EMPLOYMENT AGREEMENT
EXHIBIT
10.20
THIS
EMPLOYMENT AGREEMENT (this “Agreement”) is made effective as of the
1st
day of
January, 2007 by Titanium Hearth Technologies, Inc., a Delaware corporation
(the
“Company”), and Xx. Xxxxxxx X. Xxxxxxxx (“Employee”).
RECITALS
WHEREAS,
the Company and its affiliates (collectively, “TIMET”) are engaged in the
business of the development, manufacture and sale of titanium or other specialty
metals products (the “TIMET Business”); and
WHEREAS,
the parties have determined that it would be in the best interests of the
Company that the Company be assured of the services of Employee;
NOW,
THEREFORE, in consideration of the premises and of the covenants and agreements
contained herein, and for other good and valuable consideration, the receipt
and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
AGREEMENT
1. Employment.
The
Company hereby employs Employee, and Employee hereby agrees to be employed
by
the Company, upon the terms and subject to the conditions hereinafter set
forth.
2. Term.
The term
of this Agreement shall begin on the date hereof and shall continue for an
initial period of two (2) years and may be renewed for up to three additional
one year terms thereafter as set forth below. At the end of the initial term
and
upon each of the next two subsequent anniversaries thereof, this Agreement
shall
automatically renew for successive one-year terms unless either party provides
written notice of non-renewal at least sixty (60) days in advance of the
anniversary date. Upon termination, all provisions of this Agreement shall
terminate, with the exception of the post-employment provisions in Sections
8,
9, 10 and 11, which shall survive according to the terms provided for
therein.
3. Duties.
Employee
shall initially hold the position of President and Chief Operating Officer
of
TIMET with the responsibilities and duties normally attendant to such position
and shall report to the Chief Executive Officer of TIMET. Employee also shall
undertake such different, additional or other duties and responsibilities
as the
Company may from time to time assign or delegate to Employee. Employee shall
devote his entire business time, attention and energies to the Company’s
business and shall not during the term of this Agreement be engaged in any
other
business activity except for those activities that do not interfere in any
material way with the performance of his duties for TIMET and which are approved
in advance by the Chief Executive Officer of TIMET.
4. Compensation.
(a) As
compensation for the services to be rendered by Employee hereunder, the Company
agrees to pay to Employee a base salary of $550,000.00 per year (the “Base
Salary”). Employee may receive increases to such Base Salary from time to time
in the Company’s sole discretion.
(b) Employee
is eligible to participate in TIMET’s Profit Sharing Plan (the “Profit Sharing
Plan”) according to the terms and conditions thereof. For services performed
during calendar year 2007, Employee shall be entitled to receive a payment
equal
to 106% of his Base Salary for 2007 under the Profit Sharing Plan. Thereafter,
Employee’s participation in the Profit Sharing Plan or any other bonus or profit
sharing plan hereafter adopted shall be on the terms and conditions applicable
to such plans.
(c) On
March
30, 2007, Employee shall receive a special one-time payment of $250,000.
(d) All
compensation payable hereunder shall be payable in accordance with the Company’s
then-current payroll practices and shall be subject to customary payroll
and
other applicable taxes.
5. Other
Benefits.
During
the term of his employment hereunder, Employee shall be entitled to participate
in the Company’s employee benefit and group insurance programs, including life,
long-term disability and health insurance programs, as well as the Company’s
401(k) savings plan, on the same terms as the Company’s employees generally. In
determining such benefits, Employee shall receive service credit for the
number
of full years of service relating to his prior employment with the Company,
provided however, Employee acknowledges that he has no right to receive shares
of stock or options to acquire stock of TIMET and all options and restricted
shares of TIMET common stock that had been previously granted to Employee
at any
time have expired and are void. During the term hereof Employee shall also
be
entitled to receive a physical examination on an annual basis at the Company’s
expense.
6. Reimbursement
of Expenses.
During
the period Employee is employed hereunder, the Company shall reimburse Employee
for reasonable and necessary out-of-pocket expenses advanced or expended
by
Employee or incurred by him for or on behalf of the Company in connection
with
his duties hereunder in accordance with the then-current policies of the
Company
upon presentation of appropriate vouchers or receipts as the Company may
from
time to time require.
7. Termination
of Employment; Effect of Termination.
(a) The
Company may terminate this Agreement and Employee’s employment at any time for
“cause.” For purposes hereof, “cause” shall mean: (i) Employee’s conviction of a
felony or a crime (other than minor traffic offenses and misdemeanors not
involving fraud, theft, embezzlement, moral turpitude or harm to persons
or
property) or (ii) Employee’s willful misconduct, gross negligence or
refusal or failure to perform the duties assigned to him or as required by
his
position or by this Agreement.
(b) In
the
event of the death or “disability” (as defined below) of Employee during the
term of his employment or termination of Employee by the Company for “cause” (as
defined above) or if Employee voluntarily resigns, the Company shall have
no
further liability hereunder other than the payment to Employee (or his estate,
as the case may be) of: (i) accrued but unpaid Base Salary and bonus earned,
if
any, pursuant to the terms and conditions of the Profit Sharing Plan, in
each
case through the date of such termination, resignation, death or disability;
and
(ii) expenses incurred prior to such termination, resignation, death or
disability that are subject to reimbursement under Section 6.
(c) For
purposes hereof, “disability” shall refer to Employee becoming physically or
mentally disabled so that Employee is unable to perform his duties hereunder
for
a period of more than 90 consecutive days or more than 120 days in the aggregate
during any consecutive 12 months. The disability of Employee will be determined
by a medical doctor agreed upon in writing by Employee and the Company. If
Employee and the Company cannot agree upon a medical doctor, each of them
will
select a medical doctor and the two medical doctors will select a third medical
doctor who will determine whether Employee has a disability. The determination
of the medical doctor selected under this Section 7(c) will be binding on
the parties. Employee shall submit to reasonable examinations by the medical
doctor making the determination of disability, and the other specialists
designated by such medical doctor, and Employee hereby authorizes the disclosure
and release to the Company of such determination and all supporting medical
records. The Company shall be responsible for the payment of any medical
fees
and expenses incurred at the Company’s request in connection with the
determination of whether or not Employee is disabled.
(d) In
the
event of the Company’s termination of Employee without cause, or upon
non-renewal of this Agreement by the Company prior to the termination of
this
Agreement on the fifth anniversary following the date of this Agreement,
or upon
a Change in Control (as defined below) of TIMET, Employee shall be entitled
in
any such case to receive as severance twelve (12) months of his then current
Base Salary to be paid in semi-monthly installments over the twelve months
following such termination. As used herein, a Change in Control of TIMET
shall
mean if any time during the term hereof the Xxxxxxx Holders (as defined below)
shall cease to own or control at least 25% of TIMET’s issued and outstanding
voting securities. “Xxxxxxx
Holders”
means
(a) Xxxxxx X. Xxxxxxx (“Xxxxxxx”), (b) the spouse of Xxxxxxx (“Xxxxxxx Spouse”),
(c) any trust established primarily for the benefit of Xxxxxxx or members
of his
family (including his spouse and/or his descendants (whether natural or
adopted)) or both (such trusts, collectively, the “Xxxxxxx Trusts,” and such
individuals, collectively, the “Xxxxxxx Trusts Beneficiaries”), (d) any trustee
of the Xxxxxxx Trusts (such individuals, collectively, the “Xxxxxxx Trustees”),
(e) any person controlled in the aggregate by any one or more of Xxxxxxx,
Xxxxxxx Spouse, the Xxxxxxx Trusts, the Xxxxxxx Trusts Beneficiaries, the
Xxxxxxx Trustees, Tremont LLC, Valhi, Inc., Valhi Holding Company, the Xxxxxx
Xxxxxxx Foundation, the Xxxxxxx Family Foundation, and The Combined Master
Retirement Trust (collectively, the “Xxxxxxx Associates” and together with
Xxxxxxx, Xxxxxxx Spouse, the Xxxxxxx Trusts, the Xxxxxxx Trusts Beneficiaries,
and the Xxxxxxx Trustees, the “Xxxxxxx Group”), (f) any managing director,
general partner, director, limited partner, principal, officer, or employee
of
any of the Xxxxxxx Group, any employee benefit plan or pension fund of any
of
the Xxxxxxx Group, and any heirs, executors, administrators, testamentary
trustees, legatees, or beneficiaries of any of the Xxxxxxx Group, or (g)
a trust
or custodianship, to the extent that the beneficiaries of which, or a
corporation or partnership, the stockholders or general or limited partners
of
which, include only the Xxxxxxx Group, their respective spouses and former
spouses and ancestors or lineal descendants (by blood or adoption). For purposes
of this definition, the term “control” (including the correlative meanings, the
terms “controlled by” and “under common control with”), as used with respect to
any person shall mean the possession, directly or indirectly, of the power
to
direct or cause the direction of the management and policies of such person,
whether through the ownership of voting securities, by contract, or
otherwise.
(e) Sections
8, 9, 10 and 11 of this Agreement shall survive according to their terms
any
termination or expiration of this Agreement.
8. Non-Competition;
Non-Interference.
(a) Employee
agrees that he shall not in the United States or Europe, at any time during
his
employment by the Company and for a period equal to one (1) year following
the
termination of Employee’s employment with the Company, directly or indirectly,
engage in, represent in any way, or be connected with, any titanium or specialty
metals business competing with TIMET. For purposes of this Section 8, the
phrase
“directly or indirectly engage in” shall include having a direct or indirect
ownership interest (other than ownership of less than 5% of the outstanding
voting securities of a business that is registered under Section 12 of the
Securities Exchange Act of 1934, as amended) in any company or entity that
engages in the business in question.
(b) Employee
agrees that, at any time during his employment by the Company and for a period
of
one (1)
year following the termination of Employee’s employment with the
Company,
he will
not:
(i) Either
directly or indirectly, seek to influence any of the Company’s employees to
leave the Company’s employment; or
(ii) Contact
any person, business or entity that is a customer of TIMET as of the date
of
termination of Employee’s employment by the Company, or with whom Employee had
contact during, and by reason of, Employee’s employment with the Company, for
the purpose of developing, marketing or selling titanium or
specialty metals
products or services to such customers in competition with TIMET.
(c) Employee
declares that the foregoing limitations are reasonable and necessary to protect
the business of the Company and its affiliates. If any portion of the
restrictions set forth in this Section 8 should, for any reason whatsoever,
be
declared invalid by a court of competent jurisdiction, the validity or
enforceability of the remainder of such restrictions shall not thereby be
adversely affected, but rather such court shall reform the provision deemed
invalid so that it shall be as near to the terms of this Agreement as possible
and still remain enforceable under applicable law.
9. Non-Disclosure
of Confidential Information.
Employee
agrees that he shall not, during the term of his employment with the Company,
and for three years thereafter, directly or indirectly, in any individual
or
representative capacity whatsoever, use for his own benefit or otherwise,
or
communicate to, divulge or disclose to, or use to the benefit of any person,
firm, association, corporation or entity in any manner whatsoever, any
confidential information of any kind, nature or description concerning any
matter affecting or relating to the TIMET Business, including, without
limitation: (i) the names of any of the prior or present clients, customers
or
accounts of TIMET; (ii) the prices for which TIMET obtains or has obtained,
or
at which it sells or has sold, its properties, products, services or raw
materials; (iii) the names of the personnel of TIMET; (iv) the financial
affairs
of TIMET; (v) the methods and manner of operation of TIMET, including TIMET’s
manufacturing plants, operations and third-party service providers; (iv)
confidential or proprietary data belonging to, or developed by TIMET on behalf
of, a TIMET customer; or (vii) the plans, trade secrets, technology, techniques,
methods, marketing programs, confidential data or other proprietary information
or intellectual property of any kind, nature or description of TIMET. Upon
termination of his employment with the Company for any reason, Employee will
promptly return all such information in his possession or under his control
to
the Company, together with all copies thereof. Without regard to whether
any or
all of the foregoing matters would be deemed confidential, material or
important, the parties hereto stipulate that as between them, the same are
important, material and confidential and materially affect the Company’s
effective and successful conduct of its business. The foregoing restrictions
and
obligations under this Section 9 shall not apply to: (a) any information
that is or becomes generally available to the public, other than as a result
of
a disclosure by Employee in violation of this Agreement; (b) information
known
by Employee prior to the time of disclosure by the Company; and (c) information
disclosed in good faith to Employee by a third person legally entitled, to
the
best of Employee’s knowledge, to disclose the same.
10. Proprietary
Property.
Employee
hereby discloses and assigns to TIMET Employee’s interest in any and all
inventions, designs, trade secrets, processes, techniques, methods, discoveries,
concepts, copyrightable or patentable works, or improvements (hereinafter
collectively called “developments”), including all rights to obtain, register,
perfect or enforce TIMET’s proprietary interest in such developments, that
Employee discovers, conceives, and/or develops, either individually or jointly
with others during the course of his employment with TIMET (including any
and
all developments based wholly or in part upon ideas conceived during Employee’s
employment with TIMET), or while using TIMET’s data, facilities and/or materials
provided in either such event the subject matter is one within TIMET’s field of
interest. Employee’s obligation under this Section applies without regard to
whether any idea for a development occurs to him during or after normal business
hours. Employee further agrees that all developments as described herein
are
TIMET’s proprietary property in which TIMET has the exclusive legal rights,
whether or not patent applications are filed thereon. “Subject matter within
TIMET’s field of interest” includes any subject that TIMET reasonably considers
relevant to any of its past, current or future projects or
operations.
11. Right
to Injunction.
Employee
recognizes, acknowledges and agrees that the restrictions contained in this
Agreement are a reasonable and necessary protection of the legitimate interests
of the Company. Employee further acknowledges and agrees that a violation
or
attempted violation on his part of any agreement in Section 8, 9 or 10 above
would result in serious harm to the Company, that such harm would be
irreparable, would be difficult to ascertain and for which there would be
no
adequate remedy at law. Accordingly, Employee agrees that, if Employee violates
or attempts to violate on such Section of this Agreement, the Company shall
be
entitled as a matter of right to an injunction out of any court of competent
jurisdiction, restraining any further violation of such agreements by him
or his
employees, partners or agents. Any exercise by the Company of its rights
pursuant to this Section 11 shall be cumulative and in addition to any other
remedies to which the Company may be entitled.
12. Miscellaneous.
(a) Amendment
or Alteration.
No
amendment or alteration of the terms of this Agreement shall be valid unless
made in writing and signed by both of the parties hereto.
(b) Governing
Law.
This Agreement shall be governed in all respects by the laws of the State
of
Texas, without application of the conflict of laws principles
thereof.
(c) Severability.
The
holding of any provision of this Agreement to be illegal, invalid or
unenforceable by a court of competent jurisdiction shall not affect any other
provision of this Agreement, which shall remain in full force and
effect.
(d) Notices.
Any
notice or other communication that one party desires to give to the other
under
this Agreement shall be in writing, and shall be deemed effectively given
upon
(i) personal delivery; (ii) transmission by facsimile; (iii) the third
business day following deposit in any United States mail box, by registered
or
certified mail, postage prepaid, addressed to the other party at the address
set
forth below or at such other address as a party may designate by fifteen
(15)
days’ advance notice to the other party pursuant to the provisions of this
Section; or (iv) delivery by any express service which results in personal
delivery to the other party.
If
to
Employee:
Xx.
Xxxxxxx X. Xxxxxxxx
000
Xxxxxxxx Xxxx
Xxxxxxxxx,
XX 00000
Facsimile
No.: 000-000-0000
If
to the
Company:
Titanium
Metals Corporation
Three
Lincoln Center
0000
XXX
Xxxxxxx
Xxxxx
0000
Xxxxxx,
Xxxxx 00000
Attention:
Chief Executive Officer
Facsimile
No. 000-000-0000
with
a
copy to:
Titanium
Metals Corporation
Three
Lincoln Center
0000
XXX
Xxxxxxx
Xxxxx
0000
Xxxxxx,
Xxxxx 00000
Attention:
General Counsel
Facsimile
No. 000-000-0000
(e) Waiver
or Breach.
It is
agreed that a waiver by any party of a breach of any provision of this Agreement
shall not operate or be construed as a waiver of any subsequent breach by
that
same party.
(f) Entire
Agreement and Binding Effect.
This
Agreement contains the entire agreement of the parties with respect to the
subject matter hereof and, except as otherwise specifically provided herein,
shall be binding upon and inure to the benefit of the parties hereto and
their
respective legal representatives, heirs, distributees, successors and assigns.
This Agreement supersedes and preempts any prior understandings, agreements
or
representations between the parties, written or oral, which may have been
related to the subject matter hereof in any way.
(g) Assignment.
This
Agreement may not be transferred or assigned by Employee. Subject to the
provisions contained in Section 7(d) of this Agreement, the Company may transfer
or assign this Agreement to a company or firm that succeeds to the business
of
the Company.
(h) Headings.
The
Section headings appearing in this Agreement are for purposes of easy reference
and shall not be considered a part of this Agreement or in any way modify,
amend
or affect its provisions.
(i) Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall
be
an original, but all of which together shall constitute one instrument. This
Agreement may be executed by facsimile signature which shall be valid for
all
purposes.
(j) Attorneys’
Fees.
The
prevailing party in any dispute arising under this Agreement shall be entitled
to recover such party’s reasonable expenses, including attorneys’ fees, incurred
in connection therewith.
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date
and
year first above written.
TITANIUM
HEARTH TECHNOLOGIES, INC.
By: /s/Xxxxxx
X. Xxxxxx
Name: Xxxxxx
X. Xxxxxx
Title: Chief
Executive Officer
/s/Xxxxxxx
X. Xxxxxxxx
Xxxxxxx
X. Xxxxxxxx, Employee
