Employment Agreement
This Agreement ("Agreement") is made and entered into as of the 1st day
of February, 1999 ("Effective Date"), by and among Synthetic Industries, Inc.
("the Corporation") and Xxxx X. Xxxx (the "Executive").
WITNESSETH:
WHEREAS, the Corporation currently employees Executive as Vice
President of Technical Textiles Division; and WHEREAS, both the
Corporation and Executive (the "Parties") desire to state certain terms
and conditions of Executive's employment and wish to substitute this
agreement for their previous employment agreements;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, the Parties agree as follows:
1. Employment.
The Corporation agrees to continue to employ Executive and
Executive agrees to continue to serve the Corporation upon the terms and
conditions hereinafter set forth.
2. Term.
Except as otherwise provided in Section 7 below, the term of
employment under this Agreement shall continue from the Effective Date for a
period that ends on the date that is the third anniversary of the Effective
Date; provided, however, that on the first day of the calendar month next
following the first anniversary of the Effective Date, and on the first day of
each successive month, such term of employment shall automatically be extended
for successive one month periods, providing a minimum remaining term of two
years. Either party may haltfuture extension by written notice, in which case
such term of employment shall be the term in effect when such written notice was
given. Notwithstanding the foregoing, this Agreement shall automatically
terminate on the twenty-fifth (25th) anniversary of the Effective Date if it is
not terminated earlier pursuant to Section 7.
3. Duties and Extent of Services; Location of Principal Office.
During the term set forth in Section 2 above, the Corporation
shall employee Executive and Executive shall serve the Corporation as Vice
President of Technical Textiles Division. During the period of his employment,
Executive shall devote his full business time and attention to the business and
affairs of the Corporation. During such term, Executive's principal office shall
be located at 0000 Xxx Xxxxxxx, Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxxx.
4. Compensation.
(a) Base Salary. During the term set forth in Section 2 above, the Corporation
shall pay Executive a base salary, payable in accordance with the Corporation's
standard payroll practices, as follows: $158,000 per annum. Executive's salary
may be reviewed from time to time by the Board, to increase the amount of such
salary. Executive's salary shall not be reduced during the term of this
Agreement. Any increased salary shall become Executive's base salary for
purposes of this Agreement. (b) Annual Incentive. During the term set forth in
Section 2, above, Executive shall be eligible to participate in the Executive
Incentive Plan, or in such successor plan as may be adopted for the provision of
annual incentive compensation for senior executives (the "Annual Incentive
Plan"). Executive shall be entitled to an incentive payment applicable under the
Annual Incentive Plan if the Corporation meets its business plan for the year
("Making Plan").
(c) Stock Options. Executive shall have such rights to stock
options under either the Synthetic Industries, Inc. 1994 Stock Option Plan, the
Synthetic Industries, Inc. 1996 Stock Option Plan, or any successor stock option
plan, or any combination of such plans (collectively, the "Option Plan") as
shall be set forth in any applicable stock option agreement.
5. Benefits.
During the term set forth in Section 2, above, Executive shall
be eligible to Participate in all group life insurance, health insurance,
disability insurance, survivor income insurance and similar programs maintained
by the Corporation and covering executive employees. Participation in any
retirement plans maintained by the Corporation shall be as determined under the
provisions of such plans.
6. Reimbursement for Expenses.
The Corporation shall reimburse Executive for all reasonable
business expenses Incurred by him on behalf of the Corporation in the
performance of his duties hereunder, provided Executive shall account therefore
in accordance with the Corporation's business expense policies and procedures.
7. Termination.
Executive's employment may be terminated prior to the end of
the term described in Section 2, only as provided in this Section 7.
(a) Termination for Disability. If the Executive becomes unable to
substantially perform his duties due to permanent physical or mental disability,
as determined by a physician agreed upon by the Corporation and the Executive,
his employment pursuant to this Agreement shall terminate. If Executive's
employment is terminated on account of disability under this Section 7(a),
Executive's rights to compensation and benefits shall be as follows:
(i) Executive (or in the event of his death, his
estate) shall be paid his base salary accrued through the date of termination of
employment.
(ii) Executive shall be entitled to any unpaid amount
previously fully accrued under the Annual
Incentive Plan.
(iii) Executive's rights with respect to stock
options, if any, shall be determined under the Option
Plan and any applicable stock option agreement.
(iv) Following his termination, Executive's right to
participate in the benefit program described in
Section 5 above, including the rights of Executive's dependents to participate
in such programs, if any, shall be as determined under the provisions of such
benefit program.
(b) Termination on Executive's Death. In the event of
termination of employment by reason of the death of Executive, payment of
compensation and benefits shall be as set forth below. Payment shall be made to
the executor or administrator of Executive's estate, or, in the case of a
payment made under a benefit program, to the person or persons who have been
designated pursuant to the terms of such program to receive such payments. (i)
Executive's base salary accrued through the date of termination of employment.
(ii) Executive shall be entitled to any unpaid
amount previously fully accrued under the Annual Incentive Plan. In addition,
Executive shall be entitled to an incentive payment, in lieu of an incentive
payment under the Annual Incentive Plan for the plan year in which his
employment terminates, in an amount equal to the payment otherwise determined
under the Annual Incentive Plan, as if the Executive were employed by the
Corporation to the end of the year of his termination, multiplied by a fraction
the numerator of which is the number of weeks Executive was employed during such
year, and the denominator of which is 52.
(iii) Executive's rights with respect to stock
options, if any, shall be determined under the Option
Plan and any applicable stock option agreement.
(iv) Following his death, Executive's rights under
the benefit programs described in Section 5 above,
including the rights of Executive's dependents to participate in such programs,
if any, shall be as determined under such programs.
(c) Termination for Cause. The Corporation shall have
the right to terminate Executive's employment for "Cause." If Executive's
employment is terminated for Cause, Executive's rights to compensation and
benefits shall be as follows:
(i) Executive shall be paid his base salary
accrued through the date of termination of employment.
(ii) Executive's rights with respect to stock
options, if any, shall be determined under the Option Plan and any applicable
stock option agreements.
(iii) Following his termination, Executive's right
to participate in the benefit program described in Section 5, above, including
the rights of Executive's dependents to participate in such programs, if any,
shall be determined under the provisions of such benefit programs.
For purposed of this Subsection, "Cause" shall mean (1) Executive's
conviction of, or plea of, guilty or nolo contendere to a felony (unless
committed in the good faith belief that Executive's actions were in the best
interests of the Corporation and would not violate criminal law); or (2) gross
neglect or gross misconduct in the performance of Executive's duties. Executive
shall be given written notice that the Corporation intends to terminate his
employment for Cause under this Subsection. Such notice shall specify the
particular acts, or failures to act, that give rise to the decision to so
terminate employment.
In the case of termination for Cause under definition (1), Executive's
employment shall be terminated effective as of the date such notice is given,
provided, however, that Executive shall be given the opportunity to meet with
the Board of Directors of the Corporation within 30 days of the date such notice
is given, to be heard with regard to whether he, in good faith, believed that
his actions or inactions were both in the best interests of the Corporation and
would not violate criminal law.
In the case of termination for Cause under definition (2), Executive
shall be given the opportunity within 20 days of the receipt of such notice to
meet with the Board of Directors to defend such acts or failures to act.
Executive shall be given seven days after such meeting to correct any particular
acts or failures to act, and upon failure of Executive, within such seven day
period, to correct such acts or failures to act, Executive's employment by the
Corporation shall be terminated.
Termination on account of disability, as provided in Section 7(a)
above, shall not be considered a termination for Cause under this Section 7(c).
(d) Termination Without Cause.
(1) The Corporation shall have the right to terminate Executive's
employment without Cause as defined in Section 7(c) above. In the event of a
termination by the Corporation without Cause, other than (A) following a Change
in Control, as defined in Section 7(e) below, or (B) as described in Subsection
(2) below, Executive's rights to compensation and benefits shall be as follows:
(i) Executive shall be paid his base salary at the rate in effect on date of
termination of employment for a period of one and one-half years from the date
of termination.
(ii) Executive shall be entitled to any unpaid
amount previously fully acrrued under the Annual Incentive Plan. In addition,
Executive shall be entitled to an incentive payment, in lieu of an incentive
payment under the Annual Incentive Plan for the plan year in which his
employment terminates, in an amount equal to the payment otherwise determined
under the Annual Incentive Plan, as if the Executive were employed by the
Corporation to the end of the year of his termination, multiplied by a fraction
the numerator of which is the number of weeks Executive was employed during the
year, and the denominator of which is 52. In addition, in lieu of future
payments under the Annual Incentive Plan, Executive shall be entitled to a
payment that equals the average of the incentive payments received by Executive
(or fully accrued by him) under the Annual Incentive Plan for the three full
plan years immediately preceding his termination of employment.
(iii) Executive's rights with respect to stock
options, if any, shall be determined under the Option
Plan and any applicable stock option agreement.
(iv) Executive shall be entitled to a lump sum
payment equal to the estimated sum of the premiums that
Executive would have to pay to continue to cover Executive and his eligible
dependents under the Corporation's group health plans, including medical and
dental plans, in effect at the time of termination for a period of 18 months
following termination of employment.
(2) If Executive's employment is terminated by
the Corporation without Cause, as defined in Subsection (e) above, prior to the
occurrence of a Change in Control of the Corporation (as defined below), and if
it can be shown that Executive's termination (i) was at the direction or request
of a third party that had taken steps reasonably calculated to effect the Change
in Control of the Corporation thereafter, or (ii) otherwise occurred in
connection with, or in anticipation of, the Change in Control of the
Corporation, then Executive shall have the rights described in Section 7 (e)
below, as if a Change in Control of the Corporation had occurred on the date
immediately preceding such termination. (e) Termination Following a Change in
Control. (1) Definitions: (A) "Act" means the Securities Exchange Act of 1934,
as amended. (B) "Affiliate of any specified persons" means any other person
that, directly or indirectly, through one or more intermediaries, controls, or
is controlled by, or is uner direct or indirect common control with such
specified person. For the purposes of this definition, "control" means the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a person, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing. (C) "Termination
Payment" means the sum of:
(i) One and one-half times Executive's
base salary at the rate in effect on the date of a termination of employment
(or, in the event of a termination for Good Reason below, the base salary as in
effect immediately before the actions giving rise to Good Reason); plus
(ii) Two times the greatest of the incentive
payments under the Annual Incentive Plan either paid or accrued in either the
Year of the Change in Control or the immediately preceding Year.
(D) "Base Amount" means an amount equal to Executive's Annualized
Includable Compensation for the Base Period as defined in Section 280(G)(d)(1)
and (2) of the Code (as hereinafter defined). (E) "Change in Control" of the
Corporation means a Change in Control of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated
under the Act or any successor thereto, provided that without limiting the
foregoing, a Change in Control of the Corporation also shall be deemed to have
occurred if: (i) any "person" (as defined under Section 3(a) (9) of the Act) or
"group" of persons (as provided under Rule 13d-3 of the Act) (other than
Synthetic Industries, LP (the "Partnership") is or becomes the "beneficial
owner" (as defined in Rule 13d-3 or otherwise under the Act), directly or
indirectly (including as provided in Rule 13d-3(d) (1) of the Act), of capital
stock of the Corporation the holders of which are entitled to vote ("voting
stock") representing that percentage of the Corporation's then outstanding
voting stock (giving effect to the deemed ownership of securities by such person
or group, as provided in Rule 13d-3(d)(1) of the Act, but not giving effect to
any such deemed ownership of securities by another person or group) equal to or
greater than thirty-five percent (35%) of all such voting stock; (ii)
individuals who constitute the Board on the date hereof (the "Incumbent Board")
cease for any reason to constitute at least a majority thereof. Any person
becoming a director subsequent to such date whose election, or nomination for
election, is, at any time, approved by a vote of at least two-thirds of the
directors comprising the Incumbent Board shall be considered as though he were a
member of the Incumbent Board;
(iv) the Corporation combines with another person
or entity,\ whether through a merger, asset sale, reorganization or otherwise,
and (a) any person or group of persons (other than the Partnership) holds at any
time after such combination, voting stock equal to or greater than thirty-five
percent (35%) of all such voting stock determined by reference to the voting
securities of the surviving entity, or (b) the Corporation's Directors, as of
the date immediately before such combination, constitute less than a majority of
the Board of Directors of the combined entity;
(v) the shareholders of the Corporation approve
any merger, consolidation or share exchange as a result of which the voting
stock of the Corporation shall be changed, converted or exchanged (other than a
merger solely with a wholly owned subsidiary of the Corporation), or any
dissolution or liquidation of the Corporation or any sale or the disposition of
50% or more of the assets or business of the Corporation in a single transaction
or in a series of transactions;
(vi) any event that would constitute a
Change in Control of the Partnership within the meaning
of Item 6(e) of the Schedule 14A of Regulation 14A promulgated under the Act or
any successor thereto or under any of clauses (1), (2), (3), (4) or (5) above if
the term "Partnership" were substituted for the term "Corporation," "partner"
were substituted for "shareholder" and "interest" were substituted for "stock,"
"capital stock" or "securities," or (vii) the removal of the entity that
constitutes the general partner of the Partnership on the date hereof (the
"Incumbent General Partner") or the appointment in a dissolution of the
Partnership of a liquidating trustee that is not the Incumbent General Partner
or the individuals who constitute the Incumbent Board. (F) "Code" means the
Internal Revenue Code of 1986, including any amendments thereto. (G) "Good
Reason" means: (i) any breach of this Agreement by the Corporation, including
without limitation (a) any reduction during the employment period in the amount
of Executive's base salary or aggregate benefits as in effect from time to time,
(b) failure to provide Executive with the same fringe benefits that were
provided to Executive immediately prior to a Change in Control of the
Corporation, or with a package of fringe benefits (including paid vacations)
that, though one or more of such benefits may vary from those in effect
immediately prior to such a Change in Control, is substantially comparable in
all material respects to such fringe benefits taken as a whole, or (c) any other
breach by the Corporation of its obligation to pay compensation under this
Agreement;
(ii) without Executive's express written consent,
the assignment to Executive of any duties which are materially inconsistent with
Executive's positions, duties, responsibilities and status immediately prior to
the Change in Control of the Corporation, a material change in Executive's
reporting responsibilities, titles or offices as an employee and as in effect
immediately prior to the Change in Control, or a significant reduction in
Executive's title, duties or responsibilities, or in the level of his support
services;
(iii) the relocation of Executive's principal place
of employment, without Executive's written consent,
to a location more than 50 miles from Executive's principal place of employment
at the time of such Change in Control, or the imposition of any requirement that
Executive spend more than 60 business days per year at a location other than
such principal place of employment;
(iv) any purported termination of Executive's
employment for Cause, Disability or Retirement which is
not effected pursuant to a Notice of Termination
satisfying the requirements defined below;
Upon the occurrence of any of the events
described in (i), (ii), (iii),
or (iv) above, Executive shall give the Corporation written notice that such
event constitutes Good Reason, and the Corporation shall thereafter have 30 days
in which to cure. If the Corporation has not cured in that time, the event shall
constitute Good Reason.
(H) "Notice of Termination" means a notice which
shall indicate the specific termination provision
relied upon in this Agreement and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of Executive's
employment under the provision so indicated.
(I) "Person" or "Group" means a "person" or
"group," as defined in the definition of "Change in Control" above.
(J) "Year" means a calendar year unless otherwise
specifically provided.
(2) Payment for Termination Following a Change in Control. If,
Following a Change in Control, Executive's employment with the Corporation is
terminated by the Corporation other than for Cause, or by Executive for Good
Reason, then:
(A) Executive shall be entitled to all compensation and benefits Accrued through
the date of termination of employment; (B) Executive shall be entitled to the
Termination Payment made in a lump sum payment;
(C) Executive shall be entitled to any unpaid amount
previously fully accrued under the Annual
Incentive Plan. In addition, in lieu of future payments under the Annual
Incentive Plan, Executive shall be entitled to a payment that equals the average
of the incentive payments received by Executive (or fully accrued by him) under
the Annual Incentive Plan for the three plan years immediately preceding his
termination of employment; and
(D) Executive shall be entitled to a lump sum payment
equal to the estimated sum of the premiums that
Executive would have to pay to continue to cover Executive and his eligible
dependents under the Corporation's group health plans, including medical and
dental plans and to purchase life insurance, accidental death and dismemberment
insurance and disability insurance coverage substantially equivalent to the
coverage in effect at the time of termination for a period of 18 months
following termination of employment.
(E) The payments described above shall be made
within 2 business days after termination in the event termination is by the
Corporation or Executive gives at least 5 business days notice of termination by
the Executive. In the case of termination by the Executive without 5 business
days notice, the payments shall be made within 10 business days after the
termination. Any payments not timely made will accrue interest at 8.5% per annum
until made.
(3) Vesting of Options upon Change in Control.
In the event of a Change in Control, whether or not Executive's employment
continues with the Corporation, all options under the Option Plan shall
immediately vest on the date of the Change in Control. (3) Certain Supplemental
Provisions. Notwithstanding anything herein to the contrary, in the event that
any payment received or to be received by Executive in connection with a Change
in Control of the Corporation or the termination of Executive's employment
(whether payable pursuant to the terms of this Agreement or any other plan,
arrangement or agreement) (all such payment being referred to in the aggregate
as "Total Payment") would not be deductible (in whole or in part) as a result of
Section 280G of the Code, the payments otherwise due to Executive pursuant to
Section 7(e)(2) above ("Severance Payments") shall be reduced until no portion
of the Total Payments is not deductible as a result of Section 280G of the Code,
or the Severance Payments are reduced to zero. For purposes of this limitation
(i) no portion of the Total Payments, the receipt or enjoyment of which
Executive shall have effectively waived in writing prior to the date of payment
of the Severance Payments, shall be taken into account, (ii) no portion of the
Total Payments shall be taken into account which, in the opinion of the tax
counsel selected by the Corporation's independent auditors and reasonably
acceptable to Executive ("Tax Counsel"), does not constitute a "parachute
payment" within the meaning of Section 280G(b)(2) of the Code, (iii) the
Severance Payments shall be reduced only to the extent necessary so that the
Total Payments (other than those referred to in clause (i) or (ii)) in their
entirety constitute reasonable compensation for services actually rendered
within the meaning of Section 280G(b)(4) of the Code, in the opinion of Tax
Counsel, and (iv) the value of any non-cash benefit or any deferred payment or
benefit included in the Total Payments shall be determined by the Corporation's
independent auditors in accordance with the principles of Sections 280G(d)(3)
and (4) of the Code.
(5) Expenses and Interest.
If, after a Change in Control of the Corporation, a good faith dispute arises
with respect to the enforcement of the Executive's rights under this Subsection
7(e), or if any legal or arbitration proceeding shall be brought in good faith
to enforce or interpret any rights provided under this Subsection 7(e),
Executive shall recover from the Corporation any reasonable attorney's fees and
necessary costs and disbursements incurred as a result of such dispute, and
prejudgement interest on any money judgement or arbitration obtained by
Executive calculated at 8.5% per annum from the date that payments to him should
have been made under this Subsection. (f) Voluntary Termination. Executive may
terminate his employment voluntarily at any time by giving the Corporation two
weeks written notice. In the event Executive terminates his employment
voluntarily, other than as provided in Subsection 7(e) above, Executive's rights
to compensation and benefits shall be as follows: (i) Executive shall be paid
salary accrued through the date of employment. (ii) Executive's rights to annual
incentive, if any, shall be as determined under the Annual Incentive Plan. (iii)
Executive's rights with respect to stock options, if any, shall be determined
under the Option Plan and any applicable stock option agreement.
(iv) Following his termination, Executive's right
to participate in the benefit programs described in Section 5 above, including
the rights of Executive's dependents to participate in such programs, if any,
shall be as determined under the provisions of such benefit programs.
8. Payment Obligations Absolute.
The Corporation's obligation to pay the Executive the compensation
and to make the arrangements provided herein shall be absolute and unconditional
and shall not be affected by any circumstances, including, without limitation,
any set-off, counterclaim, recoupment, defense or other right which the
Corporation may have against him or anyone else. All amounts payable by the
Corporation hereunder shall be paid without notice or demand. Each and every
payment made hereunder by the Corporation shall be final and the Corporation
will not seek to recover all or any part of such payment from the Executive or
from whomsoever may be entitled thereto, for any reason whatever provided that
if the Executive is convicted of, or pleads guilty or nolo contendere to, a
felony or misdemeanor involving acts or omissions of the Executive in connection
with his employment by the Corporation, the Corporation shall be allowed to
recover any actual damages it has incurred from such action or omission out of
amounts paid or owing him hereunder.
9. Further Obligations of Executive.
(a) Definitions.
For purposes of this Section, the following definitions apply:
(i) "Restricted Activities" means the rendering of any
advertising, marketing, sales, administrative, supervisory, or consulting
services.
(ii) "Territory" means the continental United States and
Canada.
(iii) "Restricted Business" means the manufacture,
distribution, and/or sale of non-woven fabrics and fibers manufactured from
polypropylene resin.
(iv) "Confidential Information" means any data or information,
other than Trade Secrets, that is valuable to the Corporation and not generally
known to the public or to competitors of the Corporation.
(v) "Nondisclosure Period" means the period beginning on the
date of this Agreement and ending one year after the date Executive's employment
with the Corporation ends or is terminated for any reason.
(vi) "Nonsolicitation Period" means the period beginning on
the date of this Agreement and ending two years after the date Executive's
employment with the Corporation ends or is terminated for any reason.
(vii) "Trade Secret" means information including, but not
limited to, any technical or nontechnical data, formula, pattern, compilation,
program, device, method, technique, drawing, process, financial data, financial
plan, product plan, list of actual or potential customers or suppliers or other
information similar to any of the foregoing, which (I) derives economic value,
actual or potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can derive economic value
from its disclosure or use and (ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy.
(b) Trade Secretsand Confidential Information.
(i) Trade Secrets. Executive hereby covenants and agrees that
he shall hold in confidence all Trade Secrets of the Corporation, its direct and
indirect subsidiaries, and/or its customers (the "Associated Companies") that
came into his knowledge during his employment by the Corporation and shall not
disclose, publish or make use of any time after the date hereof such Trade
Secrets without the prior written consent of the Corporation for as long as the
information remains a Trade Secret.
(ii) Confidential Information. Executive hereby covenants and
agrees that, during the Non-Disclosure Period, he will hold in confidence all
Confidential Information of the Corporation or of the Associated Companies that
came into his knowledge during his employment by the Corporation and will not
disclose, publish or make use of such Confidential Information without the prior
written consent of the Corporation.
(iii) Return of Materials. Upon the request of the Corporation
and, in any event, upon the termination of Executive's employment with the
Corporation, Executive shall deliver to the Corporation all memoranda, notes,
records, manuals or other documents (including, but not limited to, written
instruments, voice or data recordings, or computer tapes, disks or files of any
nature), including all copies of such materials and all documentation prepared
or produced in connection therewith, pertaining to the performance of
Executive's services for the Corporation, the business of the Corporation, or
containing Trade Secrets or Confidential Information regarding the Corporation's
business, whether made or compiled by Executive or furnished to Executive by
virtue of his employment with the Corporation. Executive shall also deliver to
the Corporation all computers, credit cards, telephones, office equipment,
software, and other property the Corporation furnished to Executive by virtue of
his employment with the Corporation.
(c) Nonsolicitation.
(i) Nonsolicitation of Customers. Executive hereby covenants
and agrees that he will not, during the Nonsolicitation Period, without the
prior written consent of the Corporation, solicit, directly or indirectly, any
business related to the Restricted Businesses from any of the Corporation's
customers, including actively sought prospective customers, with whom Executive
had contact during his employment with the Corporation.
(ii) Nonsolicitation of Employees.
Executive hereby covenants that he will not, during the Nonsolicitation Period,
without the prior written consent of the Corporation, solicit or attempt to
solicit for employment for or on behalf of any corporation, partnership, venture
or other business entity any person who, on the last day of Executive's
employment with the Corporation or within 12 months prior to that date, was
employed by the Corporation or its direct or indirect subsidiaries and with whom
Executive had contact during the course of his employment with the Corporation
(whether or not such person would commit a breach of contract).
(d) Non-competition.
(i) Noncompete.
Executive hereby covenants that he will not, within the territory and during the
Nonsolicitation Period, without the prior written consent of the Corporation,
engage in any Restricted Activities for or on behalf of any corporation,
partnership, venture or other business entity which engages in any of the
Restricted Businesses.
(e) Noncompete Payment.
Notwithstanding any other provision of this Agreement, the Parties agree that in
consideration of and as an inducement to Executive's undertaking the obligations
contained in this Section 9, the Corporation shall pay Executive (or in the
event of his death, his estate), within 5 business days after the date of
termination of employment, a lump sum payment equal to one-half Executive's '
annual base salary, as in effect on the date of termination of employment (the
"Noncompete Payment"). The parties further acknowledge and agree that should
Executive breach any of the covenants contained in this Section 9, the
Corporation will suffer material damages, including but not limited to lost
business revenues, sales, and customers. Because of the difficulty in
quantifying these damages, Executive hereby agrees that, in addition to any
other rights the Corporation may have at law or in equity, he shall forfeit the
Noncompete Payment upon any breach of the covenants contained in this Section 9.
In the event a breach of covenant occurs after the termination of employment,
Employee agrees to immediately return the Noncompete Payment to the Corporation.
(f) Specific Performance.
Executive acknowledges that the obligations undertaken by him pursuant to this
Section 9 are unique and that the Corporation likely will have no adequate
remedy at law if he fails to perform any of his obligations. Executive therefore
confirms that the Corporation's right to specific performance of the terms of
this Agreement is essential to protect the rights and interests of the
Corporation. Accordingly, in addition to any other remedies that the Corporation
may have pursuant to Subsection 9(e), at law, or in equity, the Corporation
shall have the right to have all obligations, covenants, agreements and other
provisions of this Agreement specifically performed by Executive and the
Corporation shall have the right to obtain preliminary and permanent injunctive
relief from any court with proper jurisdiction, without having to first submit
arbitration, to secure specific performance and to prevent a breach or
contemplated breach of the obligations contained in this Section.
10. Arbitration.
(a) Except as provided in Subsection
9(f) above, any dispute, controversy, or claim between the parties arising out
of, relating to, or concerning this Agreement; the breach, termination, or
invalidity of this Agreement; and the scope of this arbitration clause, shall be
settled by arbitration at the American Arbitration Association ("AAA") in
Atlanta, Georgia, in accordance with the Employment Dispute Resolution Rules of
the AAA then in effect. Any award rendered shall be final and binding on the
parties hereto, and judgement may be entered in any court having jurisdiction
thereof. Nothing in this section, however, shall prevent the Corporation from
seeking immediate relief from a court of competent jurisdiction to enforce the
obligations undertaken in Section 9 above without first having to undergo
arbitration.
(b) The arbitrator shall be mutually acceptable to the
parties, or failing agreement, selected pursuant to the Employment Dispute
Arbitration Rules of the AAA. The arbitration award shall be in writing and
shall specify the factual and legal bases for the award. In rendering the award,
the arbitrator shall determine the respective rights and obligations of the
parties according the laws of the State of Georgia or, if applicable, federal
law.
(c) All costs and expenses of the arbitration shall be paid
for by the Corporation. Except as provided in Subsection 7(e)(5), each party
shall pay its own attorneys' fees.
(d) It is the specific intent of the parties that this
arbitration clause be governed by the Federal Arbitration Act, 9 X.X.X.xx. 1, et
seq. ("FAA"); however, if this clause is unenforceable for any reason under the
FAA, then the parties intend that it be governed by the provisions of the
Georgia Arbitration Code, O.C.G.A. ss. 9-9-1, et seq.
(e) Both Executive and the Corporation represent and warrant
they have read this Section, have had an opportunity to consult with and receive
advice from legal counsel regarding this Section, and hereby forever waive all
rights to assert that this Section was a result of duress, coercion, or mistake
of law of fact.
(Initialed by Executive)
(Initialed by the Corporation)
11. Withholding.
Payments required to be made by the Corporation to Executive, his
spouse, his estate or beneficiaries, will be subject to withholding of
such amounts relating to taxes as the Corporation may reasonably
determine it should withhold pursuant to any applicable law or
regulation. In lieu of withholding such amounts, in whole or in part,
the Corporation may, in its sole discretion, accept other provision for
payment of taxes as required by law, provided it is satisfied that all
requirements of law affecting its responsibilities to withhold such
taxes have been satisfied.
12. Assignability; Binding Nature.
This Agreement is binding upon, and will inure to the benefit of, the
parties and their respective successors, heirs, administrators, executors and
assigns. No rights or obligations of Executive hereunder may be assigned or
transferred by Executive except that (a) rights to compensation and benefits
hereunder, which rights will remain subject to the limitations hereunder, may be
transferred by will or operation of law, and (b) rights under employee benefit
plans or programs described in Section 5, above, may be assigned or transferred
in accordance with such plans, programs or regular practices thereunder. No
rights or obligations of the Corporation under this Agreement may be assigned or
transferred except that rights or obligations may be assigned or transferred by
operation of law or otherwise pursuant to this Section 12. The Corporation shall
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business assets
of the Corporation by written agreement in form and substance satisfactory to
the Executive, as a condition to such transaction, expressly to assume and agree
to perform this Agreement in the same manner and to the same extent as the
Corporation would be required to perform if no such succession had occurred.
13. Entire Agreement.
This Agreement supersedes any prior agreements, including but not limited
to the Prior Employment Agreement between the parties and, together with such
plans and programs as are specifically referred to herein, contains the entire
agreement between the parties concerning the subject matter hereof.
14. Amendments and Waivers.
This Agreement may not be modified or amended, except by a writing signed
by both parties. A party may waive compliance by the other party with any term
or provision of this Agreement, or any part thereof, provided that the term or
provision, or part thereof, is for the benefit of the waiving party. Any waiver
will be limited to the facts or circumstances giving rise to the non-compliance
and will not be deemed either a general waiver or modification with respect to
the term or provision, or part thereof, being waived, or as to any other term or
provision of this Agreement, nor will it be deemed a waiver of compliance with
respect to any other facts or circumstances then or thereafter occurring.
15. Notices.
Any notice given hereunder will be in writing and will be deemed given when
delivered personally or by courier, or five days after being mailed, certified
or registered mail, duly addressed to the party concerned at the address
indicated below or at such other address as which party may subsequently provide
in accordance with the notice and delivery provisions of this Section:
To the Corporation: Attn: Corporate Secretary
Synthetic Industries, Inc.
000 XxXxxxxxx Xxxx
Xxxxxxxxxxx, XX 00000
To the Executive: Xxxx X. Xxxx
Synthetic Industries, Inc.
0000 Xxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
16. Severability.
If fulfillment of any provision of this Agreement, at the time
fulfillment shall be due, shall transcend the limit of validity prescribed by
law, then the obligation to be fulfilled shall be deemed reduced to the limit of
such validity; and if any clause or provision contained in this Agreement
operates or would operate to invalidate this Agreement, in whole or in part,
then such clause or provision only shall be held ineffective to the extent of
such invalidity, as though not herein contained, and the remainder of this
Agreement shall remain operative and if full force and effect.
17. Survivorship.
The respective rights and obligations of the parties hereunder
will survive any termination of this Agreement to the extent necessary to the
intended preservation of such rights and obligations.
18. References.
In the event of Executive's death or a judicial determination of his
incompetence, reference in this Agreement to Executive will be deemed, where
appropriate, to refer to his legal representative, or, where appropriate, to his
beneficiary or benficiaries.
19. Headings.
The headings of paragraphs contained in this Agreement are for convenience
only and will not be deemed to control or affect the meaning or construction of
any provision of this Agreement 20. Governing Law.
Except to the extent governed by the FAA as provided in Section 10 above,
this Agreement, the rights and obligations of the parties, and any claims or
disputes relating thereto shall be governed by and construed in accordance with
the laws of the State of Georgia, not including the choice-of-law rules thereof.
IN WITHNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
SYNTHETIC INDUSTRIES, INC.
By:
Xxxx X. Xxxx
Title: -
