Exhibit 10.60.4
August 2, 2004
Xx. Xxxx Xxxx
0 Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Re: Amendment of Employment Agreement and Agreement for Further
Employment
Dear Xxxx:
This letter agreement (the "Agreement") constitutes an agreement to
amend the employment agreement dated October 14, 1997 and amended October 1,
2001 both attached hereto ("Employment Agreement") between Xx. Xxxx Xxxx ("you"
or "Employee") and JTM Industries, Inc., a company merged into ISG Resources,
Inc. (JTM industries, Inc. and ISG Resources, Inc. interchangeably referred to
in this Agreement as "ISG"), a subsidiary as of September 2002 of Headwaters
Incorporated ("Headwaters") and provides for your future services to Headwaters
and ISG. Capitalized terms used herein and not otherwise defined have the same
meaning as in the Employment Agreement.
The terms of our Agreement are as follows:
1. Amendment of Employment Agreement. Employee and Employer agree to amend
the Employment Agreement so that the Term as defined therein shall end
effective August 2, 2004.
2. New Employment Term. The parties agree that Employee will continue his
status as an employee of Employer under the terms of this Agreement
effective August 3, 2004 ("Effective Date") and continuing through
October 3, 2006 ("Period of Employment").
3. Reassignment. Employee shall resign from his executive positions with
Headwaters, as President of ISG, and as a member of the board of
directors of ISG and subsidiaries of Headwaters and ISG as of the
Effective Date. Employee will however, continue as an employee of
Headwaters with a designated title of Vice President until the end of
the Period of Employment. The parties anticipate that Employee's duties
during the Period of Employment will not require efforts in excess of
twenty hours per month. Employee will be free during the Period of
Employment to seek and hold other employment provided it does not
conflict with his duties hereunder or with his non-competition
obligations under Section 8 of the Employment Agreement.
4. Services to be Rendered. During the Period of Employment, and subject
to mutually agreed upon scheduling, Employee agrees to perform such
assignments as may reasonably be assigned by Headwaters' CEO including
(i) representing Headwaters in selected trade organizations such as
ACAA and EPRI; (ii) supporting Headwaters' Vice President of Marketing
and Government Relations; (iii) supporting the senior officers of the
Coal Combustion Products business unit with client relationships,
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August 2, 2004
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planning, and consulting on an as needed basis; (iv) identifying new
opportunities for Headwaters in the areas of post-combustion fly ash
and building products; (v) assisting Headwaters on a transition of
responsibilities regarding Flexcrete L.C.; and (vi) delivering a
monthly report to the CEO of pertinent activities during the past month
and activities planned for the succeeding month.
5. Employment Benefits. Employee and Headwaters agree to the following
benefits through the Period of Employment:
A. Compensation. From the Effective Date through October 3, 2004,
Headwaters will pay you a gross salary of $28,333 per month,
and the same benefits as you are currently receiving, and from
October 4, 2004 through the Period of Employment, Headwaters
will pay you a gross salary of $10,000 per month, subject to
withholdings, to be paid at regular payroll periods in
accordance with Headwaters' customary payroll practices in
effect at the time such is due. In addition, you will have the
opportunity to earn a bonus equal to one percent of the actual
gross revenue from the trailing twelve months at the time of
acquisition or merger from a new business proposal or
acquisition presented by you to the CEO during the Employment
Period, and adopted or acquired by Headwaters during the
Employment Period, or at any time up to 12 months following
the Employment Period, up to $200,000, to be paid within sixty
(60) days after each such transaction is consummated.
Compensation for any larger proposed transactions will be
subject to further negotiation and agreement between the
parties.
B. Business Expenses. Upon presentation of an itemized account
and supporting documentation to Headwaters, you will be
reimbursed in a timely manner within thirty (30) days for
necessary and reasonable travel, meals, lodging,
communications and other business expenses in the course of
performing your employment duties.
C. Health and Dental Benefits. You shall continue to receive
health and dental benefits in accordance with such benefits as
generally available from time-to-time to other company
employees. You may choose from the available health and dental
plans, and Headwaters shall continue to contribute to the
health and dental insurance premiums on your behalf as it does
for other employees through the Period of Employment. After
October 3, 2006, you may continue COBRA health insurance
coverage at your own expense as permitted by law.
D. Stock Options and Restricted Stock. Your Headwaters stock
options and restricted stock will continue to vest through the
Period of Employment and thereafter cease vesting. Your
Headwaters stock options vested as of the end of the Period of
Employment will remain exercisable until January 4, 2007, and
any unexercised options thereafter will expire. Your
restricted stock will be transferred to you as it vests
throughout the Period of Employment. The foregoing remains
subject in all respects to the terms and conditions of grant
and the 2002 Stock Incentive Plan and the 2003 Stock Incentive
Plan.
E. EVA Bonus. You will receive a bonus under Headwaters'
Incentive Bonus Plan for the full 2004 fiscal year, subject to
the generally applicable terms and conditions of the plan, and
subject to the determinations of Headwaters' Board of
Directors or its Compensation Committee. You will not
participate in the EVA bonus program after the 2004 fiscal
year and will therefore not be entitled to the banked portion
of the 2004 award or any banked portion from past years'
awards, except for the banked portion from the 2003 fiscal
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year payable in 2004 in addition to unbanked portion of the
fiscal year 2004 award. This Agreement does not change your
fiscal year 2004 EVA bonus, which shall be calculated using an
individual business goal multiplier of not less than 95
percent, based on the non-financial business targets (items
3-7 of the attached Individual Business Objective Plan) being
no less than 65 percent, and the financial objectives (items 1
and 2 of the attached Individual Business Objective Plan)
being no less than 30 percent.
F. Incentive Agreement. This Agreement and your change in
employment status as of the Effective Date do not affect or
change in any manner the Incentive Agreement between you and
Headwaters, dated November 12, 2002, a copy of which is
attached hereto
G. Other Benefits. During the Period of Employment, you will not
be eligible for benefits that are available to regular
employees such as new incentive stock awards, bonuses, or
benefits, except as provided Section 5 of this Agreement.
Ownership and title to the automobile currently assigned to
you will be transferred to you upon your payment to us of
$1,000 prior to September 30, 2004.
6. Non-Disclosure; Headwaters Property. You agree not to disclose the
terms of this Agreement, the benefits being paid under it or the facts
of these payments to anyone, except that you may disclose this
information to your spouse and those individuals who have a need to
know in order for them to render professional, legal, or financial
services to you, or as may be required by court order, law, rule or
regulation. At the end of the Period of Employment, you also agree to
return all property that belongs to Headwaters. You reaffirm the
covenants you made in Sections 5, 6, and 7of your existing Employment
Agreement.
7. Release of Claims. You fully discharge and release, and agree that this
Agreement is in full satisfaction of, any claims, liabilities, demands
or causes of action, known or unknown, that you ever had, now have, or
may claim to have had against Headwaters or any parents, subsidiaries,
directors, officers, employees or agents of Headwaters for any reason
as of the Effective Date, except (i) as specifically provided in this
Agreement, (ii) claims for vested benefits based on your employment and
claims for workers' compensation insurance and unemployment insurance
benefits; and (iii) claims for defense and indemnity as an officer or
director of ISG, Headwaters, or any subsidiaries of same. Any such
claims whether for discrimination, including claims under the Fair
Employment and Housing Act, Title VII of the Civil Rights Act of 1964
or the Age Discrimination in Employment Act, wrongful termination,
breach of contract, breach of public policy, physical or mental harm or
distress or any other claims are hereby released and you agree and
promise that you will not file any lawsuit asserting any such claims.
Except as otherwise specifically provided in this Agreement,
Headwaters, ISG, and their subsidiaries ("Headwaters Parties") fully
discharge and release you from, and agree that this Agreement is in
full satisfaction of, any claims, liabilities, demands or causes of
action, known or unknown, that the Headwaters Parties and/or their
predecessor companies ever had, now have, or may claim to have had
against you for any reason as of the Effective Date, including without
limitation any issues connected with the ISG merger transactions and
your involvement with ISG as an officer or director. The Parties each
acknowledge that he or it have had the benefit of counsel, and have
been advised of, understands and knowingly and specifically waives his
or its rights under California Civil Code Section 1542 which provides
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as follows: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR.
8. Acknowledgment of Waiver of Claims under ADEA; EEOC. You acknowledge
that you are waiving and releasing any rights you may have under the
Age Discrimination in Employment Act of 1967 ("ADEA") and that the
waiver and release is knowing and voluntary. You and Headwaters agree
that the waiver and release does not apply to any rights or claims that
may arise under ADEA after the Effective Date. You acknowledge that the
consideration given for the waiver and release of claims under this
Agreement is in addition to anything of value to which you were already
entitled. You also acknowledge that you have been advised by this
writing that (a) you should consult with an attorney prior to executing
the Agreement; (b) you have at least twenty one (21) days within which
to consider the Agreement; (c) you have at least seven (7) days
following your execution of the Agreement to revoke the Agreement; and
(d) the Agreement shall not be effective until the revocation period
has expired. This Agreement recognizes the rights and responsibilities
of the Equal Employment Opportunity Commission ("EEOC") to enforce the
statutes which come under its jurisdiction and is not intended to
prevent you from filing a charge or participating in any investigation
or proceeding conducted by the EEOC; provided, however, that nothing in
this Section limits or affects the finality or the scope of the release
provided under Section 7 or the agreement to submit claims to final and
binding arbitration under Section 11.
9. Confidential Information; Inventions; Non-Competition. You agree to
abide by all Headwaters' policies, including its policy with respect to
Headwaters confidential information and inventions both during and
after your employment. The non-competition provisions of Section 8 of
the existing Employment Agreement are reaffirmed with the Restricted
Period thereof ending on October 3, 2008 and the Restricted Business
amended to include all lines of business of ISG or its subsidiaries as
of the Effective Date.
10. No Cooperation; Non-Disparagement. The parties agree that they will not
act in any manner that might damage the business or reputation of the
other party. The parties agree that they will not counsel or assist any
attorneys or their clients in the presentation or prosecution of any
disputes, differences, grievances, claims, charges, or complaints by
any third party against the other party and/or any officer, director,
employee, agent, representative, shareholder, family member, or
attorney of the other party, unless under a subpoena or other court
order to do so. The parties also agree to refrain from any defamation,
libel or slander of the other party and where applicable the other
party's respective officers, directors, employees, investors,
shareholders, family members, administrators, affiliates, divisions,
subsidiaries, predecessor and successor corporations, and assigns, and
to refrain from any tortious interference with the contracts and
relationships of the other party and where applicable the other party's
respective officers, directors, employees, investors, shareholders,
family members, administrators, affiliates, divisions, subsidiaries,
predecessor and successor corporations, and assigns.
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11. Dispute Resolution. You agree that any future disputes between you and
Headwaters, including but not limited to disputes arising out of or
related to this Agreement shall be resolved by using the following
procedures, except that the procedures in Sections 11(c) and 11(d) will
not be followed in cases where the law specifically forbids the use of
arbitration as a final and binding remedy, or where Section 11(d) below
specifically allows a different remedy.
A. The party claiming to be aggrieved shall furnish to the other
party a written statement of the grievance identifying any
witnesses or documents that support the grievance and the
relief requested or proposed.
B. If the other party does not agree to furnish the relief
requested or proposed, or otherwise does not satisfy the
demand of the party claiming to be aggrieved, the parties
shall submit the dispute to nonbinding mediation before a
mediator to be jointly selected by the parties. Headwaters
will pay the cost of the mediation.
C. If the mediation does not produce a resolution of the dispute,
the parties agree that the dispute shall be resolved by final
and binding arbitration. The parties will attempt to agree to
the identity of an arbitrator, and, if they are unable to do
so, they will obtain a list of arbitrators from the Federal
Mediation and Conciliation Service and select an arbitrator by
striking names from that list. The arbitrator shall have the
authority to determine whether the conduct complained of in
Section 11(a) violates the rights of the complaining party
and, if so, to grant any relief authorized by law, subject to
the exclusions of Section 11(d) below. The arbitrator shall
not have the authority to modify, change or refuse to enforce
the terms of this Agreement. The hearing shall be transcribed.
Headwaters shall bear the costs of the arbitration if you
prevail. If Headwaters prevails, you will pay half the cost of
the arbitration. Each party shall be responsible for paying
its own attorneys' fees, unless the arbitrator orders
otherwise, pursuant to applicable law.
D. Arbitration shall be the exclusive final remedy for any
dispute between the parties, and the parties agree that no
dispute shall be submitted to arbitration where the party
claiming to be aggrieved has not complied with the preliminary
steps provided for above. The parties agree that the
arbitration award shall be enforceable in any court having
jurisdiction to enforce this Agreement, so long as the
arbitrator's findings of fact are supported by substantial
evidence on the whole and the arbitrator has not made errors
of law; provided however, that either party may bring an
action, including, but not limited to an action for injunctive
relief, in a court of competent jurisdiction, regarding or
related to matters involving Headwaters' confidential,
proprietary or trade secret information, or regarding or
related to inventions that you may claim to have developed
prior to joining Headwaters or after joining Headwaters, or
regarding or relating to your engaging in activities that
directly or indirectly compete with Headwaters.
12. Severability. If any term of this Agreement is held to be invalid, void
or unenforceable, the remainder of this Agreement shall remain in full
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force and effect and shall in no way be affected, and the parties shall
use their best efforts to find an alternative way to achieve the same
result.
13. Entire Agreement. The provisions of this Agreement set forth the entire
agreement between you and Headwaters concerning your changes in
employment as of the Effective Date. Any other promises, written or
oral, are replaced by the provisions of this Agreement and are no
longer effective unless they are contained in this Agreement.
14. Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the provisions of
Section 17 of the existing Employment Agreement as if incorporated
herein.
15. Indemnity. Headwaters, on behalf of itself, and its affiliates,
divisions, subsidiaries, predecessor and successor corporations, and
their directors, officers, employees, representatives, or agents,
hereby ratifies, adopts, and confirms the indemnification obligations
to Employee as set out in Section 18 of the Employment Agreement.
Further to this obligation, Headwaters shall maintain directors and
officers liability insurance in full force and effect covering you
unless Headwaters determines in good faith that such insurance is not
reasonably available, in which case, Headwaters shall promptly notify
you. Headwaters' indemnity obligation hereunder shall survive the
termination of this Agreement and the end of the Employment Period.
16. Ratification. Subject to the terms and conditions of grant and to the
2002 Stock Incentive Plan and the 2003 Stock Incentive Plan, the
parties agree that the attached list of stock options granted to
Employee to date and the attached list of restricted stock granted to
Employee to date, all remain in full force and effect, and are hereby
ratified and confirmed.
17. Counterparts. This Agreement may be executed in counterparts, and each
counterpart shall have the same force and effect as an original and
shall constitute an effective, binding agreement on the part of each of
the undersigned.
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18. Voluntary Execution of Agreement. By signing below, you acknowledge
that you are entering into this Agreement knowingly and voluntarily. In
addition, you acknowledge by your signature that you have carefully
read and fully understand all the provisions of this Agreement and you
have been represented by legal counsel in the preparation and
negotiation of this Agreement or you have voluntarily declined to seek
such counsel.
Sincerely,
/s/ Xxxx X. Xxxxxx
---------------------------
Xxxx X. Xxxxxx
Chief Executive Officer
By your signature, you agree to the terms
set forth above, and you agree to this
Agreement.
Date: August 2, 2004
/s/ Xxxx Xxxx
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Xxxx Xxxx
