EMPLOYMENT AGREEMENT
Exhibit 10.13
EMPLOYMENT AGREEMENT, dated as of December 4, 2006 (the “Employment Agreement”), by
and among McJ Holding LLC, a Delaware limited liability company (“McJ Holding LLC”),
XxXxxxxx Corporation, a West Virginia corporation (the “Company”), and Xxxxx Xxxxxxxxx (the
“Executive”).
WHEREAS, pursuant to the Agreement and Plan of Merger, dated as of the date hereof (the
“Merger Agreement”), between McJ Holding Corporation, a Delaware corporation (“McJ
Holding Corporation”), Hg Acquisition Corp., a West Virginia corporation and wholly-owned
subsidiary of McJ Holding Corporation (“Hg Acquisition”) and the Company, Hg Acquisition
will merge with and into the Company with the Company continuing as the surviving corporation (the
“Merger”);
WHEREAS, the Executive acknowledges that McJ Holding Corporation would not have entered into
the Merger Agreement unless the Executive executes this Employment Agreement and agrees to be bound
by the covenants contained in Section 4 hereof; and
WHEREAS, the Executive is currently employed as the Company’s Executive Vice President and
Chief Financial Officer and the Company and the Executive desire to continue the Executive’s
employment with the Company on the terms and conditions set forth in this Employment Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and other valid
consideration, the sufficiency of which is acknowledged, the parties hereto agree as follows:
Section 1. Employment.
1.1. Term. McJ Holding LLC and the Company agree to employ the Executive, and the
Executive agrees to be employed by McJ Holding LLC and the Company, in each case pursuant to this
Employment Agreement, for a period commencing on the Closing Date (as defined in the Merger
Agreement) (such date, the “Effective Date”) and ending on the earlier of (i) the third
(3rd) anniversary of the Effective Date and (ii) the termination of the Executive’s employment in
accordance with Section 3 hereof (the “Term”).
1.2. Duties. During the Term, the Executive shall serve as the Company’s Executive
Vice President and Chief Financial Officer and such other positions as an officer or director of
the Company and such affiliates of the Company as the Executive and the board of directors of the
Company (the “Board”) shall mutually agree from time to time. In such positions, the
Executive shall perform such duties, functions and responsibilities during the Term commensurate
with the Executive’s positions as reasonably directed by the Chief Executive Officer of the Company
(the “CEO”).
1.3. Exclusivity. During the Term, and excluding any periods of vacation and sick
leave to which the Executive is entitled, the Executive shall devote his full time and attention to
the business and affairs of the Company, shall faithfully serve the
Company, and shall in all material respects conform to and comply with the lawful and
reasonable directions and instructions given to him by the CEO, consistent with Section 1.2 hereof.
During the Term, the Executive shall use his best efforts to promote and serve the interests of
the Company and shall not engage in any other business activity, whether or not such activity shall
be engaged in for pecuniary profit; provided, however, that it shall not be a violation of
this Employment Agreement for the Executive to engage in other outside business activities with the
Board’s prior written consent.
Section 2. Compensation.
2.1. Salary. As compensation for the performance of the Executive’s services
hereunder, during the Term, the Company shall pay to the Executive a salary at an annual rate of
four hundred fifty thousand dollars ($450,000), payable in accordance with the Company’s standard
payroll policies (the “Base Salary”). The Base Salary will be reviewed annually and may be
adjusted upward by the Board (or a committee thereof) in its discretion, based on competitive data
and the Executive’s performance. No increase in Base Salary shall limit or reduce any other right
or obligation to the Executive under this Employment Agreement and the Base Salary shall not be
reduced at any time (including after any such increase).
2.2. Annual Bonus. For each completed fiscal year occurring during the Term
commencing with the 2007 fiscal year, the Executive shall be eligible to receive additional cash
incentive compensation (the “Annual Bonus”). The target Annual Bonus shall be 100% of the
Executive’s Base Salary as in effect at the beginning of such fiscal year, with the actual Annual
Bonus to be based upon such individual and/or Company performance criteria established for each
such fiscal year by the Board in consultation with the CEO. The Annual Bonus for the calendar year
ending December 31, 2006 shall be determined in accordance with the Company’s existing bonus plan,
consistent with past practice (but excluding any Merger-related expenses and any interest expenses
associated with the additional borrowing incurred in connection with the Merger).
2.3. Equity. On the Effective Date, pursuant to the Limited Liability Company
Agreement of McJ Holding LLC dated as of the date hereof (the “LLC Agreement”), the
Executive will be granted Profits Units (as defined in the LLC Agreement) as set forth therein.
Notwithstanding Section 7.2(a)(ii) of the LLC Agreement, if the Executive terminates his employment
with Good Reason (as defined herein) or the Company terminates the Executive’s employment without
Cause (as defined herein), no Profits Units issued to the Executive shall be subject to forfeiture.
2.4. Employee Benefits. During the Term, the Executive shall be eligible to
participate in such health and other group insurance and other employee benefit plans and programs
of the Company as in effect from time to time on the same basis as other senior executives of the
Company. Notwithstanding the foregoing, during the Term, the annual value attributable to
retirement benefits will be approximately seventy thousand dollars ($70,000), which amount (x) is
in addition to any benefits pursuant to the XxXxxxxx Corporation Profit-Sharing and Savings Plan
and Trust and (y) includes any benefits under the Amended and Restated XxXxxxxx Corporation
Supplemental Executive Savings Plan and Trust (the “SERP”) or any plan that replaces the
SERP.
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2.5. Vacation. During the Term, the Executive shall be entitled to paid vacation in
accordance with the Company’s vacation policy as in effect from time to time.
2.6. Business Expenses. The Company shall pay or reimburse the Executive for all
commercially reasonable business out-of-pocket expenses that the Executive incurs during the Term
in performing his duties under this Employment Agreement upon presentation of documentation and in
accordance with the expense reimbursement policy of the Company as approved by the Board (or a
committee thereof) and in effect from time to time.
Section 3. Employment Termination.
3.1. Termination of Employment. The Company may terminate the Executive’s employment
for any reason during the Term, and the Executive may voluntarily terminate his employment for any
reason during the Term, in each case (other than a termination by the Company for Cause) at any
time upon not less than thirty (30) days’ notice to the other party. Upon the termination of the
Executive’s employment with the Company for any reason, the Executive shall be entitled to any Base
Salary earned but unpaid through the date of termination, any earned but unpaid Annual Bonus for
completed fiscal years, any unreimbursed expenses in accordance with Section 2.6 hereof and, to the
extent not theretofore paid or provided, any other amounts or benefits required to be paid or
provided under any plan, program, policy or practice or other contract or agreement of the Company
and its affiliated companies through the date of termination of employment (collectively, the
“Accrued Amounts”).
3.2. Certain Terminations.
(a) Termination by the Company other than for Cause or Disability; Termination by the
Executive for Good Reason. If the Executive’s employment is terminated during the Term (i) by
the Company other than for Cause or Disability or (ii) by the Executive for Good Reason, in
addition to the Accrued Amounts the Executive shall be entitled to the following payments and
benefits: (x) the continuation of his Base Salary at the rate in effect immediately prior to the
date of termination for a period of twelve (12) months, (y) the continuation on the same terms as
an active senior executive of medical benefits the Executive would otherwise be eligible to receive
as an active senior executive of the Company for twelve (12) months or until such earlier time as
the Executive becomes eligible for medical benefits from a subsequent employer and (z) a pro rata
Annual Bonus for the fiscal year in which the termination occurs (the “Pro Rata Annual Bonus
Payment”), based on the Company’s actual performance through the end of such fiscal year and
the number of days the Executive was employed during such fiscal year (such payments and benefits,
the “Severance Payments”). The Company’s obligations to make the Severance Payments shall
be conditioned upon: (i) the Executive’s continued compliance with his obligations under Section 4
of this Employment Agreement and (ii) the Executive’s execution, delivery and non-revocation of a
valid and enforceable general release of claims (the “Release”) in the form attached hereto
as Exhibit A. In the event that the Executive breaches any of the covenants set forth in Section 4
of this Employment Agreement, the Executive will immediately return to the Company any portion of
the Severance Payments that have been paid to the Executive pursuant to this Section 3.2(a).
Subject to Section 3.2(d), the Severance Payments (with the exception of the Pro Rata Annual Bonus
Payment) will commence to be paid to the Executive as soon as practicable following the
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effectiveness of the Release. The Pro Rata Annual Bonus Payment will be paid at the time the
Company ordinarily pays incentive bonuses to its executives with respect to the fiscal year in
which the termination occurs.
(b) Termination upon Death or Disability. If the Executive’s employment is terminated
due to the Executive’s death or Disability, in addition to the Accrued Amounts, the Executive (or
the Executive’s estate, if applicable) shall be entitled to receive a pro-rated portion of the
Annual Bonus based on the Company’s performance for the full fiscal year in which termination
occurs and the number of days the Executive was employed by the Company during such fiscal year.
(c) Definitions. For purposes of this Section 3.2, the following terms shall have the
following meanings:
(1) “Cause” shall mean the Executive’s (i) continuing failure, for more than 10 days
after the Company’s written notice to the Executive thereof, to perform such duties as are
reasonably requested by the Company; (ii) failure to observe material policies generally applicable
to officers or employees of the Company unless such failure is capable of being cured and is cured
within 10 days of the Executive receiving written notice of such failure; (iii) failure to
cooperate with any internal investigation of the Company; (iv) commission of any act of fraud,
theft or financial dishonesty with respect to the Company or indictment or conviction of any
felony; (v) material violation of the provisions of this Employment Agreement unless such violation
is capable of being cured and is cured within 10 days of the Executive receiving written notice of
such violation; (vi) chronic absenteeism; or (vii) abuse of alcohol or another controlled
substance.
(2) “Disability” shall mean the Executive is entitled to receive long-term disability
benefits under the long-term disability plan of the Company in which Executive participates, or, if
there is no such plan, the Executive’s inability, due to physical or mental ill health, to perform
the essential functions of the Executive’s job, with or without a reasonable accommodation, for 180
days during any 365 day period irrespective of whether such days are consecutive.
(3) “Good Reason” shall mean (i) a material and adverse change in the Executive’s
duties or responsibilities, (ii) a reduction in the Executive’s Base Salary or target Annual Bonus
or (iii) a relocation of the Executive’s principal place of employment by more than 50 miles.
(d) Section 409A Specified Employee. If the Executive is a “specified employee” for
purposes of Xxxxxxx 000X xx xxx Xxxxxx Xxxxxx Internal Revenue Code of 1986, as amended (the
“Code”), and the regulations thereunder, to the extent required to comply with Section 409A
of the Code, any Severance Payments required to be made pursuant to Section 3.2(a) which are
subject to Section 409A of the Code shall not commence until one day after the day which is six (6)
months from the date of termination, with the first payment equaling six (6) months of his Base
Salary at the rate in effect immediately prior to the date of termination.
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3.3. Exclusive Remedy. The foregoing payments upon termination of the Executive’s
employment shall constitute the exclusive severance payments due the Executive upon a termination
of his employment under this Employment Agreement.
3.4. Resignation from All Positions. Upon the termination of the Executive’s
employment with the Company for any reason, the Executive shall be deemed to have resigned, as of
the date of such termination, from all positions he then holds as an officer, director, employee
and member of the Board (and any committee thereof) and the board of directors (and any committee
thereof) of any of the Company’s affiliates.
3.5. Cooperation. Following the termination of the Executive’s employment with the
Company for any reason, the Executive agrees to reasonably cooperate with the Company upon
reasonable request of the Board and to be reasonably available to the Company with respect to
matters arising out of the Executive’s services to the Company and its subsidiaries. The Company
shall pay the Executive a reasonable fee for any such services and promptly reimburse the Executive
for expenses reasonably incurred in connection with such matters.
| Section 4. | Unauthorized Disclosure; Non-Competition; Non-Solicitation; Interference with Business Relationships; Proprietary Rights. |
4.1. Unauthorized Disclosure. The Executive agrees and understands that in the
Executive’s position with the Company, the Executive has been and will be exposed to and has and
will receive information relating to the confidential affairs of the Company and its affiliates,
including, without limitation, technical information, intellectual property, business and marketing
plans, strategies, customer information, software, other information concerning the products,
promotions, development, financing, expansion plans, business policies and practices of the Company
and its affiliates and other forms of information considered by the Company and its affiliates to
be confidential or in the nature of trade secrets (including, without limitation, ideas, research
and development, know-how, formulas, technical data, designs, drawings, specifications, customer
and supplier lists, pricing and cost information and business and marketing plans and proposals)
(collectively, the “Confidential Information”). The Executive agrees that at all times
during the Executive’s employment with the Company and thereafter, the Executive shall not disclose
such Confidential Information, either directly or indirectly, to any individual, corporation,
partnership, limited liability company, association, trust or other entity or organization,
including a government or political subdivision or an agency or instrumentality thereof (each a
“Person”) other than in connection with the Executive’s employment with the Company without
the prior written consent of the Company and shall not use or attempt to use any such information
in any manner other than in connection with his employment with the Company, unless required by law
to disclose such information, in which case the Executive shall provide the Company with written
notice of such requirement as far in advance of such anticipated disclosure as possible. This
confidentiality covenant has no temporal, geographical or territorial restriction. Upon
termination of the Executive’s employment with the Company, the Executive shall promptly supply to
the Company all property, keys, notes, memoranda, writings, lists, files, reports, customer lists,
correspondence, tapes, disks, cards, surveys, maps, logs, machines, technical data and any other
tangible product or document which has been
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produced by, received by or otherwise submitted to the Executive during the Executive’s
employment with the Company, and any copies thereof in his (or capable of being reduced to his)
possession; provided, however, that the Executive may retain his full rolodex or similar
address and telephone directories.
4.2. Non-Competition. By and in consideration of the Company’s entering into this
Employment Agreement and the payments to be made and the benefits to be provided hereunder and in
further consideration of the Executive’s exposure to the Confidential Information of the Company
and its affiliates, the Executive agrees that the Executive shall not, during the Executive’s
employment with the Company (whether during the Term or thereafter) and for a period of twelve (12)
months thereafter (the “Restriction Period”), directly or indirectly, own, manage, operate,
join, control, be employed by, or participate in the ownership, management, operation or control
of, or be connected in any manner with, including, without limitation, holding any position as a
stockholder, director, officer, consultant, independent contractor, employee, partner, or investor
in, any Restricted Enterprise (as defined below) and in connection with the Executive’s association
directly or indirectly engage in any activity that is similar to any activity that the Executive
was engaged in with the Company during the 12 months preceding the date of termination;
provided, that in no event shall ownership of one percent (1%) or less of the outstanding
securities of any class of any issuer whose securities are registered under the Securities Exchange
Act of 1934, as amended, standing alone, be prohibited by this Section 4.2, so long as the
Executive does not have, or exercise, any rights to manage or operate the business of such issuer
other than rights as a stockholder thereof. For purposes of this paragraph, “Restricted
Enterprise” shall mean (i) any Person that is actively engaged in any geographic area in any
business which materially competes with McJ Holding LLC’s or any of its subsidiaries’ business of
the distribution of industrial pipe, valves and fittings or any other business which is material to
McJ Holding LLC or any of its subsidiaries (a “Material Business”) or (ii) any Person who
within a two (2) year period following termination of the Executive’s employment is reasonably
expected to materially compete with a Material Business or have revenue in excess of $100,000,000
derived from a business that is competitive with a Material Business. During the Restriction
Period, upon request of the Company, the Executive shall notify the Company of the Executive’s
then-current employment status.
4.3. Non-Solicitation of Employees. During the Restriction Period, the Executive
shall not directly or indirectly contact, induce or solicit (or assist any Person to contact,
induce or solicit) for employment any person who is, or within twelve (12) months prior to the date
of such solicitation was, an employee of the Company or any of its affiliates.
4.4. Interference with Business Relationships. During the Restriction Period (other
than in connection with carrying out his responsibilities for the Company and its affiliates), the
Executive shall not directly or indirectly contact, induce or solicit (or assist any Person to
contact, induce or solicit) any customer or client of the Company or its subsidiaries to terminate
its relationship or otherwise cease doing business in whole or in part with the Company or its
subsidiaries, or directly or indirectly interfere with (or assist any Person to interfere with) any
material relationship between the Company or its subsidiaries and any of its or their customers or
clients so as to cause harm to the Company or its affiliates.
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4.5. Extension of Restriction Period. The Restriction Period shall be tolled for any
period during which the Executive is in breach of any of Sections 4.2, 4.3 or 4.4 hereof.
4.6. Proprietary Rights. The Executive shall disclose promptly to the Company any and
all inventions, discoveries, and improvements (whether or not patentable or registrable under
copyright or similar statutes), and all patentable or copyrightable works, initiated, conceived,
discovered, reduced to practice, or made by him, either alone or in conjunction with others, during
the Executive’s employment with the Company and related to the business or activities of the
Company and its affiliates (the “Developments”). Except to the extent any rights in any
Developments constitute a work made for hire under the U.S. Copyright Act, 17 U.S.C. § 101 et seq.
that are owned ab initio by the Company and/or its applicable affiliate, the Executive assigns all
of his right, title and interest in all Developments (including all intellectual property rights
therein) to the Company or its nominee without further compensation, including all rights or
benefits therefor, including without limitation the right to xxx and recover for past and future
infringement. The Executive acknowledges that any rights in any Developments constituting a work
made for hire under the U.S. Copyright Act, 17 U.S.C § 101 et seq. are owned upon creation by the
Company and/or its applicable affiliate as the Executive’s employer. Whenever requested to do so
by the Company, the Executive shall execute any and all applications, assignments or other
instruments which the Company shall deem necessary to apply for and obtain trademarks, patents or
copyrights of the United States or any foreign country or otherwise protect the interests of the
Company and its affiliates therein. These obligations shall continue beyond the end of the
Executive’s employment with the Company with respect to inventions, discoveries, improvements or
copyrightable works initiated, conceived or made by the Executive while employed by the Company,
and shall be binding upon the Executive’s employers, assigns, executors, administrators and other
legal representatives. In connection with his execution of this Employment Agreement, the
Executive has informed the Company in writing of any interest in any inventions or intellectual
property rights that he holds as of the date hereof as set forth on Exhibit B hereto (the
“Existing Inventions”). Notwithstanding anything to the contrary herein, the Developments
shall not include any Existing Inventions. If the Company is unable for any reason, after
reasonable effort, to obtain the Executive’s signature on any document needed in connection with
the actions described in this Section 4.6, the Executive hereby irrevocably designates and appoints
the Company and its duly authorized officers and agents as the Executive’s agent and attorney in
fact to act for and on the Executive’s behalf to execute, verify and file any such documents and to
do all other lawfully permitted acts to further the purposes of this Section 4.6 with the same
legal force and effect as if executed by the Executive.
4.7. Confidentiality of Agreement. Other than with respect to information required to
be disclosed by applicable law, the parties hereto agree not to disclose the terms of this
Employment Agreement to any Person; provided the Executive may disclose this Employment
Agreement and/or any of its terms to the Executive’s immediate family, financial advisors and
attorneys, so long as the Executive instructs every such Person to whom the Executive makes such
disclosure not to disclose the terms of this Employment Agreement further.
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4.8. Remedies. The Executive agrees that any breach of the terms of this Section 4
would result in irreparable injury and damage to the Company for which the Company would have no
adequate remedy at law; the Executive therefore also agrees that in the event of said breach or any
threat of breach, the Company shall be entitled to an immediate injunction and restraining order to
prevent such breach and/or threatened breach and/or continued breach by the Executive and/or any
and all Persons acting for and/or with the Executive, without having to prove damages, in addition
to any other remedies to which the Company may be entitled at law or in equity, including, without
limitation, the obligation of the Executive to return any Severance Payments made by the Company to
the Company. The terms of this paragraph shall not prevent the Company from pursuing any other
available remedies for any breach or threatened breach hereof, including, without limitation, the
recovery of damages from the Executive. The Executive and the Company further agree that the
provisions of the covenants contained in this Section 4 are reasonable and necessary to protect the
businesses of the Company and its affiliates because of the Executive’s access to Confidential
Information and his material participation in the operation of such businesses.
Section 5. Representation.
The Executive and the Company each represents and warrants that (i) he or it is not subject to
any contract, arrangement, policy or understanding, or to any statute, governmental rule or
regulation, that in any way limits his or its ability to enter into and fully perform his or its
obligations under this Employment Agreement and (ii) he or it is not otherwise unable to enter into
and fully perform his or its obligations under this Employment Agreement.
Section 6. Non-Disparagement.
From and after the Effective Date and following termination of the Executive’s employment with
the Company, the Executive agrees not to make any statement (other than statements made in
connection with carrying out his responsibilities for the Company and its affiliates) that is
intended to become public, or that should reasonably be expected to become public, and that
criticizes, ridicules, disparages or is otherwise derogatory of the Company or any of its
subsidiaries, affiliates, employees, officers, directors or stockholders. The Company shall cause
its officers and directors not to make any such statement regarding the Executive.
Section 7. Withholding.
The Company may withhold from any amounts payable under this Employment Agreement such
Federal, state local or foreign taxes as shall be required to be withheld pursuant to any
applicable law or regulation. The Executive shall be solely responsible for the payment of all
taxes relating to the payment or provision of any amounts or benefits hereunder.
Section 8. Miscellaneous.
8.1. Indemnification. The Company shall indemnify the Executive to the fullest extent
provided under the Company’s By-Laws. The Company shall also maintain
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director and officer liability insurance in such amounts and subject to such limitations as
the Board shall, in good faith, deem appropriate for coverage of directors and officers of the
Company.
8.2. Amendments and Waivers. This Employment Agreement and any of the provisions
hereof may be amended, waived (either generally or in a particular instance and either
retroactively or prospectively), modified or supplemented, in whole or in part, only by written
agreement signed by the parties hereto; provided, that the observance of any provision of
this Employment Agreement may be waived in writing by the party that will lose the benefit of such
provision as a result of such waiver. The waiver by any party hereto of a breach of any provision
of this Employment Agreement shall not operate or be construed as a further or continuing waiver of
such breach or as a waiver of any other or subsequent breach, except as otherwise explicitly
provided for in such waiver. Except as otherwise expressly provided herein, no failure on the part
of any party to exercise, and no delay in exercising, any right, power or remedy hereunder, or
otherwise available in respect hereof at law or in equity, shall operate as a waiver thereof, nor
shall any single or partial exercise of such right, power or remedy by such party preclude any
other or further exercise thereof or the exercise of any other right, power or remedy.
8.3. Assignment; No Third-Party Beneficiaries. This Employment Agreement, and the
Executive’s rights and obligations hereunder, may not be assigned by the Executive, and any
purported assignment by the Executive in violation hereof shall be null and void. Nothing in this
Employment Agreement shall confer upon any Person not a party to this Employment Agreement, or the
legal representatives of such Person, any rights or remedies of any nature or kind whatsoever under
or by reason of this Employment Agreement.
8.4. Notices. Unless otherwise provided herein, all notices, requests, demands,
claims and other communications provided for under the terms of this Employment Agreement shall be
in writing. Any notice, request, demand, claim or other communication hereunder shall be sent by
(i) personal delivery (including receipted courier service) or overnight delivery service, (ii)
facsimile during normal business hours, with confirmation of receipt, to the number indicated,
(iii) reputable commercial overnight delivery service courier or (iv) registered or certified mail,
return receipt requested, postage prepaid and addressed to the intended recipient as set forth
below:
| If to the Company: | XxXxxxxx Corporation | |||
| 000 Xxxxxxxxx Xxxxx | ||||
| Xxxxxxxxxx, XX 00000 | ||||
| Attention: General Counsel & Chief Executive Officer | ||||
| Facsimile: 000-000-0000 | ||||
| with a copy to: | GS Capital Partners V Fund, L.P. | |||
| 00 Xxxxx Xxxxxx | ||||
| Xxx Xxxx, XX 00000 | ||||
| Attention: Xxxxx Xxxxxxx | ||||
| Facsimile: 000-000-0000 |
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| and | ||||
| Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx LLP | ||||
| Xxx Xxx Xxxx Xxxxx | ||||
| Xxx Xxxx, XX 00000 | ||||
| Attention: Xxxxxx X. Xxxxxxxxx, Esq. | ||||
| Facsimile: 212-859-4000 | ||||
| If to the Executive: | Xxxxx Xxxxxxxxx, at his principal office | |||
| at the Company (during the Term), and | ||||
| at all times to his principal residence as | ||||
| reflected in the records of the Company. |
All such notices, requests, consents and other communications shall be deemed to have been
given when received. Either party may change its facsimile number or its address to which notices,
requests, demands, claims and other communications hereunder are to be delivered by giving the
other parties hereto notice in the manner then set forth.
8.5. Governing Law. This Employment Agreement shall be construed and enforced in
accordance with, and the rights and obligations of the parties hereto shall be governed by, the
laws of the State of New York, without giving effect to the conflicts of law principles thereof.
8.6. Severability. Whenever possible, each provision or portion of any provision of
this Employment Agreement, including those contained in Section 4 hereof, will be interpreted in
such manner as to be effective and valid under applicable law but the invalidity or
unenforceability of any provision or portion of any provision of this Employment Agreement in any
jurisdiction shall not affect the validity or enforceability of the remainder of this Employment
Agreement in that jurisdiction or the validity or enforceability of this Employment Agreement,
including that provision or portion of any provision, in any other jurisdiction. In addition,
should a court or arbitrator determine that any provision or portion of any provision of this
Employment Agreement, including those contained in Section 4 hereof, is not reasonable or valid,
either in period of time, geographical area, or otherwise, the parties hereto agree that such
provision should be interpreted and enforced to the maximum extent which such court or arbitrator
deems reasonable or valid.
8.7. Entire Agreement. From and after the Effective Date, (i) this Employment
Agreement, (ii) the LLC Agreement and (iii) the letter agreement between the Executive and the
Company, dated July 7, 2006, regarding the Special Retention Bonus and Special Severance Payment,
constitute the entire agreement between the parties hereto, and supersede all prior
representations, agreements and understandings (including any prior course of dealings), both
written and oral, between the parties hereto with respect to the subject matter hereof. In the
event the Closing (as defined in the Merger Agreement) does not occur before the
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date the Merger Agreement terminates in accordance with its terms, this Employment Agreement
shall terminate, and shall be of no force or effect.
8.8. Counterparts. This Employment Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all such counterparts shall together
constitute one and the same instrument.
8.9. Binding Effect. This Employment Agreement shall inure to the benefit of, and be
binding on, the successors of each of the parties, including, without limitation, the Executive’s
heirs and the personal representatives of the Executive’s estate and any successor to all or
substantially all of the business and/or assets of the Company.
8.10. General Interpretive Principles. The name assigned this Employment Agreement
and headings of the sections, paragraphs, subparagraphs, clauses and subclauses of this Employment
Agreement are for convenience of reference only and shall not in any way affect the meaning or
interpretation of any of the provisions hereof. Words of inclusion shall not be construed as terms
of limitation herein, so that references to “include”, “includes” and “including” shall not be
limiting and shall be regarded as references to non-exclusive and non-characterizing illustrations.
8.11. Mitigation. Notwithstanding any other provision of this Employment Agreement,
(a) the Executive will have no obligation to mitigate damages for any breach or termination of this
Employment Agreement by the Company, whether by seeking employment or otherwise and (b) the amount
of any payment or benefit due the Executive after the date of such breach or termination will not
be reduced or offset by any payment or benefit that the Executive may receive from any other
source.
8.12 Section 409A Compliance. This Employment Agreement is intended to comply with
Section 409A of the Code (to the extent applicable) and, to the extent it would not adversely
impact the Company, the Company agrees to interpret, apply and administer this Employment Agreement
in the least restrictive manner necessary to comply with such requirements and without resulting in
any diminution in the value of payments or benefits to the Executive.
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IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the date first
written above.
| XXXXXXXX CORPORATION |
||||
| By: | /s/ X.X. Xxxxxx, III | |||
| Name: | X.X. Xxxxxx, III | |||
| Title: | Chief Executive Officer | |||
| McJ HOLDING LLC |
||||
| By: | /s/ Xxxx X. Xxxxxx | |||
| Name: | Xxxx X. Xxxxxx | |||
| Title: | Vice President | |||
| /s/ Xxxxx Xxxxxxxxx | ||||
| Xxxxx Xxxxxxxxx | ||||
[Employment Agreement with X. Xxxxxxxxx]
Exhibit A
Release
1. In consideration of the payments and benefits to be made under the Employment Agreement,
dated as of December 4, 2006 (the “Employment Agreement”), to which Xxxxx Xxxxxxxxx (the
“Executive”), McJ Holding LLC (the “LLC”) and XxXxxxxx Corporation (the
“Company”) (each of the Executive, the LLC and the Company, a “Party” and
collectively, the “Parties”) are parties, the sufficiency of which the Executive
acknowledges, the Executive, with the intention of binding himself and his heirs, executors,
administrators and assigns, does hereby release, remise, acquit and forever discharge the Company
and each of its subsidiaries and affiliates (the “Company Affiliated Group”), their present
and former officers, directors, executives, shareholders, agents, attorneys, employees and employee
benefit plans (and the fiduciaries thereof), and the successors, predecessors and assigns of each
of the foregoing (collectively, the “Company Released Parties”), of and from any and all
claims, actions, causes of action, complaints, charges, demands, rights, damages, debts, sums of
money, accounts, financial obligations, suits, expenses, attorneys’ fees and liabilities of
whatever kind or nature in law, equity or otherwise, whether accrued, absolute, contingent,
unliquidated or otherwise and whether now known or unknown, suspected or unsuspected, which the
Executive, individually or as a member of a class, now has, owns or holds, or has at any time
heretofore had, owned or held, arising on or prior to the date hereof, against any Company Released
Party that arises out of, or relates to, the Employment Agreement, the Executive’s employment with
the Company or any of its subsidiaries and affiliates, or any termination of such employment,
including claims (i) for severance or vacation benefits, unpaid wages, salary or incentive
payments, (ii) for breach of contract, wrongful discharge, impairment of economic opportunity,
defamation, intentional infliction of emotional harm or other tort, (iii) for any violation of
applicable state and local labor and employment laws (including, without limitation, all laws
concerning unlawful and unfair labor and employment practices) and (iv) for employment
discrimination under any applicable federal, state or local statute, provision, order or
regulation, and including, without limitation, any claim under Title VII of the Civil Rights Act of
1964 (“Title VII”), the Civil Rights Act of 1988, the Fair Labor Standards Act, the
Americans with Disabilities Act (“ADA”), the Executive Retirement Income Security Act of
1974, as amended (“ERISA”), the Age Discrimination in Employment Act (“ADEA”), and
any similar or analogous state statute, excepting only:
| (A) | rights of the Executive arising under, or preserved by, this Release or Sections 2.3 and 3 of the Employment Agreement; | ||
| (B) | the right of the Executive to receive COBRA continuation coverage in accordance with applicable law; | ||
| (C) | claims for benefits under any health, disability, retirement, life insurance or other, similar employee benefit plan (within the meaning of Section 3(3) of ERISA) of the Company Affiliated Group; and |
| (D) | rights to indemnification the Executive has or may have under the by-laws or certificate of incorporation of any member of the Company Affiliated Group or as an insured under any director’s and officer’s liability insurance policy now or previously in force. |
2. The Employee acknowledges and agrees that the release of claims set forth in this Release
is not to be construed in any way as an admission of any liability whatsoever by any Company
Released Party, any such liability being expressly denied.
3. The release of claims set forth in this Release applies to any relief no matter how called,
including, without limitation, wages, back pay, front pay, compensatory damages, liquidated
damages, punitive damages, damages for pain or suffering, costs, and attorneys’ fees and expenses.
4. The Executive specifically acknowledges that his acceptance of the terms of the release of
claims set forth in this Release is, among other things, a specific waiver of his rights, claims
and causes of action under Title VII, ADEA, ADA and any state or local law or regulation in respect
of discrimination of any kind; provided, however, that nothing herein shall be
deemed, nor does anything contained herein purport, to be a waiver of any right or claim or cause
of action which by law the Executive is not permitted to waive.
5. As to rights, claims and causes of action arising under the ADEA, the Executive
acknowledges that he has been given but not utilized a period of twenty-one (21) days to consider
whether to execute this Release. If the Executive accepts the terms hereof and executes this
Release, he may thereafter, for a period of seven (7) days following (and not including) the date
of execution, revoke this Release as it relates to the release of claims arising under the ADEA.
If no such revocation occurs, this Release shall become irrevocable in its entirety, and binding
and enforceable against the Executive, on the day next following the day on which the foregoing
seven-day period has elapsed. If such a revocation occurs, the Executive shall irrevocably forfeit
any right to payment of the Severance Payments (as defined in the Employment Agreement), but the
remainder of the Employment Agreement shall continue in full force.
6. Other than as to rights, claims and causes of action arising under the ADEA, the release of
claims set forth in this Release shall be immediately effective upon execution by the Executive.
7. The Executive acknowledges and agrees that he has not, with respect to any transaction or
state of facts existing prior to the date hereof, filed any complaints, charges or lawsuits against
any Company Released Party with any governmental agency, court or tribunal.
8. The Executive acknowledges that he has been advised to seek, and has had the opportunity to
seek, the advice and assistance of an attorney with regard to the release of claims set forth in
this Release, and has been given a sufficient period within which to consider the release of claims
set forth in this Release.
9. The Executive acknowledges that the release of claims set forth in this Release relates
only to claims which exist as of the date of this Release.
10. The Executive acknowledges that the Severance Payments he is receiving in connection with
the release of claims set forth in this Release and his obligations under this Release are in
addition to anything of value to which the Executive is entitled from the Company.
11. Each provision hereof is severable from this Release, and if one or more provisions hereof
are declared invalid, the remaining provisions shall nevertheless remain in full force and effect.
If any provision of this Release is so broad, in scope, or duration or otherwise, as to be
unenforceable, such provision shall be interpreted to be only so broad as is enforceable.
12. This Release constitutes the complete agreement of the Parties in respect of the subject
matter hereof and shall supersede all prior agreements between the Parties in respect of the
subject matter hereof except to the extent set forth herein.
13. The failure to enforce at any time any of the provisions of this Release or to require at
any time performance by another party of any of the provisions hereof shall in no way be construed
to be a waiver of such provisions or to affect the validity of this Release, or any part hereof, or
the right of any party thereafter to enforce each and every such provision in accordance with the
terms of this Release.
14. This Release may be executed in several counterparts, each of which shall be deemed to be
an original, but all of which together shall constitute one and the same instrument. Signatures
delivered by facsimile shall be deemed effective for all purposes.
15. This Release shall be binding upon any and all successors and assigns of the Executive and
the Company.
16. Except for issues or matters as to which federal law is applicable, this Release shall be
governed by and construed and enforced in accordance with the laws of the State of New York without
giving effect to the conflicts of law principles thereof.
[signature page follows]
IN WITNESS WHEREOF, this Release has been signed by or on behalf of each of the Parties, all
as of .
| XXXXXXXX CORPORATION |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| McJ HOLDING LLC |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
Exhibit B
Existing Inventions
[none.]
