EXHIBIT 4.11
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "AGREEMENT") is made and entered into as
of the _1st__ day of _SEPTEMBER____, 2004 (the "EFFECTIVE DATE"), by and between
XXXXX XXXXXX BUILDING PRODUCTS, INC., a California corporation (the "COMPANY")
and XXXXX XXXXXXX, a resident of California (the "EXECUTIVE").
RECITALS
The Company and the Executive desire to enter into this Agreement to
establish the terms and conditions of the Executive's employment by the Company
during the term hereof.
The Executive will have responsibilities for activities in companies in
the Xxxxx Xxxxxx group in addition to those owed to the Company - these
companies together with the Company are referred to in this Agreement as the
"Group".
AGREEMENT
NOW, THEREFORE, in consideration of the covenants contained herein, the
above recitals and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and subject to the conditions and
covenants contained herein the parties agree as follows:
ARTICLE I
DUTIES
1.01 Duties. The Company hereby employs the Executive, and the Executive
hereby accepts such employment, as the Company's Executive Vice President --
Engineering and Process Development upon the terms and subject to the conditions
set forth in this Agreement. The Executive will report directly to the Chief
Executive Officer and will be responsible, to the Chief Executive Officer, for
various duties and functions, including but not limited to continued engineering
advances and developments, new plant design and construction, and Pipes and Trim
technology and manufacturing. The Executive shall perform such other or
different duties and functions consistent with his role as Executive Vice
President -- Engineering and Process Development as may from time to time be
assigned to him by the Company's Chief Executive Officer or Board of Directors.
1.02 Other Business.
(a) During the term of this Agreement, the Executive agrees that
during the course of the Company's business hours, he will devote the whole of
his time, attention and efforts to the performance of his duties and obligations
hereunder. The Executive shall not, during the term of this Agreement, engage in
any activity which materially interferes with his performance of duties assigned
the Executive hereunder.
(b) The Executive shall not, during the term of this Agreement,
without the written approval of the Chief Executive Officer and obtained in each
instance, directly or indirectly (i) accept employment or receive any
compensation for the performance of services from any business enterprise other
than the Company or the Group, or (ii) enter into or be concerned or interested
in any trade or business or public or private work (whether for profit or
otherwise and whether as partner, principal shareholder or otherwise), which
may, in the absolute discretion of the Chief Executive Officer, hinder or
otherwise interfere with the performance by the Executive of his duties and
obligations hereunder, except as a holder of not more than five percent (5%) of
any class of stock or other securities in any company which is listed and or
traded on any securities market. Nothing in this Section 1.02(b) prevents the
Executive from carrying out up to 15 hours per week of unpaid employment with
religious, not for profit or voluntary organizations.
ARTICLE II
TERM OF AGREEMENT
The term of this Agreement shall commence on the Effective Date and shall
continue in full force and effect until the Executive leaves employment with the
Company for any reason, including but not limited to resignation, termination,
death or disability. The provisions of Article V of the Agreement will continue
in full force and effect after the termination of the Agreement in accordance
with the provisions thereof.
ARTICLE III
COMPENSATION
During the term of this Agreement, the Company shall pay, or cause to be
paid to the Executive in cash in accordance with the normal payroll practices of
the Company for senior executive officers (including deductions withholdings and
collections as required by law), the following:
3.01 Annual Base Salary. An annual base salary ("ANNUAL BASE SALARY") will
be paid equal to Three Hundred Seven Thousand Dollars ($307,000) per year.
Adjustments in Annual Base Salary, if any, shall be determined by the Company in
its sole and absolute discretion, based upon annual reviews prior to March 31 of
each year of the scope of the Executive's duties and Executive's performance of
such duties.
3.02 Annual Bonus. A cash bonus (the "ANNUAL BONUS") to be paid each year
pursuant to the Company's Economic Profit Bonus Plan, subject to the achievement
of goals agreed by the Chief Executive Officer in accordance with this Section
3.02, at the same time bonuses are generally paid to other senior executives of
the Company for the relevant fiscal year. Each year of the term of this
Agreement the Chief Executive Officer shall approve objective and quantifiable
annual goals which shall be reduced to writing and presented to the Executive on
or before the sixtieth (60th) day after the Effective Date or the commencement
of the Company's fiscal year, as appropriate. The targeted annual bonus shall be
sixty-five percent (65%) of the Executive's Annual Base Salary on March 31, 2005
prorated from April 1, 2004 to the effective
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date of this agreement and ninety percent (90%) of the Executive's Annual Base
Salary on March 31,from the effective date forward.
3.03 Gross Amounts. The Annual Base Salary and Annual Bonus set forth in
this Article III shall be the gross amounts of such Annual Base Salary and
Annual Bonus. The Executive is responsible for paying any and all taxes due on
any amounts received by him as Annual Base Salary or Annual Bonus, including,
but not limited to, any income tax, social security tax, Medicare tax or capital
gains tax.
ARTICLE IV
OTHER BENEFITS
4.01 Incentive Savings and Retirement Plans. The Executive shall be
entitled to participate, during the term of this Agreement, in all incentive
(including the Company's Equity Incentive Plan), savings and retirement plans,
practices, policies and programs available to other senior executives of the
Company. Any benefits received pursuant to this Section 4.01 shall be the gross
amount of such benefits. The Executive is responsible for paying any and all
taxes due on any benefits received pursuant to this Section 4.01, including, but
not limited to, any income tax, social security tax, Medicare tax or capital
gains tax.
4.02 Welfare Benefits. Immediately upon the Effective Date and throughout
the term of this Agreement, the Executive and/or the Executive's family, as the
case may be, shall be entitled to participate in, and shall receive all benefits
under, all welfare benefit plans, practices, policies and programs provided by
the Company (including without limitation, medical, prescription, dental,
disability, salary continuance, employee life, group life, dependent life,
accidental death and travel accident insurance plans and programs) in accordance
with the applicable provisions thereof, at a level that is equal to other senior
executives of the Company. For the avoidance of doubt, the Executive's Accident,
Death and Dismemberment cover will be a minimum three times the Executive's
annual base salary, or such higher amount as is agreed by the Company.
4.03 Fringe Benefits. Immediately upon the Effective Date and throughout
the term of this Agreement, the Executive shall be entitled to participate in
all appropriate fringe benefit programs provided by the Company to its senior
executives at comparable levels.
4.04 Expenses. During the term of this Agreement, the Executive shall be
entitled to receive prompt reimbursement for all reasonable and necessary travel
and other business expenses incurred or paid by the Executive in connection with
the performance of his services under this Agreement. The Executive shall be
reimbursed upon the Company's receipt of accountings in accordance with
practices, policies and procedures applicable to senior executives of the
Company.
4.05 Vacation. The Executive shall be entitled to twenty (20) paid
vacation days during each twelve (12) month period, beginning the Effective
Date, during the term of this Agreement. Such paid vacation days shall accrue
without cancellation, expiration or forfeiture.
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4.06 Car Allowance. The Company will either lease an automobile for
business and personal use by the Executive, or, in the alternative, the
Executive will be entitled to an automobile lease allowance not to exceed Seven
Hundred Fifty Dollars ($750) per month during the term of this Agreement. Unused
allowance or part thereof will be paid to the Executive. The Company shall be
responsible for all costs relating thereto, including gasoline, repairs,
maintenance and insurance. All automobile insurance policies for such automobile
shall name the Company and the Executive as co-insureds. Personal taxation costs
arising from the Executive's personal use of such automobile shall be the
Executive's sole responsibility.
4.07 Annual Review. The Executive's benefits under this Article IV will be
reviewed annually during the review process provided in Section 3.01 above.
ARTICLE V
RESTRICTIVE COVENANTS
5.01 Trade Secrets. Confidential and Proprietary Business Information.
(a) The Company has advised the Executive and the Executive has
acknowledged that it is the policy of the Company to maintain as secret and
confidential all Protected Information (as defined below), and that Protected
Information has been and will be developed at substantial cost and effort to the
Group. "Protected Information" means trade secrets, confidential and proprietary
business information of the Group, any information of the Group other than
information which has entered the public domain (unless such information entered
the public domain through effects of or on account of the Executive), and all
valuable and unique information and techniques acquired, developed or used by
the Group relating to its business, operations, employees, customers and
suppliers, which give the Group a competitive advantage over those who do not
know the information and techniques and which are protected by the Group from
unauthorized disclosure, including but not limited to, customer lists (including
potential customers), sources of supply, processes, plans, materials, pricing
information, internal memoranda, marketing plans, internal policies, and
products and services which may be developed from time to time by the Group and
any of their agents or employees.
(b) The Executive acknowledges that the Executive will acquire
Protected Information with respect to the Group and its successors in interest,
which information is a valuable, special and unique asset of the Group's
business and operations and that disclosure of such Protected Information would
cause irreparable damage to the Group.
(c) Either during or after termination of employment by the Company,
the Executive shall not, directly or indirectly, divulge, furnish or make
accessible to any person, firm, corporation, association or other entity
(otherwise than as may be required in the regular course of the Executive's
employment) nor use in any manner, any Protected Information, or cause any such
information of the Group to enter the public domain.
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5.02 Non-Competition
(a) The Executive agrees that the Executive shall not during the
Executive's employment with the Company, and, in accordance with Sections
6.01(b), 6.02(b), and 6.03(c) for a period of at least two (2) years, and up to
four (4) years at the Company's discretion (assuming exercise of the Company's
rights under 7.01(b)), after the termination of this Agreement, directly or
indirectly, in any capacity, engage or participate in, or become employed by or
render advisory or consulting or other services in connection with any
Prohibited Business as defined in Section 5.02(c).
(b) The Executive agrees that the Executive shall not during the
Executive's employment with the Company, and, in accordance with Sections
6.01(b), 6.02(b), and 6.03(c) for a period of at least two years, and up to four
(4) years at the Company's discretion (assuming exercise of the Company's rights
under 7.01(b)), after the termination of this Agreement, make any financial
investment, whether in the form of equity or debt, or own any interest, directly
or indirectly, in any Prohibited Business. Nothing in this Section 5.02(b)
shall, however, restrict the Executive from making any investment in any company
whose stock is listed on a national securities exchange; provided that (i) such
investment does not give the Executive the right or ability to control or
influence the policy decisions of any Prohibited Business, and (ii) such
investment does not create a conflict of interest between the Executive's duties
hereunder and the Executive's interest in such investment.
(c) For purposes of this Section 5.02, "Prohibited Business" shall
be defined as the business of:
(i) marketing or selling of fiber cement products, where the
marketing or selling of such products is a principal
activity of the business;
(ii) manufacturing or processing fiber cement products;
(iii) building, assembling, operating or maintaining plant and
equipment, where that plant and equipment is particular
to the manufacturing or processing of fiber cement
products;
(iv) manufacturing or processing raw materials for fiber
cement products where that manufacturing or processing
is particular to the raw material used in fiber cement
products;
(v) research or development activities relating to Section
5.02(c)(i)-(iv); and
and any branch, office or operation thereof, which is a competitor of the
Company or which has established or seeks to establish contact, in whatever form
(including, but not limited to solicitation of sales, or the receipt or
submission of bids), with any entity who is at any time a client, customer or
supplier of the Company (including but not limited to all subdivisions of the
federal government.)
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5.03 Non-Solicitation. From the date hereof until at least two (2) years
and up to four (4) years at the Company's discretion after the Executive's
termination of employment with the Company, the Executive shall not, directly or
indirectly (a) encourage any employee or supplier of the Group or any of their
successors in interest to leave his or her employment with the Group or any of
their successors in interest, (b) employ, hire, solicit or cause to be employed,
hired or solicited (other than by the Group or any of their successors in
interest), or encourage others to employ or hire any person who within at least
two (2) years, and up to four (4) years at the Company's discretion, prior
thereto was employed by the Group or any of their successors in interest, or (c)
establish a business with, or encourage others to establish a business with, any
person who within at least two (2) years, and up to four (4) years at the
Company's discretion, prior thereto was an employee or supplier of the Group or
any of their successors in interest.
5.04 Disclosure of Employee-Created Trade Secrets Confidential and
Proprietary Business Information. The Executive agrees to promptly disclose to
the Company all Protected Information developed in whole or in part by the
Executive during the Executive's employment with the Company and which relates
to the Group's business. Such Protected Information is, and shall remain, the
exclusive property of the Company. All writings created during the Executive's
employment with the Company (excluding writings unrelated to the Company's
business) are considered to be "works-for-hire" for the benefit of the Group and
the Company shall own all rights in such writings.
5.05 Survival of Undertakings and Injunctive Relief
(a) The provisions of Sections 5.01, 5.02, 5.03 and 5.04 of this
Agreement shall survive both the termination of the Executive's employment with
the Company and the termination of this Agreement irrespective of the reasons
for such termination.
(b) The Executive acknowledges and agrees that the restrictions
imposed upon the Executive by Sections 5.01, 5.02, 5.03 and 5.04 of this
Agreement and the purpose of such restrictions are reasonable and are designed
to protect the Protected Information and the continued success of the Company
without unduly restricting the Executive's future employment by others.
Furthermore, the Executive acknowledges that, in view of the Protected
Information which the Executive has or will acquire or has or will have access
to and in view of the necessity of the restrictions contained in Sections 5.01,
5.02, 5.03 and 5.04, any violation of any provision of Sections 5.01, 5.02, 5.03
and 5.04 hereof would cause irreparable injury to the Company and its successors
in interest with respect to the resulting disruption in their operations. By
reason of the foregoing the Executive consents and agrees that if the Executive
violates any of the provisions of Sections 5.01, 5.02, 5.03 or 5.04 of this
Agreement, the Company and its successors in interest as the case may be, shall
be entitled, in addition to any other remedies that they may have, including
money damages, to an injunction to be issued by a court of competent
jurisdiction, restraining the Executive from committing or continuing any
violation of such Sections of this Agreement.
In the event of any such violation of Sections 5.01, 5.02, 5.03 and 5.04
of this Agreement, the Executive further agrees that the time periods set forth
in such Sections shall be extended by the period of such violation.
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ARTICLE VI
TERMINATION
6.01 Termination of Employment by Voluntary Resignation /Death
/Disability.
(a) The Executive's employment under this Agreement may be
terminated:
(i) Upon voluntary resignation by the Executive in accordance
with the notification requirement provided in Article IX;
(ii) Upon the death of the Executive, this Agreement and the
Executive's employment hereunder shall terminate immediately and without notice
by the Company; or
(iii) In the event of the inability of the Executive to
perform his duties or responsibilities thereunder, as a result of a Permanent
Disability (as defined below) upon written notice by the Company. A "Permanent
Disability" occurs when for a period of ninety (90) consecutive calendar days,
or an aggregate of one hundred twenty (120) calendar days during any calendar
year (whether or not consecutive) the Executive is unable to perform his duties
or responsibilities hereunder as a result of a mental or physical ailment or
incapacity. Upon the occurrence of a Permanent Disability, the Company will
evaluate the Executive's condition and determine whether or not to send written
notice of such Executive's termination.
(b) Upon termination pursuant to this Section 6.01(a)(i), the
Executive shall not be entitled to payment of any compensation other than salary
under this Agreement earned up to the date of such termination, any accrued but
unpaid vacation days, and any stock options, warrants or similar rights which
have vested at the date of such termination. The Company and the Executive agree
that the Company shall continue to pay the Executive his Annual Base Salary, in
accordance with the Company's normal practices for other senior executives, for
two (2) years after the Executive's voluntary resignation, and the Executive
agrees not to violate the provisions of Section 5.02 for an equivalent period.
(c) Upon termination pursuant to this Section 6.01(a)(ii) above, the
Company shall pay or grant, to such person as the Executive designates in a
notice filed with the Company, or, if no such person shall be designated, to the
Executive's estate as a lump sum death benefit, an amount equal to any
compensation under this Agreement earned up to the date of such termination,
including salary and any accrued but unpaid vacation days. In addition, any
stock options or warrants which have vested at the time such termination will be
exercisable by the Executive's estate in accordance with the Company's Equity
Incentive Plan. The Executive's designated beneficiary or the executor of the
Executive's estate, as the case may be, shall accept the payment provided for in
this Paragraph 6.01(c) in full discharge and release of the Company of and from
any further obligations under this Agreement.
(d) Upon termination pursuant to Section 6.01(a)(iii) above, the
Executive shall be entitled to the benefit of disability or other relevant
insurance or benefits provided pursuant to Section 4.02 above. The Executive
shall not be entitled to payment of any
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compensation other than salary under this Agreement earned up to the date of
such termination, any accrued but unpaid vacation days, and any stock options,
warrants or similar rights which have vested at the date of such termination.
The Company, in its sole and absolute discretion, may decide to continue to pay
the Executive his Annual Base Salary, in accordance with the Company's normal
practices for other senior executives, for two (2) years after the Executive's
voluntary resignation, in return for the Executive not violating the provisions
of Section 5.02 for an equivalent period and the Executive's execution, without
revocation, of a Company Release of Claims upon the effective date of the
termination of the Executive's employment.
6.02 Termination for Cause. (a) The Company may terminate the Executive's
employment for Cause by giving the Executive written notice of such termination.
For purposes of this Agreement, "Cause" for termination shall mean:
(i) the willful failure or refusal to carry out the reasonable
directions of the Chief Executive Officer or Board of Directors, which
directions are consistent with the Executive's duties as set forth under this
Agreement;
(ii) a willful act by the Executive that constitutes gross
negligence in the performance of the Executive's duties under this Agreement and
which materially injures the Company. No act, or failure to act, by the
Executive shall be considered "willful" unless committed without good faith and
without a reasonable belief that the act or omission was in the Company's best
interest; or
(iii) a conviction for a violation of a state or federal
criminal law involving the commission of a felony or other crime involving moral
turpitude.
(b) Upon termination for Cause, the Executive shall not be entitled
to payment of any compensation other than salary under this Agreement earned up
to the date of such termination, any accrued but unpaid vacation days, and any
stock options, warrants or similar rights which have vested at the date of such
termination. The Company and the Executive agree that the Company shall continue
to pay the Executive his Annual Base Salary, in accordance with the Company's
normal practices for other senior executives, for two (2) years after such
termination for Cause, and the Executive agrees not to violate the provisions of
Section 5.02 for an equivalent period and the Executive's execution, without
revocation, of a Company Release of Claims upon the effective date of the
termination of the Executive's employment.
6.03 Termination Without Cause or Termination by Executive for Good
Reason. Should the Executive's employment be terminated for a reason other than
as specifically set forth in Sections 6.01 or 6.02 above, whether terminated by
the Company or terminated by the Executive for Good Reason (as defined below):
(a) the Company shall pay the Executive an amount equal to 1.5 times
the Annual Base Salary applying as at the date of termination, paid in
accordance with Section 6.03(c) below.
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(b) the Company shall pay the Executive an amount equal to 1.5 times
the Average Annual Bonus actually paid to the Executive in accordance with
Section 6.03(c) below. For purposes of this Section 6.03, Average Annual Bonus
shall mean the aggregate Annual Bonus actually paid to the Executive by the
Company, including the bonus bank amounts actually paid out to the Executive,
over the last three years immediately preceding the year of such termination
divided by three.
(c) the Company shall pay the amounts specified in each of Sections
6.03(a) and (b) above in monthly installments, in accordance with the Company's
normal payroll practices for other senior executives, for the period of eighteen
months following such termination, in return for the Executive's execution,
without revocation, of a Company Release of Claims upon the effective date of
the termination of the Executive's employment. In addition, the Company and the
Executive agree that the Company shall continue to pay the Executive additional
amounts equal to his Annual Base Salary as of the date of termination of
employment in accordance with the Company's normal practices for other senior
executives, for up to two (2) years following the Executive's termination, and
the Executive agrees not to violate the provisions of Section 5.02 above for an
equivalent period and the Executive's execution, without revocation, of a
Company Release of Claims at that time.
(d) all of the stock options, warrants, retirement benefits and
other similar rights, if any, granted by the Company to the Executive which are
vested at the date of the termination of the Executive's employment shall remain
vested. All stock options that will vest between the date of such termination of
employment and the completion of the Consulting Agreement addressed in Article
VII of the Agreement (or violation of Section 5.02 above if that occurs), will
continue to vest on the vest dates stipulated in the grant document. All stock
options unvested as of the completion of the Consulting Agreement addressed in
Article VII of the Agreement (or violation of Section 5.02 above if that occurs)
will immediately expire. All stock options vested as of the completion of the
Consulting Agreement addressed in Article VII of the Agreement (or violation of
Section 5.02 above if that occurs) will remain exercisable until the earlier of
(i) the date such Stock Options would expire in accordance with their terms, and
(ii) 90 days after the date of completion of the Consulting Agreement and/or
violation of Section 5.02 above.
(e) all health and medical benefits shall continue for the remainder
of the term of this Agreement; and the Company will pay the Executive's premium
for continued coverage for medical, dental and vision benefits, if applicable,
under the Consolidated Omnibus Budget Reconciliation Act of 1986, as amended
("COBRA") for himself and, if applicable, his covered dependents for up to
eighteen months following the date of the termination of Executive's employment,
in accordance with the provisions of COBRA, for a period of up to eighteen
months following the termination of the Executive's employment.
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The term "Good Reason," in connection with the termination by the
Executive of his employment with the Company shall mean:
(i) A diminution in the responsibilities, title or office of the
Executive such that he does not serve as an executive officer of the Company
(which diminution was not for Cause or the result of the Executive's
disability); or
(ii) A reduction by the Company in the Executive's Annual Base
Salary to less than (a) $307,000, or (b) the Executive's Annual Base Salary at
the time of such reduction.
6.04 No Mitigation. The Executive shall not be required to mitigate the
amount of any payment provided for in Section 6.03 above by seeking other
employment or otherwise, nor shall the amount of any payment provided for in
Section 6.03 be reduced by any compensation earned by the Executive as a result
of employment by another company, self-employment or otherwise.
ARTICLE VII
POST-TERMINATION CONSULTING PERIOD
7.01 In addition to the matters set forth in Article VI above, upon the
termination of the Executive's employment, the Company and the
Executive agree to:
(a) Consult to the Company for two years for up to 100 hours/year and
agrees not to violate Section 5.02 above, in exchange for the payment
of the Executive's annual target bonus amount (paid in monthly
installments), in accordance with the terms of the standard Xxxxx
Xxxxxx Consulting Agreement, a copy of which is attached ("Consulting
Agreement").
(b) Additionally, the Company may elect to extend this Consulting
Agreement for an additional two years, and the Executive will agree to
such extension, in exchange for the amount equal to the annual base
salary and target bonus for each year of extension.
ARTICLE VIII
RELEASE
8.1 As a material inducement for the Company to provide compensation and
certain benefits described in the Agreement, Executive, on his own behalf and on
behalf of his spouse, heirs, executors, administrators, successors, and assigns,
hereby irrevocably and unconditionally releases, acquits and forever discharges
the Group and each of their predecessors, successors, assigns, agents,
directors, officers, employees, partners, attorneys, representatives, retirement
benefit plans, welfare benefit plans, divisions, subsidiaries, parent companies,
affiliates (and agents, directors, officers, employees, partners, attorneys,
representatives, retirement benefit plans, and welfare benefit plans of such
divisions, subsidiaries, parent companies and affiliates), and all persons
acting by, through, under or in concert with any of them (collectively,
"Releasees"), or any of them from any and all charges, complaints, claims,
liabilities, obligations, promises, agreements, controversies, damages, actions,
causes of action, suits, rights, demands, costs, losses, debts and expenses
(including attorneys' fees and costs actually incurred) (collectively, "Claims")
of any nature whatsoever known or unknown, suspected or unsuspected, including
but not limited to Claims arising under any compensation plan, welfare benefit
plan,
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contract, agreement or understanding, whether express or implied, any tort or
other cause of action, including but not limited to those arising under federal,
state or local laws prohibiting age, sex, disability or other forms of
discrimination, including but not limited to Title VII of the Civil Rights Act
of 1964, as amended, the Employee Retirement Income Security Act of 1974, as
amended, the Age Discrimination in Employment Act of 1967, as amended, the
Americans With Disabilities Act of 1990, the Family and Medical Leave Act of
1993, the Fair Labor Standards Act of 1938, as amended, the Consolidated Omnibus
Budget Reconciliation Act of 1986, as amended, the Fair Employment and Housing
Act, any regulations thereunder, state or federal common law, or any other duty
or obligation of any kind or description whether express or implied, which
Claims relate to arise out of the Executive's change in role as set out in this
Agreement, and which Executive now has, owns or holds or claims to have, own or
hold or which Executive at any time heretofore has owned or held or claimed to
have, own or hold or claim to have, own or hold against each or any of the
Releasees, except claims arising under any applicable bonus plan, pension
benefit plan, medical benefit plan, dental benefit plan, or vision benefit plan
in which the Executive is participating as of the date of this Agreement. The
foregoing provision in this Paragraph 8.1 shall not apply to activities that are
permitted under applicable law, except that Executive acknowledges that he has
irrevocably waived any right to recovery against the Releasees in connection
with such activities, or otherwise. This Release is not intended to restrict
either Executive's or the Company's rights and obligations to abide by and/or
enforce the terms and conditions of this Agreement. For the avoidance of doubt,
the release set out in this Article VIII applies solely to Claims which relate
to arise out of the Executive's change in role as set out in this Agreement.
8.2 As a condition of this Release, Executive waives all rights arising
under Section 1542 of the Civil Code of the State of California against
Releasees. Section 1542 provides as follows:
A General Release does not extend to claims which a creditor does
not know or suspect to exist in his favor as of the time of
executing the Release which if known by him must have materially
affected his settlement with the debtor.
Notwithstanding the provisions of Section 1542 and for the purpose of
implementing the full and complete release and discharge of the liability of all
Releasees described in Paragraph 8.1 above as of the effective date of the
Agreement, Executive expressly acknowledges that the Release is intended to
include and does include in its effect without limitation all Claims which
Executive does not know or expect to exist in his favor against Releasees as of
the time of the effective date of this Release and that this Release expressly
contemplates the extinguishment of any such Claims, including attorneys' fees
and costs.
8.3 Executive acknowledges that he has been encouraged to consult with an
attorney before signing this Agreement, and that he may return the signed
Agreement to the Company during the period beginning with his receipt of the
Agreement and ending, without Executive's revocation, twenty-one (21) days from
the date Executive receives it. If Executive does sign this Agreement, Executive
acknowledges that he will have seven (7) days after he executes it to
voluntarily decide to revoke it, and it will not become effective until seven
(7) days has expired,
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without Executive's revocation, from the date Executive voluntarily chose to
execute it. Executive further acknowledges that he has read this Article VIII
carefully and that he knowingly and voluntarily agrees to accept the terms and
conditions set forth in the Agreement, as consideration for the Release
described herein. Executive further acknowledges that he was provided twenty-one
(21) days within which to consider the terms of the Release, including seeking
counsel, and that the consideration described within the Agreement is sufficient
and adequate consideration for the Release as it reflects compensation and
benefits above and beyond those to which Executive is entitled as of the date of
this Release.
ARTICLE IX
MISCELLANEOUS
9.01 Assignment, Successors. This Agreement, or any right or interest
herein, may not be assigned by either party hereto, whether by operation of law
or otherwise, without the prior written consent of the other party. This
Agreement shall be binding upon and inure to the benefit of the Executive and
the Executive's estate and the Company and any assignee of or successor to the
Company.
9.02 Severability. If all or any part of this Agreement is declared by any
court or governmental authority to be unlawful or invalid, such unlawfulness or
invalidity shall not serve to invalidate any portion of this Agreement not
declared to be unlawful or invalid. Any paragraph or part of a paragraph so
declared to be unlawful or invalid shall, if possible, be construed in a manner
which will give effect to the terms of such paragraph or part of a paragraph to
the fullest extent possible while remaining lawful and valid.
9.03 Amendment and Waiver. This Agreement shall not be altered, amended or
modified except by written instrument executed by the Company and the Executive.
A waiver of any term, covenant, agreement or condition contained in this
Agreement shall not be deemed a waiver of any other term, covenant, agreement or
condition and any waiver of any other term, covenant, agreement or condition,
and any waiver of any default in any such term, covenant, agreement or condition
shall not be deemed a waiver of any later default thereof or of any other term,
covenant, agreement or condition.
9.04 Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed given upon personal delivery,
facsimile transmission (with confirmation of receipt), delivery by a reputable
overnight courier service or five (5) days following deposit in the U.S. mail
(if sent by registered or certified mail, return receipt requested, postage
prepaid), in each case duly addressed to the party to whom such notice or
communication is to be given as follows:
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If to the Company: XXXXX XXXXXX BUILDING PRODUCTS INC.
Attn: CEO
00000 Xx Xxxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
With a copy to: VP HR
00000 Xx Xxxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
If to the Executive: XXXXX XXXXXXX
c/o Xxxxx Xxxxxx Building Products Inc.
00000 Xx Xxxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Either party may from time to time designate a new address by notice given in
accordance with this Section. Notice and communications shall be effective when
actually received by the addressee.
9.05 Counterpart Originals. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
9.06 Entire Agreement. This Agreement forms the entire agreement between
the parties hereto with respect to any severance payment and with respect to the
subject matter contained in the Agreement.
9.07 Applicable Law. The provisions of this Agreement shall be interpreted
and construed in accordance with the laws of the state of California, without
regard to its choice of law principles.
9.08 Effect on Other Agreements. This Agreement shall terminate and
supersede all prior agreements, promises and representations regarding the terms
and conditions of the Executive's employment by the Company, Xxxxx Xxxxxx
Industries N.V., or any of their subsidiaries or affiliates, and any severance
or other payments contingent upon termination of employment, including but not
limited to a certain Employment Agreement by and between the Company and the
Executive, made and entered into as of the 9th day of October, 2002.
9.09 Extension or Renegotiation. The parties hereto agree that at any time
prior to the expiration of this Agreement, they may extend or renegotiate this
Agreement upon mutually agreeable terms and conditions.
9.10 Legal Fees; Arbitration. The parties hereto expressly agree that in
the event of any dispute, controversy or claim by any party regarding this
Agreement, the prevailing party
13
shall be entitled to reimbursement by the other party to the proceeding of
reasonable attorney's fees, expenses and costs incurred by the prevailing party.
Any controversy, dispute or claim arising out of, in connection with, or in
relation to the interpretation, performance or breach of this Agreement or
otherwise arising out of the execution hereof, including any claim based on
contract, tort or statute, shall be resolved, at the request of any party, by
submission to binding arbitration at the Orange County, California offices of
Judicial Arbitration & Mediation Services, Inc. ("JAMS"), and any judgment or
award rendered by JAMS shall be final, binding and unappealable, and judgment
may be entered by any state or federal court having jurisdiction thereof. Any
party can initiate arbitration by sending written notice of intention to
arbitrate (the "DEMAND") by registered or certified mail to all parties and to
JAMS. The Demand shall contain a description of the dispute, the amount
involved, and the remedy sought. The arbitrator shall be a retired or former
judge agreed to between the parties from the JAMS' panel. If the parties are
unable to agree, JAMS shall provide a list of three available judges and each
party may strike one. The remaining judge shall serve as the arbitrator. Each
party hereto intends that the provisions to arbitrate set forth herein be valid,
enforceable and irrevocable. In her award, the arbitrator shall allocate, in her
discretion, among the parties to the arbitration all costs of the arbitration,
including the fees of the arbitrator and reasonable attorneys' fees, costs and
expert witness expenses of the parties. The parties hereto agree to comply with
any award made in any such arbitration proceedings that has become final and
agree to the entry of a judgment in any jurisdiction upon any award rendered in
such proceeding becoming final.
IN WITNESS WHEREOF the parties have executed this Employment Agreement on
the date first written above.
XXXXX XXXXXX BUILDING PRODUCTS INC.,
a California corporation
By: /s/ Xxxxx Xxxxx
---------------------------
Name: Xxxxx Xxxxx
Title: President
XXXXX XXXXXXX, an individual
/s/ Xxxxx X. Xxxxxxx
------------------------------
Xxxxx Xxxxxxx
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CONSULTING AGREEMENT
This Agreement is entered into on the later date this Agreement is signed
by the parties by and between Xxxxx Xxxxxx Building Products, Inc., a Nevada
corporation, with its principal place of business at 00000 Xx Xxxxxxx, Xxxxxxx
Xxxxx, Xxxxxxxxxx 00000 ("Company") and the consultant named in Exhibit A
("Consultant").
In consideration of the mutual covenants and agreements contained herein,
the adequacy and sufficiency of which is acknowledged, the parties agree as
follows:
ARTICLE 1. SCOPE OF SERVICES. As directed by Company, Consultant shall
utilize its expertise to perform consulting and advisory services ("Services")
regarding various business operations and opportunities in which Company may
have an interest. The Services shall be rendered on an "as needed" basis and,
Consultant shall use its best efforts to make the Services available to Company
at times requested by Company. Consultant's responsibilities and milestones for
achieving the Services are stated in Exhibit A.
ARTICLE 2. FEES, PAYMENT, DISPUTE RESOLUTION. Unless specified otherwise
in Exhibit A, the following terms regarding fees and payment shall apply.
Company shall pay Consultant for time spent performing Services at the rates set
forth in Exhibit A upon full and satisfactory performance of the Services.
Company agrees to reimburse Consultant for all reasonable out of pocket expenses
incurred by the Consultant in connection with the Services provided hereunder.
Invoices shall be submitted by Consultant to Company as soon as practical after
the end of each month and Company agrees to pay Consultant for amounts due for
such invoices within thirty (30) days of Company's receipt of such invoice.
Invoices shall provide sufficient detail and shall be in a format acceptable to
Company. If Company reasonably disputes any of the fees charged, Company shall
not pay the amount in dispute but shall notify Consultant of the amount and
reason for the dispute. The parties shall attempt in good faith to settle the
dispute by discussions between themselves. If the dispute remains unresolved
after eight weeks after Company notifies Consultant of the dispute, the parties
are free to pursue all available legal remedies.
ARTICLE 3. EFFECTIVE DATE, TERM AND TERMINATION. Unless specified
otherwise in Exhibit A, this Agreement shall become effective on the date last
written below and shall continue to be in effect month-to-month thereafter
unless canceled as hereinafter provided and either party may terminate this
Agreement at the end of any month by giving the other party written notice of
such termination at least ten (10) days prior to the effective date of
termination; provided, however, that Company may terminate this Agreement for
cause immediately upon written notice to Consultant. Termination of the
Agreement by Company does not waive any claims for damages which it may have
against Consultant for failure to perform or insufficient performance.
ARTICLE 4. INSURANCE. Consultant shall carry comprehensive general
liability and automobile liability insurance and, if applicable, workers'
compensation and errors and omissions insurance. The minimum limits for the
comprehensive general liability coverage shall be bodily injury $3,000,000 per
occurrence, and property coverage $3,000,000 per occurrence. The minimum limits
for the automobile liability coverage shall be bodily injury $1,000,000 per
occurrence, and property damage $1,000,000 per occurrence. All policies of
insurance shall be with a company or companies acceptable to the Company and
Consultant shall provide to Company upon execution of this Agreement and upon
Company's request, a certificate of insurance demonstrating that proper
coverages are in place.
ARTICLE 5. CONSULTANT'S AUTHORITY. Consultant is an independent
contractor, not an agent or employee of Company. Consultant has no authority to
enter into any contract or incur any other obligation on behalf or in the name
of Company. Consultant shall be solely responsible for all of its own employees
and expenses.
ARTICLE 6. INDEMNIFICATION. Consultant shall indemnify and hold harmless
Company, its affiliates, agents and employees from and against all actions,
claims, demands, liabilities, damages, losses, costs and expenses (including,
but not limited to, attorney's fees and those arising in any bankruptcy or
insolvency proceeding) which relate to personal or bodily injury, sickness,
disease, death or injury or damage to property of any kind (including, without
limitation, the loss of use thereof) and any breach by Consultant of the terms
of this Agreement ("Claims") where such Claims arise out of, or by reason of, an
act or omission of Consultant, its employees or agents.
ARTICLE 7. WARRANTY. Consultant warrants that: (a) the Services shall be
performed in a good and workmanlike manner in accordance with established
professional standards for such services and the best practices in Consultant's
industry, (b) the Services and any reports, advice and other products of
Consultant's Services shall comply
1
with all applicable laws, regulations, codes and ordinances, and (c) to the
extent that the Services involve delivery of "Technology" to Company, use of
such Technology by Company does not infringe or violate any patent, copyright,
trade secret or other proprietary right of any person or entity and, to the
extent that the Services involve development of Technology, such Technology is a
"work made for hire" (or if for any reason the Technology is deemed to not be a
"work made for hire," Consultant hereby assigns all its rights in such
Technology to Company) and Company shall have full and clear title to any and
all Technology resulting from the Services (except as provided in Exhibit A) and
shall be able to use any and all such Technology without liability and without
restriction. "Technology" includes such things as, without limitation, software
programs developed by Consultant as part of the Services. If Consultant fails to
comply with this warranty, Company may, in addition to exercising any of its
other rights and remedies under this Agreement or otherwise at law, require that
Consultant perform the Services again, properly and at no additional expense to
Company.
ARTICLE 8. OWNERSHIP OF PRODUCTS OF SERVICES. All reports, data, ideas,
information and other products of the Services delivered by Consultant to
Company hereunder or developed by Consultant in performing the Services shall be
the sole and exclusive property of Company and shall be deemed "work made for
hire" with Company receiving ownership of copyright therein. Consultant hereby
assigns all such rights to Company.
ARTICLE 9. MAINTENANCE OF RECORDS. Consultant shall maintain accurate
records, sufficient and acceptable to Company, pertaining to the Services and
agrees to retain all such records for at least three years after completion of
Services. Any representative(s) authorized by Company may audit transactions
related hereto for the purpose of determining whether there has been compliance
with this Agreement.
ARTICLE 10. CONFIDENTIALITY.
10.1 The term "Confidential Information" means all information which
Consultant receives before, during and after the engagement hereunder which: (a)
is provided to Consultant by Company or an affiliate company that concerns or
relates to any aspect of the business of Company or an affiliate company; or (b)
is, for any reason, identified and treated as confidential by the Company and/or
its affiliate companies. Confidential Information does not include such
information which Consultant can prove, by clear and convincing evidence: (c) at
the time of this Agreement is publicly and openly known and in the public
domain; (d) after the date of this Agreement becomes publicly and openly known
and in the public domain through no fault of Consultant; or (e) is in
Consultant's possession and documented prior to this Agreement, lawfully
obtained by Consultant other than from the Company and not subject to any
obligation of confidentiality.
10.2 Consultant understands and acknowledges that the Confidential
Information is being revealed to Consultant in strict confidence solely for the
purpose of allowing Consultant to perform the Services. Consultant shall not
use, or induce others to use, any Confidential Information for any other purpose
whatsoever nor at any time directly or indirectly print, copy or otherwise
reproduce, in whole or in part, any Confidential Information without the prior
written consent of Company.
10.3 Consultant shall not disclose or reveal any Confidential Information
to anyone except those of Consultant's employees with a definable need to know
such Confidential Information. Prior to revealing or disclosing Confidential
Information to such employees, Consultant shall require the employees to agree
to and be bound by the terms of this Agreement.
10.4 Upon completion of the Services, or upon request of Company,
Consultant shall deliver to Company all Confidential Information embodied in
tangible form. Consultant shall deliver to Company all originals and copies of
documents, data, software, programs and things, including all recordings on
electronic, magnetic optical or other media, and all listings, comprising or
embodying Confidential Information and shall not take or retain any copies
thereof. The confidentiality provision herein shall survive termination of this
Agreement and Confidential Information shall be held as confidential until it is
no longer Confidential Information as provided herein.
10.5 Consultant acknowledges that any unauthorized disclosure or use of
Confidential Information to which it is given access by virtue of this Agreement
would cause Company immediate and irreparable injury or loss. Accordingly,
Consultant acknowledges and agrees that in the event of a breach or threatened
breach by Consultant of any provision of this Agreement, Company shall be
entitled to preliminary and permanent injunctive relief, without the need to
post a bond, restraining Consultant from the disclosure or unauthorized use of
any Confidential Information.
2
10.6 The terms of this confidentiality provision supplement the terms of
any separate confidentiality agreement signed by the parties, regardless of any
integration clause, and if there is any conflict in such terms, the provision
providing the most protection to the Confidential Information shall be applied.
ARTICLE 11. NON-COMPETITION.
(a) The Consultant agrees that the Consultant shall not during the
Consulting Agreement with the Company, directly or indirectly, in any capacity,
engage or participate in, or become employed by or render advisory or consulting
or other services in connection with any Prohibited Business as defined in
Article 11(c).
(b) The Consultant agrees that the Consultant shall not during the
Consulting Agreement with the Company, make any financial investment, whether in
the form of equity or debt, or own any interest, directly or indirectly, in any
Prohibited Business. Nothing in this Article 11(b) shall, however, restrict the
Consultant from making any investment in any company whose stock is listed on a
national securities exchange; provided that (i) such investment does not give
the Consultant the right or ability to control or influence the policy decisions
of any Prohibited Business, and (ii) such investment does not create a conflict
of interest between the Consultant's duties hereunder and the Consultant's
interest in such investment.
(c) For purposes of this Article 11, "Prohibited Business" shall be
defined as the business of:
(i) marketing or selling of fiber cement products, where the
marketing or selling of such products is a principal
activity of the business;
(ii) manufacturing or processing fiber cement products;
(iii) building, assembling, operating or maintaining plant and
equipment, where that plant and equipment is particular
to the manufacturing or processing of fiber cement
products;
(iv) manufacturing or processing raw materials for fiber
cement products where that manufacturing or processing
is particular to the raw material used in fiber cement
products;
(v) research or development activities relating to Article
11(c)(i)-(iv); and
and any branch, office or operation thereof, which is a competitor of the
Company or which has established or seeks to establish contact, in whatever form
(including, but not limited to solicitation of sales, or the receipt or
submission of bids), with any entity who is at any time a client, customer or
supplier of the Company (including but not limited to all subdivisions of the
federal government.)
ARTICLE 12. NO ASSIGNMENT. Consultant shall not assign part or all of this
Agreement without Company's prior written consent. Any independent contractors
or consultants which Consultant engages to perform Services hereunder, and the
specific portion of the Services they will perform, must be approved by the
prior written consent of Company.
ARTICLE 13. SAFETY COMPLIANCE. Consultant agrees to comply with all
Company health and safety guidelines and requirements while on Company property.
ARTICLE 14. GOVERNMENT CONTRACTS. If compensation to Consultant under this
Agreement exceeds $10,000 and is in furtherance of a U.S. Government contract or
subcontract, the provisions of the Equal Opportunity Clause as promulgated by
Section 202 of Executive Order 11246, dated September 24, 1965, as amended, are
incorporated herein by reference. Consultant also agrees to comply with all
applicable local, state and federal laws and executive orders and regulations
issued pursuant thereto, including any such rules which may be applicable to
this Agreement as a U.S. Government subcontract.
3
ARTICLE 15. INDEPENDENT CONTRACTOR STATUS. Consultant and Company
acknowledge that Consultant is engaged under this Agreement as an independent
contractor, and not an employee, of Company. Consultant and Company further
acknowledge that Consultant retains control over the method and manner in which
the Services are to be performed under the Agreement. Consultant and Company
further acknowledge that as an independent contractor, all taxes due to federal,
state and local authorities are the sole responsibility of the Consultant. The
Consultant agrees that it will indemnify and hold Company harmless for any tax
liabilities that may arise as a consequence of this Agreement, and understands
as a consideration of this Agreement that it must remain in compliance with all
laws and regulations applicable to business entities or otherwise.
ARTICLE 16. MISCELLANEOUS. This Agreement, including Exhibit A and any
attachments thereto, constitutes the entire agreement between the parties and
supersedes all prior oral or written representations, understandings, covenants
and agreements relating to the subject hereof, except the Employment Agreement
made and entered the 1st day of Sept, 2004 by and between Xxxxx Xxxxxx Building
Products, Inc. and Xxxxx Xxxxxxx, and, except as otherwise set forth herein, may
be amended only by a writing signed by both parties. This Agreement shall be
governed by and construed in accordance with the laws of the State of California
without regard to its conflict of laws principles. Consultant agrees and hereby
submits to the jurisdiction of the courts for the State of California in the
County of Orange. Any provision herein held to be invalid, unenforceable, void
or illegal, in whole or in part, by any tribunal of competent jurisdiction,
shall be severed from this Agreement and replaced by a provision that is valid
and enforceable and that comes closest to expressing the intention of such
invalid or unenforceable provision. All remedies provided herein are cumulative
and in addition to any other available remedy. This Agreement may be executed in
counterparts each of which shall be deemed an original and all of which together
shall constitute one and the same document. This Agreement may not be modified
except by a subsequent writing executed by the parties. This Agreement will be
interpreted as if written jointly by the parties. This Agreement will benefit
the affiliates, successors and assigns of Company, and will be binding upon the
affiliates, successors and assigns of Consultant.
CONSULTANT COMPANY
/s/ Xxxxx X. Xxxxxxx /s/ Xxxxx Xxxxx
------------------------- --------------------------
(signature) (signature)
By: Xxxxx X. Xxxxxxx By: Xxxxx Xxxxx
-------------------- -----------------------
(print name) (print name)
Title: EVP - Engineering Title: Chief Executive Officer
Date: September 1, 2004 Date: March 31, 2005
4
EXHIBIT A
1. Name of Consultant:
Name ________________________________________
Address ________________________________________
Individual OR corporation incorporated in _______________
(state) (insert line through entity NOT used or delete)
2. Consultant responsibilities and milestones:
3. Fee and Payment Terms:
a. Hourly Rates:
Employees of Consultant Hourly Rate ($/Hour)
b. Cap on hourly rates if other than 2% annually:
c. Other:
4. Term and termination:
5
