EMPLOYMENT CONTINUATION AGREEMENT
Exhibit 10.1
THIS AGREEMENT between Xxxxxxx Xxxxx Corporation, a Pennsylvania corporation (the “Company”),
and (the “Executive”), dated effective as of this day of , 2009.
WITNESSETH:
WHEREAS, the Company employs the Executive in what it deems to be an important Company
position;
WHEREAS, the Company believes that, in the event it is confronted with a situation that could
result in a change in ownership or control of the Company, continuity of management will be
essential to its ability to evaluate and respond to such situation in the best interests of
stockholders;
WHEREAS, the Company understands that any such situation will present significant concerns for
the Executive with respect to the Executive’s financial and job security;
WHEREAS, the Company desires to assure itself of the Executive’s services during the period in
which it is confronting such a situation, and to provide the Executive certain financial assurances
to enable the Executive to perform the responsibilities of the position without undue distraction
and to exercise judgment without bias due to personal circumstances;
WHEREAS, in order to accomplish the foregoing objectives, the Company desires to provide the
Executive with certain rights and obligations upon the occurrence of a Change of Control (as
defined in Section 2);
NOW, THEREFORE, in consideration of the promises and mutual covenants herein contained, and
intending to be legally bound, it is hereby agreed by and between the Company and the Executive as
follows:
1. Operation of Agreement.
(a) Effective Date. This Agreement shall not be effective until the date on which a
Change of Control occurs (the “Effective Date”). For the avoidance of doubt, if (i) this Agreement
has been terminated prior to the Effective Date, as provided in Section 13(c) hereof, or (ii)
Executive is not employed by the Company on the Effective Date, then this Agreement shall have no
effect.
(b) Effect of Agreement on Rights of Executive. Notwithstanding anything in this
Agreement to the contrary, the Executive and the Company acknowledge and agree that the employment
of the Executive by the Company is “at will” and the Executive’s employment may be terminated by
either the Executive or the Company for any reason and at any time prior to the Effective Date, in
which case the Executive shall have no rights under this Agreement.
2. Definitions.
(a) Board. For purposes of this Agreement, “Board” shall mean the Board of Directors
of the Company.
(b) Change of Control. For the purposes of this Agreement, a “Change of Control”
shall mean:
(i) The acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)
or any successor rule thereto) (a “Person”) of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act or any successor rule thereto) of securities
of the Company entitling such Person to 30% or more of the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the election of
directors (the “Voting Power”); provided, however, that for purposes of this subsection (i),
the following acquisitions shall not constitute or cause a Change of Control: (A) any
acquisition directly from the Company following which the members of the Board continue to
be comprised of at least 51% of Continuing Directors, (B) any acquisition by the Company, or
(C) any acquisition by any employee benefit plan, employee stock ownership plan (or any
related trust for such plans) sponsored or maintained by the Company or by any corporation
controlled by the Company; or
(ii) Completion of a tender offer to acquire securities of the Company entitling the
holders thereof to 30% or more of the Voting Power of the Company, excepting any
acquisitions specified in subsection (i), above, that do not constitute or cause a Change of
Control; or
(iii) A successful solicitation subject to Rule 14a-11 under the Exchange Act relating
to the election or removal of 50% or more of the members of the Board or any class thereof
shall be made by any Person other than the Company or less than 51% of the members of the
Board shall be Continuing Directors; or
(iv) The occurrence of a merger, consolidation, share exchange, division or sale or
other disposition of all or substantially all of the Company’s assets, and as a result of
which the shareholders of the Company immediately prior to such transaction do not hold,
directly or indirectly, immediately following such transaction a majority of the Voting
Power of (i) in the case of a merger or consolidation, the surviving or resulting company,
(ii) in the case of a share exchange, the acquiring company, or (iii) in the case of a
division or a sale or other disposition of assets, each surviving, resulting or acquiring
company which, immediately following the transaction, holds more than 30% of the
consolidated assets of the Company immediately prior to the transaction; or
(v) A majority of the Board otherwise determines that a Change of Control shall have
occurred.
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(c) Continuing Directors. For purposes of this Agreement, “Continuing Directors”
shall mean a director of the Company who either (i) was a director of the Company immediately prior
to the Effective Date or (ii) is an individual whose election, or nomination for election, as a
director of the Company was approved by a vote of at least two-thirds of the directors then still
in office who were Continuing Directors (other than an individual whose initial assumption of
office is in connection with an actual or threatened election contest relating to the election of
directors of the Company which would be subject to Rule 14a-11 under the Exchange Act).
3. Employment Period. If Executive is employed on the Effective Date, the Executive
shall then be employed by the Company commencing on the Effective Date and ending on the
twenty-four month anniversary of the Effective Date (the “Employment Period”), subject to Section 6
of this Agreement.
4. Position and Duties.
(a) No Reduction in Position. During the Employment Period, the Executive’s
position, including authority, responsibilities and status but excluding changes in title shall be
at least commensurate with those held, exercised and assigned immediately prior to the Effective
Date. It is understood that, for purposes of this Agreement, such position, authority,
responsibilities and status shall not be regarded as not commensurate merely by virtue of the fact
that a successor shall have acquired all or substantially all of the business and/or assets of the
Company and/or that the Executive ceases to hold such position, authority, responsibilities and
status with a public company and/or that the Executive’s title has changed. The Executive’s
services shall be performed at the location where the Executive was employed immediately preceding
the Effective Date or any office or location within 35 miles from such location (or such other
distance not in excess of 50 miles as shall be set forth in the Company’s relocation policy as in
effect immediately prior to the Effective Date).
(b) Business Time. During the Employment Period, the Executive agrees to devote full
attention during normal business hours to the business and affairs of the Company and to use his
best efforts to perform faithfully and efficiently the responsibilities assigned to the Executive,
except for periods of vacation and sick leave to which the Executive is entitled. It is expressly
understood and agreed that the Executive’s continuing to serve on any boards and committees on
which the Executive is serving or with which the Executive is otherwise associated immediately
preceding the Effective Date shall not be deemed to interfere with the performance of the
Executive’s services to the Company.
5. Compensation.
(a) Base Salary. During the Employment Period, the Executive shall receive a base
salary at a monthly rate at least equal to the monthly salary paid to the Executive by the Company
and any of its affiliated companies immediately prior to the Effective Date. The base salary may
be increased (but not decreased) at any time and from time to time by action of the Board or any
committee thereof or any individual having authority to take such action in accordance with the
Company’s regular practices. The Executive’s base salary, as it may be increased from time to
time, shall hereafter be referred to as “Base Salary”.
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(b) Annual Bonus. During the Employment Period, in addition to the Base Salary, for
each full or partial fiscal year of the Company ending during the Employment Period, the Executive
shall be afforded the opportunity to receive an annual bonus or partial bonus (measured pro rata
based upon the actual number of days of Executive’s employment during the fiscal year in comparison
to the total number of days in the fiscal year), as applicable, on terms and conditions no less
favorable to the Executive (taking into account reasonable changes in the Company’s goals and
objectives) than the annual bonus opportunity that had been made available to the Executive for the
fiscal year ended immediately prior to the Effective Date. For purposes of this Agreement, the
amount of the annual bonus opportunity (the “Annual Bonus Opportunity”) to be awarded to the
Executive during each full year of the Employment Period shall be an amount not less than the
average bonus earned by such Executive during the three fiscal year period of the Company ending
immediately prior to the Effective Date, with the average bonus calculated by dividing the total
bonuses paid to the Executive for such three year period by the total number of years for which any
bonus was paid. Any amount payable in respect of the Annual Bonus Opportunity shall be paid
pursuant to the Company’s normal practice and within 21/2 months following the year in which the
amount is vested.
(c) Long-term Incentive Compensation Programs. During the Employment Period, the
Executive shall participate in all long-term incentive compensation programs for key executives,
including stock option or stock incentive plans, at a level that is commensurate with the
Executive’s opportunity to participate in such plans immediately prior to the Effective Date, or,
if more favorable to the Executive, at the level made available to the Executive or other similarly
situated officers at any time thereafter.
(d) Benefit Plans. During the Employment Period, the Executive (and, to the extent
applicable, the Executive’s dependents) shall be entitled to participate in or be covered under all
pension, retirement, deferred compensation, savings, medical, dental, health, disability, group
life, accidental death and travel accident insurance plans and programs of the Company and its
affiliated companies at a level that is commensurate with the Executive’s participation in such
plans immediately prior to the Effective Date, or, if more favorable to the Executive, at the level
made available to the Executive or other similarly situated officers at any time thereafter. All
payments by the Company hereunder, except for payments for Accrued Obligations, as defined in
Section 7(a), shall be taken into account (to the extent permitted by, and consistent with, law and
the terms of the applicable plan document) in determining the amount of contributions to be made by
or on behalf of the Executive under any tax-qualified defined contribution plan of the Company.
(e) Expenses. During the Employment Period, the Executive shall be entitled to
receive prompt reimbursement for all reasonable business expenses incurred by the Executive in
accordance with the policies and procedures of the Company as in effect immediately prior to the
Effective Date. Notwithstanding the foregoing, the Company shall apply the policies and procedures
in effect after the Effective Date to the Executive, if such policies and procedures are more
favorable to the Executive than those in effect immediately prior to the Effective Date. In no
event, however, will any expense which is incurred in a particular year be reimbursed later than
the end of the Executive’s taxable year following the taxable year in which the expense was
incurred. The amount of reimbursable expenses incurred in one taxable year of the Executive shall
not affect the amount of
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reimbursable expenses in a different taxable year and shall not be subject to liquidation or
exchange for another benefit.
(f) Vacation and Fringe Benefits. During the Employment Period, the Executive shall
be entitled to paid vacation and fringe benefits at a level that is commensurate with the paid
vacation and fringe benefits available to the Executive immediately prior to the Effective Date,
or, if more favorable to the Executive, at the level made available from time to time to the
Executive or other similarly situated officers at any time thereafter.
(g) Indemnification. During and after the Employment Period, the Company shall
indemnify the Executive and hold the Executive harmless from and against any claim, loss or cause
of action arising from or out of the Executive’s performance as an officer, Director or employee of
the Company or any of its subsidiaries or in any other capacity, including any fiduciary capacity,
in which the Executive serves at the request of the Company to the maximum extent permitted by
applicable law and the Company’s Articles of Incorporation and By-laws (the “Governing Documents”)
and the Company shall maintain existing or comparable policies of insurance covering such matters,
provided that in no event shall the protection afforded to the Executive hereunder be less
than that afforded under the Governing Documents as in effect immediately prior to the Effective
Date.
(h) Office and Support Staff. During the Employment Period, the Executive shall be
entitled to an office with furnishings and other appointments, and to secretarial and other
assistance, at a level that is at least commensurate with the foregoing provided to other similarly
situated officers provided that such items shall be at least equivalent to those provided for the
Executive immediately prior to the Effective Date.
6. Termination. The provisions of this Section 6 shall only apply in the event
Executive’s employment is terminated following a Change of Control.
(a) Death, Disability or Retirement. This Agreement shall terminate automatically
upon the Executive’s death, termination due to permanent and total disability (“Disability”) within
the meaning of section 409A(a)(2)(C) of the Internal Revenue Code of 1986 (the “Code”), or
successor provision, or voluntary retirement under any of the Company’s retirement plans as in
effect from time to time.
(b) Voluntary Termination. The Executive may, upon not less than 30 days’ written
notice to the Company, voluntarily terminate employment for any reason (including early retirement
under the terms of any of the Company’s retirement plans as in effect from time to time),
provided that any termination by the Executive pursuant to Section 6(d) on account of Good
Reason (as defined therein) shall not be treated as a voluntary termination under this Section
6(b).
(c) Cause. The Company may terminate the Executive’s employment for Cause. For
purposes of this Agreement, “Cause” means (i) the Executive’s conviction of, or plea of nolo
contendere to, a felony; (ii) an act or acts of dishonesty or gross misconduct on the
Executive’s part which result or are intended to result in material damage to the Company’s
business or reputation; (iii) the willful and continued failure by Executive to substantially
perform the required duties with the Company (other than any such failure
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resulting from Executive’s incapacity due to physical or mental illness or Disability or any
actual or anticipated failure after the termination by Executive for Good Reason as defined in
paragraph 6(d), below) after a written demand for substantial performance is delivered to Executive
by the Company, which demand specifically identifies the manner in which the Company believes that
Executive has not substantially performed the required duties; or (iv) any conduct on the part of
Executive contributing to, or any failure to correct deficiencies directly or indirectly resulting
in, financial restatements or irregularities.
(d) Good Reason. Following the occurrence of a Change of Control, the Executive may
terminate employment for Good Reason. For purposes of this Agreement, “Good Reason” means the
occurrence of any of the following, without the express written consent of the Executive, after the
occurrence of a Change of Control; provided, however, that the Executive must provide notice to the
Company of any such act or failure to act within 90 days of the initial existence of such act or
failure to act, and, if the Company remedies and corrects such act or failure to act during the
period of 30 days following the Executive’s notice, such act or failure to act shall not constitute
“Good Reason” under this Agreement:
(i) (A) the assignment to the Executive of any duties inconsistent in any material
adverse respect with the Executive’s position, authority, responsibilities or status as
contemplated by Section 4 of this Agreement, or (B) any other material adverse change in
such position, responsibilities, authority or status, except for any changes contemplated by
Section 4 of this Agreement, or any removal of the Executive from or any failure to re-elect
the Executive to any position, except in connection with the termination of the Executive’s
employment due to Cause, Disability, retirement, death or voluntary termination for reasons
other than those set forth in this Section 6(d);
(ii) any failure by the Company to comply with any of the provisions of Section 5 of
this Agreement;
(iii) any purported termination of the employment of the Executive by the Company
which is not due to the Executive’s Disability, death, retirement, or termination for Cause
in accordance with Section 6(c) or voluntary termination for reasons other than those set
forth in this Section 6(d);
(iv) the relocation of the Executive’s principal place of employment to a location
more than 35 miles (or such other distance not in excess of 50 miles as shall be set forth
in the Company’s relocation policy as in effect immediately prior to the Effective Date)
from the Executive’s principal place of employment immediately prior to the Change of
Control, or the Company’s requiring the Executive to travel on Company business to a
substantially greater extent than required immediately prior to the Effective Date; or
(v) any failure by the Company to obtain the assumption and agreement to perform this
Agreement by a successor as contemplated by Section 12(b).
Notwithstanding the foregoing, in no event shall the mere occurrence of a Change of Control, absent
any further impact on the Executive, be deemed to constitute Good Reason.
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(e) Notice of Termination. Any termination by the Company for Cause or by the
Executive for Good Reason shall be communicated by Notice of Termination to the other party hereto
given in accordance with Section 13(e). For purposes of this Agreement, a “Notice of Termination”
means a written notice given, in the case of a termination for Cause, within 60 days of the
Company’s having actual knowledge of the events giving rise to such termination, and in the case of
a termination for Good Reason, within 90 days of the Executive’s having actual knowledge of the
events giving rise to such termination, and which (i) indicates the specific termination provision
in this Agreement relied upon, (ii) sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive’s employment under the provision so
indicated, and (iii) if the termination date is other than the date of receipt of such notice,
specifies the termination date (which date shall be not more than 15 days after the giving of such
notice). The failure by the Executive to set forth in the Notice of Termination any fact or
circumstance which contributes to a showing of Good Reason shall not waive any right of the
Executive hereunder or preclude the Executive from asserting such fact or circumstance in enforcing
the Executive’s rights hereunder.
(f) Date of Termination. For the purpose of this Agreement, the term “Date of
Termination” means (i) in the case of a termination for which a Notice of Termination is required,
the date of receipt of such Notice of Termination or, if later, the date specified therein, as the
case may be, and (ii) in all other cases, the actual date on which the Executive’s employment
terminates during the Employment Period. For purposes of this Agreement, the term “termination”
when used in the context of a condition to, or timing of, payment hereunder shall be interpreted to
mean a “separation from service” as that term is used in Section 409A of the Code.
7. Company Obligations on Termination during Employment Period.
(a) Death or Disability. If the Executive’s employment is terminated during the
Employment Period by reason of the Executive’s death or Disability, this Agreement shall terminate
without further obligations to the Executive or the Executive’s legal representatives other than
those obligations accrued hereunder at the Date of Termination, and the Company shall pay to the
Executive (or the Executive’s beneficiary or estate) only the following: (i) the Executive’s full
Base Salary through the Date of Termination (the “Earned Salary”), (ii) any vested amounts or
benefits owing to the Executive under the Company’s otherwise applicable employee benefit plans and
programs, including any compensation previously deferred by the Executive (together with any
accrued earnings thereon) and not yet paid by the Company and any accrued vacation pay not yet paid
by the Company (the “Accrued Obligations”), and (iii) any other benefits payable due to the
Executive’s death or Disability under the Company’s plans, policies or programs (the “Additional
Benefits”).
Any Earned Salary shall be paid in cash in a single lump sum on the next regularly scheduled
payroll date following the Date of Termination. Accrued Obligations and Additional Benefits shall
be paid in accordance with the terms of the applicable plan, program or arrangement.
(b) Cause and Voluntary Termination. If, during the Employment Period, the
Executive’s employment shall be terminated for Cause or voluntarily terminated by the
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Executive (other than on account of Good Reason following a Change of Control), the Company
shall pay the Executive only the following: (i) the Earned Salary in cash in a single lump sum, on
the next regularly scheduled payroll date following the Date of Termination, and (ii) the Accrued
Obligations in accordance with the terms of the applicable plan, program or arrangement and giving
effect to the reason for termination.
(c) Termination by the Company other than for Cause and Termination by the Executive for
Good Reason.
(i) Lump Sum Payments. If, during the Employment Period, the Company
terminates the Executive’s employment other than for Cause, or the Executive terminates
employment for Good Reason, the Company shall pay to the Executive only the following
amounts:
| (A) | the Executive’s Earned Salary; | ||
| (B) | a cash amount (the “Severance Amount’) equal to two times the sum of |
| (1) | the Executive’s annual Base Salary; and | ||
| (2) | the average of the bonuses payable to the Executive for the three fiscal years of the Company ending immediately prior to the Effective Date calculated by dividing (x) the total bonuses paid to the Executive for such three year period by (y) three; |
| reduced by the amounts set forth in the following paragraph; and | |||
| (C) | the Accrued Obligations. |
The Earned Salary shall be paid in cash in a single lump sum on the next regularly scheduled
payroll date following the Date of Termination. The Severance Amount shall be reduced by any
further salary payable to Executive for periods following termination of employment and any
severance benefit or separation pay otherwise payable to the Executive, if any, whether payable
under a Company employee benefit plan, including without limitation the Corporation’s Policy
regarding Reductions in Force, employment agreement between Executive and the Company or otherwise
(which payments shall be made under and pursuant to the terms of the relevant plan or agreement).
Such reduced Severance Amount shall paid in cash in a lump sum 30 days following the date of
termination; provided that if Executive is a Specified Employee under Section 409A of the Code on
the termination of employment then such amount shall be paid on the first day following the six
month anniversary of the Executive’s termination of employment. Accrued Obligations shall be paid
in accordance with the terms of the applicable plan, program or arrangement, provided that no
taxable amounts may be paid prior to the first day following the six month anniversary of the
Executive’s termination of employment if the Executive is a Specified Employee under Section 409A
of the Code on the termination of employment and earlier payment thereof would cause any part of
the benefits to be subject to additional taxes and interest under Section 409A of the Code.
(ii) Continuation of Benefits. If, during the Employment Period, the Company
terminates the Executive’s employment other than for Cause, or the Executive terminates
employment for Good Reason, the Executive (and, to the extent
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applicable, the Executive’s dependents) shall be entitled, after the Date of
Termination until the earlier of (x) the twenty-four month anniversary of the Date of
Termination (the “End Date”) and (y) the date the Executive becomes eligible for comparable
benefits under a similar plan, policy or program of a subsequent employer, to continue
participation in all of the Company’s employee and executive welfare and fringe benefit
plans (the “Benefit Plans”). The Executive’s participation in the Benefit Plans will be on
the same terms and conditions that would have applied had the Executive continued to be
employed by the Company through the End Date. To the extent any such benefits cannot be
provided on a non-taxable basis under the terms of the applicable plan, policy or program,
the Company shall provide a comparable benefit under another plan or from the Company’s
general assets, payable in a lump sum on the first day following the six month anniversary
of the Executive’s termination of employment.
(d) Limit on Payments by the Company.
(i) Application of Section 7(d). In the event that any amount or benefit paid
or distributed to the Executive pursuant to this Agreement, taken together with any amounts
or benefits otherwise paid or distributed to the Executive by the Company or any affiliated
company (collectively, the “Covered Payments”), would be an “excess parachute payment” as
defined in Section 280G of the Code and would thereby subject the Executive to the tax (the
“Excise Tax”) imposed under Section 4999 of the Code (or any similar tax that may hereafter
be imposed), the provisions of this Section 7(d) shall apply to determine the amounts
payable to Executive pursuant to this Agreement.
(ii) Calculation of Benefits. Immediately following delivery of any Notice of
Termination, the Company shall notify the Executive of the aggregate present value of all
termination benefits to which the Executive would be entitled under this Agreement and any
other plan, program or arrangement as of the projected Date of Termination, together with
the projected maximum payments, determined as of such projected Date of Termination, that
could be paid without the Executive being subject to the Excise Tax.
(iii) Imposition of Payment Cap. If (A) the aggregate value of the Severance
Amount, Accrued Obligations, and continuation of benefits to be paid or provided to the
Executive under this Agreement and any other plan, agreement or arrangement with the Company
exceeds the amount which can be paid to the Executive without the Executive incurring an
Excise Tax and (B) the Executive would receive a greater net-after-tax amount (taking into
account all applicable taxes payable by the Executive, including any Excise Tax) by applying
the limitation contained in this Section 7(d)(iii), then such amounts payable to the
Executive under this Section 7 shall be reduced (but not below zero) to the maximum amount
which may be paid hereunder without the Executive becoming subject to such an Excise Tax
(such reduced payments to be referred to as the “Payment Cap”). In the event that Executive
receives reduced payments and benefits pursuant to the previous sentence, Executive shall
have the right to designate, to the extent consistent with Section 409A of the Code, which
of the payments and benefits otherwise provided for
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in this Agreement that the Executive will receive in connection with the application of
the Payment Cap.
(iv) Application of Section 280G. For purposes of determining whether any of
the Covered Payments will be subject to the Excise Tax and the amount of such Excise Tax,
(A) such Covered Payments will be treated as “parachute payments” within the
meaning of Section 280G of the Code, and all “parachute payments” in excess of the
“base amount” (as defined under Section 280G(b)(3) of the Code) shall be treated as
subject to the Excise Tax, unless, and except to the extent that, in the good faith
judgment of the Company’s independent certified public accountants appointed prior to
the Effective Date or tax counsel selected by such accountants (the “Accountants”),
the Company has a reasonable basis to conclude that such Covered Payments (in whole
or in part) either do not constitute “parachute payments” or represent reasonable
compensation for personal services actually rendered (within the meaning of Section
280G(b)(4)(B) of the Code) in excess of the “base amount,” or such “parachute
payments” are otherwise not subject to such Excise Tax, and
(B) the value of any non-cash benefits or any deferred payment or benefit shall
be determined by the Accountants in accordance with the principles of Section 280G of
the Code.
(v) For purposes of determining whether the Executive would receive a greater
net-after-tax benefit were the amounts payable under this Agreement reduced in accordance
with Paragraph 7(d)(iii), the Executive shall be deemed to pay:
(A) Federal income taxes at the highest applicable marginal rate of Federal
income taxation for the calendar year in which the first amounts are to be paid
hereunder, and
(B) any applicable state and local income taxes at the highest applicable
marginal rate of taxation for such calendar year, net of the maximum reduction in
Federal income taxes which could be obtained from the deduction of such state or
local taxes if paid in such year;
provided, however, that the Executive may request that such determination be made based on the
Executive’s individual tax circumstances, which shall govern such determination so long as the
Executive provides to the Accountants such information and documents as the Accountants shall
reasonably request to determine such individual circumstances.
(vi) If it is established pursuant to a final determination of a court or an Internal
Revenue Service proceeding (a “Final Determination”) that, notwithstanding the good faith of
the Executive and the Company in applying the terms of this Agreement, the aggregate
“parachute payments” within the meaning of Section 280G of the Code paid to the Executive or
for the Executive’s benefit are in an amount that would result in the Executive’s being
subject to an Excise Tax, then the Executive shall have an
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obligation to repay to the Company on the tenth day following the Final Determination
the amount equal to such excess parachute payments, together with interest on such amount at
the applicable Federal rate (as defined in Section 1274(d) of the Code) from the date of the
payment hereunder to the date of repayment by the Executive.
8. Non-Exclusivity of Rights. Except as expressly provided herein, nothing in this
Agreement shall prevent or limit the Executive’s continuing or future participation in any benefit,
bonus, incentive, stock option or other plan or program provided by the Company or any of its
affiliated companies and for which the Executive may qualify, nor shall anything herein limit or
otherwise prejudice such rights as the Executive may have under any other agreements with the
Company or any of its affiliated companies, including employment agreements or stock option
agreements. Except as otherwise provided herein, amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any plan or program of the Company or any of its
affiliated companies at or subsequent to the Date of Termination shall be payable in accordance
with such plan or program.
9. Full Settlement. The Company’s obligation to make the payments provided for in
this Agreement and otherwise to perform its obligations hereunder shall not be affected by any
circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or
other right which the Company may have against the Executive or others whether by reason of the
subsequent employment of the Executive or otherwise, except as otherwise provided herein. In the
event of a termination of the Executive’s employment by the Company other than for Cause or
termination of employment by the Executive for Good Reason, the Executive shall have no duty to
seek any other employment after termination of employment with the Company and the Company hereby
waives and agrees not to raise or use any defense based on the position that the Executive had a
duty to mitigate or reduce the amounts due to the Executive hereunder by seeking other employment
whether suitable or unsuitable and should the Executive obtain other employment, then the only
effect of such on the obligations of the Company hereunder shall be that the Company shall be
entitled to credit against any payments which would otherwise be made pursuant to Section 7(c)(ii)
hereof, any comparable payments to which the Executive is entitled under the employee and executive
welfare benefit plans maintained by the Executive’s other employer or employers in connection with
services to such employer or employers after termination of the Executive’s employment with the
Company.
10. Legal Fees and Expenses. If the Executive asserts any claim in any contest
(whether initiated by the Executive or by the Company) as to the validity, enforceability or
interpretation of any provision of this Agreement, the Company shall pay the Executive’s costs (or
cause such costs to be paid) in so asserting, including, without limitation, reasonable attorneys’
fees and expenses, incurred for the period beginning upon the Effective Date and ending upon the
Executive’s death, if the Executive is the prevailing party in such contest as determined by the
arbitrators selected pursuant to Section 13(b) hereof to resolve such contest. Such legal fees
shall be reimbursed or paid on a monthly basis, payable on the first of each month, and all
reimbursement payments with respect to expenses incurred within a particular year shall be made no
later than the end of the Executive’s taxable year following the taxable year in which the expense
was incurred. The amount of reimbursable expenses incurred in one taxable year of the Executive
shall not
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affect the amount of reimbursable expenses in a different taxable year and such reimbursement
shall not be subject to liquidation or exchange for another benefit. Notwithstanding the
foregoing, no such payments may be made to Executive until the first day following the six month
anniversary of the Executive’s termination if the Executive is a Specified Employee under Section
409A of the Code upon termination of employment. In the event that the Executive is not the
prevailing party as determined by the arbitrators selected pursuant to Section 13(b) hereof, the
Executive shall repay any amount previously paid by the Company pursuant to this Section 10 in
respect of such dispute or other proceeding within ten (10) days of the final resolution thereof.
11. Confidential Information; Company Property. For and in consideration of the
salary and benefits to be provided by the Company hereunder, including the severance arrangements
set forth herein, the Executive agrees that:
(a) Confidential Information. The Executive shall hold in a fiduciary capacity for
the benefit of the Company all secret or confidential information, knowledge or data relating to
the Company or any of its affiliated companies, and their respective businesses, (i) obtained by
the Executive during the Executive’s employment by the Company or any of its affiliated companies
and (ii) not otherwise public knowledge (other than by reason of an unauthorized act by the
Executive). After termination of the Executive’s employment with the Company, the Executive shall
not, without the prior written consent of the Company, unless compelled pursuant to an order of a
court or other body having jurisdiction over such matter, communicate or divulge any such
information, knowledge or data to anyone other than the Company and those designated by it.
(b) Company Property. Except as expressly provided herein or as mutually agreed in
writing between the Executive and the Company, promptly following the Executive’s termination of
employment, the Executive shall return to the Company all property of the Company and all copies
thereof in the Executive’s possession or under the Executive’s control.
(c) Injunctive Relief and Other Remedies with Respect to Covenants. The Executive
acknowledges and agrees that the covenants and obligations of the Executive with respect to
confidentiality and Company property relate to special, unique and extraordinary matters and that a
violation of any of the terms of such covenants and obligations will cause the Company irreparable
injury for which adequate remedies are not available at law. Therefore, the Executive agrees that
the Company shall (i) be entitled to pursue an injunction, restraining order or such other
equitable relief (without the requirement to post bond) restraining Executive from committing any
violation of the covenants and obligations contained in this Section 11 and (ii) have no further
obligation to make any payments to the Executive hereunder following any finding by a court or an
arbitrator that the Executive has engaged in a material violation of the covenants and obligations
contained in this Section 11. These remedies are cumulative and are in addition to any other
rights and remedies the Company may have at law or in equity. In no event shall an asserted
violation of the provisions of this Section 11 constitute a basis for deferring or withholding any
amounts otherwise payable to the Executive under this Agreement. The Company may withhold amounts
otherwise payable to the Executive and recoup amounts previously paid to the Executive under this
Agreement following a finding by a court or an
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arbitrator that Executive has engaged in a material violation of any of the provisions of the
covenants and obligations contained herein.
12. Successors. (a) This Agreement is personal to the Executive and, without the
prior written consent of the Company, shall not be assignable by the Executive. This Agreement
shall inure to the benefit of and be enforceable by the Executive’s legal representatives,
including by will or the laws of descent and distribution.
(b) This Agreement shall inure to the benefit of and be binding upon the Company and its
successors. The Company shall require any successor to all or substantially all of the business
and/or assets of the Company, whether direct or indirect, by purchase, merger, consolidation,
acquisition of stock, or otherwise, by an agreement in form and substance satisfactory to the
Executive, expressly to assume and agree to perform this Agreement in the same manner and to the
same extent as the Company would be required to perform if no such succession had taken place.
13. Miscellaneous.
(a) Applicable Law. This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Pennsylvania, applied without reference to principles of
conflict of laws.
(b) Arbitration. Except to the extent provided in Section 11(c), any dispute or
controversy arising under or in connection with this Agreement shall be resolved by binding
arbitration. The arbitration shall be held in the City of Pittsburgh, Commonwealth of
Pennsylvania, and except to the extent inconsistent with this Agreement, shall be conducted in
accordance with the Expedited Employment Arbitration Rules of the American Arbitration Association
then in effect at the time of the arbitration, and otherwise in accordance with principles which
would be applied by a court of law or equity. The arbitrator shall be acceptable to both the
Company and the Executive. If the parties cannot agree on an acceptable arbitrator, the dispute
shall be heard by a panel of three arbitrators, one appointed by each of the parties and the third
appointed by the other two arbitrators.
(c) Amendments and Termination. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their respective successors
and legal representatives. This Agreement may be terminated upon 30 days’ advance written notice
by either the Company or the Executive at any time prior to the Effective Date without liability.
(d) Entire Agreement. Excepting any plans, agreements or arrangements specifically
referred to in this Agreement, this Agreement constitutes the entire agreement between the parties
hereto with respect to the matters referred to herein. No other agreement relating to the terms of
the Executive’s employment by the Company, oral or otherwise, shall be binding between the parties
unless it is in writing and signed by the party against whom enforcement is sought. There are no
promises, representations, inducements or statements between the parties other than those that are
expressly contained herein. The Executive acknowledges that he is entering into this Agreement of
his own free will and accord, and with no duress, that he has read this Agreement and that he
understands it and its legal consequences.
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(e) Notices. All notices and other communications hereunder shall be in writing and
shall be given by hand-delivery to the other party or by registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:
If to the Executive:
|
at the home address of the Executive noted on the records of the Company | |
If to the Company:
|
Chairman of the Board Xxxxxxx Xxxxx Corporation Airside Business Park 000 Xxxxxxx Xxxxx Xxxx Xxxxxxxx, XX 00000 |
|
with a copy to:
|
Xxxx Xxxxx LLP Attn: Xxxxx X. XxXxxxx, Esq. 000 Xxxxx Xxxxxx Xxxxxxxxxx, XX 00000 |
or to such other address as either party shall have furnished to the other in writing in accordance
herewith. Notice and communications shall be effective when actually received by the addressee.
(f) Tax Withholding. The Company shall withhold from any amounts payable under this
Agreement such Federal, state, foreign, or local taxes or levies as shall be required to be
withheld pursuant to any applicable law or regulation.
(g) Severability; Reformation. In the event that one or more of the provisions of
this Agreement shall become invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall not be affected
thereby. In the event that any of the provisions of Section 11(a) or Section 11(c) are not
enforceable in accordance with its terms, the Executive and the Company agree that such Sections
shall be reformed to make such Sections enforceable in a manner which provides the Company the
maximum rights permitted at law.
(h) Waiver. Waiver by any party hereto of any breach or default by the other party
of any of the terms of this Agreement shall not operate as a waiver of any other breach or default,
whether similar to or different from the breach or default waived. No waiver of any provision of
this Agreement shall be implied from any course of dealing between the parties hereto or from any
failure by either party hereto to assert its or his rights hereunder on any occasion or series of
occasions.
(i) Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original but all of which together shall constitute one and the same instrument.
(j) Captions. The captions of this Agreement are not part of the provisions hereof
and shall have no force or effect.
-14-
IN WITNESS WHEREOF, the Executive has hereunder set his hand and the Company has caused this
Agreement to be executed in its name on its behalf, and its corporate seal to be hereunto affixed
and attested by its Secretary, all as of the day and year set forth below.
| [CORPORATE SEAL] | XXXXXXX XXXXX CORPORATION | |||||||||||||
| By: H. Xxxxx XxXxxxxx, Esquire | By: Xxxxxxx X. Xxxxxxx | |||||||||||||
| Title: | Secretary | Title: | President and Chief Executive Officer | |||||||||||
| EXECUTIVE | ||||||||||||||
| Witnessed | ||||||||||||||
| Date | ||||||||||||||
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