1
EXHIBIT 10.53
AGREEMENT
This Agreement ("Agreement") is dated as of January 1, 2000, and is entered into
by and between Xxxx X. Xxxxxxx ("Employee") and Xxxxxxx Xxxxxxx, Inc., a
Delaware corporation ("Xxxxxxx"). Employee and Xxxxxxx hereby agree to the
following terms and conditions:
1. Purpose of Agreement. The purpose of this Agreement is to provide that,
in the event of a "Change in Control," Employee may become entitled to
receive additional benefits in the event of his termination. It is
believed that the existence of these potential benefits will benefit
Xxxxxxx by discouraging turnover among Employees with Agreements and
causing such Employees to be more able to respond to the possibility of
a Change in Control without being influenced by the potential effect of
a Change in Control on their job security. In addition, this Agreement
provides Employee with certain benefits upon the termination of his
employment by reason of disability before or after a Change in Control.
2. Change in Control. As used in this Agreement, the phrase "Change in
Control" shall mean the following and shall be deemed to occur if any of
the following events occur:
(a) Any "person," as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of Xxxxxxx representing 15% or more of
the combined voting power of Xxxxxxx'x then outstanding voting
securities, provided that, no Change in Control shall be deemed
to occur solely because a corporation (the "seller") owns 15% or
more of Xxxxxxx voting securities if such ownership is only a
transitory step in a reorganization whereby Xxxxxxx purchases
the assets of the seller for Xxxxxxx voting securities and the
seller liquidates shortly thereafter; or if the "person"
described above is an underwriter or underwriting syndicate that
has acquired ownership of the Company's securities solely in
connection with a public offering of the Company's securities or
is an employee benefit plan maintained by the Company or any of
its subsidiaries.
(b) Individuals who, as of the date hereof, constitute the Board of
Directors of Xxxxxxx (the "Incumbent Board"), cease for any
reason to constitute at least a majority of the Board of
Directors, provided that any person becoming a director
subsequent to the date hereof whose election, or nomination for
1
2
election by Xxxxxxx'x stockholders, was approved by a vote of at
least a majority of the directors then comprising the Incumbent
Board (other than an election or nomination of an individual
whose initial assumption of office is in connection with an
actual or threatened election contest relating to the election
of the directors of Xxxxxxx, as such terms are used in Rule
14a-11 of Regulation 14A promulgated under the Exchange Act)
shall be deemed to be a member of the Incumbent Board of
Xxxxxxx;
(c) The consummation of a merger or consolidation with any other
corporation, other than
(1) a merger or consolidation which would result in the
voting securities of Xxxxxxx outstanding immediately
prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting
securities of another entity) more than 85% of the
combined voting power of the voting securities of
Xxxxxxx or such other entity outstanding immediately
after such merger or consolidation,
(2) a merger or consolidation affected to implement a
recapitalization of Xxxxxxx (or similar transaction) in
which no person acquires 15% or more of the combined
voting power of Xxxxxxx'x then outstanding voting
securities; or
(d) The stockholders of Xxxxxxx approve a plan of complete
liquidation of Xxxxxxx or an agreement for the sale or
disposition by Xxxxxxx of all or substantially all of Xxxxxxx'x
assets.
Furthermore, even though a transaction meets the definition of a Change
in Control set forth in clause (a) of the first sentence of this
section, such transaction shall not constitute a Change in Control under
this Agreement if subsequent to the transaction and at all times
thereafter at least 70% of the voting power of Xxxxxxx'x then
outstanding voting securities remain widely held by members of the
general public.
In addition, the merger or consolidation which would constitute a Change
in Control under clause (c) of the first sentence of this section shall
not be treated as a Change in Control if three criteria are met: (1)
after the merger or consolidation, persons who owned Xxxxxxx voting
securities prior to the merger or consolidation own at least 60% of the
voting securities of the surviving entity; (2) the voting securities not
owned by former Xxxxxxx shareholders are widely held by the general
public; and (3) the Committee resolves, prior to the approval that would
otherwise constitute a Change in Control under clause (c), that no
Change in Control shall be treated as having occurred. For the purpose
of this paragraph, the former Xxxxxxx
2
3
shareholders shall be treated as owning the shares owned by the entity
into which their shares are converted so that, for example, if the
reorganization causes Xxxxxxx to become a wholly owned subsidiary of
another entity and the former Xxxxxxx shareholders own at least 60% of
that entity, then the share ownership requirement shall be considered to
have been satisfied.
3. Disability Payment and Benefits Prior to or Subsequent to a Change in
Control.
(a) In the event of the Disability of the Employee, Xxxxxxx shall
pay two times Compensation (as defined hereinafter). As used
herein "Disability" refers to an illness, or accident that
causes the Employee to be unable to perform his job for six or
more consecutive months. In addition, the Employee shall receive
additional payments from Xxxxxxx under the Xxxxxxx Xxxxxxx, Inc.
Pension Plan (the "Pension Plan") as set forth in this section.
The Disability Payment provided by this section shall be paid in
equal monthly installments over two (2) years.
(b) In addition, at the time that Employee (or Employee's
beneficiary) first begins to receive benefits under the Pension
Plan there shall be calculated the difference between the
benefit that Employee or Employee's beneficiary has begun to
receive under the Pension Plan and the benefit that would have
been received if Employee had worked for another two years
subsequent to the date of the Disability. For the purpose of the
preceding sentence, Employee shall be deemed to have received
"Earnings" under the Pension Plan for the period subsequent to
the Disability at an annual rate equal to his Compensation, as
calculated under Section 8(a) of this Agreement. This difference
shall be paid by Xxxxxxx as a supplemental payment to Employee
or Employee's beneficiary for the period of time that he is
entitled to the payment that is being supplemented.
(c) To the extent that Employee's pension benefit is provided by
tax-qualified defined benefit pension plan for Xxxxxxx employees
other than the Pension Plan, the calculation of the obligation
under this section shall be calculated with regard to such
successor plan's benefit formula and other relevant features.
This section shall be applied with regard to the new plan in a
manner designed to provide Employee with the additional benefits
he would have received if he had remained employed for another
two years. If Employee is not participating in a tax-qualified
defined benefit pension plan at the time of the Disability, the
benefit under this section shall be calculated with regard to
the terms of the Pension Plan at the time of this Agreement.
(d) The disability benefits provided in Subsections (b) and (c) of
this Section 3 shall in no event result in the Employee
receiving more than the benefits he
3
4
would have otherwise received under the Pension Plan when
retiring at age sixty-two (62).
4. Rights and Obligations Prior to a Change in Control. With the exception
of Section 3, prior to a Change in Control the rights and obligations of
Employee with respect to his employment by Xxxxxxx shall be whatever
rights and obligations are negotiated between Xxxxxxx and Employee from
time to time. The existence of this Agreement, which deals with such
rights and obligations subsequent to a Change in Control, shall not be
treated as raising any inference with respect to what rights and
obligations exist prior to a Change in Control unless specifically
stated elsewhere in this Agreement.
5. Effect of a Change in Control. In the event of a Change in Control,
Sections 7 through 10 of this Agreement shall become applicable to
Employee if his Qualifying Termination occurs on or prior to the second
anniversary of the date upon which the Change in Control occurred. If a
Qualifying Termination has occurred by that date, this Agreement shall
remain in effect until Employee receives the various benefits to which
he has become entitled under the terms of this Agreement; otherwise,
upon such date this Agreement shall be of no further force or effect.
6. Qualifying Termination. If, subsequent to a Change in Control Employee's
employment terminates, such termination shall be considered a Qualifying
Termination unless:
(a) Employee voluntarily terminates employment. It shall not be
considered, however, a voluntary termination of employment if,
following the Change in Control, Employee's compensation or
duties are changed in any material respect from what they were
immediately prior to a Change in Control, and subsequent to such
change Employee elects to terminate employment. A "change in any
material respect" shall encompass any substantial diminishment
or modification in Employee's overall compensation (as measured
by the overall value of such compensation, including fringe
benefits, to Employee), position, duties, responsibilities, or
reporting relationship, and shall also include the transfer of
Employee's job location to a site more than 50 miles away from
his place of employment prior to the Change in Control.
(b) The termination is on account of Employee's death or Disability.
(c) Employee is involuntarily terminated for "cause." For this
purpose "cause" shall mean:
4
5
(i) any material act of misconduct against Xxxxxxx or any
of its affiliates, such as fraud, misappropriation, or
embezzlement;
(ii) conviction of a felony involving a crime of moral
turpitude;
(iii) willful and knowing significant violation of rules
or regulations of any governmental or regulatory body which has
a material impact to the business of Xxxxxxx; or
(iv) substantial and willful failure to render services in
accordance with the job description of Employee's position
(other than as a result of illness, accident or other physical
or mental incapacity), provided that (A) a demand for
performance of services has been delivered to the Employee in
writing by or on behalf of the Board of Directors of Xxxxxxx at
least 60 days prior to termination identifying the manner in
which such Board of Directors believes that the Employee has
failed to perform and (B) the Employee has thereafter failed to
remedy such failure to perform.
7. Constructive Qualifying Termination. If within six months prior to a
change in control the Employee's employment terminates other than by
causes listed in paragraph 6(a)(b) & (c), Employee may submit to an
arbitration proceeding under paragraph 17 the determination of whether
said termination within six month prior to a change in control was a
constructive Qualifying Termination, entitling the Employee to
Compensation and other benefits that would have been granted if said
termination had occurred after a change in control.
8. Date and Notice of Termination. Any termination of the Employee's
employment by Xxxxxxx or by the Employee shall be communicated by a
written notice of termination to the other party (the "Notice of
Termination"). Where applicable, the Notice of Termination shall
indicate the specific termination provision in this Agreement relied
upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Employee's employment under the provision so indicated. The date of the
Employee's termination of employment with Xxxxxxx (the "Date of
Termination") shall be determined as follows: (i) if the Employee's
employment is terminated by Xxxxxxx, either with or without Cause, the
Date of Termination shall be the date specified in the Notice of
Termination (which, in the case of a termination by Xxxxxxx other than
for Cause, shall not be less than two (2) weeks from the date such
Notice of Termination is given unless Xxxxxxx elects to pay the
Employee, in addition to any other amounts payable hereunder, an amount
equal to two (2) weeks of the Employee's base salary in effect on the
Date of Termination), and (ii) if the basis for the Employee's
Termination is a Qualifying Termination, the Date of Termination shall
be determined by Xxxxxxx, but shall
5
6
not in any event be less than fifteen (15) days nor more than sixty (60)
days from the date such Notice of Termination is given.
9. Severance Payment. If Employee is terminated as a result of a Qualifying
Termination, Xxxxxxx shall pay Employee within 30 days of said
Qualifying Termination a declining lump sum depending upon the age of
this Agreement. At the effective date of this Agreement, the lump sum
will equal to 60 months of Compensation. The amount of the lump sum will
decrease each month by one month of Compensation until the amount of 36
months of compensation is reached. For calculation purposes, any partial
month will be rounded up or down to the nearest month. The lump sum will
not be less than 36 months of Compensation. The calculation of Benefits
under the Pension Plan in Section 10 shall use the same monthly
calculation as utilized in this Section 8. By way of example and
clarification, and if there were a Change in Control, the Employee had a
Qualifying Termination 12 months after the effective date of this
Agreement, the Employee would receive a lump sum of 48 months
Compensation and a Pension Plan calculation as if the Employee had
worked an additional 48 months.
(a) "Compensation" shall equal the sum of the Employee's highest
annual salary rate (i.e., the highest rate of annual salary that
Employee has been entitled to while an employee of Xxxxxxx) plus
a "Management Bonus Increment." The Management Bonus Increment
equals the "applicable percentage" of the highest annual salary
rate. The "applicable percentage" is determined by looking at
the management bonus plan that is applicable to Employee at the
time of the Qualifying Termination and calculating the total
award guideline percentage that would be applicable if the
target performance were achieved. The total award guideline
percentage (at target) shall not be adjusted either up or down
by any individual performance rating under the plan. By way of
illustration, the applicable percentage is 75% under the Xxxxxxx
Employee Bonus Plan currently applicable to the Chief Executive
Officer. If subsequent to this Agreement the Xxxxxxx Management
Bonus Plan is redesigned or replaced, the applicable percentage
shall be equitably adjusted to reflect the percentage of salary
that Employee could reasonably expect to receive as a bonus if
his performance had been excellent and profit objectives had
been met for the year of the Qualifying Termination. If at the
time of the Qualifying Termination neither the Xxxxxxx
Management Bonus Plan nor a successor plan with a substantially
similar bonus potential is in place and applicable to Employee,
the calculation of the applicable percentage shall be based on
the terms of the Xxxxxxx Management Bonus Plan that applied to
Employee at the time that this Agreement was executed.
(b) In lieu of a cash lump sum, Employee may elect in writing to
receive the Severance Payment provided by this Section in equal
monthly installments
6
7
over three to five years (depending on the applicable multiple
discussed in this Section 8). Such election may only be made
prior to the occurrence of the events which constitute the
Change in Control in question and such election is irrevocable
once made.
(c) The Severance Payment hereunder is in lieu of any severance
payments that Employee might otherwise be entitled to from
Xxxxxxx under the terms of any severance pay arrangement not
referred to in this Agreement.
(d) If a Qualifying Termination occurs during a calendar year,
Employee shall receive a prorata Management Bonus for that
portion of the year before the Qualifying Termination occurred.
The prorata Management Bonus shall be calculated to the nearest
month based on a twelve month year. Further, the prorata
Management Bonus shall be based on the total award guideline
percentage applicable to Employee if the target performance were
achieved. The total award guideline percentage (at target) shall
not be adjusted either up or down by any individual performance
rating under the plan.
10. Stock Option Grants and Other Forms of Employee Compensation.
(a) Employee may have received or will receive stock option grants
or restricted stock under the Xxxxxxx Incentive Compensation
Plan, or other stock option plans of Xxxxxxx. In the event of a
Qualifying Termination, Xxxxxxx agrees (1) that all such stock
options shall be immediately exercisable and shall remain
exercisable for the length of the option period, and (2) that
all such restricted stock shall have the restrictions removed.
(b) Xxxxxxx acknowledges that it may establish new Employee
compensation programs subsequent to the date of this Agreement
in addition to the ones described in this Agreement. If such a
program is established, Employee becomes a participant in such a
program, and the receipt by Employee of the benefits to which he
is potentially entitled under the program is conditioned upon
the satisfaction of a vesting requirement, then such vesting
requirement shall be treated as completely satisfied in the
event of a Qualifying Termination.
11. Pension Plan for Employees of Xxxxxxx (the "Pension Plan"). In addition
to any retirement benefits that might otherwise be due Employee under
the Pension Plan or any successor plan, Employee shall receive
additional payments from Xxxxxxx calculated as set forth in this section
if Employee is terminated on account of a Qualifying Termination.
7
8
(a) At the time that Employee (or Employee's beneficiary) first
begins to receive benefits under the Pension Plan there shall be
calculated the difference between the benefit that Employee or
Employee's beneficiary has begun to receive under the Pension
Plan and the benefit that would have been received if Employee
had worked for another three to five years (depending on the
compensation multiple discussed in Section 8 used to calculate
the Employee's Severance Payment) subsequent to the date of the
Qualifying Termination. For the purpose of the preceding
sentence, Employee shall be deemed to have received "Earnings"
under the Pension Plan for the period subsequent to the
Qualifying Termination at an annual rate equal to his
Compensation, as calculated under Section 7(a) of this
Agreement. This difference shall be paid by Xxxxxxx as a
supplemental payment to Employee or Employee's beneficiary for
the period of time that he is entitled to the payment that is
being supplemented.
(b) To the extent that Employee's pension benefit is provided by a
different tax-qualified defined benefit pension plan for Xxxxxxx
employees, the calculation of the obligation under this section
shall be calculated with regard to such successor plan's benefit
formula and other relevant features. This section shall be
applied with regard to the new plan in a manner designed to
provide Employee with the additional benefits he would have
received if he had remained employed for another three to five
years, as the case may be. If Employee is not participating in a
tax-qualified defined benefit pension plan at the time of the
Qualifying Termination, the benefit under this section shall be
calculated with regard to the terms of the Pension Plan at the
time of this Agreement.
12. Additional Benefits. In the event of a Qualifying Termination, Employee
shall be entitled to continue to participate in the following employee
benefit programs which had been made available to Employee before the
Qualifying Termination: group medical insurance, group dental insurance,
group-term life insurance, disability insurance, automobile allowance,
outplacement services, continuation of D&O insurance, and
indemnification. These programs shall be continued at no additional cost
to Employee; provided that, Employee acknowledges that tax rules may
require the inclusion of the value of such benefits in Employee's
income. The programs shall be continued in the same way and at the same
level as immediately prior to the Qualifying Termination. The programs
shall continue for three to five years, depending on Employee's
compensation multiple under Section 8.
13. Funding of SERP Obligations Upon Change of Control and a Qualifying
Termination. Upon the occurrence of a Change in Control and a Qualifying
Termination of the Employee, Xxxxxxx shall fund that portion, if any, of
the obligations of Xxxxxxx to the Employee, under any supplemental
executive
8
9
retirement plan ("SERP") and other non qualified plans that may then
cover the Employee, that are not then irrevocably funded by establishing
and irrevocably funding a trust for the benefit of the Employee. The
amount of such fund shall include the obligations of Xxxxxxx to Employee
under any non qualified plan as well as the then present value of the
supplemental pension obligation due as determined by a nationally
recognized firm qualified to provide actuarial services which has not
rendered services to Xxxxxxx during the two years preceding such
determination. The actuary shall be selected by Xxxxxxx, subject to
approval by the Employee (which approval shall not unreasonably be
withheld), and paid by Xxxxxxx. The establishment and funding of such
trust shall not affect the obligation of Xxxxxxx to pay any non
qualified benefits, including, but not limited to supplemental pension
payments under the terms of the applicable SERP.
14. Section 280G
(a) Gross-Up. Notwithstanding any other provisions of this
Agreement, in the event that any payment or benefit received or
to be received by the Employee or the acceleration of any
payment or benefit (all such payments and benefits, and
accelerations thereof including the Change in Control Severance
Payments, being hereinafter called the "Total Payments") would
be subject (in whole or in part) to the tax (the "Excise Tax")
imposed under Section 4999 of the Code, Xxxxxxx shall pay to the
Employee such additional amounts (the "Gross-Up Payment") such
that the net amount retained by the Employee, after deduction of
any Excise Tax on the Total Payments and any federal, state and
local income and employment taxes and Excise Tax upon the
Gross-Up Payment, shall be equal to the Total Payments. For
purposes of determining the amount of the Gross-Up Payment, the
Employee shall be deemed to pay federal income tax at the
highest marginal rate of federal income taxation in the calendar
year in which the Gross-Up Payment is calculated for purposes of
this section, net of the maximum reduction in federal income
taxes which could be obtained from deduction of such state and
local taxes. In the event that the Excise Tax is subsequently
determined to be less than the amount taken into account
hereunder, the Employee shall repay to Xxxxxxx, at the time that
the amount of such reduction in Excise Tax is finally
determined, the portion of the Gross-Up Payment attributable to
such reduction (plus that portion of the Gross-Up Payment
attributable to the Excise Tax and federal, state and local
income tax imposed on the Gross-Up Payment being repaid by the
Employee to the extent that such repayment results in a
reduction in Excise Tax and/or a federal, state or local income
tax deduction) plus interest on the amount of such repayment at
the rate provided in Section 1274(b)(2)(B) of the Code. In the
event that the Excise Tax is determined to exceed the amount
taken into account hereunder (including by reason of any payment
the existence or
9
10
amount of which cannot be determined at the time of the Gross-Up
Payment), Xxxxxxx shall make an additional Gross-Up Payment in
respect of such excess (plus any interest, penalties or
additions payable by the Employee with respect to such excess)
at the time that the amount of such excess is finally
determined. The Employee and Xxxxxxx shall each reasonably
cooperate with the other in connection with any administrative
or judicial proceedings concerning the existence or amount of
liability for Excise Tax with respect to the Total Payments.
(b) Accounting Firm. All determinations to be made with respect to
this Section 12 shall be made by Xxxxxxx'x independent
accounting firm (or, in the case of a payment following a Change
in Control, the accounting firm that was, immediately prior to
the Change in Control, Xxxxxxx'x independent auditor). The
accounting firm shall be paid by Xxxxxxx for its services
performed hereunder.
15. Term of Agreement. This Agreement shall be effective from January 1,
2000 through December 31, 2009. Xxxxxxx may, in its sole discretion and
for any reason, provide written notice of termination (effective as of
the then applicable expiration date) to Employee no later than 60 days
before expiration date of this Agreement. If written notice is not so
provided, this Agreement shall be automatically extended for an
additional period of 12 months past the expiration date. This Agreement
shall continue to be automatically extended for an additional 12 months
at the end of such 12-month period and each succeeding 12-month period
unless notice is given in the manner described in this section.
16. Governing Law. Except to the extent that federal law is applicable, this
Agreement is made and entered into in the State of California, and the
laws of California shall govern its validity and interpretation in the
performance by the parties hereto of their respective duties and
obligations hereunder.
17. Entire Agreement. This Agreement constitutes the entire agreement
between the parties respecting the benefits due Employee in the event of
a Change in Control followed by a Qualifying Termination, and there are
no representations, warranties or commitments, other than those set
forth herein, which relate to such benefits. This Agreement may be
amended or modified only by an instrument in writing executed by all of
the parties hereto. This is an integrated agreement.
18. Dispute Resolution. Any disagreement, dispute, controversy or claim
arising out of or relating to this Agreement or the interpretation of
this Agreement or any arrangements relating to this Agreement or
contemplated in this Agreement or the breach, termination or invalidity
thereof shall be settled by final and binding arbitration administered
by JAMS/Endispute in Orange County, California in
10
11
accordance with the then existing JAMS/Endispute Arbitration Rules and
Procedures for Employment Disputes. In the event of such an arbitration
proceeding, the Employee and Xxxxxxx shall select a mutually acceptable
neutral arbitrator from among the JAMS/Endispute panel of arbitrators.
In the event the Employee and Xxxxxxx cannot agree on an arbitrator, the
Administrator of JAMS/Endispute will appoint an arbitrator. Neither the
Employee nor Xxxxxxx nor the arbitrator shall disclose the existence,
content, or results of any arbitration hereunder without the prior
written consent of all parties. Except as provided herein, the Federal
Arbitration Act shall govern the interpretation, enforcement and all
proceedings. The arbitrator shall apply the substantive law (and the law
of remedies, if applicable), of the State of California, or federal law,
or both, as applicable and the arbitrator is without jurisdiction to
apply any different substantive law. The arbitrator shall have the
authority to entertain a motion to dismiss and/or a motion for summary
judgement by any party and shall apply the standards governing such
motions under the Federal Rules of Civil Procedure. The arbitrator shall
render an award and a written, reasoned opinion in support thereof.
Judgement upon the award may be entered in any court having jurisdiction
thereof. The Employee and Xxxxxxx shall generally each be responsible
for payment of one-half the amount of the arbitrator's fee, provided,
however, that Xxxxxxx shall pay to the Employee all legal fees and
expenses (including but not limited to fees and expenses in connection
with any arbitration) incurred by the Employee in disputing in good
faith any issue arising under this Agreement relating to the termination
of the Employee's employment in connection with a Change in Control or
in seeking in good faith to obtain or enforce any benefit or right
provided by this Agreement on account of a Change in Control.
In the case of a termination for cause, and Employee files for
arbitration under the dispute resolution paragraph 17, the Company shall
continue to pay Employee his salary from the time of said termination
for cause for a period of six (6) months. The arbitrator in the dispute
resolution proceeding shall have the authority to direct the Company of
the Employee (taking into account the good faith claim and the needs of
the Employee) to continue payment of Employee's salary beyond said six
months. If Employee is successful in the arbitration proceeding with a
finding of a Qualifying Termination and receives his Compensation under
this Agreement, the payment of salary subsequent to the alleged
termination for cause will be deducted from any payment of Compensation
to the Employee.
19. Tax Withholding. All amounts paid under this Agreement shall be subject
to all applicable federal, state and local wage and employment tax
withholding.
20. Release. Notwithstanding anything herein to the contrary, Xxxxxxx'x
obligation to make the payments provided for in this Agreement is
expressly made subject to and
11
12
conditioned upon (i) the Employee's prior execution of a release
substantially in the form attached hereto as Exhibit A within forty-five
days after the applicable Date of Termination and (ii) the Employee's
non-revocation of such release in accordance with the terms thereof.
21. Successors: Binding Agreement.
(a) Assumption by Successor. Xxxxxxx shall require any successor
(whether direct or indirect, by purchase, merger, consolidation
or otherwise) to all or substantially all of the business or
assets of Xxxxxxx expressly to assume and to agree to perform
its obligations under this Agreement in the same manner and to
the same extent that Xxxxxxx would be required to perform such
obligations if no such succession had taken place; provided,
however, that no such assumption shall relieve Xxxxxxx of its
obligations hereunder. As used herein, Xxxxxxx shall mean any
successor to its business and/or assets as aforesaid that
assumes and agrees to perform its obligations by operation of
law or otherwise.
(b) Enforceability Beneficiaries. This Agreement shall be binding
upon and inure to the benefit of the Employee (and the
Employee's personal representatives and heirs) and Xxxxxxx and
any organization which succeeds to substantially all of the
business or assets of Xxxxxxx, whether by means of merger,
consolidation, acquisition of all or substantially all of the
assets of Xxxxxxx or otherwise, including, without limitation,
as a result of a Change in Control or by operation of law. This
Agreement shall inure to the benefit of and be enforceable by
the Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and
legatees. If the Employee should die while any amount would
still be payable to such Employee hereunder if he had continued
to live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to
his devisee, legatee or other designee or, if there is no such
designee, to his estate.
22. Confidentiality: Non Solicitation.
(a) Confidentiality. The Employee acknowledges that in the course of
his employment within Xxxxxxx, he has acquired non-public
privileged or confidential information and trade secrets
concerning the operations, future plans and methods of doing
business ("Proprietary Information") of Xxxxxxx, and the
Employee agrees that it would be extremely damaging to Xxxxxxx
if such Proprietary Information were disclosed to a competitor
of Xxxxxxx or to any other person or corporation. The Employee
understands and agrees that all Proprietary Information the
Employee has acquired during the course of
12
13
such employment has been divulged to the Employee in confidence
and further understands and agrees to keep all Proprietary
Information secret and confidential (except for such information
which is or becomes publicly available other than as a result of
a breach by the Employee of this provision) without limitation
in time. In view of the nature of the Employee's employment and
the Proprietary Information the Employee has acquired during the
course of such employment, the Employee likewise agrees that
Xxxxxxx would be irreparably harmed by any disclosure of
Proprietary Information in violation of the terms of this
paragraph and that Xxxxxxx shall therefore be entitled to
preliminary and/or permanent injunctive relief prohibiting the
Employee from engaging in any activity or threatened activity in
violation of the terms of this paragraph and to any other
judicial relief available to it. Inquires regarding whether
specific information constitutes Proprietary Information shall
be directed to Xxxxxxx'x General Counsel (or, if such position
is vacant, Xxxxxxx'x Chief Executive Officer); provided,
however, that Xxxxxxx shall not unreasonably classify
information as Proprietary Information.
(b) Non-Solicitation of Employees. The Employee recognizes that he
possesses and will possess confidential information about other
employees of Xxxxxxx, relating to their education, experience,
skills, abilities, compensation and benefits, and interpersonal
relationships with customers of Xxxxxxx. The Employee recognizes
that the information he possesses and will possess about these
other employees is not generally known, is of substantial value
to Xxxxxxx in developing their business and in securing and
retaining customers, and has been and will be acquired by him
because of his business position within Xxxxxxx. The Employee
agrees that for a period of one (1) year following the Date of
Termination, he will not, directly or indirectly, solicit
recruit any employee of Xxxxxxx for the purpose of being
employed by him or by any other competitor of Xxxxxxx on whose
behalf he is acting as an agent, representative or employee and
that he will not convey any such confidential information or
trade secrets about other employees of Xxxxxxx to any other
person; provided, however, that it shall not constitute a
solicitation or recruitment of employment in violation of this
paragraph to discuss employment opportunities with any employee
of Xxxxxxx who has either first contacted the Employee or
regarding whose employment the Employee has discussed with and
received written approval of Xxxxxxx'x Vice President, Human
Resources (or, if such position is vacant, Xxxxxxx Chief
Executive Officer), prior to making such solicitation or
recruitment. In view of the nature of the Employee's employment
with Xxxxxxx, the Employee likewise agrees that Xxxxxxx would
irreparably harmed by any solicitation or recruitment in
violation of the terms of this paragraph and that Xxxxxxx shall
therefore be entitled to preliminary and/or permanent injunction
relief prohibiting the Employee from engaging in any activity or
13
14
threatened activity in violation of the terms of this paragraph
and to any other judicial relief available to it.
23. Notices. Any notice or communications required or permitted to be given
to the parties hereto shall be delivered personally or be sent by United
States registered or certified mail, postage prepaid and return receipt
requested, and addressed or delivered as follows, or to such other
addresses the party addressed may have substituted by notice pursuant to
this section:
(a) If to Xxxxxxx Xxxxxxx, Inc.:
Xxxxxxx Xxxxxxx, Inc.
0000 X. Xxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Vice President, General Counsel and Secretary
(b) If to Employee:
Xxxx X. Xxxxxxx
[Address Deleted]
24. Captions. The captions of this Agreement are inserted for convenience
and do not constitute a part hereof.
25. Severability. In case any one or more of the provisions contained in
this Agreement shall for any reason be held to be invalid, illegal or
unenforceable in other respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement,
but this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein and there shall
be deemed substituted for such other provision as will most nearly
accomplish the intent of the parties to the extent permitted by the
applicable law. In case this Agreement, or any one or more of the
provisions hereof, shall be held to be invalid, illegal or unenforceable
within any governmental jurisdiction or subdivision thereof, this
Agreement or any such provision thereof shall not as a consequence
thereof be deemed to be invalid, illegal or unenforceable in any other
governmental jurisdiction or subdivision thereof.
26. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same Agreement.
14
15
IN WITNESS HEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first written above in
Fullerton, California.
XXXXXXX XXXXXXX, INC.
By /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxx X. Xxxxxx, Ph.D.
Chairman, Organization and
Compensation Committee of the
Board of Directors
EMPLOYEE
/s/ Xxxx X. Xxxxxxx
-----------------------------------
Xxxx X. Xxxxxxx
15
16
Exhibit A
RELEASE OF ALL CLAIMS
1.0 This Release of all Claims ("Release") serves to conclude _________________
_________ (name) employment at Xxxxxxx Xxxxxxx, Inc. ("Company") pursuant to a
change in control Agreement dated ___________________ and a Qualifying
Termination thereunder.
2.0 Consideration of the full and final settlement of any and all claims that
______________________ (name) may have or have made against the Company, or any
of its agents at any time through and including, the effective date of this
Release and for the execution and delivery of this Release is the Company's
obligations under the Agreement between _______________________ (name) and the
Company dated _____________________.
3.0 __________________________ (name) and (his/her) heirs, executors and
administrators, if any, hereby forever release and discharge the Company, any of
its past, present or future parent companies, subsidiaries, affiliates,
divisions, successors, assigns, trust fiduciaries, stockholders, agents,
directors, officers, employees, representatives, heirs, attorneys, and all
persons acting by, through, under or in concert with them, or any of them
(hereinafter collectively known as "Releasees") of and from any and all manner
of claims, causes of action, or complaints, in law or in equity, of any nature
whatsoever, known or unknown, fixed or contingent (hereinafter called "Claims"),
which _______________________ (name) now has or may have against the Releasees,
or any of them, arising out of (his/her) employment or separation from Company,
and any other claim of any nature whatsoever based upon any fact or event
occurring prior to the date of this Release.
4.0 Without limiting the generality of paragraph 3, _________________ (name)
ALSO SPECIFICALLY AGREES TO WAIVE ANY RIGHT TO RECOVERY BASED ON LOCAL, STATE OR
FEDERAL AGE, SEX, SEXUAL ORIENTATION, PREGNANCY, RACE, COLOR, NATIONAL ORIGIN,
MARITAL STATUS, RELIGION, PHYSICAL DISABILITY, MENTAL CONDITION OR MENTAL
DISABILITY DISCRIMINATION LAWS, INCLUDING WITHOUT LIMITATION, TITLE VII OF THE
CIVIL RIGHTS ACT OF 1964, THE AGE DISCRIMINATION IN EMPLOYMENT ACT, THE
AMERICANS WITH DISABILITIES ACT, THE FEDERAL FAMILY MEDICAL LEAVE ACT OF 1993,
THE CALIFORNIA FAMILY RIGHTS ACT OF 1991 AND THE FAIR EMPLOYMENT AND HOUSING
ACT, WHETHER SUCH CLAIM OR CLAIMS MAY BE BASED ON AN ACTION FILED BY YOU OR BY A
GOVERNMENTAL AGENCY.
16
17
5.0 ____________________(name) is aware that after the effective date of this
Release ____________________ (name) may discover facts different from, or in
addition, those ____________________(name) now knows or believes to be true with
respect to the Claims released in paragraphs 3 and 4 above and agrees that this
Release shall be and remain in effect in all respects as a complete and general
release as to all matters released, notwithstanding any different or additional
facts.
6.0 It is _____________________(name) intention in executing this Release that
it shall be effective as a bar to each and every Claim of any nature whatsoever.
In furtherance of this intention, ____________________(name) specifically waives
the benefit of SECTION 1542 OF THE CIVIL CODE OF THE STATE OF CALIFORNIA, which
states the following:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN ITS FAVOR AT THE TIME OF
EXECUTING THIS RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY EFFECTED HIS SETTLEMENT WITH THE DEBTOR.
7.0 This Release shall be construed and interpreted in accordance with the laws
of the State of California.
8.0 I, _____________________(name) understand, acknowledge and represent that:
(a) I have carefully read and understand this Release and its final
and binding effect;
(b) This Release constitutes a voluntary waiver of any and all
rights and claims I have against Company as of the date of the
execution of this Release;
(c) I have waived rights or claims pursuant to this Release in
exchange for consideration, the value of which exceeds payment
or remuneration to which I was already entitled;
(d) I was advised to consult and have had the opportunity to fully
discuss the contents and consequences of this Release with any
attorney of my choice prior to executing it;
(e) I have a period of at least 21 days to consider the terms of
this Release. I may revoke this Release at any time during the
seven (7) days following the
17
18
date I execute this Release, and this Release shall not become
effective or enforceable until such revocation period has
expired;
(f) I have voluntarily and knowingly signed this Release.
-----------------------------------
Name
Date:
------------------------------
18
