EXHIBIT 10(b)(1)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, made and entered into as of the 1st day of
February, 1998 (the "EFFECTIVE DATE"), by and between Imperial Xxxxx
Corporation, a Texas corporation (hereafter "COMPANY") and [NAME] (hereafter
"EXECUTIVE"), an individual;
W I T N E S S E T H:
WHEREAS, Company wishes to continue to secure the services of the Executive
subject to the terms and conditions hereafter set forth; and
WHEREAS, the Executive is willing to enter into this Agreement upon the
terms and conditions hereafter set forth,
NOW, THEREFORE, in consideration of the mutual promises and agreements set
forth herein, the parties hereto agree as follows:
1. EMPLOYMENT. During the Employment Period (as defined in Section 4
hereof), the Company shall employ Executive, and Executive shall serve, as
[TITLE]. Executive's principal place of employment shall be .
2. COMPENSATION. The Company shall pay or cause to be paid to Executive
during the Employment Period an annual base salary for his services under this
Agreement of not less than $, payable in equal monthly or semi-monthly
installments in accordance with the Company's normal payroll procedures. The
Executive's base salary shall be subject to annual review and may be increased,
depending upon the performance of the Company and Executive, upon the
recommendation of the Company's President and approved by the Executive
Compensation Committee of the Board of Directors of the Company (hereafter
"Committee"). Nothing contained herein shall preclude the payment of a bonus or
bonuses to Executive provided that the Committee authorizes any such bonus
payment.
3. DUTIES AND RESPONSIBILITIES OF EXECUTIVE. During the Employment
Period, Executive shall devote his services full time to the business of the
Company and perform the duties and responsibilities assigned to him by the
Company's President or the Company's Board of Directors ("BOARD OF DIRECTORS")
to the best of his ability and with reasonable diligence. In determining
Executive's duties and responsibilities, the Company's President and Board of
Directors shall act in good faith and shall not assign duties and
responsibilities to Executive that
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are not appropriate or customary with respect to the position of Executive
hereunder. This Section 3 shall not be construed as preventing Executive from
engaging in reasonable volunteer services for charitable, educational or civic
organizations, or from investing his assets in such form or manner as will not
require a material amount of his services in the operations of the companies or
businesses in which such investments are made.
4. TERM OF EMPLOYMENT. Executive's initial term of employment with the
Company under this Agreement shall be for the period from the Effective Date
through January 31, 1999. Thereafter, the term of employment hereunder shall be
automatically extended repetitively for additional one (1) year periods on each
annual anniversary of February 1, 1999, unless Notice of Termination pursuant to
Section 7 is given by either the Company or Executive to the other party at
least sixty (60) days prior to the end of the initial term of employment or any
one-year extension thereof, as applicable. The Company and Executive shall each
have the right to give Notice of Termination at will, with or without cause, at
any time, subject, however, to the terms of this Agreement regarding rights and
duties of the parties upon termination of employment. The initial period through
January 31, 1999, or any one-year extension of employment hereunder, shall be
referred to herein as the "TERM OF EMPLOYMENT." The period from the Effective
Date through the date of Executive's termination of employment for whatever
reason shall be referred to herein as the "EMPLOYMENT PERIOD."
5. BENEFITS. Subject to the terms and conditions of this Agreement,
during the Employment Period, Executive shall be entitled to the following:
(a) REIMBURSEMENT OF EXPENSES. The Company shall pay or reimburse
Executive for all reasonable travel, entertainment (including club
dues appropriate in the performance of Executive's service
hereunder) and other reasonable expenses paid or incurred by
Executive in performing his obligations hereunder. The Company
shall also provide Executive with suitable office space and
secretarial help.
(b) OTHER BENEFITS. Executive shall be entitled to participate and
shall be included in any pension, profit-sharing, stock option,
deferred compensation, or similar plan or program of the Company
established by the Company, to the extent that he is eligible
under the provisions thereof. Executive shall also be entitled to
participate in any group insurance, hospitalization, medical,
health and accident, disability or similar plan or program
established by the Company, to the extent that he is eligible
under the provisions thereof.
(c) PAID VACATION. Executive shall be entitled to the number of days
of paid vacation each year that is accorded under the Company's
vacation policy
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for senior officers in the Office of the President of the Company.
The number of days of paid vacation may be increased by the
Company's President or Board of Directors at any time during the
Employment Period.
(d) ANNUAL PHYSICAL. Each year the Company shall pay for a complete
physical examination of Executive at the Xxx Xxxxxxxxxx Institute
in Houston, Texas or any comparable facility designated by the
Company's President.
6. RIGHTS AND PAYMENTS UPON TERMINATION. The Executive's right to
compensation and benefits for periods after the date on which his employment
with the Company terminates for whatever reason (the "TERMINATION DATE") shall
be determined in accordance with this Section 6:
(a) Minimum Payments. Executive shall be entitled to the following
payments, in addition to any payments or benefits to which the
Executive is entitled under the terms of any employee benefit plan
or the following provisions of this Section 6:
(i) his unpaid salary for the full month in which his
Termination Date occurred; provided, however, if Executive
is terminated for Cause pursuant to Section 6(c) below, he
shall only be entitled to receive his accrued but unpaid
salary through his Termination Date; and
(ii) his accrued but unpaid vacation pay for the period
ending on his Termination Date.
(b) CHANGE IN CONTROL PAYMENT. Executive and Savannah Foods &
Industries, Inc., its subsidiaries or affiliates are parties to
prior Change of Control Agreement(s) dated [DATE] (the "CHANGE
OF CONTROL AGREEMENT"), and they hereby agree that the Change of
Control Agreement shall be terminated and superseded in all
respects by this Agreement on and after the effective date hereof.
Notwithstanding any other provision of this Agreement to the
contrary, in the event that Executive's employment is terminated
within two (2) years following a Change in Control (as defined
below) (i) by the Company for any reason except for (A) Cause (as
defined in Section 6(c) hereof) or (B) Executive's death or
Disability (as defined below) or (ii) by the Executive for Good
Reason (as defined in Section 6(c) hereof), then Executive shall
be entitled to receive, and the Company shall be obligated to pay,
a lump sum payment equal to three hundred percent (300%) of
Executive's base
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annual salary pursuant to Section 2 or the annual salary then
being paid to him, whichever is greater. Such payment shall be
made within 30 days from the later of (i) the Change in Control
date or (ii) the termination date. Also, such payment shall be in
addition to, and shall not reduce or offset, any other payments
that are due to Executive from the Company (or from any other
source) under any other agreements except the Change of Control
Agreement which has been terminated by this Agreement. For
purposes of illustration and not limitation, if the Company should
provide Notice of Termination to Executive pursuant to Section 4
hereof and the resultant termination of his employment occurs
within two (2) years from the date of the Change in Control,
Executive shall be entitled to the lump sum payment described in
this paragraph. The provisions of this Section 6(b) shall
supersede any conflicting provisions of this Agreement but shall
not be construed to curtail, offset or limit Executive's rights to
any other payments, whether contingent upon a Change in Control or
otherwise, under the Agreement or any other agreement, contract,
plan or other source of payment except as provided herein. In
addition, Executive shall be entitled to receive the bonus payment
described in Section 9 hereof, if applicable.
A "CHANGE IN CONTROL" of the Company shall be deemed to have
occurred if any of the following shall have taken place: (a) a
change in control is reported by the Company in response to either
Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934 (the "Exchange Act") or Item 1 of
Form 8-K promulgated under the Exchange Act, or any successor
provisions thereto; (b) any "person" (as such term is used in
Sections 13(d) and 14(d)(2) of the Exchange Act) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), or any successor provisions thereto, directly or indirectly,
of securities of the Company representing forty percent (40%) or
more of the combined voting power of the Company's then-
outstanding securities; or (c) following the election or removal
of directors, a majority of the Board of Directors consists of
individuals who were not members of the Board of Directors two (2)
years before such election or removal, unless the election of each
director who is not a director at the beginning of such two-year
period has been approved in advance by directors representing at
least a majority of the directors then in office who were
directors at the beginning of the two-year period.
For purposes of this Section 6(b), "DISABILITY" shall mean a
"permanent and total disability" as defined in Section 22(e)(3) of
the Internal Revenue
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Code of 1986, as amended (the "CODE") and Treasury regulations
thereunder. Evidence of such Disability shall be certified by a
physician acceptable to both the Company and Executive. In the
event that the parties are not able to agree on the choice of a
physician, each shall select a physician who, in turn, shall
select a third physician to render such certification. All costs
relating to the determination of whether Executive has incurred a
Disability shall be paid by the Company.
References in this Agreement to any Section of the Code shall
include any "Successor Provisions" (as defined in Section 9(e)
hereof).
(c) OTHER TERMINATION PAYMENTS. In addition to any other payments due
to Executive under this Agreement or otherwise, in the event that
during the Term of Employment (1) Executive's employment is
terminated by the Company for any reason other than a "Non-Salary
Event" (as defined below), or (2) Executive terminates his own
employment hereunder for "Good Reason" (as defined below), then,
in either event, Executive shall be entitled to receive as damages
hereunder, and the Company shall be obligated to pay, a lump sum
payment equal to the present value of Executive's base salary
pursuant to Section 2 or the salary then being paid to him,
whichever is greater, for the greater of (A) the remaining Term of
Employment as if there had been no termination or (B) twelve (12)
months. For purposes of the preceding sentence, the "present
value" of such amount shall be determined in accordance with the
procedures under Section 280G of the Code and the Treasury
regulations thereunder.
Notwithstanding any provision of this Section 6(c) to the
contrary, the Executive must first execute an appropriate release
agreement whereby he agrees to release and waive, in return for
the other termination payments described in this Section 6(c)
only, any claims that he may have against the Company for (1)
unlawful discrimination (including, without limitation, age
discrimination) or (2) termination pay under any severance pay
plan, program or arrangement maintained by the Company, its
affiliates or subsidiaries, that covers Executive; provided,
however, such release shall not release any claims by Executive
for payments due under this Agreement, including, without
limitation, any Change in Control payment described in Section
6(b), without Executive's express written consent. Any lump sum
payment required under this Section 6(c) shall be paid within 10
days after Executive executes such release. Executive shall not be
required to mitigate any damages under this Section 6(c) or any
other provision of this Agreement.
The Company shall make any lump sum payment due to Executive under
this Section 6(c) within ten (10) days following the Termination
Date.
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(1) For purposes of this Section 6(c), a "NON-SALARY EVENT"
means termination for "Cause" (as defined below), death, or
Disability (as defined below).
(2) For purposes of this Section 6(c), "CAUSE" means a
termination directly resulting from (a) an act of dishonesty
on the part of the Executive constituting a felony which
adversely affects the Company, (b) a breach by the Executive
during the Employment Period of the provisions of Sections
11, 12, 13 or 14 below, if such breach results in a material
injury to the Company which is not cured to the reasonable
satisfaction of the Board of Directors within 30 days after
notice of such failure is provided to Executive, or (c) the
continuing and material failure of Executive to fulfill his
obligations under this Agreement. The termination of
Executive's employment by the Company shall not be deemed to
be for Cause unless the Board of Directors first provides
written notice to Executive of the conduct on which the
termination is based.
(3) For purposes of this Section 6(c), "DISABILITY" means a
"Disability" as defined in Section 6(b) hereof.
(4) For purposes of this Section 6(c), "GOOD REASON" means the
occurrence of any of the following events without
Executive's express written consent:
(i) A reduction in Executive's base salary;
(ii) Any material breach by the Company or its
successors of any provision of this Agreement; or
(iii) Following a Change in Control (as defined
in Section 6(b) hereof):
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(A) the failure by the Company or its successor to
expressly assume and agree to continue and perform this
Agreement in the same manner and to the same extent that
the Company would be required to perform if such Change
in Control had not occurred;
(B) a relocation of more than twenty-five (25)
miles of Executive's principal office from the location
of such office immediately prior to the Change in Control
date;
(C) A substantial increase in the business travel
required of Executive by the Company or its successor;
(D) The Company or its successor fails to continue
in effect any pension plan, life insurance plan, health-
and-accident plan, 401(k) plan, employee stock ownership
plan, disability plan, deferred compensation SERP plan or
executive incentive compensation plan in which Executive
was participating at the time of the Change in Control
(or plans providing Executive with substantially equal
and similar benefits), or the taking of any action by the
Company or its successor which would adversely affect
Executive's participation in or materially reduce his
benefits under any such plan, or deprive him of any
material fringe benefit enjoyed by him immediately prior
to the Change in Control; or
(E) A substantial and adverse change in the
Executive's duties, control, authority, status or
position, or the assignment to the Executive of any
duties or responsibilities which are materially
inconsistent with such status or position, or a material
reduction in the duties and responsibilities previously
exercised by the Executive, or a loss of title, loss of
office, loss of significant authority, power or control,
or any removal of Executive from, or any failure to
reappoint or reelect him to, such positions, except in
connection with the termination of his employment for
Cause, Disability or death;
7. NOTICE OF TERMINATION. Any termination by the Company or the Executive
shall be communicated by Notice of Termination to the other party hereto. For
purposes of this Agreement, the term "Notice of Termination" means a written
notice which indicates the specific termination provision of this Agreement
relied upon and sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment under
the provision so indicated.
8. NO MITIGATION REQUIRED. Executive shall not be required to mitigate
the amount of any payment provided for under this Agreement by seeking other
employment or in any other manner.
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9. CHANGE IN CONTROL: REQUIREMENT OF BONUS PAYMENT IN CERTAIN
CIRCUMSTANCES.
(a) In the event that Executive is deemed to have received an "excess
parachute payment" (as such term is defined in Section 280G(b) of the Code)
which is subject to the excise taxes (the "EXCISE TAXES") imposed by
Section 4999 of the Code in respect of any payment pursuant to this
Agreement, or any other agreement, plan, instrument or obligation, in
whatever form, the Company shall make the Bonus Payment (defined below) to
Executive promptly after the date on which Executive received or is deemed
to have received any excess parachute payment notwithstanding any contrary
provision herein.
(b) The term "BONUS PAYMENT" means a cash payment in an amount equal
to the sum of (i) all Excise Taxes payable by Executive, plus (ii) all
additional Excise Taxes and federal or state income taxes to the extent
such taxes are imposed in respect of the Bonus Payment, such that Executive
shall be in the same after-tax position and shall have received the same
benefits that he would have received if the Excise Taxes had not been
imposed. For purposes of calculating any income taxes attributable to the
Bonus Payment, Executive shall be deemed for all purposes to be paying
income taxes at the highest marginal federal income tax rate, taking into
account any applicable surtaxes and other generally applicable taxes which
have the effect of increasing the marginal federal income tax rate and, if
applicable, at the highest marginal state income tax rate, to which the
Bonus Payment and Executive are subject. An example of the calculation of
the Bonus Payment is set forth below: Assume that the Excise Tax rate is
20%, that the highest federal marginal income tax rate is 40% and that
Executive is not subject to state income taxes. Further assume that
Executive has received an excess parachute payment in the amount of
$200,000, on which $40,000 in Excise Taxes are payable. The amount of the
required Bonus Payment is thus $100,000. The Bonus Payment of $100,000,
less additional Excise Taxes on the Bonus Payment of $20,000 (i.e., 20% x
$100,000) and income taxes of $40,000 (i.e., 40% x $100,000), yields
$40,000, the amount of the Excise Taxes payable in respect of the original
excess parachute payment.
(c) Executive agrees to reasonably cooperate with the Company to
minimize the amount of the excess parachute payments, including, without
limitation, assisting the Company in establishing that some or all of the
payments received by Executive that are "contingent on a change", as
described in Section 280G(b)(2)(A)(i) of the Code, are reasonable
compensation for personal services actually rendered by Executive before
the date of such change or to be rendered by Executive on or after the date
of such change. In the event that the Company is able to establish that the
amount of the excess parachute payments is less than originally anticipated
by Executive, Executive shall refund to the
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Company any excess Bonus Payment to the extent not required to pay Excise
Taxes or income taxes (including those incurred in respect of receipt of
the Bonus Payment). Notwithstanding the foregoing, Executive shall not be
required to take any action which his attorney or tax advisor advises him
in writing (i) is improper or (ii) exposes Executive to material personal
liability. Executive may require the Company to deliver to Executive an
indemnification agreement in form and substance satisfactory to Executive
as a condition to taking any action required by this subsection (c).
(d) The Company shall make any payment required to be made under this
Section 9 in cash and on demand. Any payment required to be paid by the
Company under this Section 9 which is not paid within 30 days of receipt by
the Company of Executive's written demand therefor shall thereafter be
deemed delinquent, and the Company shall pay to Executive immediately upon
demand interest at the highest nonusurious rate per annum allowed by
applicable law from the date such payment becomes delinquent to the date of
payment of such delinquent sum with interest.
(e) In the event that there is any change to the Code which results in
the recodification of Section 280G or Section 4999 of the Code, or in the
event that either such section of the Code is amended, replaced or
supplemented by other provisions of the Code of similar import ("SUCCESSOR
PROVISIONS"), then this Agreement shall be applied and enforced with
respect to such new Code provisions in a manner consistent with the intent
of the parties as expressed herein, which is to assure that Employee is in
the same after-tax position and has received the same benefits that he
would have been in and received if any taxes imposed by Section 4999 or any
Successor Provisions had not been imposed.
10. POST-EMPLOYMENT MEDICAL BENEFITS.
If Executive's employment with the Company is terminated for any reason
except Cause (as defined in Section 6(c)) after Executive has completed at least
five (5) complete years of service with the Company (including, for this
purpose, prior service with any corporation acquired by or merged into the
Company), then the Company shall provide post-employment medical coverage in
accordance with the terms and conditions of this Section 10. The Company shall
continue to cover Executive and his spouse (hereinafter referred to as "SPOUSE")
and his eligible dependent children, if any, from the date of Executive's
termination of employment with the Company, under the group health care plan
maintained by the Company to provide major medical insurance coverage for
employees and their dependents (such group medical plan or its successor(s)
shall be hereinafter referred to as the "HEALTH CARE PLAN"). The coverage of
Executive and his Spouse under the Health Care Plan shall continue for each of
their lives without interruption, but such coverage of his eligible dependent
children shall continue only for such time period that they otherwise qualify
for dependent coverage under the terms of the
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Health Care Plan. In the event of any change to the Health Care Plan following
the date of Executive's termination from employment with the Company, then
Executive, his Spouse and dependents shall be treated consistently with the
then-current senior officers of the Company (or its successor) with respect to
the terms and conditions of coverage and other substantive provisions of the
Health Care Plan. The provisions of this Section 10 shall be effective
regardless of the reason for Executive's termination of employment with the
Company except for Cause.
The continuation coverage under the Health Care Plan provided to Executive
and his Spouse pursuant to this Agreement shall continue and remain in full
force and effect until the later of (a) Executive's date of death or (b) his
Spouse's date of death. Executive and his Spouse hereby agree and consent to
acquire and maintain any and all coverage that either or both of them are
entitled to at any time during their lives under the Medicare program or any
similar or succeeding plan or program that is sponsored or maintained by the
United States Government or any agency thereof (hereinafter referred to as
"MEDICARE"). The coverage described in the immediately preceding sentence
includes, without limitation, parts A and B of Medicare and any additional or
successor parts of Medicare. Executive and his Spouse further agree and consent
to pay all required premiums and other costs for Medicare coverage from their
personal funds.
If Executive or Spouse are covered under Medicare, the "retiree" coverage
provided under the Health Care Plan to such person shall be secondary payor to
Medicare to the full extent permitted by law. In addition, if Executive, or his
Spouse or other dependents should become covered under another major medical
plan maintained by another employer or other entity, such coverage shall be
primary payor to the coverage provided pursuant to this Section 10 to the full
extent permitted by law.
Executive, on behalf of himself and his Spouse and other dependents, if
any, shall be required to pay premiums for their coverage under the Health Care
Plan at the rates, if any, charged by the Company to active employees who are
senior officers of the Company at the time the premium is charged. The Company
shall not be responsible for the payment of any income or other taxes which may
be imposed on Executive, or on his Spouse or dependents, as the result of
receiving coverage under the Health Care Plan pursuant to this Section 10.
11. CONFLICTS OF INTEREST. In keeping with his fiduciary duties to
Company, Executive hereby agrees that he shall not become involved in a conflict
of interest, or upon discovery thereof, allow such a conflict to continue at any
time during the Employment Period. Moreover, Executive agrees that he shall
immediately disclose to the Board of Directors any facts which might involve a
conflict of interest that has not been approved by the Board of Directors.
Executive and Company recognize and acknowledge that it is not possible to
provide an exhaustive list of actions or interests which may constitute a
"conflict of interest." Moreover,
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Company and Executive recognize there are many borderline situations. In some
instances, full disclosure of facts by the Executive to the Board of Directors
may be all that is necessary to enable Company to protect its interests. In
others, if no improper motivation appears to exist and Company's interests have
not demonstrably suffered, prompt elimination of the outside interest may
suffice. In other egregious instances, it may be necessary for Company to
terminate Executive's employment for Cause pursuant to Section 6(c) hereof. The
Board of Directors reserves the right to take such action as, in its good faith
judgment, will resolve the conflict of interest.
Executive hereby agrees that any direct or indirect interest in, connection
with, or benefit from any outside activities, particularly commercial
activities, which interest might adversely affect the Company or any of its
affiliated entities, involves a possible conflict of interest. Circumstances in
which a conflict of interest on the part of Executive would or might arise, and
which should be reported immediately to the Board of Directors, include, but are
not limited to, any of the following:
(a) Ownership of more than a de minimis interest in any lender,
supplier, contractor, customer or other entity with which Company
or any of its affiliated entities does business;
(b) Misuse of information, property or facilities to which Executive
has access in a manner which is demonstrably injurious to the
interests of Company or any of its affiliated entities, including
its business, reputation or goodwill; or
(c) Materially trading in products or services connected with products
or services designed or marketed by or for the Company or any of
its affiliated entities.
For purposes of this Agreement, "AFFILIATED ENTITY" means any entity which
owns or controls, is owned or controlled by, or is under common ownership or
control with, the Company.
12. CONFIDENTIAL INFORMATION.
(A) CONFIDENTIAL INFORMATION DEFINED. Executive hereby acknowledges
that in his senior management position, he will create, acquire and have
access to confidential information and trade secrets pertaining to the
business of Company (hereafter "Confidential Information" as defined
below). Executive hereby acknowledges that such Confidential Information is
unique and valuable to Company's business and that Company would suffer
irreparable injury if Confidential Information was divulged to the public
or to persons or entities in competition with Company. Therefore, Executive
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hereby covenants and agrees to keep in strict secrecy and confidence, both
during and after the Employment Period, any Confidential Information.
Executive specifically agrees that he will not at any time disclose to
others, use, copy or permit to be copied, except in pursuance of his duties
on behalf of Company or with the prior consent of Company, Confidential
Information relating to the Company or any of its affiliated entities. For
purposes of this Agreement, "CONFIDENTIAL INFORMATION" shall mean and
include, without limitation, information related to the business affairs,
property, methods of operation, future plans, financial information,
customer or client information, or other data which relates to the business
or operations of Company or any of its affiliated entities, and all other
information obtained by Executive from and during the Employment Period
which concerns the affairs of Company or any of its affiliated entities and
which Company has requested be held in confidence or could reasonably be
expected to desire be held in confidence, or the disclosure of which would
likely be embarrassing, detrimental or disadvantageous to the Company or
any of its affiliated entities, or its and their directors, officers,
employees or shareholders. Confidential Information, however, shall not
include:
(i) Information that is at the time of receipt by Executive in
the public domain or is otherwise generally known in the industry or
subsequently enters the public domain or becomes generally known in
the industry through no fault of Executive; or
(ii) Information that at any time is received in good faith by
Executive from a third party who was lawfully in possession of the
same and had the right to disclose the same.
(b) REQUIRED DISCLOSURE. In the event that Executive is required by
law which cannot be waived to disclose any Confidential Information,
Executive agrees that he will provide prompt notice of such potential
disclosure to Company so that an appropriate protective order may be sought
and/or a waiver of compliance with the provisions of this Agreement may be
granted. In the event that (i) such protection or other remedy is not
obtained or (ii) Company waives in writing the compliance by Executive with
this provision, Executive agrees that he may furnish only that portion of
the Confidential Information which Executive is advised by written opinion
of counsel is legally required to be disclosed, and Executive shall
exercise his best efforts to obtain assurances that confidential treatment
will be accorded such Confidential Information.
(c) DELIVERY OF DOCUMENTS. Executive further agrees to deliver to
Company at the termination of his employment, all correspondence,
memoranda, notes, records, drawings, plans, customer lists or other
documents, and all copies thereof made, composed or received by Executive,
solely or jointly with others, and which are in
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Executive's possession, custody or control at such date and which relate in
any manner to the past, present or anticipated business of Company or any
of its affiliated entities.
(d) REMEDIES. In the event of a breach or threatened breach of any of
the provisions of this Section 12, Company shall be entitled to an
injunction ordering the return of all such documents, and any and all
copies thereof, and restraining Executive from using or disclosing, for his
benefit or the benefit of others, in whole or in part, any Confidential
Information, including, but not limited to, the Confidential Information
which such documents contain, constitute or embody. Executive further
agrees that any breach or threatened breach of any of the provisions of
this Section 12 would cause irreparable injury to Company, for which it
would have no adequate remedy at law. Nothing herein shall be construed as
prohibiting Company from pursuing any other remedies available to it for
any such breach or threatened breach, including the recovery of damages.
13. PROPERTY RIGHTS. In keeping with his fiduciary duties to Company,
Executive hereby covenants and agrees that during his Employment Period, and for
a period of six (6) months following his Termination Date, Executive shall
promptly disclose in writing to Company any and all information, ideas,
concepts, improvements, discoveries, inventions and other intellectual
properties, whether patentable or not, and whether or not reduced to practice,
which are conceived, developed, made or acquired by Executive, either
individually or jointly with others, and which relate to the business, products
or services of Company or any of its affiliated entities. In consideration for
his employment hereunder, Executive hereby specifically sells, assigns and
transfers to Company all of his worldwide right, title and interest in and to
all such information, ideas, concepts, improvements, discoveries, inventions and
other intellectual properties.
If during the Employment Period, Executive creates any original work of
authorship or other property fixed in any tangible medium of expression which
(a) is the subject matter of copyright (including computer programs) and (b)
relates to Company's present or planned business, products, or services, whether
such property is created solely by Executive or jointly with others, such
property shall be deemed a work for hire, with the copyright automatically
vesting in Company. To the extent that any such writing or other property is
determined not to be a work for hire for whatever reason, Executive hereby
consents and agrees to the unconditional waiver of "moral rights" in such
writing or other property, and to assign to Company all of his right, title and
interest, including copyright, in such writing or other property.
Executive hereby agrees to (a) assist Company or its nominee at all times
in the protection of any and all property subject to this Section 13, (b) not to
disclose any such property to others without the written consent of Company or
its nominee, except as required by his employment hereunder, and (c) at the
request of Company, to execute such assignments,
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certificates or other interests as Company or its nominee may from time to time
deem desirable to evidence, establish, maintain, perfect, protect or enforce its
rights, title or interests in or to any such property.
14. AGREEMENT NOT TO COMPETE. Executive hereby recognizes and acknowledges
that: (a) in his executive capacity with Company he will be given knowledge of,
and access to, the Confidential Information (as described in Section 12); (b) in
the event that Executive was to enter into competition with Company, Executive's
knowledge of such Confidential Information would be of invaluable benefit to a
competitor of Company, and could cause irreparable harm to Company's business
interests; and (c) Executive's consent and agreement to enter into the
noncompetition provisions and covenants set forth herein is an integral
condition of this Agreement, without which Company would not have agreed to
provide Confidential Information to Executive nor to his compensation, benefits,
and other terms of this Agreement. Accordingly, in consideration for his
employment, compensation, benefits, access to and entrustment of Confidential
Information, and the goodwill, training and experience provided to Executive
during his Employment Period, Executive hereby covenants, consents and agrees
(regardless of whether or not there has been a Change of Control) that during
the Employment Period, and for a period of one (1) year after his employment is
terminated for any reason except (i) termination by the Company without Cause
(as defined in Section 6(c)) or termination by Executive for Good Reason (as
defined in Section 6(c)) or (ii) termination of employment upon expiration of
the Term of Employment (as defined in Section 4), Executive shall not, directly
or indirectly, acting alone or in conjunction with others, for his own account
or for the account of others, including, without limitation, as an officer,
director, stockholder, owner, partner, joint venturer, employee, promoter,
consultant, agent, representative, or otherwise:
(a) Solicit, canvass, or accept any fees or business from any customer
of Company for himself or any other person or entity engaged in a
"Similar Business to Company" (as defined below);
(b) Engage or participate in any Similar Business to Company within
the entire continental United States (referred to herein as the
"RESTRICTED AREA");
(c) Request or advise any service provider, supplier, or customer to
reduce or cancel any business that it may transact with Company or
any of its affiliated entities;
(d) Solicit, induce, or otherwise attempt to influence any employee of
the Company or any of its affiliated entities, to terminate his or
her relationship with the Company or any of its affiliated
entities; or
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(e) Make any statement or perform any act intended to advance an
interest of an existing or prospective competitor of the Company
or any of its affiliated entities in any way that demonstrably
injures the reputation, goodwill or any other business interest of
Company or any of its affiliated entities.
For purposes of this Agreement, "SIMILAR BUSINESS TO COMPANY" means any
business or other enterprise that is competitive with the current or planned
businesses, products, services or operations of the Company or any of its
affiliated entities at the time of termination of Executive's employment. For
purposes of clarity, the non-compete and other provisions of this Section 14
shall not apply to Executive if Executive's employment hereunder is terminated
(i) by the Company without Cause (as defined in Section 6(c)), (ii) by the
Executive for Good Reason (as defined in Section 6(c)), or (iii) after the Term
of Employment (as defined in Section 4) has expired.
Executive hereby agrees that the limitations set forth above on his rights
to compete with Company after his termination of employment are reasonable and
necessary for the protection of Company. In this regard, Executive specifically
agrees that such limitations as to the period of time, geographic area and types
and scopes of restriction on his activities, as specified above, are reasonable
and necessary to protect the goodwill and other business interests of Company.
However, should the time period, the geographic area or any other non-
competition provision set forth herein be deemed invalid or unenforceable in any
respect, then Executive acknowledges and agrees that, as set forth in Section 15
hereof, reformation may be made with respect to such time period, geographic
area or other non-competition provision in order to protect Company's reasonable
business interests to the maximum permissible extent.
15. REMEDIES. In the event of any pending, threatened or actual breach of
any of the covenants or provisions of Section 11, 12, 13 or 14, it is understood
and agreed by Executive that the remedy at law for a breach of any of the
covenants or provisions of these Sections may be inadequate and, therefore,
Company shall be entitled to a restraining order or injunctive relief from any
court of competent jurisdiction, in addition to any other remedies at law and in
equity. In the event that Company seeks to obtain a restraining order or
injunctive relief, Executive hereby agrees that Company shall not be required to
post any bond in connection therewith. Should a court of competent jurisdiction
or an arbitrator (pursuant to Section 24) declare any provision of Section 11,
12, 13 or 14 to be unenforceable due to an unreasonable restriction of duration
or geographical area, or for any other reason, such court or arbitrator is
hereby granted the consent of each of the Executive and Company to reform such
provision and/or to grant the Company any relief, at law or in equity,
reasonably necessary to protect the reasonable business interests of Company or
any of its affiliated entities. Executive hereby acknowledges and agrees that
all of the covenants and other provisions of Sections 11, 12, 13 and 14 are
reasonable and necessary for the protection of the Company's business interests.
Executive hereby agrees that if the Company prevails in any action, suit or
proceeding with respect to any matter arising out of
15
or in connection with Section 11, 12, 13 or 14, Company shall be entitled to all
equitable and legal remedies, including, but not limited to, injunctive relief
and compensatory damages.
16. DEFENSE OF CLAIMS. Executive agrees that, during the Employment Period
and for a period of two (2) years after his Termination Date, upon reasonable
request from the Company, he will cooperate with the Company and its affiliated
entities in the defense of any claims or actions that may be made by or against
the Company or any of its affiliated entities that affect his prior areas of
responsibility, except if Executive's reasonable interests are adverse to the
Company (or affiliated entity) in such claim or action. To the extent travel is
required to comply with the requirements of this Section 16, the Company shall,
to the extent possible, provide Executive with notice at least 10 days prior to
the date on which such travel would be required. The Company agrees to promptly
pay or reimburse Executive upon demand for all of his reasonable travel and
other direct expenses incurred, or to be reasonably incurred, to comply with his
obligations under this Section 16.
17. DETERMINATIONS BY THE BOARD OF DIRECTORS.
(a) TERMINATION OF EMPLOYMENT. Prior to a Change in Control (as
defined in Section 6(b) hereof), any question as to whether and when there
has been a termination of Executive's employment, and the cause of such
termination, shall be determined by the Board of Directors in its
discretion.
(b) COMPENSATION. Prior to a Change in Control (as defined in Section
6(b) hereof), any question regarding salary, bonus and other compensation
payable to Executive pursuant to this Agreement shall be determined by the
Committee in its discretion.
18. WITHHOLDINGS: RIGHT OF OFFSET. Company may withhold and deduct from
any benefits and payments made or to be made pursuant to this Agreement (a) all
federal, state, local and other taxes as may be required pursuant to any law or
governmental regulation or ruling, (b) all other normal employee deductions made
with respect to Company's employees generally, and (c) any advances made to
Executive and any other amounts owed by Executive to Company.
19. NONALIENATION. The right to receive payments under this Agreement shall
not be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge or encumbrance by Executive, his dependents or beneficiaries,
or to any other person who is or may become entitled to receive such payments
hereunder. The right to receive payments hereunder shall not be subject to or
liable for the debts, contracts, liabilities, engagements or torts of any person
who is or may become entitled to receive such payments, nor may the same be
subject to attachment or seizure by any creditor of such person under any
circumstances, and any such attempted attachment or seizure shall be void and of
no force and effect.
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20. INCOMPETENT OR MINOR PAYEES. Should the Board of Directors determine
that any person to whom any payment is payable under this Agreement has been
determined to be legally incompetent or is a minor, any payment due hereunder
may, notwithstanding any other provision of this Agreement to the contrary, be
made in any one or more of the following ways: (a) directly to such minor or
person; (b) to the legal guardian or other duly appointed personal
representative of the person or estate of such minor or person; or (c) to such
adult or adults as have, in the good faith knowledge of the Board of Directors,
assumed custody and support of such minor or person; and any payment so made
shall constitute full and complete discharge of any liability under this
Agreement in respect to the amount so paid.
21. SEVERABILITY. It is the desire of the parties hereto that this
Agreement be enforced to the maximum extent permitted by law, and should any
provision contained herein be held unenforceable by a court of competent
jurisdiction or arbitrator (pursuant to Section 24), the parties hereby agree
and consent that such provision shall be reformed to create a valid and
enforceable provision to the maximum extent permitted by law; provided, however,
if such provision cannot be reformed, it shall be deemed ineffective and deleted
herefrom without affecting any other provision of this Agreement.
22. TITLE AND HEADINGS; CONSTRUCTION. Titles and headings to Sections
hereof are for the purpose of reference only and shall in no way limit, define
or otherwise affect the provisions hereof. Any and all Exhibits referred to in
this Agreement are, by such reference, incorporated herein and made a part
hereof for all purposes. The words "herein", "hereof", "hereunder" and other
compounds of the word "here" shall refer to the entire Agreement and not to any
particular provision hereof.
23. CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO THE PRINCIPLES
OF CONFLICTS OF LAW.
24. ARBITRATION.
(a) ARBITRABLE MATTERS. If any dispute or controversy arises between
Executive and the Company as to their respective rights or obligations
under this Agreement, then either party may submit the dispute or
controversy to arbitration under the then-current National Employment
Dispute Resolution Rules of the American Arbitration Association (AAA) (the
"Rules"); provided, however, the Company shall retain its rights to seek a
restraining order or injunctive relief pursuant to Section 15. Any
arbitration hereunder shall be conducted before a single arbitrator unless
the parties mutually agree to a panel of three arbitrators. The site for
any arbitration hereunder shall be in Houston, Xxxxxx County, Texas unless
otherwise mutually agreed by the parties.
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(b) SUBMISSION TO ARBITRATION. The party submitting any matter to
arbitration shall do so in accordance with the Rules. Notice to the other
party shall state the question or questions to be submitted for decision or
award by arbitration. Notwithstanding any provision in this Section 24,
Executive shall be entitled to seek specific performance of the Executive's
right to be paid during the pendency of any dispute or controversy arising
under this Agreement. In order to prevent irreparable harm, the arbitrator
may grant temporary or permanent injunctive or other equitable relief for
the protection of property rights.
(c) ARBITRATION PROCEDURES. The arbitrator shall set the date, time
and place for each hearing, and shall give the parties advance written
notice in accordance with the Rules. Any party may be represented by
counsel or other authorized representative at any hearing. The arbitration
shall be governed by the Federal Arbitration Act, 9 U.S.C. (S)(S) 1 et.
seq. (or its successor). The arbitrator shall apply the substantive law
(and the law of remedies, if applicable) of the State of Texas to the
claims asserted to the extent that the arbitrator determines that federal
law is not controlling.
(d) COMPLIANCE WITH AWARD.
(i) Any award of an arbitrator shall be final and binding upon
the parties to such arbitration, and each party shall immediately make
such changes in its conduct or provide such monetary payment or other
relief as such award requires. The parties agree that the award of the
arbitrator shall be final and binding and shall be subject only to the
judicial review permitted by the Federal Arbitration Act.
(ii) The parties hereto agree that the arbitration award may be
entered with any court having jurisdiction and the award may then be
enforced as between the parties, without further evidentiary
proceedings, the same as if entered by the court at the conclusion of
a judicial proceeding in which no appeal was taken. The Company and
the Executive hereby agree that a judgment upon any award rendered by
an arbitrator may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.
(e) COSTS AND EXPENSES. Each party shall pay any monetary amount
required by the arbitrator's award, and the fees, costs and expenses for
its own counsel, witnesses and exhibits, unless otherwise determined by the
arbitrator in the award. The compensation and costs and expenses assessed
by the arbitrator and AAA shall be paid by the losing party unless
otherwise determined by the arbitrator in the award. If court proceedings
to stay litigation or compel arbitration are necessary, the party who
18
unsuccessfully opposes such proceedings shall pay all associated costs,
expenses, and attorney's fees which are reasonably incurred by the other
party as determined by the arbitrator.
25. BINDING EFFECT: THIRD PARTY BENEFICIARIES. This Agreement shall be
binding upon and inure to the benefit of the parties hereto, and to their
respective heirs, executors, personal representatives, successors and permitted
assigns hereunder, but otherwise this Agreement shall not be for the benefit of
any third parties.
26. ENTIRE AGREEMENT AND AMENDMENT. This Agreement contains the entire
agreement of the parties with respect to Executive's employment and the other
matters covered herein; moreover, this Agreement supersedes all prior and
contemporaneous agreements and understandings, oral or written, between the
parties hereto concerning the subject matter hereof. This Agreement may be
amended, waived or terminated only by a written instrument executed by both
parties hereto.
27. SURVIVAL OF CERTAIN PROVISIONS. Wherever appropriate to the intention
of the parties hereto, the respective rights and obligations of said parties,
including, but not limited to, the rights and obligations set forth in Sections
6 through 16 and 24 hereof, shall survive any termination or expiration of this
Agreement.
28. WAIVER OF BREACH. No waiver by either party hereto of a breach of any
provision of this Agreement by any other party, or of compliance with any
condition or provision of this Agreement to be performed by such other party,
will operate or be construed as a waiver of any subsequent breach by such other
party or any similar or dissimilar provision or condition at the same or any
subsequent time. The failure of either party hereto to take any action by reason
of any breach will not deprive such party of the right to take action at any
time while such breach continues.
29. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of Company and its affiliated entities, and its and their
successors, and upon any person or entity acquiring, whether by merger,
consolidation, purchase of assets or otherwise, all or substantially all of the
assets and business of Company. This Agreement is personal to Executive, and
Executive may not assign, delegate or otherwise transfer all or any of his
rights, duties or obligations hereunder without the consent of the Board of
Directors. Any attempt by the Executive to assign, delegate or otherwise
transfer this Agreement, any portion hereof, or his rights, duties or
obligations hereunder without the prior written consent of the Board of
Directors shall be deemed void and of no force and effect.
30. NOTICES. Notices provided for in this Agreement shall be in writing
and shall be deemed to have been duly received (a) when delivered in person or
sent by facsimile
19
transmission, (b) on the first business day after it is sent by air express
overnight courier service, or (c) on the third business day following deposit in
the United States mail, registered or certified mail, return receipt requested,
postage prepaid and addressed, to the following address, as applicable:
(i) If to Company, addressed to:
Imperial Xxxxx Corporation
X.X. Xxx 0
Xxxxx Xxxx, Xxxxx 00000-0000
Attention: President
(ii) If to Executive, addressed to the address set forth below
his name on the execution page hereof;
or to such other address as either party may have furnished to the other party
in writing in accordance with this Section 30.
31. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute one and the same instrument.
Each counterpart may consist of a copy hereof containing multiple signature
pages, each signed by one party hereto, but together signed by both of the
parties hereto.
32. EXECUTIVE ACKNOWLEDGMENT/NO STRICT CONSTRUCTION. The Executive
represents to Company that he is knowledgeable and sophisticated as to business
matters, including the subject matter of this Agreement, that he has read the
Agreement and that he understands its terms and conditions. The parties hereto
agree that the language used in this Agreement shall be deemed to be the
language chosen by them to express their mutual intent, and no rule of strict
construction shall be applied against either party hereto. Executive also
represents that he is free to enter into this Agreement including, without
limitation, that he is not subject to any other contract of employment or
covenant not to compete that would conflict in any way with his duties under
this Agreement.
33. TERMINATION OF CHANGE OF CONTROL AGREEMENT. Only after this Agreement
is effective and enforceable upon the proper execution of this Agreement by the
parties hereto, that certain Change of Control Agreement between the Company and
[NAME], dated [DATE] shall terminate and be superseded in all respects by this
Agreement. All other agreements or arrangements between the Executive and
Company in effect on the date hereof shall remain fully effective in accordance
with their terms.
[Signature page follows.]
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IN WITNESS WHEREOF, the Executive has hereunto set his hand, and Company
has caused these presents to be executed in its name and on its behalf, to be
effective as of the Effective Date first above written.
WITNESS: EXECUTIVE:
Signature: Signature:
-------------------------- ------------------------
Printed Name: Printed Name:
----------------------- ---------------------
Date: Date:
------------------------------- -----------------------------
Address for Notices:
--------------
-----------------------------
-----------------------------
-----------------------------
ATTEST: IMPERIAL XXXXX CORPORATION:
By: By:
--------------------------------- -------------------------------
Title: Its:
------------------------------ ------------------------------
Printed Name: Printed Name:
----------------------- ---------------------
Date: Date:
------------------------------- -----------------------------
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