terminated under the following circumstances.
(a) Death. The Executive's employment shall terminate upon his death.
(b) Disability. If the Executive becomes Disabled, the Company may
terminate his employment with the Company. For purposes of this Agreement,
the Executive shall be deemed to be "Disabled" if (i) he is eligible for
disability benefits under a Company long term disability plan, or (ii) he
has a physical or mental disability which renders him incapable, after
reasonable
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accommodation, of performing substantially all of his duties hereunder for
a period of 180 days (which need not be consecutive) in any 12-month
period. In the event of a dispute as to whether the Executive is Disabled,
the Company may, at its expense, refer him to a licensed practicing
physician of the Company's choice and the Executive agrees to submit to
such tests and examination as such physician shall deem appropriate. The
determination of such physician shall be final and binding on the Company
and Executive.
(c) Cause. The Company may terminate the Executive's employment immediately
and at any time for Cause by written notice to the Executive detailing the
basis for the Cause termination. For purposes of this Agreement, "Cause"
means (i) gross negligence or willful and continued failure by the
Executive to substantially perform his duties as an employee of the Company
(other than any such failure resulting from incapacity due to physical or
mental illness); (ii) willful misconduct by the Executive that is
demonstrably and materially injurious as determined in the sole discretion
of the Board, to the Company, monetarily or otherwise; (iii) the engaging
by the Executive in egregious misconduct involving serious moral turpitude
to the extent that his creditability and reputation no longer conforms to
the standard of senior executives of the Company; (iv) the commission by
the Executive of a material act of dishonesty or breach of trust resulting
or intending to result in personal benefit or enrichment to the Executive
at the expense of the Company; (v) Executive's conviction of, or plea of
nolo contendre to, a felony; or (vi) a material breach of this Agreement.
For purposes of this paragraph, no act or failure to act shall be deemed
"willful" unless done or omitted to be done not in good faith and without
reasonable belief that such action or omission was in the best interest of
the Company.
(d) Termination by Executive. The Executive may terminate his employment
with the Company at any time for any reason by giving the Company prior
written notice not less than 30 days prior to such termination. Any
termination pursuant to this paragraph 4(d) shall preclude a later claim
that such termination was for Good Reason.
(e) Mutual Agreement. This Agreement may be terminated at any time by
mutual written agreement of the parties.
(f) Termination by the Company without Cause. The Company may terminate the
Executive's employment hereunder at any time for any reason by giving the
Executive prior written notice not less than 30 days prior to such
termination; provided, however, that termination by the Company shall be
deemed to have occurred under this paragraph 4(f) only if such termination
by the Company is not pursuant to paragraph 4(b), 4(c) or 4(e).
(g) Termination by the Executive for Good Reason. The Executive may
terminate his employment with the Company immediately at any time for Good
Reason, provided that the Executive gives the Company notice of such Good
Reason within a reasonable period (but, except as provided below, in no
event more than 30 days) after he has knowledge of the events giving rise
to the Good Reason and provided further that the Company fails to correct
such events within a reasonable period (but in no event more than 30 days)
after receiving such notice from the Executive. Good Reason shall mean,
without the Executive's consent, (i) any material breach or violation by
the Company of paragraph 1(c), (ii) the failure by the Company to pay the
Executive any portion of his current compensation within ten (10) business
days of the date such compensation is due or otherwise declared payable,
(iii) the failure by the Company to continue any incentive compensation
plan in which the Executive participates that is material to his
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compensation, unless an equitable substitute plan or alternative plan is
made available to the Executive, (iv) the failure by the Company to obtain
a satisfactory agreement from any successor to the business of the Company
to assume and agree to perform this Agreement, or (v) the failure by the
Company to retain Executive as Chief Executive Officer.
(h) Date of Termination. "Date of Termination" means the last day that the
Executive is employed by the Company under this Agreement under
circumstances in which his employment is terminated in accordance with one
of the foregoing provisions of this paragraph 4.
5. RIGHTS UPON TERMINATION.
(a) If the Executive's Date of Termination occurs during the Employment
Term for any reason, the Company shall:
(i) Pay the Executive's Salary for the period ending on the Date of
Termination.
(ii) Make a payment in respect of unused vacation days, as determined
in accordance with Company policy as in effect from time to time.
(iii) Make any other payments or provide benefits pursuant to any
employee benefit plans or arrangements adopted by the Company, to the
extent such payments and benefits are earned and vested as of the Date
of Termination or are required by law to be offered for periods
following the Executive's Date of Termination.
The amounts payable under clauses (i) and (ii) above shall be paid in
a lump sum as soon as practicable following such Date of Termination,
and any amounts payable under clause (iii) above shall be paid in
accordance with applicable law and with the terms of the applicable
plan or arrangement.
(b) If, during the Employment Term, the Executive's employment is
terminated by the Company without Cause or the Executive terminates his
employment for Good Reason, and if the Executive executes and does not
revoke a release of claims, as described in paragraph 5(e) below (a
"Release"), then, in addition to the amounts payable under paragraph 5(a),
the Executive shall be entitled to the following:
(i) The Company shall pay the Executive an amount equal to 24 months
of Salary and Target Bonus, at the rate in effect as of the Date of
Termination, which shall be paid in regular payroll installments
beginning as soon as practicable after the Date of Termination, but
not later than 10 days after the expiration of the revocation period
for the Release (except as required by paragraph 8 below); and
(ii) The Initial Awards shall continue to vest for the applicable
vesting period specified in the Long Term Incentive Award Agreement
(so that the Initial Awards will vest as if the Executive continued as
an employee of the Company and, in the case of performance-based
restricted stock, based on Company performance). The Executive's
outstanding vested stock options that are part of the Initial Awards
(including options that will vest under this paragraph (ii)) will
remain outstanding until the later of (x) 25 months after the Date of
Termination, (y) 30 days after the last vesting date of an option
under this paragraph (ii), or (z) any later applicable date specified
in the Executive's Long Term Incentive Award
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Agreement; provided, however, that in no event shall a stock option
remain outstanding later than the expiration of the option term as
specified in the Long Term Incentive Award Agreement.
(iii) Stock options and restricted stock other than the Initial Awards
shall continue to vest for a period of 24 months from the Date of
Termination (so that the stock options and restricted stock will vest
as if the Executive continued as an employee of the Company for the
24-month period and, in the case of performance-based restricted
stock, based on Company performance). The Executive's outstanding
vested stock options (including options that will vest under this
paragraph (iii)) (other than the Initial Awards) will remain
outstanding for the period ending 25 months after the Date of
Termination, or any longer applicable period specified in the
Executive's Long Term Incentive Award Agreement; provided, however,
that in no event shall a stock option remain outstanding later than
the expiration of the option term as specified in the Long Term
Incentive Award Agreement.
(c) Notwithstanding the terms of the MIB plan, if the Executive's Date of
Termination occurs under paragraph 4(a) (relating to death), paragraph 4(b)
(Disability), or, subject to the Executive's execution of a Release,
paragraph 4(f) (termination without Cause) or paragraph 4(g) (termination
for Good Reason), then, in addition to the amounts payable in accordance
with paragraphs 5(a) and 5(b), the Executive will be entitled to a pro rata
bonus payment for the fiscal year in which such Date of Termination occurs,
which shall be an amount equal to the product of (A) the bonus the
Executive would have received for the fiscal year in which his Date of
Termination occurs if he had remained employed by the Company until the end
of such year, multiplied by (B) a fraction, the numerator of which is the
number of days in the fiscal year preceding the Executive's Date of
Termination and the denominator of which is 365. Such pro rata bonus shall
be payable in a lump sum payment on the next installment date on which
bonus payments are made to participants in the MIB plan following the end
of the fiscal year to which such bonus relates, but not later than 60 days
after the end of such fiscal year (except as required by paragraph 8
below).
(d) Notwithstanding any provision of this Agreement to the contrary, in the
event that the Executive's Date of Termination occurs for the reasons set
forth in paragraph 4(c) (relating to termination for Cause), or the Board
reasonably determines that the Executive has violated the terms of
paragraph 6, all outstanding options (vested and unvested), service-based
Restricted Stock and performance-based Restricted Stock held by the
Executive shall be immediately forfeited, and all payments and benefits
under this Agreement, except those described in paragraph 5(a), shall cease
and be permanently forfeited.
(e) As a condition of payment of the benefits described in paragraph 5(b)
and paragraph 5(c) above (with respect to termination without Cause or
termination for Good Reason), the Executive shall be required to execute
and not revoke a Release, which shall be a release, in a form provided by
the Company, of all claims against the Company, its Affiliates and all
related parties with respect to all matters arising in connection with the
Executive's employment with the Company and the termination thereof.
6. RESTRICTIVE COVENANTS. Executive acknowledges the Company's willingness to
employ and pay Executive as provided in this Agreement is expressly conditioned
on Executive's undertaking and complying with the requirements in this paragraph
6.
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(a) Confidential Information.
(i) Executive covenants that he believes that he can legally work in
the position for which he is being hired, and expressly agrees that he
shall not disclose to the Company, or use in his employment with the
Company, any trade secrets, confidential or proprietary information
relating to any former employers, without the former employer's
written consent.
(ii) Executive recognizes and acknowledges that by reason of
Executives' employment by and service to the Company, Executive will
have access to proprietary or confidential information, technical
data, trade secrets or know- how relating to the Company, which may
include, but is not limited to, market and product research and plans,
markets, products, services, customer lists and customers,
advertising, software, developments, inventions, processes, formulas,
technology, designs, drawings, engineering, marketing and sales
techniques, strategies and programs, intellectual property
distribution methods and systems, sales and profit figures, pricing
and discount plans, financial and other business information
(collectively referred to as "Confidential Information"). Executive
acknowledges that such Confidential Information is a valuable and
unique asset of the Company and covenants that he will not, either
during the Employment Term or after the Date of Termination, disclose
any such Confidential Information to any person for any reason
whatsoever (except as Executive's duties as an employee of the Company
may require) without the prior written authorization of the Board,
unless such information is in the public domain through no fault of
Executive or except as may be required by law or in a judicial or
administrative proceeding, in which case Executive will promptly
inform the Company in writing of such required disclosure, but in any
event at least two business days prior to the disclosure.
(iii) All written Confidential Information (including, without
limitation, in any computer or other electronic format) that comes
into Executive's possession during the course of Executive's
employment will remain the property of the Company. Unless expressly
authorized in writing by the Board, Executive will not remove any
written Confidential Information from the Company's premises, except
in connection with the performance of Executive's duties for the
Company and in a manner consistent with the Company's policies
regarding Confidential Information. Upon termination of employment for
any reason, Executive agrees immediately to return to the Company all
written Confidential Information in Executive's possession, including
without limitation all memoranda, notes, plans, records, reports,
computer tapes and software, and other documents and data (and copies
thereof) containing or relating to the Confidential Information.
(b) Inventions and Patents. Executive agrees that all inventions,
innovations, improvements, developments, methods, designs, analyses,
drawings, reports and all similar or related information that relate to the
Company's actual or anticipated business, research and development or
existing or future products or services, and that are conceived, developed
or made by Executive during the Employment Term ("Work Product") belong to
the Company. Executive will promptly disclose such Work Product to the
Company and perform all actions reasonably requested by the Company
(whether during or after the Employment Term) to establish and confirm such
ownership (including, without limitations, assignments, consents, powers of
attorney, and other instruments). To the fullest extent permitted by
applicable law all intellectual property (including patents,
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trademarks, and copyrights) which are made, developed or acquired by
Executive in the course of Executive's employment with the Company will be
and remain the absolute property of the Company, and Executive shall assist
the Company in perfecting and defending its rights to such intellectual
property.
(c) Non-Compete. In exchange for the consideration provided in this
Agreement, Executive agrees that, during the Employment Term and for a
period of two years after Executive's termination of employment with the
Company for any reason, Executive will not, except with the prior written
consent of the Board, directly or indirectly, engage in Competition. For
purposes of this Agreement, "Competition" means that Executive is employed
by, or provides consulting or other substantial services to, any company
that in any way sells, manufactures, distributes or develops store brand
and value brand OTC drug or nutritional products, topical generic
prescription pharmaceutical products or any other products that the Company
or an Affiliate is marketing or actively planning to market during
Executive's employment with the Company or, with respect to the period
after termination of employment, during the one year period ending on the
Date of Termination. Notwithstanding anything to the contrary, Executive
shall not be prohibited from being a passive owner of not more than 2% of
the outstanding stock or equity of any entity that is engaged in
competition and that is publicly traded, so long as Executive has no active
participation in the business of such entity.
(d) Non-Solicitation. Executive further covenants and agrees that during
the Employment Term and for the period of one year after the Date of
Termination, Executive will not, except with the prior written consent of
the Board, directly or indirectly, solicit for employment any person who
was an employee of the Company or an Affiliate at any time during the
Employment Term for or on behalf of any employer other than the Company or
an Affiliate for any position as an employee, independent contractor,
consultant or otherwise. The Company agrees that the term "solicit for
employment" shall not include general solicitations of employment not
specifically directed toward an employee, newspaper or other periodical
advertisements, or general searches conducted by professional recruiting
firms. This covenant will not prevent Executive from giving references and
will not preclude the solicitation or hiring or any individual following 12
months after the Date of Termination.
(e) Executive agrees that (i) the covenants set forth in this paragraph 6
are reasonable in all respects, including, where applicable, geographical
and temporal scope, and (ii) the Company and Executive would not have
entered into this Agreement but for Executive's and the Company's covenants
contained, and (iii) the covenants contained have been made in order to
induce the Company and Executive to enter into this Agreement.
7. ENFORCEMENT REMEDIES/INJUNCTION.
(a) Executive represents and acknowledges that (i) he is knowledgeable and
sophisticated as to business matters, including the subject matter of this
Agreement, that he has read this Agreement and that he understands its
terms; (ii) Executive has been advised by the Company to consult legal
counsel with respect to this Agreement and (iii) that Executive has had
full opportunity, prior to execution of this Agreement, to thoroughly
review this Agreement with counsel. The Executive and the Company agree
that the language used in this Agreement is the language chosen by the
parties to express their mutual intent, and that no rule of strict
construction is to be applied against either party. If, at the time of
enforcement of this Agreement, in general, and Section 6, in
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particular, a court shall hold that the duration, scope or area
restrictions stated herein are unreasonable under circumstances then
existing, the parties agree that the maximum duration, scope or area
reasonable under such circumstances shall be substituted for the stated
duration, scope or area and that the court shall be allowed to revise the
restrictions contained herein to cover the maximum period, scope and area
permitted by law.
(b) Executive further acknowledges and agrees that a breach of any of the
restrictions in paragraph 6 cannot be adequately compensated by monetary
damages. Executive further agrees that the Company would be entitled to
immediately stop making, and shall have no further obligation to make, any
of the cash considerations set forth in this Agreement as being conditioned
on the covenants contained in paragraph 6, and that all remaining unvested
stock options and restricted stock (other than the Initial Award) will be
forfeited if Executive breaches the provisions of paragraph 6 and that, in
any event, the Company will be entitled to preliminary and permanent
injunctive relief, without the necessity of proving actual damages, as well
as provable damages and an equitable accounting of all earnings, profits,
and other benefits arising from any violation of paragraph 6, which rights
will be cumulative and in addition to any other rights or remedies to which
the Company may be entitled.
(c) Executive irrevocably and unconditionally (i) agrees that any suit,
action or other legal proceeding arising out of paragraph 6, including
without limitation, any action commenced by the Company for preliminary and
permanent injunctive relief and other equitable relief, may be brought in
the United States District Court for the Western District of Michigan, or
if such court does not have jurisdiction or will not accept jurisdiction,
in any court of general jurisdiction in Allegan or Kent Counties, Michigan,
(ii) consents to the non-exclusive jurisdiction of any such court in any
such suit, action or proceeding, and (iii) waives any objection which
Executive may have to the laying of venue of any such suit, action or
proceeding in any such court.
8. SECTION 409A OF THE INTERNAL REVENUE CODE.
(a) This Agreement is intended to comply with section 409A of the Internal
Revenue Code of 1986, as amended (the "Code"), and its corresponding
regulations, to the extent applicable. Notwithstanding anything in this
Agreement to the contrary, payments under this Agreement that are subject
to section 409A may only be made upon an event and in a manner permitted by
section 409A. If the Executive is considered a Key Employee (as defined
below) and any payments upon termination of employment are required to be
delayed for a period of six months in order to comply with section 409A of
the Code, the payments shall be postponed for the required six-month period
under section 409A. At the end of the six-month period, the accumulated
withheld amounts under this Agreement shall be paid in a lump sum payment
within five days after the end of the six month period. If the Executive
dies during such six-month period prior to the payment of benefits, the
accumulated withheld amounts under this Agreement shall be paid to the
personal representative of the Executive's estate within 60 days after the
date of the Executive's death.
(b) The term "Key Employee" shall mean an employee who, at any time during
the 12-month period ending on the identification date (defined below), is
(i) an officer of the Company or an Affiliate (as determined for purposes
of section 416(i) of the Code) who has annual compensation greater than
$135,000 (or such other amount as may be in effect under Section 416(i)(1)
of the Code), (ii) a 5% owner of the Company or (iii) a 1% owner of the
Company who has annual compensation greater than $150,000. The
identification date shall be each December 31, and the
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determination of Key Employees as of such identification date shall apply
for the 12-month period following April 1 after the identification date.
The determination of Key Employees, including the number and identity of
persons considered officers, shall be made by the Company in accordance
with the provisions of Sections 416(i) and 409A of the Code and the
regulations issued thereunder.
9. INDEMNIFICATION. To the fullest extent permitted by applicable law, the
Company will, during and after termination of employment, indemnify Executive
(including providing advancement of expenses) for any judgments, fines, amounts
paid in settlement and reasonable expenses, including attorneys' fees, incurred
by Executive in connection with the defense of any lawsuit or other claim or
investigation to which Executive is made, or threatened to be made, a party or
witness by reason of being or having been an officer, director or employee of
the Company or any of its subsidiaries or affiliates. In addition, Executive
will be covered under any directors and officers' liability insurance policy for
his or her acts (or non-acts) as an officer or director of the Company or any of
the subsidiaries or affiliates to the extent the Company provides such coverage
for its senior executive officers.
10. ASSIGNMENTS/TRANSFERS/EFFECTS OF MERGER.
(a) No rights or obligations of the Company under this Agreement may be
assigned or transferred by the Company except that such rights or
obligations may be assigned or transferred pursuant to a merger or
consolidation in which the Company is not the continuing entity, or
pursuant to the sale or transfer of all or substantially all of the assets
of the Company, provided that the assignee or transferee is the successor
to all or substantially all of the assets of the Company.
(b) This Agreement will not terminated by any merger, consolidation or
transfer of assets of the Company referred to above. In the event of any
such merger, consolidation or transfer of assets, the provisions of this
Agreement will be binding upon the surviving or resulting corporation or
the person or entity to which such assets are transferred.
(c) The Company agrees that concurrently with any merger, consolidation or
transfer of assets referred to above, it will cause any successor or
transferee unconditionally to assume, either contractually or as a matter
of law, all of the obligations of the Company hereunder.
(d) This Agreement will inure to the benefit of, and be enforceable by or
against, Executive or Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributes, designees or
legatees. None of Executive's rights or obligations under this Agreement
may be assigned or transferred by Executive other than Executive's rights
to compensation and benefits, which may be transferred only by will or
operation of law. If Executive should die while any amounts or benefits
have been accrued by Executive but not yet paid as of the date of
Executive's death and which would be payable to Executive hereunder had
Executive continued to live, all such amounts and benefits unless otherwise
provided herein will be paid or provided in accordance with the terms of
this Agreement to such person or person appointed in writing by Executive
to receive such amounts or, if no such person is so appointed, to
Executive's estate.
11. NOTICES. All notices and other communications required or provided for in
this Agreement shall be in writing and shall be delivered personally or sent by
registered or certified mail, return receipt requested, postage prepaid, to the
parties at the addresses set forth below (or such other addresses as shall be
specified by the parties by like notice):
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To the Company: with a copy to:
Xxxxxxx Company Xxxxxxx Company
000 Xxxxxxx Xxxxxx 000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000 Xxxxxxx, XX 00000
Attn.: Sr. Vice President of Attn: General Counsel
Global Human Resources
To the Executive:
Xxxxxx X. Xxxx
Xxx Xxxx Xxxx Xxxx
Xxxxxxx, XX 00000
Notice and communications shall be effective when actually received by the
addressee.
12. TAX WITHHOLDING. All payments under this Agreement shall be made subject to
applicable tax withholding.
13. SEVERABILITY. The invalidity or unenforceability of any provision of this
Agreement will not affect the validity or enforceability of any other provision
of this Agreement, and this Agreement will be construed as if such invalid or
unenforceable provision were omitted (but only to the extent that such provision
cannot be appropriately reformed or modified).
14. WAIVER OF BREACH. No waiver of any party of a breach of any provision of
this Agreement by any other party will operate or be construed as a waiver of
any subsequent breach by such other party. The failure of any party to take any
action by reason of such breach will not deprive such party of the right to take
action at any time while such breach continues.
15. AMENDMENT. This Agreement may be amended or canceled only by mutual written
agreement of the parties without the consent of any other person. So long as the
Executive lives, no person, other than the parties hereto, shall have any rights
under or interest in this Agreement or the subject matter hereof.
16. SURVIVAL OF AGREEMENT. Except as otherwise expressly provided in this
Agreement, the rights and obligations of the parties to this Agreement shall
survive the termination of the Executive's employment with the Company.
17. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
the parties concerning the subject matter hereof and supersedes all prior and
contemporaneous agreements, if any, between the Executive and the Company
relating to the subject matter hereof.
18. GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Michigan.
19. FUTURE COOPERATION. Executive agrees that upon the Company's reasonable
request following Executive's termination of employment, Executive will use
reasonable efforts to assist and cooperate with the Company in connection with
the defense or prosecution of any claim that may be made against or by
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the Company, or in connection with any ongoing or future investigation or
dispute or claim of any kind involving the Company, including any proceedings
before any arbitral, administrative, regulatory, judicial, legislative or other
body or agency. Executive will be entitled only to reimbursement for any
reasonable out-of-pocket expenses (including travel expenses) incurred in
connection with providing such assistance.
20. NO CONFLICT. Executive represents and warrants to the Company that his
acceptance of employment and the performance of his duties for the Company will
not conflict with or result in a violation of, or breach of, or constitute a
default under any contract, agreement, or undertaking to which Executive is or
was a party or of which Executive is or aware and that there are no
restrictions, covenants, agreements or limitations on their right or ability to
enter into and perform the terms of this agreement.
21. COUNTERPARTS. This agreement may be executed in one or more counterparts,
all of which shall be considered one and the same agreement, and shall become a
binding agreement when one or more counterparts have been signed by each party
and delivered to the other party.
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties as
of the date written above.
EXECUTIVE XXXXXXX COMPANY
/s/ Xxxxxx X. Xxxx By /s/ Xxxx X. Xxxxxx, Xx.
------------------------------------- ------------------------------------
Xxxxxx X. Xxxx Xxxx X. Xxxxxx, Xx.
Compensation Committee Chair
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