EMPLOYMENT AGREEMENT
Exhibit 10.23
EMPLOYMENT AGREEMENT (the “Agreement”) entered into as of August 3, 2011 (the “Effective Date”) by and between Accellent Inc. (the “Company”) and Xxxxx XxXxxxx (the “Executive”).
WHEREAS, the Company desires to employ Executive and to enter into an agreement embodying the terms of such employment;
WHEREAS, Executive desires to accept such employment and enter into such an agreement;
NOW THEREFORE, in consideration of the mutual covenants and promises contained herein and for other good and valuable consideration, the parties agree as follows:
1. Term of Employment. Subject to the provisions of Section 8 of this Agreement, Executive shall be employed by the Company for a period commencing on August 29, 2011 (the “Commencement Date”), and ending on the second anniversary thereof (the “Initial Term”) on the terms and subject to the conditions set forth in this Agreement. Following the Initial Term, the Agreement shall automatically be renewed for additional terms of one year on each anniversary of the last day of the Initial Term (the Initial Term and any annual extensions of the term of this Agreement, together, the “Employment Term”), subject to Section 8 of this Agreement, unless the Company or the Executive provides the other party with written notice at least sixty (60) days prior to the expiration of the Employment Term of the intent not to renew the Employment Term. Notwithstanding the foregoing, at the Company’s option, any notice of nonrenewal given by the Company may specify that it is also a termination without Cause (as hereinafter defined) by the Company, to be effective as of the date such notice is given, in which case the Employment Term shall terminate immediately and any notice period shall be deemed to be waived by the Executive.
2. Position.
a. During the Employment Term, Executive shall serve as Executive Vice President, Sales and Marketing of the Company and its subsidiaries. The Executive shall report to the Chief Executive Officer and the Board of Directors (the “Board”) of the Company. In such positions, Executive shall have such duties and authority commensurate with the position of a senior vice president of a company of similar size and nature and as the Chief Executive Officer and the Board shall otherwise determine from time to time. The Executive shall primarily perform Executive’s duties hereunder at the Company’s headquarters, currently located in Wilmington, Massachusetts.
b. During the Employment Term, Executive will devote substantially all of Executive’s business time, and will devote Executive’s personal efforts, to the performance of Executive’s duties hereunder and will not engage in any other business, profession or occupation for compensation or otherwise which would materially conflict or materially interfere
with the rendition of such services either directly or indirectly, without the prior written consent of the Board; provided, however, that nothing herein shall preclude Executive, (i) subject to the prior approval of the Board, from accepting appointment to or continue to serve on any board of directors or trustees of any business corporation or any charitable organization or (ii) from managing Executive’s personal and family investments; provided, however, in each case, and in the aggregate, that such activities do not materially conflict or materially interfere with the performance of Executive’s duties hereunder or conflict with Section 9.
3. Base Salary. During the Employment Term, the Company shall pay Executive a base salary at the annual rate of $325,000.00 payable in substantially equal periodic payments in accordance with the Company’s practices for other executive employees, as such practices may be determined from time to time. Executive shall be entitled to such increases in Executive’s base salary, if any, as may be determined from time to time in the sole discretion of the Board. Executive’s annual base salary, as in effect from time to time, is hereinafter referred to as the “Base Salary.” Once increased, the Executive’s Base Salary shall not be decreased below such increased amount.
4. Annual Bonus. With respect to each full fiscal year during the Employment Term, Executive shall be eligible to earn an annual bonus award (an “Annual Bonus”), with a target bonus amount equal to 60% of Executive’s Base Salary (the “Target Bonus”) (with a maximum Annual Bonus amount not to exceed 150% of the Target Bonus) based upon the achievement of reasonable performance goals established by the Board, provided, that to the extent that any portion of the achievement of the goals or amount of the Annual Bonus shall be based on a subjective criteria, that portion of the achievement of the goals or Annual Bonus shall be as determined in the sole, good faith discretion of the Board. In addition, in the sole discretion of the Board, Executive may be eligible to earn an Annual Bonus in excess of the Target Bonus, up to one and one-half times the Target Bonus. In addition, the Board shall establish certain threshold performance goals, which the Company must achieve before Executive shall be entitled to earn any Annual Bonus. All such Annual Bonus amounts shall otherwise be paid in accordance with the Company’s annual incentive plan or policy, subject to the terms of this Agreement.
5. Equity Arrangements.
a. On or before September 26, 2011, Executive shall invest $50,000 in exchange for common stock of the Company’s parent company, Accellent Holdings Corp. (“Common Stock”), at a per share price determined by the Fair Market Value (as defined in the 2005 Equity Plan for Key Employees of Accellent Holdings Corp. and its Subsidiaries and Affiliates) of the Common Stock on the date of Executive’s investment. The Board evaluates the Fair Market Value from time to time, and at its July 2011 meeting, the Board determined and resolved that the Fair Market Value was equal to $3.00 per share as of June 30, 2011. The Board will make a subsequent determination of the Fair Market Value of the Common Stock on the date of Executive’s investment.
b. On or promptly after the Commencement Date, Executive shall receive the grant of an option (the “Option”) to acquire 300,000 shares of Common Stock at a
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per share purchase price equal to the Fair Market Value on the date of grant. In addition, Executive shall be eligible to receive additional option grants in the future at the discretion of the Board. All option grants shall be made pursuant to the Plan (as defined below).
c. The foregoing equity arrangements shall be governed by the terms and conditions of certain documents, including a Management Stockholder’s Agreement, the 2005 Equity Plan for Key Employees of Accellent Holdings, Corp. and its Subsidiaries and Affiliates (the “Plan”), Stock Option Agreement, Sale Participation Agreement, and Registration Rights Agreement, in the forms attached hereto (collectively, the “Management Equity Documents”).
6. Employee Benefits. During the Employment Term, Executive shall be entitled to participate in the Company’s employee benefit plans as in effect from time to time (collectively “Employee Benefits”), on the same basis as those benefits are generally made available to other senior executives of the Company. In addition, Executive will be entitled to four weeks of paid vacation for each full year of the Employment Term.
7. Business Expenses. During the Employment Term, reasonable business expenses incurred by Executive in the performance of Executive’s duties hereunder shall be reimbursed by the Company in accordance with Company policies.
8. Termination. The Employment Term and Executive’s employment hereunder may be terminated by either party at any time and for any reason; provided, however, that Executive will be required to give the Company at least thirty (30) days advance written notice of any resignation of Executive’s employment; provided, further, however, that the Company may, in its discretion, waive all or any portion of such notice requirement. In the event that the Company waives all or any portion of such notice requirement and therefore causes Executive’s employment to be terminated, in no event shall such waiver constitute a termination without Cause by the Company (as described in Section 8(c) below). In addition, Executive’s notice requirement hereunder shall be subject to the notice provisions of Section 8(c) below.
a. By the Company For Cause or By Executive Resignation Without Good Reason.
(i) The Employment Term and Executive’s employment hereunder may be terminated by the Company for Cause (as defined below) immediately, without prior written notice thereof, and shall terminate automatically (subject to the notice requirements, which may be waived by the Company, as described above in this Section 8) upon Executive’s resignation without Good Reason (as defined in Section 8(c)).
(ii) For purposes of this Agreement, “Cause” shall mean (A) Executive’s continued failure to substantially perform Executive’s duties hereunder (other than as a result of total or partial incapacity due to physical or mental illness) which is not cured within 15 days following receipt by the Executive of written notice from the Company of such failure; provided that it is understood that this clause (A) shall not permit the Company to terminate Executive’s employment for Cause because of dissatisfaction with the quality of services provided by or
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disagreement with the actions taken by Executive in the good faith performance of Executive’s duties to the Company, (B) an act or acts constituting a (x) felony, (y) a misdemeanor involving the Company (z) misdemeanor not involving the Company, which results in material and demonstrable harm to the business or reputation of the Company, (iii) Executive’s willful malfeasance or misconduct or (iv) a breach by Executive of the material terms of Section 9 of this Agreement.
(iii) If Executive’s employment is terminated by the Company for Cause, or if Executive resigns without Good Reason, as hereinafter defined, then the Executive, subject to the Executive’s execution, delivery and non-revocation of an effective release of claims (in a form acceptable to the Company) in favor of the Company and related parties within 45 days following the date of the termination of the Executive’s employment (which release of claims shall be delivered to the Executive within 5 days following the date of such termination) shall be entitled to receive:
(A) the Base Salary through the date of termination and any earned but unpaid Annual Bonus for the prior year and any accrued but unpaid vacation;
(B) reimbursement for any unreimbursed business expenses properly incurred by Executive in accordance with Company policy prior to the date of Executive’s termination; and
(C) such employee benefits (described in Section 6(a) above), if any, as to which Executive may be entitled under the employee benefit plans of the Company (the amounts described in clauses (A) through (C) hereof being referred to as the “Accrued Rights”).
Following such termination of Executive’s employment by the Company for Cause or resignation by Executive without Good Reason, except as set forth in this Section 8(a)(iii), Executive shall have no further rights to any compensation or any other benefits under this Agreement other than for rights to indemnification and directors and officers liability insurance as provided herein; provided, however, that the treatment of any equity rights held by Executive immediately prior to any such termination shall be subject to the applicable terms of the Management Equity Documents.
b. Disability or Death.
(i) The Employment Term and Executive’s employment hereunder shall terminate upon Executive’s death and may be terminated by the Company if a determination is made, at the request of Executive or upon the reasonable request of the Company set forth in a notice to Executive, by a physician selected by the Company and Executive, that Executive is unable to perform Executive’s duties as an employee of the Company or its subsidiaries and in all reasonable medical likelihood such inability will continue for a period in excess of 180 consecutive days (such inability is hereinafter referred to as “Disability” or being “Disabled”). Any question as to the existence of the Disability of Executive as to which Executive and the Company cannot agree shall be determined in writing by a qualified independent physician
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mutually acceptable to Executive and the Company. If Executive and the Company cannot agree as to a qualified independent physician, each shall appoint such a physician and those two physicians shall select a third who shall make such determination in writing. The determination of Disability made in writing to the Company and Executive shall be final and conclusive for all purposes of the Agreement. Notwithstanding any such determination, in the event Executive is Disabled, the Company shall, pursuant to a Company employee benefit plan or otherwise, cause Executive to continue to receive the then Base Salary (or such other salary continuation as may be provided pursuant to any Company employee benefit plan) and welfare benefits (in accordance with the applicable Company employee benefit plan under which Executive receives such benefits immediately prior to such Disability) until the earlier to occur of (x) six months after the date Executive is determined to be Disabled and (y) such time as Executive commences coverage pursuant to the Company’s long-term disability plan.
(ii) Upon termination of Executive’s employment hereunder for either Disability or death, Executive or Executive’s estate (as the case may be) shall be entitled to receive:
(A) the Accrued Rights; and
(B) a lump sum pro rata portion of any Annual Bonus, if any, that Executive would have been entitled to receive pursuant to Section 4 hereof in such year based upon the percentage of the fiscal year that shall have elapsed through the date of Executive’s termination of employment, payable when such Annual Bonus would have otherwise been payable had Executive’s employment not terminated, based on the Target for the fiscal year in which termination occurs (the “Pro-Rata Bonus”); provided that the payment shall be made no later than March 15th following the year in which such termination occurs.
Following Executive’s termination of employment due to death or Disability, except as set forth in this Section 8(b)(ii), Executive shall have no further rights to any compensation or any other benefits under this Agreement other than for rights to indemnification and directors and officers liability insurance as provided herein; provided, however, that the treatment of any equity rights held by Executive immediately prior to any such termination shall be subject to the applicable terms of the Management Equity Documents.
c. By the Company Without Cause or Resignation by Executive for Good Reason.
(i) The Employment Term and Executive’s employment hereunder may be terminated by the Company without Cause, or by Executive’s resignation for Good Reason (subject to the notice requirements, which may be waived by the Company, as described above in this Section 8, and to the provision of Section 8(c)(ii), below). In addition to the foregoing, a notice of non-extension of the Employment Term by the Company shall be deemed to be a termination of the Executive’s employment without Cause as of the date the Company notifies Executive of such non-extension.
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(ii) For purposes of this Agreement, “Good Reason” shall mean, without Executive’s consent, (A) a reduction in Executive’s base salary or annual bonus opportunity, (B) a substantial reduction in Executive’s duties, authorities, and responsibilities, (C) a transfer of Executive’s primary workplace by more than fifty (50) miles from the Company’s offices in Wilmington, Massachusetts, or (D) following a “Change in Control” (as defined in the Plan), a material adverse change in Executive’s aggregate duties and responsibilities from such aggregate duties and responsibilities in effect immediately prior to such Change in Control, such that Executive does not continue employment in a role comparable to the position described in Section 2 hereof; provided that these events shall constitute Good Reason only if the Company fails to cure such event within 30 days after receipt from Executive of written notice of the event which constitutes Good Reason; and provided, further, that “Good Reason” shall cease to exist for an event on the 60th day following the later of its occurrence or Executive’s knowledge thereof, unless Executive has given the Company written notice thereof prior to such date.
(iii) If Executive’s employment is terminated by the Company without Cause (other than by reason of death or Disability) or if Executive resigns for Good Reason, Executive shall be entitled to receive:
(A) the Accrued Rights plus payment of the Pro-Rata Bonus; and
(B) subject to Executive’s continued compliance with the provisions of Section 9, payment in equal installments over twelve months of an amount equal to the sum of (x) Executive’s then Base Salary and (y) Executive’s Annual Bonus, if any, earned or payable in respect of the fiscal year of the Company prior to the fiscal year in which the Executive’s employment is terminated; provided, however, that if there occurs a Change in Control, and the Executive’s employment terminates pursuant to this Section 8(c) within 24 months following such Change in Control, the amount to which Executive shall be entitled hereunder shall be paid in one lump sum; and
(C) Executive and his spouse and eligible dependents (to the extent covered immediately prior to such termination) shall continue to be eligible to participate in all of the Company’s group health plans to the extent that Executive elects COBRA health care continuation coverage under Section 4980B of the Code, or any replacement or successor provision of United States tax law, and the Company shall pay Executive’s costs for such coverage, during the Severance Period, or, if earlier, until such time as the Executive becomes employed by another employer (whether or not he is offered coverage under the benefit plans of the new employer). The COBRA health care continuation coverage period shall run concurrently with the Severance Period.
Following Executive’s termination of employment by the Company without Cause (other than by reason of Executive’s death or Disability) or by Executive’s resignation for Good Reason, except as set forth in this Section 8(c)(iii), Executive shall have no further rights to any compensation or any other benefits under this Agreement other than for rights to indemnification and directors and officers liability insurance as provided herein; provided, however, that the treatment of any equity rights held by Executive immediately prior to any such termination shall be subject to the applicable terms of the Management Equity Documents.
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d. Notice of Termination; Payment of Lump Sum Amounts. (i) Any purported termination of employment by the Company or by Executive (other than due to Executive’s death) as set forth above in this Section 8 shall be communicated by written Notice of Termination to the other party hereto in accordance with Section 11(h) hereof. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of employment under the provision so indicated. Notwithstanding any other provision of this Agreement, the provisions of this Section 8 shall exclusively govern Executive’s rights upon termination of employment with the Company and its affiliates.
(ii) For purposes of this Section 8, all amounts required to be paid in a lump sum pursuant to any subsection of this Section 8 shall be required to be made within thirty (30) business days after the date of the termination of Executive’s employment. Notwithstanding the provisions of this Section 8(d)(ii), any amounts payable under this Section 8 that are subject to the execution of a release of claims by the Executive shall not be paid until the sixtieth (60th) calendar day after the date of termination of Executive’s employment, and then only if the Executive has in fact executed and not revoked such release of claims, provided that if the 60 calendar day period (and any permitted revocation period thereafter, if applicable) as described in the foregoing begins in one calendar year and ends in a second calendar year, then any payments under this Section 8 shall be delayed until the second of such two calendar years (regardless of whether Executive delivers the release in the first calendar year or in the second calendar year).
9. Non-Competition.
a. Executive acknowledges and recognizes the highly competitive nature of the businesses of the Company and its affiliates and accordingly agrees, effective as of the date of Executive’s commencement of employment with the Company, without the Company’s prior written consent, Executive shall not, directly or indirectly, (i) at any time during or after Executive’s employment with the Company, disclose any Confidential Information pertaining to the business of the Company or any of its subsidiaries, except in connection with the performance of Executive’s duties hereunder as he deems in good faith reasonably necessary or desirable, or when required by law, administrative or judicial process; or (ii) at any time during the Noncompete Period (as hereinafter defined) directly or indirectly, (A) be engaged in or have a financial interest (other than a passive ownership position of less than 5% in any company whose shares are publicly traded or any non-voting non-convertible debt securities in any company or any investment the Executive owns through a mutual fund, private equity fund or other pooled account) in any business which competes with a business of the Company or any of its subsidiaries, which business of the Company (or any of its subsidiaries) provided, at least five percent (5%) of the gross revenues of the Company and its subsidiaries in the full fiscal year of the Company immediately preceding the fiscal year in which Executive’s termination of employment occurs or is expected to provide such level of gross revenues in the
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fiscal year of such termination (any such business which so competes, a “Competitor”) or (B) solicit or offer employment to any person (other than Executive’s secretary or other personal assistant who reports directly to Executive) who has been employed by the Company or any of its subsidiaries at any time during the six months immediately preceding the termination of Executive’s employment. Notwithstanding the foregoing, nothing herein shall prevent Executive from working for a, subsidiary, division or other entity of an entity that controls, directly or indirectly, another subsidiary, division or other entity, that is a Competitor, so long as the entity, subsidiary or division by which Executive may be employed is not itself a Competitor. If Executive is bound by any other agreement with the Company regarding the use or disclosure of confidential information, the provisions of this Agreement shall be read in such a way as to further restrict and not to permit any more extensive use or disclosure of confidential information. For purposes of this Section 9, (x) “Noncompete Period” shall be defined as the period during which Executive continues to be employed by the Company and a period of one year following the date Executive ceases for any reason to be employed by the Company, and (y) “Confidential Information” shall mean all non-public information concerning trade secret, know-how, software, developments, inventions, processes, technology, designs, the financial data, strategic business plans or any proprietary or confidential information, documents or materials in any form or media, including any of the foregoing relating to research, operations, finances, current and proposed products and services, vendors, customers, advertising and marketing, and other proprietary and confidential information of the Restricted Group, and “Restricted Group” shall mean, collectively, the Company, its subsidiaries, Kohlberg Kravis Xxxxxxx & Co. L.P., and their respective affiliates.
b. Notwithstanding clause (a) above, if at any time a court holds that the restrictions stated in such clause (a) are unreasonable or otherwise unenforceable under circumstances then existing, the parties hereto agree that the maximum period, scope or geographic area determined to be reasonable under such circumstances by such court will be substituted for the stated period, scope or area.
c. The provisions of this Section 9 are intended to supersede the terms contained in Section 24 of the Management Stockholders’ Agreement with respect to the restrictive covenants contained therein.
10. Specific Performance. Executive acknowledges and agrees that the Company’s remedies at law for a breach or threatened breach of any of the provisions of Section 9 would be inadequate and the Company would suffer irreparable damages as a result of such breach or threatened breach. In recognition of this fact, Executive agrees that, in the event of such a breach or threatened breach, in addition to any remedies at law, the Company or its successors or assigns, without posting any bond, may, in addition to other rights and remedies existing in their favor, immediately apply to any court of competent jurisdiction to equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available; provided, further, that in the event Executive actually breaches any of the provisions of Section 9, in addition to the foregoing, the Company or its successors or assigns shall also be entitled to cease making any payments or providing any benefit otherwise required by this Agreement.
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11. Miscellaneous.
a. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to conflicts of laws principles thereof.
b. Entire Agreement/Amendments. This Agreement contains the entire understanding of the parties with respect to the employment of Executive by the Company. There are no restrictions, agreements, promises, warranties, covenants or undertakings between the parties with respect to the subject matter herein other than those expressly set forth herein. This Agreement may not be altered, modified, or amended except by written instrument signed by the parties hereto.
c. No Waiver. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver of such party’s rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.
d. Severability. In the event that any one or more of the provisions of this Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions of this Agreement shall not be affected thereby.
e. Assignment. This Agreement shall not be assignable by Executive. This Agreement may be assigned by the Company to a successor in interest to substantially all of the business operations of the Company. The Company may also assign this Agreement to an affiliate. Upon such assignment, the rights and obligations of the Company hereunder shall become the rights and obligations of such affiliate or successor person or entity.
f. Mitigation/Set Off. The Company’s obligation to pay Executive the amounts provided and to make the arrangements provided hereunder shall not be subject to set-off, counterclaim or recoupment of amounts owed by Executive to the Company or its affiliates except for any specific, stated amounts owed by the Executive to the Company. In the event of any termination of employment hereunder, the Executive shall be under no obligation to seek other employment or mitigate and there shall be no offset against any amounts due Executive under this Agreement on account of any remuneration attributable to any subsequent employment that Executive may obtain.
g. Indemnification. The Company shall indemnify and hold harmless the Executive to the fullest extent permitted by law or the by-laws of the Company for any action or inaction of Executive while serving as an officer or director of the Company or, at the Company’s request, as an officer or director of any other entity or as a fiduciary of any benefit plan, except for any activity by the Executive that constitutes gross negligence or is self-enriching. The Company shall cover the Executive under directors and officers liability insurance both during and, while potential liability exists, after the Employment Term in the same amount and to the same extent as the Company covers its other senior officers and directors.
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h. Arbitration. All disputes and controversies arising under or in connection with this Agreement, other than the seeking of injunctive or equitable relief pursuant to Section 9 hereof, shall be settled by arbitration conducted before one arbitrator sitting in such location agreed to by the parties hereto, in accordance with the rules for expedited resolution of commercial disputes of the American Arbitration Association then in effect. The determination of the arbitrator shall be final and binding on the parties. Judgment may be entered on the award of the arbitrator in any court having proper jurisdiction. All expenses of such arbitration, including the fees and expenses of the counsel of the Executive, shall be reimbursed by the Company unless the arbitrator determines that the Company has prevailed in such arbitration in all material respects, in which case the Executive shall bear Executive’s own legal fees, without reimbursement by the Company.
i. Successors; Binding Agreement. This Agreement shall inure to the benefit of and be binding upon personal or legal representatives, executors, administrators, successors, heirs, distributes, devises and legatees.
j. Notice. For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered by hand or overnight courier or three days after it has been mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below Agreement, 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.
If to the Company:
x/x Xxxxxxxx Xxxxxx Xxxxxxx & Xx. X.X.
0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
with copies to:
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxxx Esq.
Facsimile: (000) 000-0000
If to Executive:
To the most recent address of Executive set forth in the personnel records of the Company.
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k. Executive Representation. Executive hereby represents to the Company that the execution and delivery of this Agreement by Executive and the Company and the performance by Executive of Executive’s duties hereunder shall not constitute a breach of, or otherwise contravene, the terms of any employment agreement or other agreement or policy to which Executive is a party or otherwise bound.
l. Cooperation. Executive shall provide Executive’s reasonable cooperation in connection with any action or proceeding (or any appeal from any action or proceeding) which relates to events occurring during Executive’s employment hereunder; provided that, the Company shall pay all expenses related to the Executive’s cooperation. This provision shall survive any termination of this Agreement, without implication of the survival of any other provision of this Agreement.
m. Withholding Taxes. The Company may withhold from any amounts payable under this Agreement such Federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation.
n. Compliance with IRC Section 409A. Notwithstanding anything herein to the contrary, (i) if at the time of Executive’s termination of employment with the Company Executive is a “specified employee” as defined in Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the deferral of the commencement of any payments or benefits otherwise payable hereunder as a result of such termination of employment is necessary in order to prevent any accelerated or additional tax under Section 409A of the Code, then the Company will defer the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to Executive) until the date that is six months following Executive’s termination of employment with the Company (or the earliest date as is permitted under Section 409A of the Code) and (ii) if any other payments of money or other benefits due to Executive hereunder could cause the application of an accelerated or additional tax under Section 409A of the Code, such payments or other benefits shall be deferred if deferral will make such payment or other benefits compliant under Section 409A of the Code, or otherwise such payment or other benefits shall be restructured, to the extent possible, in a manner, determined by the Board, that does not cause such an accelerated or additional tax. The Company shall consult with Executive in good faith regarding the implementation of the provisions of this Section 11(n); provided that neither the Company nor any of its employees or representatives shall have any liability to Executive with respect to thereto. For purposes of Section 409A of the Code, each payment made under this Agreement shall be designated as a “separate payment” within the meaning of the Section 409A of the Code, and references herein to Executive’s “termination of employment” shall refer to Executive’s separation from service with the Company within the meaning of Section 409A. To the extent any reimbursements or in-kind benefits due to Executive under this Agreement constitute “deferred compensation” under Section 409A of the Code, any such reimbursements or in-kind benefits shall be paid to Executive in a manner consistent with Treas. Reg. Section 1.409A-3(i)(1)(iv).
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o. Counterparts. This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.
[Signatures on next page.]
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.
| ACCELLENT INC. | XXXXX XxXXXXX | |||||||
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| By: |
Xxxxxx X. Xxxxxx | |||||||
| Title: |
President & CEO | |||||||
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