Exhibit 10.1
FORM OF
TERMINATION BENEFITS AGREEMENT
THIS TERMINATION BENEFITS AGREEMENT ("AGREEMENT") is executed as of the
date set forth below to be effective as of the Effective Date (defined below) by
and between Xxxxxx International, Inc., a Delaware corporation (the "COMPANY"),
and ____________, an individual residing in the State of Indiana (the
"EMPLOYEE").
WITNESSETH:
WHEREAS, the Company and the Employee previously entered into that certain
Severance Agreement (the "SEVERANCE AGREEMENT") dated as of June 29, 2000
whereby the rights and obligations of the Employee in the event of a termination
associated with a change in control of the Company were set forth; and
WHEREAS, on March 29, 2004, the Company filed a voluntary petition for
bankruptcy under Chapter 11 of Title 11 of the U.S. Code (11 USC Section 101,
et. seq.) in the U.S. Bankruptcy Court for the Southern District of Indiana (the
"BANKRUPTCY"); and
WHEREAS, the Company and the Employee desire to amend and restate such
Severance Agreement to set forth the rights and obligations of the parties with
respect to a termination of the Employee's employment with the Company following
the Company's emergence from Bankruptcy.
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby recognized, the Company and the Employee agree as follows:
AGREEMENT
1. PRIOR AGREEMENT. Effective as of effective date of the Company's plan
of reorganization (the "PLAN OF REORGANIZATION") as filed with the U.S.
Bankruptcy Court for the Southern District of Indiana (the "EFFECTIVE DATE"),
the Employee's benefits upon a termination of employment shall be governed by
this Agreement, which restates and supersedes the Severance Agreement.
2. TERM OF AGREEMENT. This Agreement shall commence as of the Effective
Date and shall continue in effect until September 30, 2007; provided, however,
that commencing on October 1, 2007 (the "RENEWAL DATE") and on each two-year
anniversary thereafter, the term of this Agreement shall automatically be
extended for two (2) years (until the two-year anniversary of the Renewal Date
next following) unless either the Company or the Employee shall have given
written notice to the other at least sixty (60) days prior thereto that the term
of this Agreement shall not be so extended (the "TERM").
3. TERMINATION BENEFITS.
(a) If, during the Term of this Agreement, the Employee's employment
with the Company shall be terminated, the Employee shall be entitled to
receive the following compensation and benefits (in addition to any
compensation and benefits provided for under any of the Company's employee
benefit plans, policies and practices or as required by law):
(1) TERMINATION WITHOUT CAUSE, FOR GOOD REASON, OR DUE TO
DISABILITY OR DEATH. If the Employee's employment with the Company
shall be terminated by the Company without Cause, by the Employee for
Good Reason, or by reason of the Employee's Disability or death:
(i) the Employee or the Employee's heirs, estate, personal
representative or legal guardian, as appropriate, shall be
entitled to receive a lump sum cash payment equal to the sum of:
(A) the Employee's accrued but unpaid Base Salary
through the Date of Termination;
(B) any accrued but unpaid compensation, including
but not limited to any unpaid bonus compensation
and reimbursement, in accordance with the then
prevailing reimbursement practices of the
Company, for all reasonable and customary
business expenses incurred by the Employee in
connection with his employment by the Company as
of the Date of Termination; and
(C) a bonus for the fiscal year in which the Date of
Termination occurs in an amount equal to the
Employee's target bonus for such fiscal year
under the bonus or incentive compensation plan
maintained by the Company, calculated as if the
Employee earned one hundred percent (100%) of
such target bonus (the "SEVERANCE BONUS"),
multiplied by a fraction, the numerator of which
is the number of days the Employee worked in the
fiscal year in which the Date of Termination
occurs and the denominator of which is three
hundred sixty five (365); and
(ii) (A) upon a termination of employment by the Company
without Cause or by the Employee for Good Reason, any unvested
stock options held by the Employee will terminate immediately and
all vested stock options held by the Employee will remain
exercisable for six (6) months following the Date of Termination,
but in no event later than the
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expiration date of the stock options as specified in the
applicable grant letter, and (B) upon a termination of employment
by reason of the Employee's Disability or death, any unvested
stock options held by the Employee will vest immediately and all
options held by the Employee will remain exercisable for six (6)
months from the Date of Termination, but in no event later than
the expiration date of such stock options as specified in the
applicable grant letter.
(2) TERMINATION FOR CAUSE. WITHOUT GOOD REASON, OR DUE TO
RETIREMENT. If the Employee's employment with the Company shall be
terminated by the Company for Cause, by the Employee without Good
Reason, or by reason of the Employee's Retirement:
(i) the Employee shall be entitled to receive a lump sum
cash payment equal to the sum of:
(A) the Employee's accrued but unpaid Base Salary
through the Date of Termination; and
(B) any accrued but unpaid compensation, including
but not limited to any unpaid bonus compensation
and reimbursement, in accordance with the then
prevailing reimbursement practices of the
Company, for all reasonable and customary
business expenses incurred by the Employee in
connection with his employment by the Company as
of the Date of Termination; and
(ii) (A) upon a termination of employment by the Company
for Cause or by the Employee without Good Reason, all vested and
unvested stock options held by the Employee shall terminate
immediately, and (B) upon the Employee's Retirement, all unvested
stock options held by the Employee shall terminate immediately
and any vested stock options held by the Employee shall remain
exercisable for six (6) months following the Date of Termination
but in no event later than the expiration date of such stock
options as specified in the applicable grant letter.
(3) TERMINATION WITHOUT CAUSE OR FOR GOOD REASON FOLLOWING A
CHANGE IN CONTROL. If the Employee's employment with the Company shall
be terminated by the Company without Cause or by the Employee for Good
Reason within twelve (12) months following a Change in Control and
during the Term of this Agreement (including any extensions or deemed
extensions thereof as provided in SECTION 2 above):
(i) the Employee shall be entitled to receive a lump sum
cash payment equal to the sum of:
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(A) the Employee's accrued but unpaid Base Salary
through the Date of Termination;
(B) the Employee's Base Salary that would be payable
for the period from the Date of Termination
through the first (1st) anniversary thereof (the
"SEVERANCE PERIOD");
(C) any accrued but unpaid compensation, including
but not limited to any unpaid bonus compensation
and reimbursement, in accordance with the then
prevailing reimbursement practices of the
Company, for all reasonable and customary
business expenses incurred by the Employee in
connection with his employment by the Company as
of the Date of Termination; and
(D) the Severance Bonus;
(ii) any unvested stock options held by the Employee will
vest immediately and all stock options held by the Employee will
remain exercisable for one (1) year from the Date of Termination,
but in no event later than the expiration date of the stock
options as specified in the applicable grant letter; and
(iii) during the Severance Period, the Company shall provide
to the Employee and Employee's dependents any medical,
hospitalization and life insurance benefits that the Employee
received from the Company immediately prior to the Date of
Termination, PROVIDED, HOWEVER, that any such benefits coverage
shall cease to the extent that the Employee obtains comparable
medical, hospitalization or life insurance benefits (as the case
may be) from any other employer during such Severance Period.
(b) The Employee shall not be required to mitigate the amount of any
payment provided for in this SECTION 3 by seeking other employment or
otherwise, nor, except as provided in SECTION 3(a)(3)(iii) above, shall the
amount of any payment or benefit provided for in SECTION 3 be reduced by
any compensation earned by the Employee or benefit made available to the
Employee as the result of employment by another employer after the Date of
Termination or otherwise.
(c) For purposes of this Agreement, the following definitions shall
apply:
(1) "DISABILITY" means the Employee is totally and permanently
disabled as defined in the Xxxxxx International, Inc. Pension Plan.
(2) "RETIREMENT" means the voluntary retirement of the Employee
after having reached age fifty-five (55) and having completed at least
five (5) years of service with the Company, but in no event prior to
September 30, 2007.
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(3) A termination for "CAUSE" means a termination by reason of
the good faith determination of the Company's Board of Directors (the
"BOARD") that the Employee (i) continually failed to substantially
perform his duties with the Company (other than a failure resulting
from the Employee's medically documented incapacity due to physical or
mental illness), including, without limitation, repeated refusal to
follow the reasonable directions of the Company's Chief Executive
Officer, knowing violation of the law in the course of performance of
the Employee's duties with the Company, repeated absences from work
without a reasonable excuse, or intoxication with alcohol or illegal
drugs while on the Company's premises during regular business hours,
(ii) engaged in conduct which constituted a material breach of SECTION
7 or SECTION 8 of this Agreement, (iii) was indicted (or equivalent
under applicable law), convicted of, or entered a plea of nolo
contendere to the commission of a felony or crime involving dishonesty
or moral turpitude, or (iv) engaged in conduct which is demonstrably
and materially injurious to the financial condition, business
reputation, or otherwise of the Company or its subsidiaries or
affiliates, or (v)perpetuated a fraud or embezzlement against the
Company or its subsidiaries or affiliates, and in each case the
particular act or omission was not cured, if curable, in all material
respects by the Employee within thirty (30) days after receipt of
written notice from the Board which shall set forth in reasonable
detail the nature of the facts and circumstances which constitute
Cause. Notwithstanding the foregoing, the Employee shall not be deemed
to have been terminated for Cause unless there shall have been
delivered to the Employee a copy of a resolution duly adopted by the
Board. If the Company has reasonable belief that the Employee has
committed any of the acts described above, it may suspend the Employee
(with or without pay) while it investigates whether it has or could
have Cause to terminate the Employee. The Company may terminate the
Employee for Cause prior to the completion of its investigation;
provided, that, if it is ultimately determined that the Employee has
not committed an act which would constitute Cause, the Employee shall
be treated as if he were terminated without Cause.
(4) A "NOTICE OF TERMINATION" means a notice which shall
indicate the specific termination provision in this Agreement which is
applicable 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. For purposes
of this Agreement, no such purported termination shall be effective
without such Notice of Termination. Any purported termination by the
Company or by the Employee shall be communicated by written notice of
termination to the other party hereto in accordance with SECTION 6
hereof.
(5) "DATE OF TERMINATION" means (i) if the Employee's employment
is terminated for Disability, thirty (30) days after Notice of
Termination is given (provided that the Employee shall not have
returned to the performance of his duties on a full-time basis during
such thirty (30) day period), and (ii) if the Employee's employment is
terminated for any other reason, the date specified in the Notice of
Termination (which, in the case of a termination without Cause shall
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not be less than thirty (30) days from the date such Notice of
Termination is given); provided that if within thirty (30) days after
any such Notice of Termination is given the party receiving such
Notice of Termination notifies the other party that a dispute exists
concerning the termination, the Date of Termination shall be the date
on which the dispute is finally determined, either by mutual written
agreement of the parties, or by the final judgment, order or decree of
a court of competent jurisdiction (the time for appeal therefrom
having expired and no appeal having been taken).
(6) "BASE SALARY" means the annual base salary of the Employee
from the Company, but determined without regard to any salary
reduction agreement of the Employee under Sections 401(k) and 125 of
the Internal Revenue Code of 1986, as amended (the "CODE"), (or
corresponding provisions of subsequent federal income tax laws) or any
salary deferral agreement of the Employee under any non-qualified
deferred compensation program that may be available to the Employee
from time to time, and excludes (i) incentive or additional cash
compensation; (ii) any amounts included in income because of Sections
79 or 89 of the Code; and (iii) any amounts paid to the Employee for
reimbursement for expenses or discharging tax liabilities.
(7) "GOOD REASON" shall mean the occurrence, during the Term of
this Agreement, of any of the following actions or failures to act,
but in each case only if it is not consented to by the Employee in
writing:
(i) a material adverse change in the Employee's duties,
reporting responsibilities, titles or elected or appointed
offices as in effect immediately prior to the effective date of
such change; or
(ii) a material reduction by the Company in the Employee's
Base Salary or annual bonus opportunity in effect immediately
prior to the effective date of such reduction, not including any
reduction resulting from changes in the market value of
securities or other instruments paid or payable to the Employee.
For purposes of this definition, none of the actions described in
clauses (i)and (ii) above shall constitute "Good Reason" with respect
to the Employee if it was an isolated and inadvertent action not taken
in bad faith by the Company and if it is remedied by the Company
within thirty (30) days after receipt of written notice thereof given
by the Employee (or, if the matter is not capable of remedy within
thirty (30) days, then within a reasonable period of time following
such thirty (30) day period, provided that the Company has commenced
such remedy within said thirty (30) day period); provided that "GOOD
REASON" shall cease to exist for any action described in clauses (i)
and (ii) above on the sixtieth (60th) day following the later of the
occurrence of such action or the Employee's knowledge thereof, unless
the Employee has given the Company written notice thereof prior to
such date.
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(8) "CHANGE IN CONTROL" shall mean the first to occur of the
following:
(i) any Person other than an Existing Substantial
Shareholder becomes the Beneficial Owner, directly or indirectly,
of securities of the Company representing a majority of the
combined voting power of the Company's then outstanding
securities (assuming conversion of all outstanding non-voting
securities into voting securities and the exercise of all
outstanding options or other convertible securities);
(ii) the following individuals cease for any reason to
constitute a majority of the number of directors then serving:
individuals who, on the Effective Date, constitute the Board and
any new director (other than a director whose initial assumption
of office is in connection with an actual or threatened election
contest, including but not limited to a consent solicitation,
relating to the election of directors of the Company) whose
appointment or election by the Board or nomination for election
by the Company's stockholders was approved or recommended by a
vote of at least two-thirds (2/3) of the directors then still in
office who either were directors on the Effective Date or whose
appointment, election or nomination for election was previously
so approved or recommended;
(iii) there is consummated a merger or consolidation of the
Company or any direct or indirect subsidiary of the Company with
any other corporation (other than with an Existing Substantial
Shareholder or any of its affiliates), other than (x) a merger or
consolidation which would result in the voting securities of the
Company outstanding immediately prior to such merger or
consolidation continuing to represent, either by remaining
outstanding or by being converted into voting securities of the
surviving entity or any parent thereof, a majority of the
combined voting power of the securities of the Company or such
surviving entity or any parent thereof outstanding immediately
after such merger or consolidation, or (y) a merger or
consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no Person, is or
becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing a majority of the combined
voting power of the Company's then outstanding securities; or
(iv) the stockholders of the Company approve a plan of
complete liquidation or dissolution of the Company or there is
consummated an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets,
other than a sale or disposition by the Company of all or
substantially all of the Company's assets to an entity controlled
by an Existing Substantial Shareholder or any of its affiliates
or to an entity a majority of the combined voting power of the
voting securities of which is owned by substantially all of the
stockholders of the Company immediately prior to such sale in
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substantially the same proportions as their ownership of the
Company immediately prior to such sale.
For the avoidance of doubt, the consummation of a Plan of
Reorganization and the transactions contemplated thereby shall
not be deemed a Change in Control.
(9) "EXISTING SUBSTANTIAL SHAREHOLDER" means any Person that
alone or together with its affiliates shall be the Beneficial Owner of
or entitled to receive more than fifteen percent (15%) of New Common
Stock (as defined in the Plan of Reorganization) as of the Effective
Date.
(10) "BENEFICIAL OWNER" shall have the meaning set forth in Rule
13d-3 under the Securities Exchange Act of 1934, as amended.
(11) "PERSON" shall, except for purposes of SECTION 8 of this
Agreement, have the meaning given in Section 3(a)(9) of the Securities
Exchange Act of 1934, as modified and used in Sections 13(d) and 14(d)
thereof, except that such term shall not include (i) the Company or
any subsidiary of the Company, (ii) a trustee or other fiduciary
holding securities under an employee benefit plan of the Company or
any of its affiliates, (iii) an underwriter temporarily holding
securities pursuant to an offering of such securities or (iv) a
corporation owned, directly or indirectly, by substantially all of the
stockholders of the Company in substantially the same proportions as
their ownership of stock of the Company.
4. SUCCESSORS; BINDING AGREEMENT.
(a) This Agreement shall be binding on the Company and any successor
to all or substantially all of its business or assets. Without limiting the
effect of the prior sentence, the Company will require any successor or
assign (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform
it if no such succession or assignment had taken place. As used in this
Agreement, the "COMPANY" shall mean the Company as hereinbefore defined and
any successor or assign to its business and/or assets as aforesaid which
assumes and agrees to -perform this Agreement or which is otherwise
obligated under this Agreement by the first sentence of this SECTION 4, by
operation of law or otherwise.
(b) This Agreement shall inure to the benefit of and be enforceable by
the Employee's personal and legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
the Employee should die while any amounts would still be payable to him
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 the Employee's devisee, legatee or other designee or if there
is no such devisee, legatee or designee, to the Employee's estate.
5. TIMING OF PAYMENT AND RELEASE.
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(a) As a condition of receiving from the Company the payments and
benefits provided for hereunder, which the Employee otherwise would not be
entitled to receive, the Employee understands and agrees that, on the Date
of Termination, he will be required to execute a release of all claims
against the Company in substantially the form attached hereto as EXHIBIT 1
(the "RELEASE") as may be modified by the Company in good faith to reflect
changes in law or its employment practices. The Employee acknowledges that
he has been advised in writing to consult with an attorney prior to
executing the Release. The Employee agrees that he will consult with his
attorney prior to executing the Release. The Employee and the Company agree
that the Employee has a period of seven (7) days following the execution of
the Release within which to revoke the Release. The parties also
acknowledge and agree that the Release shall not be effective or
enforceable until the seven (7) day revocation period expires. The date on
which this seven (7) day period expires shall be the effective date of the
Release (the "RELEASE EFFECTIVE DATE").
(b) The Company shall make all payments required under this Agreement
within five (5) business days following the Release Effective Date.
(c) The Employee understands that as used in this SECTION 5, the
"COMPANY" includes its past, present and future officers, directors,
trustees, shareholders, employees, agents, subsidiaries, affiliates,
distributors, successors, and assigns, any and all employee benefit plans
(and any fiduciary of such plans) sponsored by the Company, and any other
persons related to the Company.
(d) Notwithstanding anything in this Agreement to the contrary, this
Agreement shall not affect the Company's right or ability to terminate the
employment of the Employee, subject to any other written contract between
the Company and the Employee to the contrary.
(e) The Employee agrees that execution and delivery to the Company of
any release or disclaimer agreement requested by the Company which is
consistent with the provisions of this SECTION 5 and the passage of all
necessary waiting periods in connection therewith shall be a condition to
the receipt of any payment or benefits to be provided by the Company
following the termination of the Employee's employment with the Company.
6. NOTICES. For the purposes of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing and shall
be deemed to have been duly given when personally delivered or sent by certified
mail, return receipt requested, postage prepaid, or by expedited (overnight)
courier with established national reputation, shipping prepaid or billed to
sender, in either case addressed to the respective addresses last given by each
party to the other (provided that all notices to the Company shall be directed
to the attention of the Board with a copy to the Secretary of the Company) or to
such other address as either party may have furnished to the other in writing in
accordance herewith. All notices and communication shall be deemed to have been
received on the date of delivery thereof, on the third business day after the
mailing thereof, or on the second day after deposit thereof with an
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expedited courier service, except that notice of change of address shall be
effective only upon receipt.
7. CONFIDENTIALITY. For purposes of this SECTION 7, the term
"COMPANY" shall include, in addition to the Company, its affiliates,
subsidiaries and any of their respective predecessors, successors and assigns.
The term "COMPANY'S BUSINESS" shall mean the business of developing,
manufacturing, selling or distributing high-performance alloys for service in
severe corrosion and high temperature applications.
(a) CONFIDENTIAL INFORMATION. As used in this Agreement,
"CONFIDENTIAL INFORMATION" means any and all confidential, proprietary
or other information, whether or not originated by the Employee or the
Company, which is in any way related to the past or present Company's
Business and is either designated as confidential or not generally
known by or available to the public. Confidential Information
includes, but is not limited to (whether or not reduced to writing or
designated as confidential) (i) information regarding the Company's
existing and potential customers and vendors; (ii) any contacts
(including the existence and contents thereof and parties thereto) to
which the Company is a party or is bound; (iii) information regarding
products and services being purchased or leased by or provided to the
Company; (iv) information received by the Company from third parties
under an obligation of confidentiality, restricted, disclosure or
restricted use; (v) personnel and financial information of the
Company; (vi) information with respect to the Company's products,
services, facilities, business methods, systems, trade secrets,
technical know-how, and other intellectual property; (vii) marketing
and developmental plans and techniques, price and cost data, forecasts
and forecast assumptions, and potential strategies of the Company; and
(viii) any other information relating to Company which was obtained by
the Employee in connection with his employment by the Company, whether
before, on or after the Effective Date.
(b) NON-DISCLOSURE AND NON-USE OF CONFIDENTIAL INFORMATION. The
Employee acknowledges that the Confidential Information of the Company
is a valuable, unique asset of the Company and the Employee's
unauthorized use or disclosure thereof could cause irreparable harm to
the Company for which no remedy at law could be adequate. Accordingly,
the Employee agrees that the Employee shall hold all Confidential
Information of the Company in strict confidence and solely for the
benefit of the Company, and that he shall not, directly or indirectly,
disclose or use or authorize any third party to disclose or use any
Confidential Information, except (i) as required for the performance
of the Employee's duties hereunder, (ii) with the express written
consent of the Company, (iii) to the extent that any such information
is in or becomes in the public domain other than as a result of the
Employee's breach of any of his obligations hereunder, or (iv) where
required to be disclosed by court order, subpoena or other government
process and in such event, the Employee shall cooperate with the
Company in attempting to keep such information confidential. The
Employee shall follow all Company policies and procedures to protect
all Confidential Information and take any additional precautions
necessary to preserve and protect the use or disclosure of any
Confidential Information at all times.
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(c) OWNERSHIP OF CONFIDENTIAL INFORMATION. The Employee
acknowledges and agrees that all Confidential Information is and shall
remain the exclusive property of the Company, whether or not prepared
in whole or in part by the Employee and whether or not disclosed to or
entrusted to the custody of the Employee. Upon the termination or
resignation of his employment by the Company, or at any other time at
the request of the Company, the Employee shall promptly deliver to the
Company all documents, tapes, disks, or other storage media and any
other materials, and all copies thereof in whatever form, in the
possession of the Employee pertaining to the Company's Business,
including, but not limited to, any containing Confidential
Information.
(d) SURVIVAL. The Employee's obligations set forth in this
SECTION 7, and the Company's rights and remedies with respect hereto,
shall indefinitely survive the termination of this Agreement and the
Employee's employment by the Company, regardless of the reason
therefor.
8. RESTRICTIVE COVENANTS. For purposes of this SECTION 8, the term
"COMPANY" shall include, in addition to the Company, its affiliates,
subsidiaries and any of their respective predecessors, successors and assigns.
(a) NON-COMPETITION. During the Restricted Period and within
the Restricted Area (each as defined in subsection (c) below), the
Employee shall not, directly or indirectly, perform on behalf of any
Competitor (as defined in subsection (c) below) the same or similar
services as those that the Employee performed for the Company during
the Employee's employment by the Company or otherwise. In addition, the
Employee shall not, during the Restricted Period or within the
Restricted Area, directly or indirectly engage in, own, manage,
operate, join, control, tend money or other assistance to, or
participate in or be connected with (as an officer, director, member,
manager, partner, shareholder, consultant, employee, agent, or
otherwise), any Competitor.
(b) NON-SOLICITATION. During the Restricted Period, the
Employee shall not, directly or indirectly, for himself or on behalf of
any Person (as defined in subsection (c) below), (i) solicit or attempt
to solicit any Customers (as defined in subsection (c) below) or
prospective Customers with whom the Employee had contact at any time
during the Employee's employment by the Company; (ii) divert or attempt
to divert any business of the Company to any other Person; (iii)
solicit or attempt to solicit for employment, endeavor to entice away
from the Company, recruit, hire, or otherwise interfere with the
Company's relationship with, any Person who is employed by or otherwise
engaged to perform services for the Company (or was employed or
otherwise engaged to perform services for the Company, as of any given
time, within the immediately preceding twenty-four (24) month period);
(iv) cause or assist, or attempt to cause or assist, any employee or
other service provider to leave the Company; or (v) otherwise interfere
in any manner with the employment or business relationships of the
Company or the business or operations then being conducted by the
Company.
(c) DEFINITIONS. For purposes of this SECTION 8, the following
definitions have the following meanings:
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(i) "COMPETITOR" means any Person that engages in a
business that is the same as, or similar to, the Company's
Business.
(ii) "CUSTOMER" means any Person which, as of any
given date, used or purchased or contracted to use or
purchase any services or products from the Company within
the immediately preceding twenty-four (24) month period.
(iii) "PERSON" means any individual, corporation,
partnership, joint venture, association, limited liability
company, joint-stock company, trust, or unincorporated
organization, or any governmental agency, officer,
department, commission, board, bureau, or instrumentality
thereof,
(iv) "RESTRICTED AREA" means, because the market for
the Company's Business is global, or has the potential of
being global, and is not dependent upon the physical
location or presence of the Company, the Employee, or any
individual or entity that may be in violation of this
Agreement, the broadest geographic region enforceable by law
(excluding any location where this type of restriction is
prohibited by law) as follows: (A) everywhere in the world
that has . access to the Company's Business because of the
availability of the Internet; (B) everywhere in the world
that the Employee has the ability to compete with the
Company's Business through the Internet; (C) each state,
commonwealth, territory, province and other political
subdivision located in North America; (D) each state,
commonwealth, territory and other political subdivision of
the United States of America; (E) Indiana and any state in
which the Employee has performed any services for the
Company; (F) any geographical area in which the Company has
performed any services or sold any products; (G) any
geographical area in which the Company or any of its
subsidiaries have engaged in the Company's Business, which
has resulted in aggregate sales revenues of at least $25,000
during any year in the five (5) year period immediately
preceding the commencement of the Restricted Period; (H) any
state or other jurisdiction where the Company had an office
at any time during the Employee's employment by the Company;
(I) within one hundred (100) miles of any location in which
the Company had an office at any time during the Employee's
employment by the Company; and (J) within one hundred (100)
miles of any location in which the Employee provided
services for the Company.
(v) "RESTRICTED PERIOD" means the period of time
during Employee's employment by the Company plus a period of
twelve (12) months from the Date of Termination. In the
event of a breach of this Agreement by the Employee, the
Restricted Period will be extended automatically by the
period of the breach.
(d) SURVIVAL. The Employee's obligations set forth in this
SECTION 8, and the Company's rights and remedies with respect thereto,
will remain in full force and effect
12
during the Restricted Period and until full resolution of any dispute
related to the performance of the Employee's obligations during the
Restricted Period.
(e) PUBLIC COMPANY EXCEPTION. The prohibitions contained in this
SECTION 8 do not prohibit the Employee's ownership of stock which is
publicly traded, provided that (1) the investment is passive, (2) the
Employee has no other involvement with the company, (3) the Employee's
interest is less than five percent (5%) of the shares of the company,
and (4) the Employee makes full disclosure to the Company of the stock
at the time that the Employee acquires the shares of stock.
9. ASSIGNMENT OF INVENTIONS. Any and all inventions, improvements,
discoveries, designs, works of authorship, concepts or ideas, or expressions
thereof, whether or not subject to patents, copyrights, trademarks or service
xxxx protections, and whether or not reduced to practice, that are conceived or
developed by the Employee while employed with the Company and which relate to or
result from the actual or anticipated business, work, research or investigation
of the Company (collectively, "INVENTIONS"), shall be the sole and exclusive
property of the Company. The Employee shall do all things reasonably requested
by the Company to assign to and vest in the Company the entire right, title and
interest to any such Inventions and to obtain full protection therefor.
Notwithstanding the foregoing, the provisions of this Agreement do not apply to
an Invention for which no equipment, supplies, facility, or Confidential
Information of the Company was used and which was developed entirely on the
Employee's own time, unless (a) the Invention relates (i) to the Company's
Business, or (ii) to the Company's actual or demonstrably anticipated research
or development, or (b) the Invention results from any work performed by the
Employee for the Company.
10. REASONABLENESS. The Employee has carefully considered the nature,
extent and duration of the restrictions and obligations contained in this
Agreement, including, without limitation, the geographical coverage contained in
SECTION 8 and the time periods contained in SECTION 7 and SECTION 8, and
acknowledges and agrees that such restrictions are fair and reasonable in all
respects to protect the legitimate interests of the Company and that these
restrictions are designed for the reasonable protection of the Company's
Business.
11. REMEDIES. The Employee recognizes that any breach of this
Agreement shall cause irreparable injury to the Company, inadequately
compensable in monetary damages. Accordingly, in addition to any other legal or
equitable remedies that may be available to the Company, the Employee agrees
that the Company shall be able to seek and obtain injunctive relief in the form
of a temporary restraining order, preliminary injunction, or permanent
injunction, in each case without notice or bond, against the Employee to enforce
this Agreement. The Company shall not be required to demonstrate actual injury
or damage to obtain injunctive relief from the courts. To the extent that any
damages are calculable resulting from the breach of this Agreement, the Company
shall also be entitled to recover damages, including, but not limited to, any
lost profits of the Company and/or its affiliates or subsidiaries. For purposes
of this Agreement, lost profits of the Company shall be deemed to include all
gross revenues resulting from any activity of the Employee in violation of this
Agreement and all such revenues shall be held in trust for the benefit of the
Company. Any recovery of damages by the Company shall be in addition to and not
in lieu of the injunctive relief to which the Company is entitled. In no event
will a damage recovery be considered a penalty in liquidated damages. In
addition, in
13
any action at law or in equity arising out of this Agreement, the prevailing
party shall be entitled to recover, in addition to any damages caused by a
breach of this Agreement, all costs and expenses, including, but not limited to,
reasonable attorneys' fees, expenses, and court costs incurred by such party in
connection with such action or proceeding. Without limiting the Company's rights
under this SECTION 11 or any other remedies of the Company, if a court of
competent jurisdiction determines that the Employee breached any of the
provisions of Sections 7 or 8 of this Agreement, the Company will have the right
to cease making any payments or providing any benefits otherwise due to the
Employee under the terms and conditions of this Agreement.
12. CLAIMS BY THE EMPLOYEE. The Employee acknowledges and agrees that
any claim or cause of action by the Employee against the Company shall not
constitute a defense to the enforcement of the restrictions and covenants set
forth in this Agreement and shall not be used to prohibit injunctive relief.
13. MISCELLANEOUS. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Employee and such officer as may be specifically
designated by the Board. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreement or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof may have been made
by either party which are not expressly set forth in this Agreement.
14. APPLICABLE LAW AND FORUM. This Agreement has been entered into in
the State of Indiana and shall be governed by and construed in accordance with
the laws of the State of Indiana. The parties agree that any action in law or
equity brought by either party arising from or in connection with this Agreement
or arising from or in connection with the performance by either party of its
obligations hereunder shall be brought only in the United States District Court
for the Southern District of Indiana, Indianapolis Division or the Circuit Court
of Xxxxxx County, Indiana, and the parties hereto consent to the jurisdiction of
such forums.
15. SEVERABILITY. If a court having proper jurisdiction holds a
particular provision of this Agreement unenforceable or invalid for any reason,
that provision shall be modified only to the extent necessary in the opinion of
such court to make it enforceable and valid and the remainder of this Agreement
shall be deemed valid and enforceable and shall be enforced to the greatest
extent possible under the then existing law. In the event the court determines
such modification is not possible, the provision shall be deemed severable and
deleted, and all other provisions of this Agreement shall remain unchanged and
in full force and effect.
16. ENFORCEABILITY IN JURISDICTIONS. The parties hereto intend to and
hereby confer jurisdiction to enforce the covenants contained in SECTIONS 7 and
8 above upon the courts of any state within the geographical scope of such
covenants. If the courts of any one or more of such states shall hold any of the
previous covenants unenforceable by reason of the breadth of such scope or
otherwise, it is the intention of the parties hereto that such determination not
bar or in any way affect the Company's rights to the relief provided above in
the courts of any other states
[Exhibit 1 - Release of Claims has been omitted from the Agreement as filed
with the Securities and Exchange Commission (the "SEC"). The omitted information
is considered immaterial from an investor's perspective. The Registrant will
furnish supplementally a copy of any of the omitted exhibit to the SEC upon
request from the SEC.]
14
within the geographical scope of such covenants, as to breaches of such
covenants in such other respective jurisdictions, the above covenants as they
relate to each state being, for this purpose, severable into diverse and
independent covenants.
17. FAIR DEALING. The Employee acknowledges that the Company has
negotiated this Agreement in good faith and has been fair in its dealing with
the Employee. The Employee shall not raise any defense and expressly waives any
defense against the Company based upon any alleged breach of good faith or fair
dealing by the Company in connection with this Agreement.
18. ENTIRE AGREEMENT; RELEASE. This Agreement constitutes the entire
agreement between the parties hereto, and, effective as of the Effective Date,
supersedes all prior agreements, understandings and arrangements, oral or
written, between the parties hereto, with respect to the subject matter hereof
(including, but not limited to, the Severance Agreement). The Employee hereby
unconditionally releases and discharges the Company from any and all claims,
causes of action, demands, lawsuits or other charges whatsoever, known or
unknown, directly or indirectly related to the Severance Agreement arising prior
to the Effective Date.
19. OPPORTUNITY TO CONSULT COUNSEL. THE EMPLOYEE ACKNOWLEDGES THAT HE
HAS CAREFULLY READ THIS AGREEMENT AND HAS BEEN GIVEN ADEQUATE OPPORTUNITY, AND
HAS BEEN ENCOURAGED BY THE COMPANY, TO CONSULT WITH LEGAL COUNSEL OF HIS CHOICE
CONCERNING THE TERMS HEREOF BEFORE EXECUTING THIS AGREEMENT.
[SIGNATURE PAGE FOLLOWS]
15
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
its duty authorized officer and the Employee has executed this Agreement, each
as of the Effective Date.
COMPANY
XXXXXX INTERNATIONAL, INC.
By:
-------------------------------------
Printed: Xxxxxx Xxxxxx
Title: Vice President, Finance, CFO
ATTEST
-------------------------------
Secretary
EMPLOYEE
----------------------------------------
WITNESS
-------------------------------
[Exhibit 1--Release of Claims has been omitted from the Agreement as filed
with the Securities and Exchange Commission (the "SEC"). The omitted
information is considered immaterial from an investor's perspective. The
Registrant will furnish supplementally a copy of any of the omitted exhibit
to the SEC upon request from the SEC.]
16
SCHEDULE OF EMPLOYEES PARTY TO THE TERMINATION BENEFITS AGREEMENT
Cijan, August X.
Xxxxxx, Xxxxxx X.
Xxxxx, Xxxxx X.
Xxxxxx, Xxxxxx
Xxxx, Xxxx X.
Xxxxxxx, Xxxxx X.
Xxxxxxx, Xxxxxxx X.
Xxxxxxxx, Xxxxxxx X.
Xxxxxxxxx, Xxxxxxx, J.
17
