EMPLOYMENT AGREEMENT
Exhibit 10.4
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT, dated as of January 1, 2011, by and between
Xxxxxxx Xxxxxx Holdings Corp., a Delaware corporation (“Xxxxxxx Xxxxxx Holdings”), Xxxxxxx
Financial Solutions Inc. (the “Company”), an Oregon corporation, and Xxxx Xxxxxxxxxx (the
“Executive”).
WHEREAS, the Company and the Executive wish to restate in its entirety the terms of the
Executive’s employment agreement, by and between Xxxxxxx Xxxxxx Holdings, the Company and the
Executive, dated May 5, 2008, as amended as of December 30, 2008 and as of February 22, 2010 (the
“Prior Employment Agreement”).
Accordingly, Xxxxxxx Xxxxxx Holdings, the Company and the Executive hereby agree as follows:
1. Employment, Duties and Acceptance.
1.1 Employment, Duties. The Company hereby employs the Executive for the Term (as
defined in Section 2.1), to render exclusive and full-time services to the Company as President of
the Company or in such other executive position as may be mutually agreed upon by the Company and
the Executive, and to perform such other duties consistent with such position as may be assigned to
the Executive by the Chief Executive Officer of Xxxxxxx Xxxxxx Holdings (the “CEO”) or his
designee or the Board of Directors of Xxxxxxx Xxxxxx Holdings (the “Board”). During the
Term, the Executive shall report solely to the CEO (or his designee).
1.2 Acceptance. The Executive hereby accepts such employment and agrees to render the
services described above. During the Term, the Executive agrees to serve the Company faithfully and
to the best of the Executive’s ability, to devote the Executive’s entire business time, energy and
skill to such employment, and to use the Executive’s best efforts, skill and ability to promote the
Company’s interests. The Executive further agrees to accept election, and to serve during all or
any part of the Term, as an officer or director of the Company and of any subsidiary or affiliate
of the Company, without any compensation therefor other than that specified in this Agreement, if
elected to any such position by the shareholders or by the Board or of any subsidiary or affiliate,
as the case may be.
1.3 Location. The duties to be performed by the Executive hereunder shall be
performed primarily at the offices of the Company in Lake Mary, Florida subject to reasonable
travel requirements on behalf of the Company.
2. Term of Employment; Certain Post-Term Benefits.
2.1 The Term. This Agreement and the term of the Executive’s employment under this
Agreement (the “Term”) shall become effective as of January 1, 2011 (the “Effective
Date”) and will continue until December 31, 2013 (the “Termination Date”), subject to
earlier termination pursuant to Section 4.
2.2 End-of-Term Provisions. Prior to the end of the Term, the Company and the
Executive shall meet to discuss whether the Term should be extended. The Company shall have the
right at any time, however, to give written notice of non-renewal of the Term. In the event of
non-renewal of the Term by the Company and the Executive’s employment is terminated by the Company
after the end of the Term, other than for (i) Cause (as defined below), (ii) Disability (as
defined below) or (iii) death, in each case following such Company notice of non-renewal, then such
termination shall be treated as a termination without Cause and the Restricted Period (as defined
below) shall be reduced to a period of one year post termination of employment (the “Reduced
Restricted Period”). During such Restricted Period, the Executive shall receive as severance
pay, an amount equal to the greater of (A) 50% of the payments set forth in Sections 4.4(i) and
4.4(ii) or (B) severance and benefits in accordance with Company policy as in effect at that time,
in each case payable in installments in accordance with the Company’s normal payroll practices,
subject to Executive’s signing and not revoking the release of claims as set forth in Section 4.6.
For the avoidance of doubt, if the Executive’s employment is terminated by the Company after the
end of the Term (x) for Cause, the Executive will not be entitled to receive any severance or other
benefits, or (y) for death or Disability, the Executive will receive severance and benefits in
accordance with Company policy as in effect at that time. For the avoidance of doubt, if the
Company is willing to extend the Term and Executive does not agree to extend the Term, then upon
termination of employment at or after the end of the Term, the Executive shall be bound by the
restrictive covenants set forth in Section 5 below, the Restricted Period shall not be reduced and
Executive shall not be entitled to receive any severance benefits with respect to such termination.
Notwithstanding the foregoing, the terms of this Section 2.2 will not impact any payments or
other benefits to which the Executive would then be entitled under normal Company policies or the
LTIP (as defined below) pursuant to the terms thereof.
3. Compensation; Benefits.
3.1 Salary. As compensation for all services to be rendered pursuant to this
Agreement, the Company agrees to pay the Executive a base salary, payable in accordance with the
Company’s normal payroll practices, at the annual rate of not less than $450,000 (effective January
1, 2011) less such deductions or amounts to be withheld as required by applicable law and
regulations (the “Base Salary”). In the event that the Company, in its sole discretion,
from time to time determines to increase the Base Salary, such increased amount shall, from and
after the effective date of the increase, constitute “Base Salary” for purposes of this Agreement.
3.2 Incentive Compensation.
3.2.1 Annual Bonus. Commencing with the 2011 fiscal year, the Executive will
be eligible to receive a bonus with respect to 2011 and each later fiscal year ending
during the Term computed in accordance with the provisions hereafter. If, with respect to
any such fiscal year, the Company achieves “Consolidated EBITDA” (as defined below)
of at least the percentage set forth in the table below of its business plan for such
fiscal year, such bonus
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shall be the percentage set forth in the table below of Base Salary with respect to
the fiscal year for which the bonus (any such bonus, an “Annual Bonus”) was earned:
| Percentage of Consolidated EBITDA | ||||
| in Business Plan | Percentage of Base Salary | |||
89.9% and below
|
Nil | |||
90 – 94.9
|
90 | |||
95 – 99.9
|
95 | |||
100 – 105
|
100 | |||
105.1 – 110
|
105.56 | |||
110.1 – 115
|
111.11 | |||
115.1 – 120
|
116.67 | |||
120.1 – 125
|
122.22 | |||
125.1 – 130
|
127.78 | |||
130.1 – 135
|
133.33 | |||
135.1 – 140
|
138.89 | |||
140.1 – 145
|
144.44 | |||
145.1 and over
|
150 | |||
An Annual Bonus if earned in accordance with this Agreement shall be paid no later than the
fifteenth day of the third month next following the year with respect to which such bonus was
earned, provided that, except as otherwise specifically provided in this Agreement (including,
without limitation, Section 4.4), as a condition precedent to any bonus entitlement the Executive
must remain in employment with the Company at the time that the Annual Bonus is paid.
Notwithstanding the foregoing, to the extent that Section 162(m) of the Internal Revenue Code of
1986, as amended (the “Code”), may be applicable, such Annual Bonus shall be subject to,
and contingent upon, such shareholder approval as is necessary to cause the Annual Bonus to qualify
as “performance-based compensation” under Section 162(m) of the Code and the regulations
promulgated thereunder as well as approval of this Section 3.2.1 by the M&F Worldwide Corp.
(“MFW”) Compensation Committee and any other required committees.
For the purposes of this Agreement, “Consolidated EBITDA” means for any fiscal year of the
Company, consolidated operating income for such fiscal year of the Company plus, without
duplication and to the extent reflected as a charge in the statement of such operating income for
such fiscal year, the sum of (i) depreciation and amortization expense (excluding amounts of
prepaid incentives under customer contracts), (ii) any extraordinary non-cash expenses or losses,
(iii) allocation of fees charged by MFW or a subsidiary to the Company relating to the operation of
the Company, (iv) all restructuring costs (as defined under U.S. generally accepted accounting
principles (“GAAP”), (v) fees paid to the Company’s external advisors in connection with
acquisitions (whether or not consummated) and (vi) effects of changes in accounting policy and
GAAP, in the case of clauses (i) through (vi) above, solely with respect to the Company, and minus
without duplication and to the extent included in the statement of such operating income for such
period, the sum of (a) any extraordinary or
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non-recurring non-cash income or gains (including, whether or not otherwise includable as a
separate item in the statement of such operating income for such period, gains on the sales of
assets outside of the ordinary course of business), (b) effects of changes in accounting policy and
GAAP, and (c) any cash payments made during such period in respect of items described in clause
(ii) above subsequent to the fiscal quarter in which the relevant non-cash expenses or losses were
reflected as a charge in the statement of operating income, in the case of clauses (a) through (c)
above, solely with respect to the Company, all as determined on a consolidated basis, all of the
foregoing to be determined by the Board of MFW or the MFW Compensation Committee, as applicable.
For the purposes of determining compensation milestones for any fiscal year, Consolidated EBITDA
will be adjusted by the Board of MFW or the MFW Compensation Committee, as applicable, as
appropriate for material acquisitions or dispositions of any business or assets of or by the
Company or its subsidiaries for such fiscal year and thereafter.
3.2.2 Long Term Incentive Plan. During the Term, the Executive shall
participate in the M&F Worldwide Corp. 2011 Long Term Incentive Plan (the “LTIP”). The
specific terms of award or awards under the LTIP shall be set forth in one or more Award
Agreements entered into with the Executive on or about the date hereof. If the Term is
extended, the Executive shall participate in a new Long Term Incentive Plan that shall
commence after the LTIP ends. Notwithstanding the foregoing, to the extent that Section
162(m) of the Code may be applicable, the LTIP (and any subsequent Long Term Incentive
Plan) shall be subject to, and contingent upon, such shareholder approval as is necessary
to cause the LTIP to qualify as “performance-based compensation” under Section 162(m) of
the Code and the regulations promulgated thereunder.
3.3 Business Expenses. The Company shall pay or reimburse the Executive for all
reasonable expenses actually incurred or paid by the Executive during the Term in the performance
of the Executive’s services under this Agreement, upon presentation of expense statements or
vouchers or such other supporting information as the Company customarily may require of its
officers provided, however, that the maximum amount available for such expenses during any period
may be fixed in advance by the CEO.
3.4 Vacation. During the Term, the Executive shall be entitled to a vacation period
or periods of five (5) weeks during any fiscal year taken in accordance with the vacation policy of
the Company during each year of the Term.
3.5 Fringe Benefits. During the Term, the Executive shall be entitled to all benefits
for which the Executive shall be eligible under any qualified pension plan, 401(k) plan, group
insurance or other so-called “fringe” benefit plan which the Company provides to its executive
employees generally, which benefits may be amended, modified or terminated in the Company’s
discretion.
4. Termination.
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4.1 Death. If the Executive dies during the Term, the Term shall terminate forthwith
upon the Executive’s death. The Company shall pay to the Executive’s estate: (i) any Base Salary
earned but not paid; (ii) a pro rated Annual Bonus based on the number of days of the fiscal year
worked by the Executive, which pro-rated Annual Bonus will be paid at the time and in the manner
such Annual Bonus is paid to other executives receiving such bonus payment; (iii) amounts payable
under the LTIP in accordance with the terms thereof and (iv) Annual Bonus for the year prior to the
year in which the Executive dies if at the time of death the Executive has earned an Annual Bonus
payment for such prior year and has not yet been paid such Annual Bonus, which prior year Annual
Bonus will be paid at the time and in the manner such prior year Annual Bonus is paid to other
executives receiving such prior year Annual Bonus. The Executive shall have no further rights to
any compensation (including any Base Salary or Annual Bonus) or any other benefits under this
Agreement, except to the extent already earned and vested as of the day immediately prior to his
death, or as earned, vested, or accrued by virtue of his death.
4.2 Disability. If, during the Term the Executive is unable to perform his duties
hereunder due to a physical or mental incapacity for a period of 6 months within any 12 month
period (hereinafter a “Disability”), the Company shall have the right at any time
thereafter to terminate the Term upon sending written notice of termination to the Executive. If
the Company elects to terminate the Term by reason of Disability, the Company shall pay to the
Executive promptly after the notice of termination: (i) any Base Salary earned but not paid, (ii) a
pro rated Annual Bonus based on the number of days of the fiscal year worked by the Executive until
the date of the notice of termination, which pro-rated Annual Bonus will be paid at the time and in
the manner such Annual Bonus is paid to other executives receiving such bonus payment, (iii)
amounts payable under the LTIP in accordance with the terms thereof, and (iv) Annual Bonus for the
year prior to the year in which the Executive is terminated if at the time of termination the
Executive has earned an Annual Bonus payment for such prior year and has not yet been paid such
Annual Bonus, which prior year Annual Bonus will be paid at the time and in the manner such prior
year Annual Bonus is paid to other executives receiving such prior year Annual Bonus, in each case
less any other benefits payable to the Executive under any disability plan provided for hereunder
or otherwise furnished to the Executive by the Company. The Executive shall have no further rights
to any compensation (including any Base Salary or Annual Bonus) or any other benefits under this
Agreement except to the extent already earned and vested as of the day immediately prior to his
termination by reason of Disability, or as earned, vested, or accrued by virtue of his Disability.
4.3 Cause. The Company may at any time by written notice to the Executive terminate
the Term for “Cause” (as defined below) and, upon such termination, this Agreement shall terminate
and the Executive shall be entitled to receive no further amounts or benefits hereunder, except for
any Base Salary earned but not paid prior to such termination. For the purposes of this Agreement,
“Cause” means: (i) continued neglect by the Executive of the Executive’s duties hereunder, (ii)
continued incompetence or unsatisfactory attendance, (iii) conviction of any felony, (iv) violation
of the rules, regulations, procedures or instructions relating to the conduct of employees,
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directors, officers and/or consultants of the Company, (v) willful misconduct by the Executive
in connection with the performance of any material portion of the Executive’s duties hereunder,
(vi) breach of fiduciary obligation owed to the Company or commission of any act of fraud,
embezzlement, disloyalty or defalcation, or usurpation of a Company opportunity, (vii) breach of
any provision of this Agreement, including any non-competition, non-solicitation and/or
confidentiality provisions hereof, (viii) any act that has a material adverse effect upon the
reputation of and/or the public confidence in the Company, (ix) failure to comply with a reasonable
order, policy or rule that constitutes material insubordination, (x) engaging in any discriminatory
or sexually harassing behavior or (xi) using, possessing or being impaired by or under the
influence of illegal drugs or the abuse of controlled substances or alcohol on the premises of the
Company or any of its subsidiaries or affiliates or while working or representing the Company or
any of its subsidiaries or affiliates. A termination for Cause by the Company of any of the events
described in clauses (i), (ii), (iv), (ix), (x) and (xi) shall only be effective on 15 days advance
written notification, providing Executive the opportunity to cure, if reasonably capable of cure
within said 15-day period; provided, however, that no such notification is required if the Cause
event is not reasonably capable of cure or the Board determines that its fiduciary obligation
requires it to effect a termination of Executive for Cause immediately.
4.4 Termination by Company without Cause or by the Executive for Good Reason. If the
Executive’s employment is terminated by the Company without Cause (other than by reason of death or
Disability) or by the Executive for Good Reason (as defined below), the Executive shall receive:
(i) as severance pay, an amount equal to two times the Base Salary payable in installments in
accordance with the Company’s normal payroll practices, (ii) continuation for a 12-month period
following the date of termination of group health plan benefits to the extent authorized by and
consistent with 29 U.S.C. § 1161 et seq. (commonly known as “COBRA”), with the cost of the regular
premium for such benefits shared in the same relative proportion by the Company and the Employee as
in effect on the date of termination (provided that the Company shall not be required to pay any
portion of the premium if such payment would result in penalty taxes imposed on the Company), (iii)
Annual Bonus for the year in which termination occurred if the Executive would have been eligible
to receive such bonus hereunder (including due to satisfaction by the Company of performance
milestones) had the Executive been employed at the time such Annual Bonus is normally paid, which
Annual Bonus will be paid at the time and in the manner such Annual Bonus is paid to other
executives receiving such bonus payment, (iv) Annual Bonus for the year prior to the year in which
the Executive is so terminated if at the time of termination the Executive has earned an Annual
Bonus payment for such prior year and has not yet been paid such due to such termination, which
prior year Annual Bonus will be paid at the time and in the manner such prior year Annual Bonus is
paid to other executives receiving such prior year Annual Bonus and (v) amounts payable, if any,
under the LTIP in accordance with the terms thereof. The Executive shall have no further rights to
any compensation (including any Base Salary or Annual Bonus) or any other benefits under this
Agreement. For purposes of this Agreement, “Good Reason” means, without the advance written
consent of the Executive: (i) a reduction in Base Salary, unless such reduction is made generally
to other senior executives of Xxxxxxx Xxxxxx Holdings, or
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(ii) a material and continuing reduction in the Executive’s responsibilities, provided,
that a change in reporting responsibilities shall not constitute Good Reason and further
provided, that a termination by the Executive for Good Reason shall be effective only if
the Executive provides the Company with written notice specifying the event which constitutes Good
Reason within thirty (30) days following the occurrence of such event or date Executive became
aware or should have become aware of such event and the Company fails to cure the circumstances
giving rise to Good Reason within 30 days after such notice.
4.5 Termination by Executive other than for Good Reason. The Executive is required to
provide the Company with 30 days prior written notice of termination to the Company. Subject to
Section 4.4, upon termination of employment by the Executive, the Executive shall receive any Base
Salary earned but not paid prior to such termination and shall have no further rights to any
compensation (including any Base Salary or Annual Bonus) or any other benefits under this
Agreement, except to the extent already earned and vested as of the day immediately prior to such
termination.
4.6 Release. Notwithstanding any other provision of this Agreement to the contrary,
the Executive acknowledges and agrees that any and all payments, other than payment of any accrued
and unpaid Base Salary to which the Executive is entitled under this Section 4 are conditioned upon
and subject to the Executive’s execution of a general waiver and release (for the avoidance of
doubt, the restrictive covenants contained in Section 5 of this Agreement shall survive the
termination of this Agreement), in such form as may be prepared by the Company, of all claims,
except for such matters covered by provisions of this Agreement which expressly survive the
termination of this Agreement. Notwithstanding anything to the contrary, the severance payments
and benefits are conditioned on the Executive’s execution, delivery and nonrevocation of the
general waiver and release of claims within fifty-five days following the Executive’s termination
of employment (the “Release Condition”). Payments and benefits of amounts which do not
constitute nonqualified deferred compensation and are not subject to Section 409A (as defined
below) shall commence five (5) days after the Release Condition is satisfied and payments and
benefits which are subject to Section 409A shall commence on the 60th day after termination of
employment (subject to further delay, if required pursuant to Section 4.7.2 below) provided that
the Release Condition is satisfied.
4.7 Section 409A.
4.7.1 This Agreement is intended to satisfy the requirements of Section 409A of the
Code (“Section 409A”) with respect to amounts, if any, subject thereto and shall be
interpreted and construed and shall be performed by the parties consistent with such
intent. If either party notifies the other in writing that one or more or the provisions of
this Agreement contravenes any Treasury Regulations or guidance promulgated under Section
409A or causes any amounts to be subject to interest, additional tax or penalties under
Section 409A, the parties shall agree to negotiate in good faith to make amendments to this
Agreement as the parties mutually agree, reasonably and in
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good faith are necessary or desirable, to (i) maintain to the maximum extent reasonably practicable
the original intent of the applicable provisions without violating the provisions of
Section 409A or increasing the costs to the Company of providing the applicable benefit or
payment and (ii) to the extent possible, to avoid the imposition of any interest,
additional tax or other penalties under Section 409A upon the parties.
4.7.2 To the extent the Executive would otherwise be entitled to any payment or
benefit under this Agreement, or any plan or arrangement of the Company or its affiliates,
that constitutes a “deferral of compensation” subject to Section 409A and that if paid
during the six (6) months beginning on the date of termination of the Executive’s
employment would be subject to the Section 409A additional tax because the Executive is a
“specified employee” (within the meaning of Section 409A and as determined by the Company),
the payment or benefit will be paid or provided to the Executive on the earlier of the
first day following the six (6) month anniversary of the Executive’s termination of
employment or death.
4.7.3 Any payment or benefit due upon a termination of the Executive’s employment that
represents a “deferral of compensation” within the meaning of Section 409A shall be paid or
provided to the Executive only upon a “separation from service” as defined in Treas. Reg. §
1.409A-1(h). Each payment made under this Agreement shall be deemed to be a separate
payment for purposes of Section 409A. Amounts payable under this Agreement shall be deemed
not to be a “deferral of compensation” subject to Section 409A to the extent provided in
the exceptions in Treasury Regulation §§ 1.409A-1(b)(4) (“short-term deferrals”) and (b)(9)
(“separation pay plans,” including the exception under subparagraph (iii)) and other
applicable provisions of Treasury Regulation § 1.409A-1 through A-6.
4.7.4 Notwithstanding anything to the contrary in Agreement, any payment or benefit
under this Agreement or otherwise that is exempt from Section 409A pursuant to Treasury
Regulation § 1.409A-1(b)(9)(v)(A) or (C) (relating to certain reimbursements and in-kind
benefits) shall be paid or provided to the Executive only to the extent that the expenses
are not incurred, or the benefits are not provided, beyond the last day of the second
calendar year following the calendar year in which the Executive’s “separation from
service” occurs; and provided further that such expenses are reimbursed no later than the
last day of the third calendar year following the calendar year in which the Executive’s
“separation from service” occurs. To the extent any expense reimbursement or the provision
of any in-kind benefit is determined to be subject to Section 409A (and not exempt pursuant
to the prior sentence or otherwise), the amount of any such expenses eligible for
reimbursement, or the provision of any in-kind benefit, in one calendar year shall not
affect provision of in-kind benefits or expenses eligible for reimbursement in any other
calendar year (except for any life-time or other aggregate limitation applicable to medical
expenses), and in no event shall any expenses be reimbursed after the last day of
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the calendar year following the calendar year in which the Executive incurred such
expenses, and in no event shall any right to reimbursement or the provision of any in-kind
benefit be subject to liquidation or exchange for another benefit.
5. Protection of Confidential Information; Restrictive Covenants.
5.1 Prior to the Effective Date, the Company has shared confidential and trade secret
information of the Company and its subsidiaries and affiliates with the Executive. From the
Effective Date, the Company will share with Executive confidential and trade secret information
regarding not only the Company but also its subsidiaries and affiliates. In view of the fact that
the Executive’s work for the Company will bring the Executive into close contact with many
confidential affairs of the Company not readily available to the public, trade secret information
and plans for future developments, the Executive agrees:
5.1.1 To keep and retain in the strictest confidence all confidential matters of the
Company, including, without limitation, “know how”, trade secrets, customer lists, pricing
policies, operational methods, technical processes, formulae, inventions and research
projects, other business affairs of the Company, and any material confidential information
whatsoever concerning any director, officer, employee, shareholder, partner, customer or
agent of the Company or their respective family members learned by the Executive heretofore
or hereafter, and not to disclose them to anyone outside of the Company, either during or
after the Executive’s employment with the Company, except in the course of performing the
Executive’s duties hereunder or with the Company’s express written consent. The foregoing
prohibitions shall include, without limitation, directly or indirectly publishing (or
causing, participating in, assisting or providing any statement, opinion or information in
connection with the publication of) any diary, memoir, letter, story, photograph,
interview, article, essay, account or description (whether fictionalized or not) concerning
any of the foregoing, publication being deemed to include any presentation or reproduction
of any written, verbal or visual material in any communication medium, including any book,
magazine, newspaper, theatrical production or movie, or television or radio programming or
commercial; and
5.1.2 To deliver promptly to the Company on termination of the Executive’s employment
by the Company, or at any time the Company may so request, all memoranda, notes, records,
reports, manuals, drawings, blueprints and other documents (and all copies thereof),
including data stored in computer memories or on other media used for electronic storage or
retrieval, relating to the Company’s business and all property associated therewith, which
the Executive may then possess or have under the Executive’s control, and not retain any
copies, notes or summaries; provided Executive shall be entitled to keep a copy of
this Agreement and compensation and benefit plans to which Executive is entitled to receive
benefits thereunder.
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5.2 In support of Executive’s commitments to maintain the confidentiality of the Company’s
confidential and trade secret information, (i) during the Term and for any period the Executive is
employed by the Company after the Term, and (ii) for a period of two years following termination of
the Executive’s employment for any reason (the “Restricted Period”), the Executive shall
not in the United States and in any non-US jurisdiction where the Company may then do business: (a)
directly or indirectly, enter the employ of, or render any services to, any person, firm or entity
engaged in any business competitive with any business of the Company or of any of its subsidiaries
or affiliates; (b) engage in such business on the Executive’s own account; and the Executive shall
not become interested in any such business, directly or indirectly, as an individual, partner,
shareholder, director, officer, principal, agent, employee, trustee, consultant, or in any other
relationship or capacity; (c) directly or indirectly, solicit or encourage (or cause to be
solicited or encouraged) or cause any client, customer or supplier of the Company to cease doing
business with the Company, or to reduce the amount of business such client, customer or supplier
does with the Company or (d) directly or indirectly, solicit or encourage (or cause to be solicited
or encouraged) to cease to work with the Company, or hire (or cause to be hired), any person who is
an employee of or consultant then under contract with the Company or who was an employee of or
consultant then under contract with the Company within the six month period preceding such activity
without the Company’s written consent, provided however that this clause (d) shall not apply during
the Restricted Period to a consulting or advisory firm which is also then currently engaged or
under a retainer relationship (in each case, without any action by the Executive, whether directly
or indirectly) by a subsequent employer of the Executive.
5.3 If the Executive commits a breach, or poses a serious and objective threat to commit a
breach, of any of the provisions of Sections 5.1 or 5.2 hereof, the Company shall have the
following rights and remedies:
5.3.1 The right and remedy to have the provisions of this Agreement specifically
enforced by any court having equity jurisdiction, it being acknowledged and agreed that any
such breach or threatened breach will cause irreparable injury to the Company and that
money damages will not provide an adequate remedy to the Company;
5.3.2 The right and remedy to require the Executive to account for and pay over to the
Company all compensation, profits, monies, accruals, increments or other benefits derived
or received by the Executive as the result of any transactions constituting a breach of any
of the provisions of the preceding paragraph, and the Executive hereby agrees to account
for and pay over such benefits to the Company. Each of the rights and remedies enumerated
above shall be independent of the other, and shall be severally enforceable, and all of
such rights and remedies shall be in addition to, and not in lieu of, any other rights and
remedies available to the Company under law or in equity; and
5.3.3 In addition to any other remedy which may be available (i) at law or in equity,
or (ii) pursuant to any other provision of this
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Agreement, the payments by the Company of Base Salary and the regular premium for
group health benefits pursuant to Section 4.4 will cease as of the date on which such
violation first occurs. In addition, if the Executive breaches any of the covenants
contained in Sections 5.1 and 5.2 and the Company obtains injunctive relief with respect
thereto (that is not later reversed or otherwise terminated or vacated by judicial order),
the period during which the Executive is required to comply with that particular covenant
shall be extended by the same period that the Executive was in breach of such covenant
prior to the effective date of such injunctive relief.
5.4 If any of the covenants contained in Sections 5.1 or 5.2, or any part thereof, hereafter
are held by a court to be invalid or unenforceable, the same shall not affect the remainder of the
covenant or covenants, which shall be given full effect, without regard to those portions found
invalid.
5.5 If any of the covenants contained in Sections 5.1 or 5.2, or any part thereof, are held to
be unenforceable because of the duration of such provision or the area covered thereby, the parties
agree that the court making such determination shall have the power to reduce the duration and/or
area of such provision and, in its reduced form, said provision shall then be enforceable.
5.6 The Executive agrees (whether during or after the Executive’s employment with the Company)
not to issue, circulate, publish or utter any false or disparaging statements, remarks or rumors
about the Company or its affiliates or the officers, directors, managers, customers, partners, or
shareholders of the Company or its affiliates, provided that nothing herein shall prohibit the
Executive from providing truthful testimony if such testimony is required by law.
5.7 For purposes of this Section 5 only, the term “Company” includes the Company and its
subsidiaries and affiliates.
6. Inventions and Patents.
6.1 The Executive agrees that all processes, technologies and inventions (collectively,
“Inventions”), including new contributions, improvements, ideas and discoveries, whether
patentable or not, conceived, developed, invented or made by him during the Term shall belong to
the Company, provided that such Inventions grew out of the Executive’s work with the
Company or any of its subsidiaries or affiliates, are related in any manner to the business
(commercial or experimental) of the Company or any of its subsidiaries or affiliates or are
conceived or made on the Company’s time or with the use of the Company’s facilities or materials.
The Executive shall further: (a) promptly disclose such Inventions to the Company; (b) assign to
the Company, without additional compensation, all patent and other rights to such Inventions for
the United States and foreign countries; (c) sign all papers necessary to carry out the foregoing;
and (d) give testimony in support of the Executive’s inventorship.
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6.2 If any Invention is described in a patent application or is disclosed to third parties,
directly or indirectly, by the Executive within two years after the termination of the Executive’s
employment by the Company, it is to be presumed that the Invention was conceived or made during the
Term.
6.3 The Executive agrees that the Executive will not assert any rights to any Invention as
having been made or acquired by the Executive prior to the date of this Agreement, except for
Inventions, if any, disclosed to the Company in writing prior to the date hereof.
7. Intellectual Property.
The Company shall be the sole owner of all the products and proceeds of the Executive’s
services hereunder, including, but not limited to, all materials, ideas, concepts, formats,
suggestions, developments, arrangements, packages, programs and other intellectual properties that
the Executive may acquire, obtain, develop or create in connection with and during the Term, free
and clear of any claims by the Executive (or anyone claiming under the Executive) of any kind or
character whatsoever (other than the Executive’s right to receive payments hereunder). The
Executive shall, at the request of the Company, execute such assignments, certificates or other
instruments as the Company may from time to time deem necessary or desirable to evidence,
establish, maintain, perfect, protect, enforce or defend its right, title or interest in or to any
such properties.
8. Notices.
All notices, requests, consents and other communications required or permitted to be given
hereunder shall be in writing and shall be deemed to have been duly given if delivered personally,
sent by overnight courier or mailed first class, postage prepaid, by registered or certified mail
(notices mailed shall be deemed to have been given on the date mailed), as follows (or to such
other address as either party shall designate by notice in writing to the other in accordance
herewith):
If to the Company, to:
Xxxxxxx Xxxxxx Holdings Corp.
00000 Xxxxxxxx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: General Counsel
00000 Xxxxxxxx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: General Counsel
If to the Executive, to:
Such address as shall most currently appear on the records of the Company.
9. Governing Law; Dispute Resolution.
9.1 It is the intent of the parties hereto that all questions with respect to the construction
of this Agreement and the rights and liabilities of the parties
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hereunder shall be determined in accordance with the laws of the State of Delaware, without
regard to principles of conflicts of laws thereof that would call for the application of the
substantive law of any jurisdiction other than the State of Delaware.
9.2 Each party irrevocably agrees for the exclusive benefit of the other that any and all
suits, actions or proceedings relating to Section 5 of this Agreement (a “Proceeding”)
shall be maintained in either the courts of the State of Delaware or the federal District Courts
sitting in Bexar County, Texas or Wilmington, Delaware (collectively, the “Chosen Courts”)
and that the Chosen Courts shall have exclusive jurisdiction to hear and determine or settle any
such Proceeding and that any such Proceedings shall only be brought in the Chosen Courts. Each
party irrevocably waives any objection that it may have now or hereafter to the laying of the venue
of any Proceedings in the Chosen Courts and any claim that any Proceedings have been brought in an
inconvenient forum and further irrevocably agrees that a judgment in any Proceeding brought in the
Chosen Courts shall be conclusive and binding upon it and may be enforced in the courts of any
other jurisdiction.
9.3 Each of the parties hereto agrees that this Agreement involves at least $100,000 and that
this Agreement has been entered into in express reliance on Section 2708 of Title 6 of the Delaware
Code. Each of the parties hereto irrevocably and unconditionally agrees (i) that, to the extent
such party is not otherwise subject to service of process in the State of Delaware, it will appoint
(and maintain an agreement with respect to) an agent in the State of Delaware as such party’s agent
for acceptance of legal process and notify the other parties hereto of the name and address of said
agent, (ii) that service of process may also be made on such party by pre-paid certified mail with
a validated proof of mailing receipt constituting evidence of valid service sent to such party at
the address set forth in Section 8 of this Agreement, as such address may be changed from time to
time pursuant hereto, and (iii) that service made pursuant to clause (i) or (ii) above shall, to
the fullest extent permitted by applicable law, have the same legal force and effect as if served
upon such party personally within the State of Delaware.
9.4 Any controversy or claim arising out of or related to any other provision of this
Agreement shall be settled by final, binding and non-appealable arbitration in Bexar County, Texas
or Wilmington, Delaware by a single arbitrator. Subject to the following provisions, the
arbitration shall be conducted in accordance with the applicable rules of JAMS then in effect. Any
award entered by the arbitrator shall be final, binding and nonappealable and judgment may be
entered thereon by either party in accordance with applicable law in any court of competent
jurisdiction. This arbitration provision shall be specifically enforceable. The arbitrator shall
have no authority to modify any provision of this Agreement or to award a remedy for a dispute
involving this Agreement other than a benefit specifically provided under or by virtue of the
Agreement. Each party shall be responsible for its own expenses relating to the conduct of the
arbitration or litigation (including reasonable attorneys’ fees and expenses) and shall share the
fees of JAMS and the arbitrator, if applicable, equally.
10. General.
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10.1 JURY TRIAL WAIVER. THE PARTIES EXPRESSLY AND KNOWINGLY WAIVE ANY RIGHT TO A JURY TRIAL IN
THE EVENT ANY ACTION ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE EXECUTIVE’S
EMPLOYMENT WITH THE COMPANY IS LITIGATED OR HEARD IN ANY COURT.
10.2 Continuation of Employment. Unless the parties otherwise agree in writing,
continuation of the Executive’s employment with the Company beyond the expiration of the Term shall
be deemed an employment at will and shall not be deemed to extend any of the provisions of this
Agreement, and Executive’s employment may thereafter be terminated “at will” by the Executive or
the Company and Executive will be entitled to fringe benefits which the Executive is eligible to
receive for so long as the Executive continues to be employed with the Company and the Executive
shall be eligible for severance in accordance with the terms of the Company’s severance policy then
in effect. Notwithstanding the foregoing, the Executive shall be subject to the restrictive
covenants set forth in Section 5.2 for the Restricted Period or if applicable, the Reduced
Restricted Period in accordance with Section 2.2.
10.3 Headings. The section headings contained herein are for reference purposes only
and shall not in any way affect the meaning or interpretation of this Agreement.
10.4 Entire Agreement. This Agreement sets forth the entire agreement and
understanding of the parties relating to the Executive’s employment by the Company, and supersedes
all prior agreements, arrangements and understandings, written or oral, relating to the Executive’s
employment by the Company and its affiliates including, without limitation, effective as of the
Effective Date, the Prior Employment Agreement and any severance, retention, change in control or
similar types of benefits. Notwithstanding the preceding sentence, to the extent not yet paid, the
Executive will be entitled to receive payment of (i) his Annual Bonus, if any, for 2010 and (ii)
amounts payable in accordance with the LTIP, if any with respect to 2008-2010, in each case in
accordance with the terms of (and at the times provided for in) the Prior Employment Agreement. No
representation, promise or inducement has been made by either party that is not embodied in this
Agreement, and neither party shall be bound by or liable for any alleged representation, promise or
inducement not so set forth.
10.5 Assignment. This Agreement, and the Executive’s rights and obligations hereunder,
may not be assigned by the Executive. The Company may assign its rights, together with its
obligations, hereunder (i) to any affiliate or (ii) to third parties in connection with any sale,
transfer or other disposition of all or substantially all of the business or assets of the Company;
in any event the obligations of the Company hereunder shall be binding on its successors or
assigns, whether by merger, consolidation or acquisition of all or substantially all of its
business or assets.
10.6 Waiver. This Agreement may be amended, modified, superseded, canceled, renewed
or extended and the terms or covenants hereof may be waived, only by a written instrument executed
by all of the parties hereto, or in the case
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of a waiver, by the party waiving compliance. The failure of either party at any time or
times to require performance of any provision hereof shall in no manner affect the right at a later
time to enforce the same. No waiver by either party of the breach of any term or covenant contained
in this Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed
to be, or construed as, a further or continuing waiver of any such breach, or a waiver of the
breach of any other term or covenant contained in this Agreement.
10.7 Withholding Taxes. The Company may withhold from any amounts payable under this
Agreement such federal, state, local and other taxes as may be required to be withheld pursuant to
any applicable law or regulation.
11. Subsidiaries and Affiliates.
11.1 As used herein, the term “subsidiary” shall mean any corporation or other business entity
controlled directly or indirectly by the corporation or other business entity in question, and the
term “affiliate” shall mean and include any corporation or other business entity directly or
indirectly controlling, controlled by or under common control with the corporation or other
business entity in question.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.
| XXXXXXX FINANCIAL SOLUTIONS INC. |
||||
| By: | /s/ Xxxxxx Xxxxxx | |||
| Name: | Xxxxxx Xxxxxx | |||
| Title: | Vice President & Treasurer | |||
| XXXXXXX XXXXXX HOLDINGS CORP. |
||||
| By: | /s/ Xxxxxxx Xxxxxx | |||
| Name: | Name: Xxxxxxx Xxxxxx | |||
| Title: | President and Chief Executive Officer | |||
| /s/ Xxxx Xxxxxxxxxx | ||||
| Xxxx Xxxxxxxxxx | ||||
