EMPLOYMENT AGREEMENT
Exhibit 10.20
This Employment Agreement (“Agreement”) is entered into effective as of March 23, 2009
(the “Effective Date”), by and between The Xxxx Group Inc., a Louisiana corporation
(collectively with its affiliates and subsidiaries hereinafter referred to as, the
“Company”), and Xxxxxxxxx X. Xxxxxxx (“Employee”). The Company and Employee may
hereinafter be referred to, individually, as a “Party” and, collectively, as the
“Parties”.
WHEREAS, the Company and Employee desire to enter into an employment relationship.
NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and
agreements contained herein, and for other valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the Parties agree as follows:
1. Employment. The Company hereby employs Employee, and Employee hereby accepts
employment by the Company, on the terms and conditions set forth in this Agreement.
2. Term of Employment. Subject to the provisions for earlier termination provided in
this Agreement, the term of this Agreement (the “Term”) shall be two years commencing on
the Effective Date and shall be automatically renewed on each day following the Effective Date so
that on any given day the unexpired portion of the Term shall be two years. Notwithstanding the
foregoing provision, at any time after the Effective Date, the Company or Employee may give written
notice to the other Party that the Term shall not be further renewed from and after a subsequent
date specified in such notice (the “fixed term date”), in which event
the Term shall become fixed, and this Agreement shall terminate on the second anniversary of
such fixed term date.
3. Employee’s Duties.
(a) During the Term, Employee shall serve as the President of the Power Group of the Company,
or such other similar position(s) as the Parties may mutually agree, with such duties and
responsibilities as may from time to time be assigned to him by the Board of Directors of the
Company (the “Board”) or the Chief Executive Officer of the Company, provided that such
duties and responsibilities are comparable to the customary duties and responsibilities of such
position(s).
(b) Employee agrees to devote Employee’s full attention and time during normal business hours
to the business and affairs of the Company and to use reasonable best efforts to perform faithfully
and efficiently Employee’s duties and responsibilities. Employee shall not, either directly or
indirectly, enter into any business or employment with or for any Person (defined below) other than
the Company during the Term; provided, however, that Employee shall not be
prohibited from making financial investments in any other company or business or from serving on
the board of directors of any other company, subject in each case to the provisions set forth in
the Nonsolicitation and Noncompete Agreement (defined below) and the Company’s Code of Conduct or
similar guidelines of which Employee is notified in writing. For the purposes of this Agreement,
the term “Person” shall mean any individual, corporation, limited or general partnership,
limited liability company, joint venture, association, trust or other entity or organization,
whether or not a legal entity. Employee shall at all times observe
and comply with all lawful directions and instructions of the Board of which Employee is
notified in writing.
4. Compensation.
(a) Base Compensation. For services rendered by Employee under this Agreement, the
Company shall pay to Employee a base salary (“Base Compensation”) of $700,000 per annum,
payable in accordance with the Company’s customary pay periods and subject to tax and other
customary withholdings. Employee’s Base Compensation will be reviewed by the Board on an annual
basis as of the close of each fiscal year of the Company and may be increased as the Board may deem
appropriate. In the event the Board deems it appropriate to increase Employee’s Base Compensation,
that increased amount shall thereafter be the Base Compensation for the purposes of this Agreement.
Employee’s Base Compensation, as increased from time to time, may not be decreased unless agreed
to by Employee in writing. Nothing contained herein shall prevent the Board from paying additional
compensation to Employee in the form of bonuses or otherwise during the Term.
(b) Annual Bonus. During the Term, Employee will be eligible to participate in the
Company’s discretionary management incentive program as established by the Board (as the same may
be amended from time to time), with an annual performance bonus range of 0-200% of Employee’s bonus
target (the “Bonus Target”), which Bonus Target shall initially be an amount equal to 100%
of Employee’s Base Compensation. The Bonus Target may be adjusted annually as the Board may deem
appropriate based upon competitive peer company analysis. Annual bonus payments will be subject to
tax and other customary withholdings.
Employee’s annual bonus, if any, for the Company’s fiscal year ending August 31, 2009, shall
be pro rated.
(c) Long Term Incentive Awards.
(i) During the Term, Employee will be eligible to participate in the Company’s
discretionary Long Term Incentive (defined below) plan(s) as established by the Board (as
the same may be amended from time to time), subject to the terms and conditions of the
applicable plan(s). The overall target value of the annual Long Term Incentive grants to
Employee on the date of grant will be not less than $1,000,000.
(ii) On the first business day of the month immediately following the Effective Date,
Employee will be granted Long Term Incentives with an aggregate value of $500,000, which
will be divided equally between stock options and restricted stock units. The actual
number of Long Term Incentives will be determined utilizing the closing price of the
Company’s stock on the date of grant. This grant of Long Term Incentives will vest in
annual installments of 25% each, with full vesting after four years.
(iii) All Long Term Incentive awards are subject to shareholders’ approval of shares to
be allocated to the Company’s Long Term Incentive plan and are granted under the strict
purview of the Compensation Committee of the Board.
(iv) The actual number of Long Term Incentives will be determined utilizing the
valuation methodology used for other similarly situated executive officers of the Company.
(v) Notwithstanding any provision to the contrary in the plan(s) governing such Long
Term Incentives, in the event that this
Agreement is terminated by Employee pursuant to Section 7(a)(ii), (iv) or (v) or by the
Company pursuant to Section 7(a)(iii)(A) (other than for Misconduct) or (iii)(D), Employee
shall have not less than one year from the Date of Termination in which to exercise all Long
Term Incentives granted to Employee by the Company on or before the Date of Termination
(including any Long Term Incentives that become vested pursuant to Section 7);
provided that in no event shall such one year period extend the exercise period for
any Long Term Incentive awards beyond the date that is 10 years from the date of grant of
such Long Term Incentive awards.
5. Additional Benefits. In addition to the compensation provided for in Section 4,
Employee shall be entitled to the following:
(a) Business Expenses. The Company shall, in accordance with any rules and
policies that it may establish from time to time for its executive officers, reimburse
Employee for business expenses reasonably incurred in the performance of Employee’s duties.
It is understood that Employee is authorized to incur reasonable business expenses for
promoting the business of the Company, including reasonable expenditures for professional
memberships and licenses, travel, lodging, meals and client or business associate
entertainment. Requests for reimbursement for all business expenses must be accompanied by
appropriate documentation.
(b) Vacation; Sick Days. Employee shall be entitled to four weeks of vacation
per year and five sick days per year, without any loss of compensation or benefits. Upon
termination of employment of Employee for whatever reason, Employee shall be paid for any
unused vacation time
based on Employee’s Base Compensation as in effect immediately prior to the Date of
Termination.
(c) General Benefits. Employee shall be entitled to participate in the various
Employee benefit plans or programs provided to employees of the Company in general,
including, but not limited to, health, dental, disability, accident and life insurance plans
and 401k plans. Benefits are subject to the eligibility requirements with respect to each
of such benefit plans or programs and such other benefits or perquisites as may be approved
by the Board during the Term. Nothing in this Section 5(c) shall be deemed to prohibit the
Company from making any changes in any of the plans or programs described in this Section
5(c), provided the change similarly affects all executive officers of the Company that are
similarly situated.
(d) Flexible Perquisites; Use of Corporate Aircraft. Employee shall be
entitled to participate in the Company’s flexible perquisites plan, which provides an amount
equal to 4% of Employee’s Base Compensation in each calendar year in lieu of customary
perquisite benefits. Payments under the flexible perquisites plan will be made on a
calendar quarter basis and will be calculated based on Employee’s Base Compensation from the
previous calendar quarter, less any amounts deducted for approved personal use of the
Company’s corporate aircraft. Employee shall be permitted to use the Company’s corporate
aircraft for personal use subject to availability and approval of the CEO in accordance with
the Company’s aircraft policy. The cost to Employee for approved use of the Company’s
corporate aircraft is calculated based on then effective Internal Revenue Service tables.
Nothing
in this Section 5(d) shall be deemed to prohibit the Company from making any changes in
the flexible perquisites plan, provided the change similarly affects all executive officers
of the Company that are similarly situated.
(e) Point of Origin; Relocation Expenses.
(i) Employee’s point of origin (the “Point of Origin”) will be Portland,
Oregon, and Employee’s business assignment location will be the Power Group’s executive
offices in Charlotte, North Carolina (the “Business Location”). From the Effective
Date until the earliest to occur of (A) the date that is six months following the Effective
Date, (B) the date of permanent relocation of Employee to the Business Location and (C) the
Date of Termination, the Company will provide Employee, at the Company’s expense, housing in
the Company’s corporate apartment in the Business Location.
(ii) The Company will provide relocation assistance to Employee in connection with
Employee’s permanent relocation from the Point of Origin to the Business Location in
accordance with the domestic relocation policies of the Company at the time such relocation
occurs. Employee acknowledges that such relocation assistance does not include the purchase
by the Company of Employee’s residence at the Point of Origin.
(f) Country Club Membership. The Company will pay, on behalf of Employee, one
country club membership initiation fee. Employee shall be responsible for monthly dues,
expenses, assessments, etc., in connection with such membership.
6. Confidentiality; Nonsolicitation and Noncompete.
(a) Employee hereby acknowledges that the Company possesses certain Confidential Information
(defined below) that is peculiar to the businesses in which the Company is or may be engaged.
Employee hereby affirms that such Confidential Information is the exclusive property of the Company
and that the Company has proprietary interests in such Confidential information. For the purposes
of this Agreement, the term “Confidential Information” shall mean any and all information
of any nature and in any form that at the time or times concerned is not generally known to Persons
(other than the Company) that are engaged in businesses similar to that conducted or contemplated
by the Company (other than by the act or acts of an employee not authorized by the Company to
disclose such information), which may include, without limitation, the Company’s existing and
contemplated products and services; the Company’s purchasing, accounting, marketing and
merchandising methods or practices; the Company’s development data, theories of application and/or
methodologies; the Company’s customer/client contact and/or supplier information files; the
Company’s existing and contemplated policies and/or business strategies; any and all samples and/or
materials submitted to Employee by the Company; and any and all directly and indirectly related
records, documents, specifications, data and other information with respect thereto. Employee
further acknowledges by signing this Agreement that the Company has expended much time, cost and
difficulty in developing and maintaining the Company’s customers.
(b) Employee shall (i) use the Confidential Information solely for the purpose of performing
Employee’s duties on behalf of the Company and for no other purpose whatsoever, (ii) not, directly
or indirectly, at any time during or after Employee’s employment by the Company, disclose
Confidential Information to any
other Person (except to the Company’s officers in connection with Employee’s duties on behalf
of the Company) or use or otherwise exploit Confidential Information to the detriment of the
Company, and (iii) not lecture on or publish articles with respect to Confidential Information
without prior written approval of the General Counsel of the Company. In the event of a breach or
threatened breach of the provisions of this Section 6(b), the Company shall be entitled, in
addition to any other remedies available to the Company, to an injunction restraining Employee from
disclosing such Confidential Information.
(c) Upon termination of employment of Employee for whatever reason, Employee shall surrender
to the Company any and all documents, manuals, correspondence, reports, records and similar items
then or thereafter coming into the possession of Employee that contain any Confidential
Information; provided, however, that (i) the Company will provide Employee
reasonable access to such Confidential Information to the extent required by Employee in connection
with the defense of any cause of action, dispute, proceeding or investigation made or initiated
against Employee by any Person other than the Company related to the employment of Employee by the
Company or the performance by Employee of its duties in the course of such employment and (ii)
Employee may retain a copy of any agreement between Employee and the Company.
(d) Employee agrees that, as part of the consideration for this Agreement and as an integral
part hereof, Employee has executed, delivered and agreed to be bound by the Nonsolicitation and
Noncompete Agreement attached hereto as Exhibit A, as well as any subsequent addenda
thereto.
7. Termination.
(a) This Agreement may be terminated prior to the expiration of the Term only under the terms
and conditions set forth below:
(i) Resignation (other than for Good Reason). Employee may resign Employee’s
position at any time, including by reason of retirement, by providing written notice of
resignation to the Company. In the event of such resignation (except in the case of
resignation for Good Reason (defined in Section 7(a)(iv) below)), this Agreement shall
terminate on the Date of Termination (defined in Section 7(c) below), and Employee shall not
be entitled to further compensation pursuant to this Agreement other than the payment of any
Base Compensation and General Benefits (e.g., unused vacation, unreimbursed business
expenses, etc.) accrued and unpaid as of the Date of Termination and the retention of any
and all stock options, restricted shares or units or other similar awards granted to
Employee by the Company under any long term incentive plan(s) duly adopted by the Board
(“Long Term Incentives”) that have vested or become exercisable on or before the
Date of Termination in accordance with the plans governing such Long Term Incentives (which
Long Term Incentives remain subject to, and must thereafter be exercised in accordance with,
the plan(s) governing such Long Term Incentives).
(ii) Death. If Employee’s employment is terminated due to Employee’s death,
(A) the Company shall pay to Employee’s surviving spouse or estate, subject to customary
withholdings, not later than 30 days after Employee’s death, (I) any Base Compensation and
General Benefits accrued and unpaid as of the date of Employee’s death, and (II) a lump sum
amount, in cash, equal to the cost for Employee’s surviving spouse or legal
representatives to obtain one year of paid group health and dental insurance benefits
covering Employee’s surviving spouse and dependents that are substantially similar to those
that Employee’s surviving spouse and dependents were receiving immediately prior to
Employee’s death, and (B) notwithstanding any provision to the contrary in the plan(s)
governing such Long Term Incentives, Employee, as of the date of Employee’s death, shall
become immediately and totally vested in any and all Long Term Incentives granted to
Employee by the Company prior to the Date of Termination that have not previously vested in
full. After all payments, benefits and vesting of Long Term Incentives under this Section
7(a)(ii) have been paid or performed, this Agreement shall terminate, and the Company shall
have no obligations to Employee or Employee’s surviving spouse, dependents or estate with
respect to this Agreement. This provision shall not be exclusive and shall be in addition
to death benefits payable by the Company or any insurer under any insurance plan or program
covering Employee.
(iii) Discharge.
(A) The Company may terminate Employee’s employment for any reason at any time
upon written notice delivered to Employee in accordance with Section 7(b).
(B) In the event that Employee’s employment is terminated during the Term by
the Company for any reason other than Employee’s Misconduct or Disability (both as
defined below), the following shall occur:
(I) the Company shall pay to Employee, subject to tax and other
customary withholdings, not later than 15 days after the Date of
Termination, (x) any Base Compensation and General Benefits accrued and
unpaid as of the date of Employee’s death, (y) a lump sum amount, in cash,
equal to the sum of (1) the product of (a) Employee’s Base Compensation as
in effect immediately prior to the Date of Termination, multiplied
by (b) the remaining portion of the Term, plus (2) an amount
equal to Employee’s highest annual bonus actually paid by the Company during
the two year period immediately preceding the Date of Termination, and (z) a
lump amount, in cash, equal to the cost for Employee to obtain, for the
period commencing on the Date of Termination and ending on the earlier to
occur of (1) the date that is 18 months following the Date of Termination
and (2) the fixed term date (if any), life, disability, accident, dental and
health insurance benefits (“Welfare Benefits”) covering Employee
(and, as applicable, Employee’s spouse and dependents) that are
substantially similar to those that Employee (and Employee’s spouse and
dependents) were receiving immediately prior to the Date of Termination;
and
(II) notwithstanding any provision to the contrary in the plan(s)
governing such Long Term Incentives, Employee shall become immediately and
totally vested in any
and all Long Term Incentives granted to Employee by the Company prior
to the Date of Termination.
(C) Notwithstanding anything to the contrary in this Agreement, in the event
that Employee is terminated because of Misconduct, the Company shall have no
obligations pursuant to this Agreement after the the Date of Termination other than
the payment of any Base Compensation and General Benefits accrued and unpaid through
the the Date of Termination. As used herein, “Misconduct” means:
(1) (A) any willful breach or habitual neglect of duty by Employee or
(B) Employee’s material and continued failure to substantially perform
Employee’s duties with the Company (other than any such failure resulting
from Employee’s incapacity due to a Disability or any such actual or
anticipated failure after the issuance of a Notice of Termination by
Employee for Good Reason) (I) in a professional manner and (II) in a manner
that is reasonably expected as appropriate for the position, in the case of
either (A) or (B), which breach, neglect or failure is not cured by Employee
within 30 days from receipt by Employee of written notice from the Company
that specifies the alleged breach, neglect or failure;
(2) the misappropriation or attempted misappropriation by Employee of a
material business opportunity of the Company, including attempting to secure
any personal profit in connection with entering into any transaction on
behalf of the Company;
(3) the misappropriation or attempted misappropriation by Employee of
any of the Company’s funds or property;
(4) an intentional violation by Employee of the Company’s Code of
Corporate Conduct or Fraud Policy; or
(5) (A) the commission by Employee of a felony offense or a misdemeanor
offense involving violent or dishonest behavior or (B) Employee engaging in
conduct involving fraud or dishonesty in connection with his duties with the
Company.
(D) Disability. If Employee shall have been absent from the full-time
performance of Employee’s duties with the Company for 120 consecutive calendar days
as a result of Employee’s incapacity due to a Disability, Employee’s employment may
be terminated by the Company. For the purposes of this Agreement, a
“Disability” shall exist if::
(1) Employee is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment that can
be expected to result in death or can be expected to last for a continuous
period of not less than 12 months; or
(2) Employee is, by reason of any medically determinable physical or
mental impairment that can be expected to result in death or can be expected
to last for a
continuous period of not less than 12 months, receiving income
replacement benefits for a period of not less than three months under an
accident and health plan covering employees of the Company.
If Employee is terminated pursuant to this Section 7(a)(iii)(D), Employee shall not
be entitled to further compensation pursuant to this Agreement, except that (x) the
Company shall (1) not later than 15 days after the Date of Termination, pay to
Employee any Base Compensation and General Benefits accrued and unpaid as of the
date of the Date of Termination, (2) for the 12 month period beginning with the Date
of Termination, pay to Employee monthly the amount by which Employee’s monthly Base
Compensation as in effect immediately prior to the Date of Termination exceeds the
monthly benefit received by Employee pursuant to any disability insurance covering
Employee, and (3) not later than 15 days after the Date of Termination, pay to
Employee a lump amount, in cash, equal to the cost for Employee to obtain, for the
period commencing on the Date of Termination and ending on the earlier to occur of
(a) the date that is 18 months following the Date of Termination and (b) the fixed
term date (if any), health and dental insurance benefits covering Employee and
Employee’s spouse and dependents that are substantially similar to those that
Employee (and Employee’s spouse and dependents) was receiving immediately prior to
the Date of Termination; and (y) notwithstanding any provision to the contrary in
the plan(s) governing such Long Term Incentives, Employee shall become
immediately and totally vested in any and all Long Term Incentives granted to
Employee by Company prior to the Date of Termination that have not previously vested
in full.
(iv) Resignation for Good Reason. Employee shall be entitled to terminate
Employee’s employment for Good Reason (as defined herein). If Employee terminates
employment for Good Reason, Employee shall be entitled to the compensation and benefits
provided in Section 7(a)(iii)(B). For the purposes of this Agreement, the term “Good
Reason” shall mean the occurrence of any of the following circumstances without
Employee’s express written consent:
(A) any material diminution of Employee’s duties or responsibilities (other
than in connection with the termination of Employee for Misconduct or Disability in
accordance with the terms of this Agreement);
(B) any material diminution of Employee’s Base Compensation;
(C) the relocation of Employee’s office more than 50 miles from its location at
the commencement of this Agreement; or
(D) any other material breach by the Company of its obligations under this
Agreement;
provided, however, Employee shall provide written notice (a “Good Reason
Notice”) to the Company of the initial existence of the condition causing the change in
terms or status no more than 90 days after the change in terms or status occurs, and the
Company shall have 30 days from receipt of the Good Reason Notice to resolve the issue
causing the change in terms or
status. If the Company resolves such issue, then Employee’s employment shall not be subject
to the Good Reason provisions of this Agreement as to such issue.
(v) Resignation for Corporate Change. Employee shall be entitled to terminate
Employee’s employment for a Corporate Change (as defined herein) if Employee is not retained
in Employee’s current (or a comparable) position, but only if Employee gives notice of
Employee’s intent to terminate employment within 90 days following the effective date of
such Corporate Change (provided that, notwithstanding the foregoing, the Notice of
Termination may not be given later than February 13th of the year following the year in
which the Corporate Change occurs). If Employee terminates employment for a Corporate
Change, Employee shall be entitled to the compensation and benefits provided in Section
7(a)(iii)(B). For the purposes of this Agreement, the term “Corporate Change” means
a “change in ownership,” a “change in effective control,” or a “change in the ownership of
substantial assets” of the Company.
(A) A “change in ownership” of the Company occurs on the date that any one
person, or more than one person acting as a group, acquires ownership of stock of
the Company that, together with stock held by such person or group, constitutes more
than 50% of the total fair market value or total voting power of the stock of the
Company. However, if any one person, or more than one person acting as a group, is
considered to own more than 50% percent of the total fair market value or total
voting power of the stock of the Company, the acquisition of additional stock by the
same person or
persons is not considered to cause a change in ownership of the Company (or to
cause a change in the effective control of the Company (within the meaning of
Section 7(v)(B)).
(B) Notwithstanding that the Company has not undergone a change in ownership
under Section 7(v)(A), a “change in effective control” of the Company occurs on the
date that a majority of members of the Board is replaced during any 12-month period
by directors whose appointment or election is not endorsed by a majority of the
members of the Board prior to the date of the appointment or election. For purposes
of this Section 7(v)(B), the term “Company” refers solely to the relevant
corporation identified in the opening paragraph of this Agreement, for which no
other corporation is a majority shareholder.
(C) A “change in the ownership of substantial assets” of the Company occurs on
the date that any one person, or more than one person acting as a group, acquires
(or has acquired during the 12-month period ending on the date of the most recent
acquisition by such person or persons) assets from the Company that have a total
gross fair market value equal to or more than 75% percent of the total gross fair
market value of all of the assets of the Company immediately prior to such
acquisition or acquisitions. For this purpose, “gross fair market value” means the
value of the assets of the Company, or the value of the assets being disposed of,
determined without regard to any liabilities associated with such assets.
(b) Notice of Termination. Any purported termination of Employee’s employment
by the Company under Sections 7(a)(iii)(C) or (D), or by Employee under Section 7(a)(i),
(iv) or (v), shall be communicated by a written Notice of Termination to the other Party in
accordance with Section 10. For purposes of this Agreement, a “Notice of
Termination” shall mean a notice that (i) in the case of termination by the Company,
shall set forth in reasonable detail the reason for such termination of Employee’s
employment and the Date of Termination, or (ii) in the case of resignation by Employee,
shall specify in reasonable detail the basis for such resignation and the Date of
Termination. A Notice of Termination given by Employee pursuant to Section 7(a)(iv) shall
be effective even if given after the receipt by Employee of notice that the Board has set a
meeting to consider terminating Employee for Misconduct. A Notice of Termination given by
Employee pursuant to Section 7(a)(iv) shall be considered effective only after 30 days have
elapsed since Employee delivered the applicable Good Reason Notice and the Company has
failed to resolve the issue causing the change in terms or status during such 30 day period.
Employee shall not be expected to provide further services after the Date of Termination.
Any purported termination for which a Notice of Termination is required that does not
materially comply with this Section 7(b) shall not be effective.
(c) Date of Termination, Etc. The “Date of Termination” shall mean the
date specified in the Notice of Termination, provided that the Date of Termination shall be
at least 15 calendar days, but not more than 45 calendar days, following the date the Notice
of Termination is given. Notwithstanding anything herein to the contrary, if a Notice of
Termination
is given pursuant to Section 7(a)(v), then the Date of Termination may not be later
than February 28th of the year following the year in which the Change of Control occurs. In
the event Employee is terminated for Misconduct, the Company may refuse to allow Employee
access to the Company’s offices (other than to allow Employee to collect Employee’s personal
belongings under the Company’s supervision) prior to the Date of Termination. Employee
shall not be expected to provide further services after the Date of Termination.
(d) Mitigation. Employee shall not be required to mitigate the amount of any
payment provided for in this Section 7 by seeking other employment or otherwise, nor shall
the amount of any payment provided for in this Agreement be reduced by any compensation
earned by Employee as a result of employment by another employer, except that any severance
amounts payable to Employee pursuant to the Company’s severance plan or policy for employees
in general shall reduce the amount otherwise payable pursuant to Section 7(a)(iii)(B).
(e) Excess Parachute Payments. Notwithstanding anything in this Agreement to
the contrary, to the extent that any payment or benefit received or to be received by
Employee hereunder in connection with the termination of Employee’s employment would, as
determined by tax counsel selected by the Company, constitute an “Excess Parachute Payment”
(as defined in Section 280G of the Internal Revenue Code), the Company shall fully “gross
up” such payment so that Employee is in the same “net” after tax position he would have been
if such payment and gross up payments had not constituted Excess Parachute Payments. No
payment of a gross up
shall occur until the first business day occurring after the date that is six months
after the Date of Termination. Payment of the gross up will be made no later than the end
of Employee’s taxable year next following Employee’s taxable year in which Employee remits
the related taxes.
8. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit
Employee’s continuing or future participation in any benefit, bonus, incentive, or other plan or
program provided by the Company and for which Employee may qualify, nor shall anything herein limit
or otherwise adversely affect such rights as Employee may have under any Long Term Incentives
granted by the Company.
9. Assignability. The obligations of Employee hereunder are personal and may not be
assigned or delegated by Employee or transferred in any manner whatsoever, nor are such obligations
subject to involuntary alienation, assignment or transfer. The Company shall have the right to
assign this Agreement and to delegate all rights, duties and obligations hereunder, either in whole
or in part, to any parent, affiliate, successor or subsidiary of the Company, so long as the
obligations of the Company under this Agreement remain the obligations of the Company.
10. Notice. For the purpose of this Agreement, all notices and other communications
provided for in this Agreement shall be in writing and shall be deemed to have been duly given when
delivered by Federal Express or similar courrier addressed (a) to the Company, at its principal
office address, directed to the attention of the Board with a copy to the Corporate Secretary of
the Company, and (b) to Employee, at Employee’s residence address on the records of the Company or
to such other address as either Party may have furnished to the other
in writing in accordance herewith except that notice of change of address shall be effective
only upon receipt.
11. Severability. In the event that one or more of the provisions set forth in this
Agreement shall for any reason be held to be invalid, illegal, overly broad or unenforceable, the
same shall not affect the validity or enforceability of any other provision of this Agreement, but
this Agreement shall be construed as if such invalid, illegal, overly broad or unenforceable
provisions had never been contained therein; provided, however, that no provision
shall be severed if it is clearly apparent under the circumstances that the Parties would not have
entered into the Agreement without such provision.
12. Successors; Binding Agreement.
(a) The Company will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession had taken place.
Failure of the Company to obtain such agreement prior to the effectiveness of any such succession
shall constitute Good Reason under Section 7(a)(iv); provided that, for purposes of
implementing the foregoing, the date on which any such succession becomes effective shall be deemed
the Date of Termination. As used herein, the term “Company” shall include any successor to
its business and/or assets as aforesaid that executes and delivers the Agreement provided for in
this Section 12 or that otherwise becomes bound by all terms and provisions of this Agreement by
operation of law.
(b) This Agreement and all rights of Employee hereunder shall inure to the benefit of and be
enforceable by Employee’s personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees.
13. Miscellaneous.
(a) No provision of this Agreement may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and signed by Employee and such officer of the
Company as may be specifically authorized by the Board.
(b) No waiver by either Party at any time of any breach by the other Party of, or in
compliance with, any condition or provision of this Agreement to be performed by such other Party
shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time.
(c) Together with the Nonsolicitation and Noncompete Agreement, this Agreement is an
integration of the Parties’ agreement; no agreement or representations, oral or otherwise, express
or implied, with respect to the subject matter hereof have been made by either Party, except those
which are set forth expressly in this Agreement and the Nonsolicitation and Noncompete Agreement.
(d) THE VALIDITY, INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF LOUISIANA.
(e) Notwithstanding anything herein to the contrary, this Agreement is intended to comply with
Internal Revenue Code Section 409A and the regulations and other guidance of general applicability
thereunder and shall at all times be interpreted in accordance with such intent such that amounts
credited under this Agreement shall not be taxable until such amounts are distributed in
accordance with the terms of this Agreement. In the event that Employee is a “specified employee”
at the Date of Termination, any amounts that are considered nonqualified deferred compensation for
purposes of Internal Revenue Code Section 409A and that are distributable because of a separation
from service shall be delayed until the first business day occuring after the date that is six
months after the Date of Termination. Any provision of this Agreement to the contrary is without
effect.
(f) Reimbursements provided for under this Agreement shall be provided in accordance with
policies of the Company established from time to time.
14. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together will constitute one and the same
instrument.
15. Arbitration.
(a) Employee and the Company agree that any dispute regarding the covenants herein and/or the
validity of this Agreement and its addenda, if any, shall be resolved through arbitration.
Employee and the Company hereby expressly acknowledge that Employee’s position in the Company and
the Company’s business have a substantial impact on interstate commerce and that Employee’s
development and involvement with the Company and the Company’s business have a national and
international territorial scope commercially. Any arbitration-related matter or arbitration
proceeding of a dispute regarding the covenants herein and/or the validity of this Agreement and
its addenda, shall be governed, heard, and decided under the provisions and the authority of the
Federal Arbitration Act, 9 U.S.C.A. §1, et seq., and shall be submitted for arbitration to the
office of the American Arbitration Association (“AAA”) in New Orleans, Louisiana, on demand
of either Party.
(b) Such arbitration proceedings shall be conducted in New Orleans, Louisiana, and shall be
conducted in accordance with the then-current Employment Arbitration Rules and Mediation Procedures
of the AAA, with the exception that the Employee expressly waives the right to request interim
measures or injunctive relief from a judicial authority. Employee acknowledges that the Company
alone retains the right to seek injunctive relief from a judicial authority based on the nature of
this Agreement. Each Party shall have the right to be represented by counsel or other designated
representatives. The Parties shall negotiate in good faith to appoint a mutually acceptable
arbitrator; provided, however, that, in the event that the Parties are unable to
agree upon an arbitrator within 30 days after the commencement of the arbitration proceedings, the
AAA shall appoint the arbitrator. The arbitrator shall have the right to award or include in his
or her award any relief that he or she deems proper under the circumstances, including, without
limitation, all types of relief that could be awarded by a court of law, such as money damages
(with interest on unpaid amounts from date due), specific performance and injunctive relief. The
arbitrator shall issue a written opinion explaining the reasons for his or her decision and award.
The award and decision of the arbitrator shall be conclusive and binding upon both Parties, and
judgment upon the award may be entered in any court of competent jurisdiction. The Parties
acknowledge and agree that any arbitration award may be enforced against either or both of them in
a court of competent jurisdiction, and each waives any right to contest the validity or
enforceability of
such award. The Parties further agree to be bound by the provisions of any statute of
limitations that would be otherwise applicable to the controversy, dispute, or claim that is the
subject of any arbitration proceeding initiated hereunder. Without limiting the foregoing, the
Parties shall be entitled in any such arbitration proceeding to the entry of an order by a court of
competent jurisdiction pursuant to a decision of the arbitrator for specific performance of any of
the requirements of this Agreement. The provisions of this Section 15 shall survive and continue
in full force and effect subsequent to and notwithstanding expiration or termination of this
Agreement for any reason. Employee agrees to pay arbitration fees in an amount not to exceed the
amount required to file a lawsuit in a court of law. The Company agrees to pay the remaining
amount of arbitration fees. The arbitrator shall have the right to award reasonable attorney’s
fees and costs to the prevailing Party. Employee and the Company acknowledge and agree that any
and all rights they may have to resolve their claims by a jury trial are hereby expressly waived.
The provisions of this Section 15 do not preclude Employee from filing a complaint with any
federal, state, or other governmental administrative agency, if applicable.
IN WITNESS WHEREOF, the Parties have executed this Agreement on
March 23, 2009, effective for
all purposes as of the Effective Date.
| THE XXXX GROUP INC. |
||||
| By: | /s/ Xxxxxxx X. Xxxxxx | |||
| Xxxxxxx X. Xxxxxx | ||||
| General Counsel and Corporate Secretary | ||||
EMPLOYEE |
||
/s/ Xxxxxxxxx X. Xxxxxxx |
||
