Exhibit 10.10
AMENDED
AND RESTATED
EXECUTIVE
EMPLOYMENT AGREEMENT
THIS
AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (this “AGREEMENT”) is
entered into as of the date set forth below and effective as of the Effective Date
(defined below), by and between Xxxxxx International, Inc. (the “COMPANY”), a
Delaware corporation, and Xxxxxxx X. Xxxxx (the “EXECUTIVE”).
PRELIMINARY
STATEMENTS
WHEREAS,
the Company and the Executive previously entered into that certain Executive
Employment Agreement, dated as of January 1, 2003 (the “EMPLOYMENT AGREEMENT”);
WHEREAS,
the Company and the Executive previously entered into that certain Severance
Agreement (the “SEVERANCE AGREEMENT”) dated as of January 29, 2000 whereby the
rights and obligations of the Executive in the event of a termination
associated with a change in control of the Company were set forth;
WHEREAS,
on March 29, 2004, the Company filed a voluntary petition for bankruptcy under
Chapter 11 of Title 11 of the U.S. Code (11 USC Section 101, ET. SEQ.) in the
U.S. Bankruptcy Court for the Southern District of Indiana (the “BANKRUPTCY”);
and
WHEREAS,
the Company and the Executive desire to amend and restate the Employment
Agreement on the terms and conditions set forth herein such that this Agreement
shall supersede and replace both the Employment Agreement and the Severance
Agreement and shall address the Executive’s employment and termination of
employment with the Company following the Company’s emergence from Bankruptcy.
NOW,
THEREFORE, in consideration of the mutual promises, covenants and agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
as follows:
AGREEMENT
SECTION
1. EMPLOYMENT.
(a) PRIOR AGREEMENTS.
Effective as of the effective date of the Company’s plan of reorganization (the
“PLAN OF REORGANIZATION”) as filed with the U.S. Bankruptcy Court for the
Southern District of Indiana (the “EFFECTIVE DATE”), the Executive’s employment
with the Company and benefits upon a termination of employment shall be
governed by this Agreement, which restates and supersedes each of the
Employment Agreement and the Severance Agreement.
(b) OFFER AND
ACCEPTANCE. During the Employment Term (as defined in SECTION 1(d) below), the
Company agrees to employ the Executive in the position of President and Chief
Executive Officer of the Company upon the terms and subject to the conditions
set forth herein, and the Executive agrees to remain in the employ of the
Company on such terms and conditions.
(c) DUTIES. The
Executive’s duties shall include those duties that are consistent with his
position as President and Chief Executive Officer of the Company as well as
those reasonably assigned to him from time to time, in good faith, by the Board
of Directors of the Company (the “BOARD”). The Executive shall (i) devote his
working hours, on a full-time basis, to his duties under this Agreement; (ii)
faithfully, industriously and loyally serve the Company; (iii) comply in all material
respects with the lawful and reasonable directions and instructions given to
him by the Board; and (iv) use his reasonable best efforts to promote and serve
the interests of the Company. The Executive shall comply in all material
respects with all applicable laws, rules and regulations relating to the
performance of the Executive’s duties and responsibilities hereunder. The
Executive agrees to serve as (i) a member of the Board and on any of the board
of directors of any subsidiary or affiliate of the Company, and (ii) as an
officer of any subsidiary or affiliate of the Company, without any additional
compensation while he is employed by the Company. Upon termination of the
Executive’s employment by the Company for any reason, the Executive shall immediately
resign from the Board and any other position as a member of the board of
directors or as an officer of any such subsidiary or affiliate of the Company.
(d) EMPLOYMENT
TERM. The Executive’s employment by the Company under this Agreement shall
commence on the Effective Date and shall continue thereafter and shall
terminate on September 30, 2007 (the “EMPLOYMENT TERM”), unless renewed by a
subsequent written agreement of the parties. The Executive’s employment by the Company
shall be subject to termination at any time during the Employment Term as
provided in subsection (f) of this SECTION 1. As used herein, the term “EMPLOYMENT
TERM” shall mean the actual period of time during which the Executive is
employed by the Company under the terms and conditions of this Agreement.
(e) COMPENSATION
AND BENEFITS. During the Employment Term, the Company shall pay and provide the
following compensation and other benefits to the Executive as full compensation
for all services rendered by the Executive as an employee of the Company under
the terms and conditions of this Agreement. All payments made to the Executive
hereunder shall be subject to appropriate payroll deductions and other
withholdings required by law.
(i) ANNUAL
SALARY. During the Employment Term, the Company shall pay to the Executive, in
accordance with the then prevailing payroll practices of the Company, a base
salary (the “ANNUAL SALARY”) at the annual rate of Four Hundred Eighty Thousand
Dollars ($480,000) per year.
(ii) BONUSES.
With respect to each full fiscal year during the Employment Term, the Executive
shall be eligible to receive an annual bonus based upon the achievement by the
Company of specific performance requirements (e.g. EBITDA benchmarks’ and/or
working capital targets) which shall be determined by the Board in its sole and
absolute discretion prior to or at the commencement of the applicable fiscal
year (the “BONUS”). The actual amount of the Bonus shall be equal to a
percentage of the Annual Salary in effect as
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of September 30th of such
fiscal year and shall be determined by the Board in its sole and absolute
discretion prior to or at the commencement of the applicable fiscal year.
Notwithstanding the foregoing, for the 2004 fiscal year only, the target amount
for the Bonus shall be sixty percent (60%) of the Annual Salary in effect as of
September 30, 2004; provided, however, Executive shall be eligible to receive a
minimum Bonus in an amount equal to thirty-five percent (35%) of such Annual
Salary and a maximum Bonus equal to one hundred twenty percent (120%) of such
Annual Salary, based upon the achievement of the performance requirements, as
determined by the Board in its sole and absolute discretion. The Bonus, if
earned, shall be paid to the Executive by the Company no later than February 1
of the following calendar year.
(iii) BENEFITS.
The Executive shall be eligible to participate in all employee health and
welfare benefit plans in which senior executives of the Company are entitled to
participate, but participation shall be subject to all of the terms and
conditions) of such plans applicable to all such senior executives, including
all waiting periods, eligibility requirements, contributions, exclusions and
other similar conditions or limitations. In the case of any disability plan,
the Company agrees that such plan will provide the benefits contemplated by
SECTION 1(e)(iv) or in lieu of such plan participation, the Company will
provide to the Executive the disability insurance coverage contemplated by
SECTION 1(e)(iv).
(iv) INSURANCE.
The Executive shall be entitled to receive long-term disability insurance
coverage and the amount of the benefit payments under such insurance coverage
shall be not less than sixty percent (60%) of the Annual Salary then in effect
(the “DISABILITY INSURANCE”). The Company shall pay all premiums related to the
Disability Insurance as long as the Executive is employed by Company hereunder.
In addition, the Company shall provide the Executive with a life insurance
policy in a face amount equal to five (5) times the Annual Salary then in
effect (the “LIFE INSURANCE”), which policy shall be convertible to an
individual policy at the election of the Executive upon termination of the
Executive’s employment by the Company. The Company shall be the owner of the
Life Insurance and shall pay all premiums related thereto prior to termination of
the Executive’s employment by the Company.
(v) EXPENSES.
The Company shall reimburse the Executive, in accordance with the then
prevailing reimbursement practices of the Company, for all reasonable and
customary business expenses incurred by the Executive in connection with his
employment by the Company, including, but not limited to, all reasonable and
customary travel-related expenses incurred in connection with periodic trips to
Syracuse, New York, provided, in any case, that the Executive complies with the
standard reporting and reimbursement policies as may be established by the
Company from time to time.
(vi) VACATION.
The Executive shall be entitled to five (5) weeks of vacation, measured on a
calendar year basis. The Executive shall schedule vacation periods at
reasonable times in accordance with the Company’s vacation policy for senior
executives. The Executive shall accrue and receive full compensation and
benefits during his vacation periods. Unused vacation leave time shall not
entitle the Executive to any additional compensation and may not be carried
over to a subsequent calendar year.
(vii) SERP. The
Executive shall be entitled to participate in the Xxxxxx International, Inc.
Supplemental Executive Retirement Plan on the terms and conditions
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as set forth in the
Participation Agreement entered into by and between the Executive and the
Company dated December 13, 2002 as amended as of the date hereof (the “SERP”).
(viii) COMPANY CAR.
The Company shall provide the Executive with the use of an automobile owned or
leased by the Company at its expense for Company-related purposes (the “COMPANY
CAR”). The Company shall pay or reimburse the Executive for all expenses incurred
in connection with the Executive’s use of the Company Car, including, but not
limited to, insurance, gasoline, registration taxes and maintenance. The
Company Car shall be a Buick Park Avenue or an automobile of a similar class.
The Executive agrees that the use of the Company Car for personal-related matters
will result in imputed income to the Executive and at the end of each calendar
year, the Company and its accountants shall reasonably determine the amount of
such income to be included in the Executive’s compensation in connection with
the personal use of the Company Car and the Executive agrees that he shall be
responsible for any and all taxes imposed on such imputed income.
(ix) COUNTRY CLUB
MEMBERSHIP. The Company shall reimburse the Executive for all regular monthly
membership dues and business-related charges incurred by the Executive in
connection with his membership at a country club. The Executive agrees that he
shall be responsible for any and all taxes imposed on the reimbursements made
pursuant to the preceding sentence.
(x) OPTIONS. As
of the Effective Date, the Company shall establish a long-term equity incentive
plan in which the Executive is eligible to participate (the “LTIP”). During the
Employment Term, the Executive shall remain eligible to participate in the LTIP
pursuant to the terms and conditions set forth therein.
(xi) DEATH
BENEFIT PLAN. The Executive shall be eligible to participate in the Xxxxxx
International, Inc. Death Benefit Plan, as amended, pursuant to the terms and
conditions set forth in such plan.
(f) TERMINATION
OF EMPLOYMENT. Subject to the terms of Section 1(g) below, the Executive’s
employment by the Company may be terminated as follows:
(i) TERMINATION
UPON THE EXPIRATION OF THE EMPLOYMENT TERM. Unless otherwise agreed to in
writing by the Company and the Executive, the Executive’s employment shall
terminate on September 30, 2007 unless terminated earlier pursuant to this
SECTION 1(f). In the event that the Executive’s employment terminates upon the
expiration of the Employment Term, then the Executive shall be entitled to
receive the compensation and benefits set forth in SECTION 1(g)(i).
(ii) TERMINATION
FOR CAUSE. The Company may immediately terminate, at any time, Executive’s
employment by the Company for “Cause.” A termination for “Cause” means a
termination by reason of the Board’s good faith determination that the
Executive (i) continually failed to substantially perform his duties with the
Company (other than a failure resulting from the Executive’s medically
documented incapacity due to physical or mental illness) including, without
limitation, repeated refusal to follow the reasonable
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directions of the Board,
knowing violation of the law in the course of performance of the Executive’s
duties with the Company, repeated absences from work without a reasonable
excuse, or intoxication with alcohol or illegal drugs while on the Company’s
premises during regular business hours, (ii) engaged in conduct which
constituted a material breach of SECTION 2 or SECTION 3 of this Agreement,
(iii) was indicted (or equivalent under applicable law), convicted of, or
entered a plea of nolo contendere to the commission of a felony or crime
involving dishonesty or moral turpitude, or (iv) engaged in conduct which is
demonstrably and materially injurious to the financial condition, business
reputation, or otherwise of the Company or its subsidiaries or affiliates, or
(v) perpetuated a fraud or embezzlement against the Company or its subsidiaries
or affiliates, and in each case the particular act or omission was not cured,
if curable, in all material respects by the Executive within thirty (30) days
after receipt of written notice from the Board which shall set forth in reasonable
detail the nature of the facts and circumstances which constitute Cause.
Notwithstanding the foregoing, the Executive shall not be deemed to have been
terminated for Cause unless there shall have been delivered to the Executive a
copy of a resolution duly adopted by the Board. If the Company has reasonable belief
that the Executive has committed any of the acts described above, it may
suspend the Executive (with or without pay) while it investigates whether it
has or could have Cause to terminate the Executive. The Company may terminate
the Executive for Cause prior to the completion of its investigation; provided,
that, if it is ultimately determined that the Executive has not committed an
act which would constitute Cause, the Executive shall be treated as if he were terminated
without Cause.
(iii) TERMINATION
WITHOUT CAUSE. The Company may, at any time, terminate the Executive’s
employment by Company without Cause by providing prior written notice thereof
to the Executive.
(iv) RESIGNATION
FOR GOOD REASON. The Executive may terminate his employment by the Company for
Good Reason (as defined below) by providing written notice thereof to the
Company (the “RESIGNATION NOTICE”) at least forty-five (45) days prior to the
effective date of the resignation, which notice shall set forth in reasonable
detail the nature of the facts and circumstances which constitute Good Reason
and the Company shall have thirty (30) days after receipt of the Resignation
Notice to cure in all material respects the facts and circumstances which
constitute Good Reason. For purposes of this Agreement, “GOOD REASON” shall
mean the occurrence, during the Employment Term, of any of the following
actions or failures to act, but in each case only if it is not consented to by
the Executive in writing: (a) a material adverse change in the Executive’s
duties, reporting responsibilities, titles or elected or appointed offices as
in effect immediately prior to the effective date of such change; (b) a
material reduction by the Company in the Executive’s Base Salary or annual
bonus opportunity in effect immediately prior to the effective date of such reduction,
not including any reduction resulting from changes in the market value of
securities or other instruments paid or payable to the Executive; or (c) any
change of more than 50 miles in the location of the principal place of
employment of the Executive immediately prior to the effective date of such
change. For purposes of this definition, none of the actions described in
clauses (a) and (b) above shall constitute “Good Reason” with respect to the
Executive if it was an isolated and inadvertent action not taken in bad faith
by the Company and if it is
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remedied by the Company
within thirty (30) days after receipt of written notice thereof given by the
Executive (or, if the matter is not capable of remedy within thirty (30) days,
then within a reasonable period of time following such thirty (30) day period,
provided that the Company has commenced such remedy within said thirty (30) day
period); provided that “Good Reason” shall cease to exist for any action
described in clauses (a) and (b) above on the sixtieth (60th) day following the
later of the occurrence of such action or the Executive’s knowledge thereof,
unless the Executive has given the Company written notice thereof prior to such
date.
(v) RESIGNATION
WITHOUT GOOD REASON. The Executive may, at any time, terminate the Executive’s
employment by the Company without Good Reason by providing thirty (30) days’
prior written notice thereof to the Company.
(vi) DEATH;
DISABILITY OR RETIREMENT. The Executive’s employment shall terminate
immediately upon the Executive’s death, Disability, or Retirement (each as
defined below). For purposes of this Agreement, “DISABILITY” means the
Executive is totally and permanently disabled as defined in the Xxxxxx International,
Inc. Pension Plan and “RETIREMENT” means a resignation by the Executive after
having reached age fifty-five (55), but in no event prior to September 30,
2007.
(g) EFFECT OF
TERMINATION.
(i) TERMINATION
UPON THE EXPIRATION OF THE EMPLOYMENT TERM. Upon the termination of the
Executive’s employment pursuant to SECTION 1(f)(i), the Executive will be
entitled to (A) payment of that portion of the Executive’s then effective)
Annual Salary which has been earned but not yet paid through and including the
last day of the Executive’s employment (the “TERMINATION DATE”); (B) payment of
any Bonus earned by the Executive under the terms and conditions of this
Agreement prior to the Termination Date that remains unpaid; (C) reimbursement
of any reimbursable business expenses under SECTION 1(e)(v), which were
incurred by the Executive through and including the Termination Date; (D)
continuation of benefits to which the Executive is entitled under SECTION
L(e)(iii) and SECTION 1(e)(iv) through and including the Termination Date and;
(E) the SERP that the Executive is entitled to under SECTION 1(e)(vii). In
addition, any unvested stock options held by the Executive shall terminate
immediately and any vested stock options held by the Executive shall remain
exercisable for ninety days (90) following the Termination Date, but in no
event later than the expiration date of such stock option as specified in the applicable
grant letter.
(ii) TERMINATION
FOR CAUSE OR RESIGNATION WITHOUT GOOD REASON. Upon the Company’s termination of
the Executive’s employment for Cause pursuant to SECTION 1(f)(ii) or the
Executive’s resignation without Good Reason pursuant to SECTION L(f)(v),
Executive will be entitled to (A) payment of that portion of the Executive’s
then effective Annual Salary which has been earned but not yet paid through and
including the Termination Date; (B) payment of any Bonus earned by the
Executive under the terms and conditions of this Agreement prior to the
Termination Date that remains unpaid; (C) reimbursement of any reimbursable
business expenses under SECTION 1(e)(v), which were incurred by the Executive
through and including the
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Termination Date; (D)
continuation of benefits to which the Executive is entitled under SECTION
1(e)(iii) and SECTION 1(e)(iv) through and including the Termination Date; and
(E) the SERP that the Executive is entitled to under SECTION 1(e)(vii). In
addition, (x) upon a termination by the Company pursuant to SECTION 1(f)(ii),
any vested or unvested stock options held by the Executive shall terminate
immediately and (y) upon the Executive’s resignation pursuant to SECTION
1(f)(v), any unvested stock options held by the Executive shall terminate
immediately and any vested stock option held by the Executive shall remain
exercisable for thirty (30) days following the Termination Date but in no event
later than the expiration date of such stock option as specified in the
applicable grant letter.
(iii) TERMINATION
WITHOUT CAUSE OR RESIGNATION FOR GOOD REASON. Upon the Company’s termination of
the Executive’s employment without Cause, pursuant to SECTION 1(f)(iii) or the
Executive’s resignation for Good Reason pursuant to SECTION L(f)(iv), the
Executive shall be entitled to receive a lump sum payment equal to (A) payment
of that portion of the Executive’s then effective Annual Salary which has been
earned but not yet paid through and including the Termination Date; (B) payment
of any Bonus earned by the Executive under the terms and conditions of this
Agreement prior to the Termination Date that remains unpaid; and (C) payment of
an amount based upon the following formula:
(A
+ ((B + C)/2)) x 2
Where:
“A” equals the Annual Salary then in effect;
“B”
equals the Bonus paid or payable to the Executive with respect to the fiscal
year immediately preceding the fiscal year in which the Executive’s termination
or resignation occurs (if no such Bonus was paid or payable with respect to
such year, the Bonus amount used for this calculation shall be zero).
“C”
equals the Bonus paid or payable to the Executive with respect to the second
fiscal year preceding the fiscal year in which the Executive’s termination or
resignation occurs (if no such Bonus was paid or payable with respect to such
year, the Bonus amount used for this calculation shall be zero.)
The
Executive shall also be entitled to receive (A) reimbursement of any reimbursable
business expenses under SECTION 1(e)(v), which were incurred by the Executive
through and including the Termination Date; (B) continuation of medical and
hospitalization benefits to which the Executive is entitled under SECTION
1(e)(iii), Life Insurance and Disability Insurance to which the Executive is
entitled under SECTION 1(e)(iv), in each case, until the second (2nd)
anniversary of the Termination Date; provided, however, that such benefits shall
terminate to the extent that the Executive obtains comparable benefits coverage
from another employer during such two (2) year period and (C) the SERP that the
Executive is entitled to under SECTION 1(e)(vii). In addition, any unvested
stock options held by the Executive will vest immediately and all options held
by the Executive will remain exercisable for one (1) year from the Termination
Date, but in no event later than the expiration date of such stock option as
specified in the applicable grant letter.
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(iv) DEATH;
DISABILITY OR RETIREMENT. Upon termination of the Executive’s employment
pursuant to SECTION 1(f)(vi), the Executive or the Executive’s heirs, estate,
personal representative or legal guardian, as appropriate, will be entitled to
receive (A) payment of that portion of the Executive’s then effective Annual
Salary which has been earned but not yet paid through and including the
Termination Date; (B) payment of any Bonus earned by the Executive under the
terms and conditions of this Agreement prior to the Termination Date that
remains unpaid; (C) reimbursement of any reimbursable business expenses under
SECTION 1(e)(v), which were incurred by the Executive through and including the
Termination Date; (D) continuation of benefits to which the Executive is
entitled under SECTION 1(e)(iii) and SECTION 1(e)(iv) through and including the
Termination Date (including, without limitation, coverage under any Company
disability plan then in effect); and (E) payment of the SERP that the Executive
is entitled to under SECTION 1(e)(vii) in accordance with its terms. In
addition, any unvested stock options held by the Executive will vest
immediately and all options held by the Executive will remain exercisable for
one (1) year in the event of death or Disability and six (6) months in the
event of Retirement following the Termination Date, but in no event later than
the expiration date of such stock option as specified in the applicable grant letter.
(v) TIMING OF
PAYMENT AND RELEASE. As a condition of receiving from the Company the payments
and benefits provided for under this SECTION 1(g) which the Executive otherwise
would not be entitled to receive, the Executive understands and agrees that, on
the Termination Date, he will be required to execute a release of all claims
against the Company in substantially the form attached hereto as Exhibit I (the
“RELEASE”) as may be modified by the Company in good faith to reflect changes
in law or its employment practices. The Executive acknowledges that he has been
advised in writing to consult with an attorney prior to executing the Release.
The Executive agrees that he will consult with his attorney prior to executing the
Release. The Executive and the Company agree that the Executive has a period of
seven (7) days following the execution of the Release within which to revoke
the Release. The parties also acknowledge and agree that the Release shall not
be effective or enforceable until the seven (7) day revocation period expires.
The date on which this seven (7) day period expires shall be the effective date
of the Release (the “RELEASE EFFECTIVE DATE”). The Company shall make all
payments required under this Agreement, except to the extent that such payments
are to be made over time, within five (5) business days following the Release
Effective Date. In the event of a termination for Cause or by reason of the
Executive’s death, the Company shall make any payments under this SECTION 1(g)
within five (5) business days of the Termination Date, except to the extent
that such payments are to be made over time. The Executive understands that as
used in this SECTION 1(g)(iv), the “Company” includes its past, present and future
officers, directors, trustees, shareholders, employees, agents, subsidiaries,
affiliates, distributors, successors, and assigns, any and all employee benefit
plans (and any fiduciary of such plans) sponsored, by the Company, and any
other person related to the Company.
Except
as specifically provided in this SECTION 1(g) or required under applicable law,
the Executive will not be eligible to receive any salary, bonus or other
compensation or benefits described in SECTION 1(e) with respect to any future
periods after the
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Termination Date;
provided, however, the Executive shall have the right to receive all
compensation and benefits to which he is entitled under any benefit plans of
the Company to the extent he is fully vested as of the effective date of the
termination of the Executive’s employment by the Company pursuant to the terms
and conditions of such employee benefit plans.
SECTION
2. CONFIDENTIALITY.
For purposes of this Section 2, the term “Company” shall include, in addition
to the Company, its affiliates, subsidiaries and any of their respective
predecessors, successors and assigns. The term “Company’s Business” shall mean
the business of developing, manufacturing, selling or distributing
high-performance alloys for service in severe corrosion and high temperature
applications.
(a) CONFIDENTIAL
INFORMATION. As used in this Agreement, “CONFIDENTIAL INFORMATION” means any
and all confidential, proprietary or other information, whether or not
originated by the Executive or the Company, which is in any way related to the
past or present Company’s Business and is either designated as confidential or
not generally known by or available to the public. Confidential Information
includes, but is not limited to (whether or not reduced to writing or
designated as confidential) (i) information regarding the Company’s existing and
potential customers and vendors; (ii) any contacts (including the existence and
contents thereof and parties thereto) to which the Company is a party or is bound;
(iii) information regarding products and services being purchased or leased by
or provided to the Company; (iv) information received by the Company from third
parties under an obligation of confidentiality, restricted, disclosure or
restricted use; (v) personnel and financial information of the Company; (vi)
information with respect to the Company’s products, services, facilities,
business methods, systems, trade secrets, technical know-how, and other
intellectual property; (vii) marketing and developmental plans and techniques,
price and cost data, forecasts and forecast assumptions, and potential
strategies of the Company; and (viii) any other information relating to the
Company which was obtained by the Executive in connection with his employment
by the Company, whether before, on or after the Effective Date.
(b) NON-DISCLOSURE
AND NON-USE OF CONFIDENTIAL INFORMATION. The Executive acknowledges that the
Confidential Information of the Company is a valuable, unique asset of the
Company and the Executive’s unauthorized use or disclosure thereof could cause
irreparable harm to the Company for which no remedy at law could be adequate.
Accordingly, the Executive agrees that he shall hold all Confidential
Information of the Company in strict confidence and solely for the benefit of
the Company, and that, he shall not, directly or indirectly, disclose or use or
authorize any third party to disclose or use any Confidential Information
except (i) as required for the performance of the Executive’s duties hereunder,
(ii) with the express written consent of the Company, (iii) to the extent that
any such information is in or becomes in the public domain other than as a
result of the Executive’s breach of any of his obligations hereunder, or (iv)
where required to be disclosed by court order, subpoena or other government
process and in such event, the Executive shall cooperate with the Company in
attempting to keep such information confidential. The Executive shall follow
all Company policies and procedures to protect all Confidential Information and
take any additional precautions necessary to preserve and protect the use or
disclosure of any Confidential Information at all times. The Company shall
reimburse the Executive for all reasonable
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expenses
and costs he may incur as a result of cooperating under this SECTION 2(b), upon
receipt of proper documentation.
(c) OWNERSHIP OF
CONFIDENTIAL INFORMATION. The Executive acknowledges and agrees that all
Confidential Information is and shall remain the exclusive property of the
Company, whether or not prepared in whole or in part by the Executive and
whether or not disclosed to or entrusted to the custody of the Executive. Upon
the termination or resignation of his employment by the Company, or at any
other time at the request of the Company, the Executive shall promptly deliver
to the Company all documents, tapes, disks, or other storage media and any
other materials, and all copies thereof in whatever form, in the possession of
the Executive pertaining to the Company’s Business, including, but not limited
to, any containing Confidential Information.
(d) SURVIVAL.
The Executive’s obligations set forth in this SECTION 2, and the Company’s
rights and remedies with respect hereto, shall indefinitely survive the
termination of this Agreement and the Executive’s employment by the Company,
regardless of the reason therefor.
SECTION
3. RESTRICTIVE COVENANTS.
For purposes of this SECTION 3, the term “Company” shall include, in addition
to the Company, its affiliates, subsidiaries and any of their respective
predecessors, successors and assigns.
(a) NON-COMPETITION.
During the Restricted Period and within the Restricted Area (each as defined in
subsection (c) below), the Executive shall not, directly or indirectly, perform
on behalf of any Competitor (as defined in subsection (c) below) the same or
similar services as those that the Executive performed for the Company during
the Executive’s employment by the Company or otherwise. In addition, the
Executive shall not, during the Restricted Period or within the Restricted
Area, directly or indirectly engage in, own, manage, operate, join, control,
tend money or other assistance to, or participate in or be connected with (as
an officer, director, member, manager, partner, shareholder, consultant,
employee, agent, or otherwise), any Competitor.
(b) NON-SOLICITATION.
During the Restricted Period, the Executive shall not, directly or indirectly,
for himself or on behalf of any Person (as defined in subsection (c) below),
(i) solicit or attempt to solicit any Customers (as defined in subsection (c)
below) or prospective Customers with whom the Executive had contact at any time
during the Executive’s employment by the Company; (ii) divert or attempt to
divert any business of the Company to any, other Person; (iii) solicit or
attempt to solicit for employment, endeavor to entice away from the Company,
recruit, hire, or otherwise interfere with the Company’s relationship with, any
Person who is employed by or otherwise engaged to perform services for the
Company (or was employed or otherwise engaged to perform services for the
Company, as of any given time, within the immediately preceding twenty-four
(24) month period); (iv) cause or assist, or attempt to cause or assist, any
employee or other service provider to leave the Company; or (v) otherwise
interfere in any manner with the employment or business relationships of the
Company or the business or operations then being conducted by the Company.
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(c) DEFINITIONS.
For purposes of this SECTION 3, the following definitions have the following
meanings:
(i) “COMPETITOR”
means any Person that engages in a business that is the same as, or similar to,
the Company’s Business.
(ii) “CUSTOMER”
means any Person which, as of any given date, used or purchased or contracted
to use or purchase any services or products from Company within the immediately
preceding twenty-four (24) month period.
(iii) “PERSON”
means any individual, corporation, partnership, joint venture, association,
limited liability company, joint-stock company, trust, or unincorporated
organization, or any governmental agency, officer, department, commission, board,
bureau, or instrumentality thereof.
(iv) “RESTRICTED
AREA” means, because the market for the Company’s Business is global, or has
the potential of being global, and is not dependent upon the physical location
or presence of the Company, the Executive, or any individual or entity that may
be in violation of this Agreement, the broadest geographic region enforceable
by law (excluding any location where this type of restriction is prohibited by
law) as follows: (A) everywhere in the world that has access to the Company’s
Business because of the availability of the Internet; (B) everywhere in the
world that the Executive has the ability to compete with the Company’s Business
through the Internet; (C) each state, commonwealth, territory, province and other
political subdivision located in North America; (D) each state, commonwealth,
territory and other political subdivision of the United States of America; (E)
Indiana and any state in which the Executive has performed any services for the
Company; (F) any geographical area in which the Company has performed any
services or sold any products; (G) any geographical area in which the Company
or any of its subsidiaries have engaged in the Company’s Business, which has
resulted in aggregate sales revenues of at least $25,000 during any year in the
five (5) year period immediately preceding the commencement of the Restricted
Period; (H) any state or other jurisdiction where the Company had an office at
any time during the Executive’s employment by the Company; (I) within one
hundred (100) miles of any location in which the Company had an office at any
time during the Executive’s employment by the Company; and (3) within one hundred
(100) miles of any location in which the Executive provided services for the
Company.
(v) “RESTRICTED
PERIOD” means the period of time during the Executive’s employment by the
Company plus a period of twenty-four (24) months from the Termination Date. In
the event of a breach of this Agreement by the Executive, the Restricted Period
will be extended automatically by the period of the breach.
(d) SURVIVAL.
The Executive’s obligations set forth in this Section 3, and the Company’s
rights and remedies with respect thereto, will remain in full force and effect
during the Restricted Period and until full resolution of any dispute related
to the performance of the Executive’s obligations during the Restricted Period.
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(e) PUBLIC
COMPANY EXCEPTION. The prohibitions contained in this SECTION 3 do not prohibit
the Executive’s ownership of stock which is publicly traded, provided that (1)
the investment is passive, (2) the Executive has no other involvement with the
company, (3) the Executive’s interest is less than five percent (5%) of the
shares of the company, and (4) the Executive makes full disclosure to the
Company of the stock at the time that the Executive acquires the shares of
stock.
SECTION
4. ASSIGNMENT
OF INVENTIONS. Any and all inventions, improvements, discoveries, designs,
works of authorship, concepts or ideas, or expressions thereof, whether or not
subject to patents, copyrights, trademarks or service xxxx protections, and
whether or not reduced to practice, that are conceived or developed by the
Executive while employed with the Company and which relate to or result from
the actual or anticipated business, work, research or, investigation of the
Company (collectively, “INVENTIONS”), shall be the sole and exclusive property
of the Company. The Executive shall do all things reasonably requested by the
Company to assign to and vest in the Company the entire right, title and
interest to any such Inventions and to obtain full protection therefor.
Notwithstanding the foregoing, the provisions of this Agreement do not apply to
an Invention for which no equipment, supplies, facility, or Confidential Information
of the Company was used and which was developed entirely on the Executive’s own
time, unless (a) the Invention relates (i) to the Company’s Business, or (ii)
to the Company’s actual or demonstrably anticipated research or development, or
(b) the Invention results from any work performed by the Executive for the
Company.
SECTION
5. GENERAL.
(a) REASONABLENESS.
The Executive has carefully considered the nature, extent and duration of the
restrictions and obligations contained in this Agreement, including, without
limitation, the geographical coverage contained in SECTION 3 and the time
periods contained in SECTION 2 and SECTION 3, and acknowledges and agrees that
such restrictions are fair and reasonable in all respects to protect the
legitimate interests of the Company and that these restrictions are designed
for the reasonable protection of the Company’s Business.
(b) REMEDIES.
The Executive recognizes that any breach of this Agreement shall cause
irreparable injury to the Company, inadequately compensable in monetary
damages. Accordingly, in addition to any other legal or equitable remedies that
may be available to the Company, the Executive agrees that the Company shall be
able to seek and obtain injunctive relief in the form of a temporary restraining
order, preliminary injunction, or permanent injunction, in each case without
notice or bond, against the Executive to enforce this Agreement. The Company
shall not be required to demonstrate actual injury or damage to obtain
injunctive relief from the courts. To the extent that any damages are
calculable resulting from the breach of this Agreement, the Company shall also
be entitled to recover damages, including, but not limited to, any lost profits
of the Company and/or its affiliates or subsidiaries. For purposes of this
Agreement, lost profits of the Company shall be deemed to include all gross
revenues resulting from any activity of the Executive in violation of this Agreement
and all such revenues shall be held in trust for the benefit of the Company.
Any recovery of damages by the Company shall be in addition to and not in lieu
of the injunctive relief to which the Company is entitled. In no event will a
damage recovery be considered a penalty in liquidated damages. In addition, in
any action at law or in equity arising out of this Agreement, the prevailing
party shall be entitled
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to
recover, in addition to any damages caused by a breach of this Agreement, all costs
and expenses, including, but not limited to, reasonable attorneys’ fees, expenses,
and court costs incurred by such party in connection with such action or
proceeding. Without limiting the Company’s rights under this SECTION 5(b) or any
other remedies of the Company, if a court of competent jurisdiction determines
that the Executive breached any of the provisions of Section or SECTION 3,
Company will have the right to cease making any payments or providing any
benefits otherwise due to the Executive under the terms and conditions of this
Agreement.
(c) CLAIMS BY
EXECUTIVE. The Executive acknowledges and agrees that, any claim or cause of
action by the Executive against the Company shall not constitute a defense to
the enforcement of the restrictions and covenants set forth in this Agreement
and shall not be used to prohibit injunctive relief.
(d) AMENDMENTS.
This Agreement may not be modified, amended, or waived in any manner except by
an instrument in writing signed by both parties to this Agreement.
(e) WAIVER. The
waiver by either party of compliance by the other party with any provision of
this Agreement shall not operate or be construed as a waiver of any other
provision of this Agreement (whether or not similar), or a continuing waiver,
or a waiver of any subsequent breach by a party of any provision of this
Agreement.
(f) GOVERNING LAW;
JURISDICTION. The laws of the State of New York shall govern the validity,
performance, enforcement, interpretation, and other aspects of this Agreement,
notwithstanding any state’s choice of law provisions to the contrary. The
parties intend the provisions of this Agreement to supplement, but not
displace, their respective obligations and responsibilities under the New York
and Indiana Uniform Trade Secrets Act. Any proceeding to enforce, interpret,
challenge the validity of, or recover for the breach of any provision of, this
Agreement may be filed in the courts of the State of Indiana or the United
States District Court sitting in Indianapolis, Indiana, and the parties hereto
expressly waive any and all objections to personal jurisdiction, service of
processor venue in connection therewith.
(g) COMPLETE
AGREEMENT; RELEASE. This Agreement constitutes a complete and total integration
of the understanding of the parties with respect to the subject matter hereof
and thereof and supersedes all prior or contemporaneous negotiations,
commitments, agreements, writings, and discussions with respect to the subject
matter of this Agreement, including but not limited to the Severance Agreement
and the Employment Agreement. The Executive hereby unconditionally releases and
discharges the Company from any and all claims, causes of action, demands,
lawsuits or other charges whatsoever, known or unknown, directly or indirectly
related to the Severance Agreement and the Employment } Agreement arising prior
to the Effective Date.
(h) SEVERABILITY.
If a court having proper jurisdiction holds a particular provision of this
Agreement unenforceable or invalid for any reason, that provision shall be
modified only to the extent necessary in the opinion of such court to make it enforceable
and valid and the remainder of this Agreement shall be deemed valid and
enforceable and shall be enforced to the greatest extent possible under the
then existing law. In the event the court determines such
13
modification
is not possible, the provision shall be deemed severable and deleted, and all
other provisions of this Agreement shall remain unchanged and in full force and
effect.
(i) ENFORCEABILITY
IN JURISDICTIONS. The parties hereto intend to and hereby confer jurisdiction
to enforce the covenants contained in SECTIONS 2 AND 3 above upon the courts of
any state within the geographical scope of such covenants. If the courts of any
one or more of such states shall hold any of the previous covenants
unenforceable by reason of the breadth of such scope or otherwise, it is the
intention of the parties hereto that such determination not bar or in any way
affect the Company’s rights to the relief provided above in the courts of any
other states within the geographical scope of such covenants, as to breaches of
such covenants in such other respective jurisdictions, the above covenants as
they relate to each state being, for this purpose, severable into diverse and
independent covenants.
(j) FAIR
DEALING. The Executive acknowledges that the Company has negotiated this
Agreement in good faith and has been fair in its dealing with the Executive.
The Executive shall not raise any defense and expressly waives any defense
against the Company based upon any alleged breach of good faith or fair dealing
by the Company in connection with this Agreement.
(k) COUNTERPARTS.
This Agreement may be executed in two (2) counterparts, each of which shall be
deemed an original but both of which together shall constitute one and the same
Agreement. Facsimile transmission of the executed version of this Agreement or
any counterpart hereof shall have the same force and effect as the original.
(l) EXECUTIVE
WARRANTIES. The Executive warrants and represents to the Company that the
execution and performance of this Agreement does not and shall not violate any
express or implied obligations of the Executive to any other person and that
the Executive shall inform any prospective employer about the existence of this
Agreement before accepting employment by such employer.
(m) HEADINGS.
The headings of the Sections of this Agreement are inserted for convenience
only and shall not be deemed to constitute part of this Agreement or to affect
the construction of this Agreement.
(n) THIRD PARTY
BENEFICIARIES. The Company’s affiliates and subsidiaries are expressly made
third party beneficiaries of this Agreement.
(o) NOTICES. Any
notice required or permitted hereunder shall be personally delivered or mailed
by certified mail, return receipt requested, to the addresses of the parties
set out on the signature pages hereto, or as changed from time to time by
notice as provided herein.
(p) SUCCESSORS
AND ASSIGNS. The Executive shall not assign or transfer any of his rights or
obligations under this Agreement to any individual or entity. The Company may
assign its rights hereunder to any of its affiliates or to any individual or
entity who or that shall acquire or succeed to, by operation of law or
otherwise, all or substantially all of the assets of the Company or the Company’s
Business. All provisions of this Agreement are binding upon, shall inure to the
benefit of, and are enforceable by or against, the parties and their respective
heirs, executors, administrators or other legal representatives and permitted
successors and assigns.
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(q) OPPORTUNITY
TO CONSULT COUNSEL. THE EXECUTIVE ACKNOWLEDGES THAT HE HAS CAREFULLY READ THIS
AGREEMENT AND HAS BEEN GIVEN ADEQUATE OPPORTUNITY, AND HAS BEEN ENCOURAGED BY
THE COMPANY, TO CONSULT WITH LEGAL COUNSEL OF HIS CHOICE CONCERNING THE TERMS
HEREOF BEFORE EXECUTING THIS AGREEMENT.
[SIGNATURE
PAGE FOLLOWS]
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IN
WITNESS WHEREOF, the parties have made this Agreement effective as of the
Effective Date.
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COMPANY
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XXXXXX
INTERNATIONAL, INC.
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By: :
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/s/ Xxxxxx Xxxxxx
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Printed:
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Xxxxxx Xxxxxx
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Title:
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V.P. Finance, CFO
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0000 X. Xxxx
Xxxxxx
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X.X. Xxx 0000
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Xxxxxx, XX
00000-0000
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EXECUTIVE
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/s/ Xxxxxxx X.
Xxxxx
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Xxxxxxx X. Xxxxx
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0000 Xxxxxxx
Xxxx
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Xxxxxxxx, XX
00000
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[Exhibit
I - Form of Release of Claims has been omitted from the Agreement as filed with
the Securities and Exchange Commission (the “SEC”). The omitted information is
filed as Exhibit 10.08 to the Registration Statement. The Registrant will
furnish supplementally a copy of any of the omitted exhibit to the SEC upon
request from the SEC.]
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