EXHIBIT 10.1
AGREEMENT
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AGREEMENT made as of the 8th day of January, 2010, by and between XXXXX X.
XXXXXXXXX, an adult individual (hereinafter referred to as the "Executive" ),
and XXXXXX INDUSTRIES, INC., a Delaware corporation, with its principal office
at 0000 Xxxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxxxx 00000 (hereinafter referred to
as "Company").
BACKGROUND
The Executive is a senior partner in the law firm of Xxxxxxx, Xxxxxxxxx and
Xxxxxxxx, LLP (the "Xxxxxxx Firm"), one of several law firms that has provided
legal services to the Company. The Executive was a former director of the
Company and served as Secretary of the Company from 1994 to 2001. As an
attorney, officer and director, the Executive has provided valuable services to
the Company for over 35 years.
On July 22, 2009, the Executive was appointed to the Company's Board of
Directors and elected as an executive officer of the Company, serving in the
capacity as Chairman of the Board. In connection with his election as Chairman,
the Executive was awarded 100,000 shares of restricted common stock which vest
in 2014, subject to accelerated vesting under certain circumstances (the
"Restricted Stock") pursuant to the Restricted Stock Agreement attached hereto
as Exhibit A and annual compensation of $250,000 (the "Chairmanship
Compensation").
During the Executive's Chairmanship, the Executive was able to achieve,
either alone or along with others, results which exceeded the Company's
expectations, with respect to both the benefits to the Company and the time
period during which these benefits were able to be realized. Specifically, the
Executive successfully led a transition following the resignation by the
Company's previous Chairman and Chief Executive Officer and has contributed to
the achievement of various financial and strategic goals. Among the areas in
which the Company made significant progress during the Executive's Chairmanship
include the substantially improved financial performance of the Company, the
transition to the Company's new Chief Executive Officer, resolution of various
legal matters (resulting in significant recoveries to the Company and savings in
ongoing legal fees), improved stockholder, supplier and customer relations and
an increased Company market value. These achievements resulted in measurable
immediate substantial financial benefits to the Company and achievements, the
benefits from which, while not currently quantifiable, are likely to benefit the
Company in the future.
Having fulfilled these initiatives, the Company and the Executive have
determined that it would be in the best-interests for the Company to transition
to a new Chairman of the Board and for the Executive to transition back as
counsel to the Company as well as being able to engage in other business
opportunities. Following the Executive's resignation as Chairman and a director,
the Company will continue to have the benefit of the Executive's expertise
through his services as outside counsel to the Company through the Xxxxxxx Firm
by way of a separate arrangement with the Xxxxxxx Firm. As a result of his
resignation, the Restricted Stock will not vest and the Executive will forego
the potential value of the Restricted Stock. In light of this fact and, more
importantly, the value of the Executive's achievements on behalf of, and his
contributions to, the Company recited above, the Company has determined to
provide the Executive with a performance payment in the amount of $900,000 (the
"Performance Payment"). The Performance Payment was unanimously recommended by
the Compensation Committee of the Company's Board of Directors and unanimously
approved by the independent members of the Board. In making its determination,
the Compensation Committee retained independent legal counsel and independent
compensation consultants to assist the Committee. The Committee, in its
deliberations, considered, among other factors, the facts that the Executive
would receive no benefit from the Restricted Stock and that the amount of the
Performance Payment represented a relatively small percentage of the measurable
financial benefits to the Company which resulted from the Executive's efforts.
Further, the Committee took the view that the Chairmanship Compensation was
inadequate to compensate the Executive for his efforts and achievements.
Based on the foregoing and the representations and obligations set forth
herein, the Company and the Executive have agreed that the Executive will resign
as Chairman of the Board and as a director.
In consideration of the benefits outlined in this Agreement, which the
Executive acknowledges constitute good and sufficient consideration for this
Agreement, the Executive has agreed to the covenants contained herein, and a
release of any and all claims he may have against the Company arising from his
employment or separation from employment with the Company, including claims
under the Age Discrimination in Employment Act of 1967, as amended.
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AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises contained herein,
and intending to be legally bound, the parties agree as follows:
1. Recitals. The recitals set forth as background above are incorporated
into this Agreement as if they were set forth in full in the body of this
Agreement.
2. Resignation from Current Employment. Effective January 8, 2010 (the
"Separation Date"), Executive shall voluntarily resign from his current
employment as Chairman of the Board of the Company. The Executive shall also
resign his position as a director of the Company and each of its subsidiaries
effective January 8, 2010.
3. Separation Arrangements. The Company and Executive have agreed to the
following.
(a) Performance Payment. The Company shall pay the Performance Payment
in a lump sum within three business days from the date of this Agreement in
accordance with Exhibit B attached hereto.
(b) Restricted Stock. The Executive hereby relinquishes all rights to
the Restricted Stock and acknowledges that the Restricted Stock shall be
cancelled as of the date of this Agreement.
(c) Chairmanship Compensation. The Executive shall receive his
Chairmanship Compensation through the Separation Date.
(d) Public Communications. The Company shall make such public
disclosures of the terms of this Agreement as it and its counsel determines
are required by applicable law; such disclosures will be substantially in
the form attached hereto as Exhibit C.
(e) No Other Benefits. The Executive shall have no right to receive
any other payment or benefit arising from his employment relationship with
the Company except (i) as specifically set forth in this Agreement, (ii)
for any and all vested and exercisable stock options (which shall be
exercisable in accordance with their terms), and (iii) for any vested
retirement benefits provided under Company's 401(k) plan, up to the date of
this Agreement. The payments set forth in this Agreement include any and
all outstanding and accrued compensation, wages, and benefits that may be
due and owing to Executives and that Company has no further obligation to
provide Executive, in his capacity as Chairman or a director, with any
compensation of any sort, or any non-monetary or monetary benefits in
addition to that which is set forth in this Section 3.
(f) Health Insurance Benefits. Consistent with the provisions of the
Consolidated Omnibus Budget Reconciliation Act of 1986 ("COBRA") regarding
the continuation of employee health benefits, Executive may elect to
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continue coverage under Company's health and dental plans for Executive and
Executive's dependents currently enrolled in the plans for the time period
proscribed by law commencing on the Separation Date.
(g) Reimbursement. The Company shall pay the Executive, promptly after
its receipt of the documentation or other evidence (if any) necessary under
the Company's standard reimbursement policies, all amounts to which the
Executive is entitled as reimbursement of expenses through the Separation
Date under the Company's reimbursement policies as in effect on the date
the expenses were incurred.
(h) Indemnification. With respect to acts or omissions of the
Executive while he was a director and officer of the Company, the Executive
will continue to be entitled to (A) the right to indemnification and
advancement of expenses, to the fullest extent provided by the Company's
By-Laws or otherwise, from the Company, unless prohibited by applicable
law, and (B) coverage under the Company's directors' and officers'
liability insurance policies maintained by or on behalf of the Company's
directors and officers. For the absence of doubt, the Executive also shall
be entitled to the benefits described in this Section 3(h) with respect to
any liability incurred by the Executive in connection with current
litigation whereby plaintiffs have named the Company and various others as
defendants. Notwithstanding anything to the contrary contained herein, the
terms and conditions of a certain Indemnification Agreement between the
Company and Executive dated May 21, 2003 (the "Indemnification Agreement")
shall continue and remain in full force and effect after the Separation
Date and nothing herein shall be deemed to limit its terms.
(i) No Impact on Payments to Xxxxxxx Firm. The terms of this Agreement
shall have no impact on payments by the Company to the Xxxxxxx Firm for
legal services by the Xxxxxxx Firm provided to the Company or the ongoing
relationship by the Company with the Xxxxxxx firm.
4. Post-Separation Confidentiality and Cooperation. The Executive agrees
that he shall not disclose confidential information of the Company and shall
cooperate with the Company as follows:
(a) The Executive shall not at any time disclose to any person or
entity any trade secrets or Confidential Information learned or obtained by
him while employed by the Company, without written permission of the
Company or as required by legal process, subpoena, or Court order. As used
herein, the term "Confidential Information" means information disclosed to
the Executive or known by him as a consequence of or through his employment
with the Company and not generally known in the industry in which the
Company is engaged, or which is not in the public domain, and which in any
way relates to the Company's strategic plans, processes, services,
techniques or know how, including, but not limited to, customer lists and
information relating to research, development, purchasing, financing,
strategic planning, personnel information, accounting, marketing, leasing
and selling.
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(b) The Executive shall cooperate with the Company in providing
information and being available for consultations in connection with
situations arising from or related to his employment with the Company
including, but not limited to, cooperation with the Company, its
accountants, and attorneys in connection with legal or financial matters
arising from the Executive's employment by making himself reasonably
available for consultation and participation in the Company matters. In the
event that the Executive shall become involved in legal matters associated
with his employment with the Company, the Executive agrees to cooperate in
such matters by providing information, consultation, and testimony should
the need for such arise. The Company agrees that in the event Executive is
required to perform any of the foregoing acts, that he will be reasonably
compensated for his services.
5. Non-admission of Liability. Nothing in this Agreement shall be construed
as an admission of liability by the Executive or the Company; rather, the
Executive and the Company Released Parties are resolving any and all potential
disputes arising from the Executive's employment with the Company and cessation
of that employment.
6. General and Specific Releases.
(a) Executive's Release of Claims. In consideration of the benefits
hereunder and the Company's other obligations hereunder, the Executive (on
his own behalf and, to the extent enforceable, on behalf of the other
Executive Released Parties (as such term is defined below)) hereby forever
releases and discharges the Company, its parent and subsidiary
corporations, their respective affiliates, and their respective past and
present officers, directors, shareholders, partners, members, managers,
agents, employees and attorneys and each of their respective successors and
assigns (collectively, "Company Released Parties"), from any and all
claims, complaints, liens, demands, causes of action, obligations, damages
and liabilities, known or unknown, suspected or unsuspected, that the
Executive had, now has, or may hereafter claim to have against the Company
Released Parties, arising out of or relating in any way to the Executive's
hiring by, employment with, or separation from, the Company or otherwise
relating to any of the Company Released Parties up to and including the
date the Executive signs this Agreement, except for any claims that may
arise under this Agreement. Except to the extent that such waiver is
precluded by law, the Executive further promises and agrees that he will
not file, initiate, or cause to be filed or initiated, any claim, suit,
complaint, grievance, action, or cause of action based upon, arising out
of, or relating to any claim, demand, or cause of action released herein,
nor shall he participate, assist or cooperate in any claim, charge, suit,
grievance, complaint, action or proceeding regarding any of the Company
Released Parties, whether before a court or administrative agency or
otherwise, unless required to do so by law.
(b) Specific Releases. The releases set forth in Section 6(a) above
specifically extend to, without limitation, claims or causes of action for
wrongful termination, impairment of ability to compete in the open labor
market, breach of an express or implied contract, breach of the covenant of
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good faith and fair dealing, breach of fiduciary duty, fraud,
misrepresentation, defamation, slander, infliction of emotional distress,
discrimination, harassment, disability, loss of future earnings, and claims
under any state constitution, the United States Constitution, and
applicable state and federal fair employment laws, applicable state and
federal equal employment opportunity laws, and applicable state and federal
labor statutes and regulations, including but not limited to, Title VII of
the Civil Rights Act of 1964, as amended, the Pennsylvania Human Relations
Act, the Family Medical Leave Act, the National Labor Relations Act, the
Labor-Management Relations Act, the Worker Retraining and Notification Act
of 1988, the Americans With Disabilities Act of 1990, the Rehabilitation
Act of 1973, the Employee Retirement Income Security Act of 1974 (except as
to claims for vested benefits), and the Age Discrimination in Employment
Act of 1967, all as amended from time to time, all other employment tort or
common law claims, and all other laws, statutes or regulations now or
hereafter recognized, and all claims for counsel fees and costs. Executive
specifically acknowledges that he is releasing all claims for attorneys'
fees and costs.
(c) Executive's Release of Unknown Claims. The Executive acknowledges
and agrees that, as a condition of this Agreement, the Executive expressly
waives all rights and claims against the Company Released Parties covered
by Sections 6(a) and (b) above that he knows about or suspects as well as
those he may not know about or suspect, including those afforded by
applicable law, up to and including the date he signs this Agreement. For
the purpose of implementing a full and complete release and discharge of
the Company Released Parties with respect to the claims covered by Sections
6(a) and (b) above, the Executive expressly acknowledges that the release
above in this Agreement is intended to include and does include in its
effect, without limitation, all claims which he does not know or suspect to
exist in his favor against the Company Released Parties, and that this
Agreement expressly contemplates the extinguishments of all such claims,
including, but not limited to, any and all claims under any applicable
federal, state or local law.
(d) Exceptions to Releases. Notwithstanding any other provision of
this Agreement, the releases in Section 6(a) specifically do not extend to
any obligation of the Company or any of its affiliates under this Agreement
or any other agreement with or plan of the Company or any of its affiliates
that, by its terms, continues to afford the Executive rights or benefits
after the Separation Date.
(e) Review and Revocation Period. For and in consideration of the
Company's promise to cause the payment and benefits to be made as set forth
in Section 3, above, Executive WAIVES ALL RIGHT AND CLAIMS he has ever had,
or now has, under THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS
AMENDED (ADEA). The Executive acknowledges that the Company has advised the
Executive that pursuant to the Age Discrimination in Employment Act of
1967, as amended, to consult with an attorney of the Executive's choosing
prior to signing this Agreement and that the Executive has twenty-one (21)
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days during which to consider the provisions of this Agreement, although
the Executive may sign and return it sooner. If the Executive executes and
returns this Agreement prior to the expiration of such twenty-one (21) day
period, the Executive acknowledges that he has had sufficient time to
consider the terms of this Agreement with counsel and that he expressly,
voluntarily and knowingly waives the remainder of such twenty-one (21) day
period. The Executive further acknowledges that the Executive has been
advised by the Company that the Executive has the right to revoke this
Agreement for a period of seven (7) days after signing it and that this
Agreement shall not become effective or enforceable until such seven
(7)-day revocation period has expired (the "Effective Date"). The Executive
acknowledges and agrees that if the Executive wishes to revoke this
Agreement, the Executive must do so in writing, and that such revocation
must be signed by the Executive and received by January 15, no later than
5:00 p.m., Eastern Standard Time, on the seventh (7th) day after the
Executive has signed this Agreement. The Executive acknowledges and agrees
that, in the event that the Executive revokes this Agreement, the Executive
shall have no right to receive any benefits hereunder, including the
benefits hereunder, except as required by law.
(f) Company's Release of Claims.
(i) For and in consideration of the Executive's promises herein,
the Company (on its own behalf and, to the extent enforceable, on
behalf of the other Company Released Parties) does hereby remise,
release and forever the Executive and his agents, attorneys, heirs,
successors and assigns (collectively, "Executive Released Parties") of
and from any and all manner of actions and causes of action, suits,
debts, liabilities, losses, damages, claims and demands whatsoever
(which are otherwise subject to waiver) that it had, has or may have
against the Executive Released Parties, whether sounding in contract,
any form of tort or otherwise, whether at law or in equity, whether
known or unknown, relating to the Executive's employment with the
Company to the date of this Agreement except for any claims that may
arise under this Agreement. Except to the extent that such waiver is
precluded by law, the Company further promises and agrees that it will
not file, initiate, or cause to be filed or initiated, any claim,
suit, complaint, grievance, action, or cause of action based upon,
arising out of, or relating to any claim, demand, or cause of action
released herein, nor shall it participate, assist or cooperate in any
claim, charge, suit, grievance, complaint, action or proceeding
regarding the Executive's Released Parties, whether before a court or
administrative agency or otherwise, unless required to do so by law.
(ii) The Company acknowledges and agrees that, as a condition of
this Agreement, the Company expressly waives all rights and claims
against the Executive's Released Parties covered by Section 6(f)(i)
above that it knows about or suspects as well as those it may not know
about or suspect, including those afforded by applicable law, up to
and including the date it signs this Agreement. For the purpose of
implementing a full and complete release and discharge of the
Executive's Released Parties with respect to the claims covered by
Section 6(f)(i) above, the Company expressly acknowledges that the
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release above in this Agreement is intended to include and does
include in its effect, without limitation, all claims which it does
not know or suspect to exist in its favor against the Executive's
Released Parties, and that this Agreement expressly contemplates the
extinguishments of all such claims, including, but not limited to, any
and all claims under any applicable federal, state or local law.
7. Severability. The covenants in this Agreement are severable, and if any
covenant or portion thereof is held to be invalid or unenforceable for any
reason, such covenant or portion thereof shall be modified or adjusted by a
court or other tribunal exercising its equitable powers to the extent necessary
to cure such invalidity or unenforceability, and all other covenants and
provisions shall remain valid and enforceable.
8. Entire Agreement. This Agreement expresses the entire Agreement between
the parties regarding Executive's separation from employment, and all other
subjects relating hereto, and it supersedes all prior agreements,
understandings, and negotiations involving the parties on such subjects, whether
written or oral, consistent or inconsistent, or otherwise; provided, however,
that the Indemnification Agreement shall remain in full force and effect. This
Agreement may not be amended, modified, waived, terminated or clarified, except
by a written agreement signed by both parties. No representation, promise,
inducement or statement of intent relating to his employment made prior to or
contemporaneously with this Agreement that has been made by the Company or
Executive shall have any binding effect.
9. Waiver. No waiver of any provision of this Agreement shall be deemed or
shall constitute a waiver of any other provision of this Agreement, whether or
not similar, nor shall any waiver constitute a continuing waiver unless
otherwise expressly provided in a writing signed by the waiving party.
10. Benefitted Parties. The covenants, promises, rights and obligations of
Executive under this Agreement shall inure to the benefit of the Company and all
other present or future parents, subsidiaries, successors and affiliates of the
Company and all such entities shall be considered third party beneficiaries and
may enforce any provision of this Agreement.
11. Governing Law. This Agreement shall be governed by and interpreted in
accordance with the domestic laws of the State of Delaware and each of the
parties consents to the exclusive jurisdiction and venue of the courts of the
State of Delaware in all disputes arising out of or relating to the terms of
this Agreement.
12. Remedies. In the event that either party breaches any of the covenants
contained in this Agreement, the prevailing party shall be entitled to obtain
injunctive and equitable relief, in any court of competent jurisdiction,
enjoining any such breach.
13. Sections. The Section headings contained in this Agreement are for
convenience of reference only and shall not affect the meaning or interpretation
of this Agreement.
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14. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
8th day of January, 2010.
XXXXXX INDUSTRIES, INC.
By: /s/ Xxxx X. Xxxxxx
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/s/ Xxxxx X. Xxxxxxxxx
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Xxxxx X. Xxxxxxxxx
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