EXHIBIT 10.3(c)
EMPLOYMENT CONTINUATION AGREEMENT
THIS AGREEMENT between Xxxxxxx Xxxxx Corporation, a Pennsylvania
corporation (the "Company"), and Xxxxxxx X. Xxxxxxxx (the "Executive"), dated as
of this 23rd day of September 2002.
W I T N E S S E T H:
WHEREAS, the Company has employed the Executive in an officer position and
has determined that the Executive holds an important position with the Company;
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, to achieve these objectives, the Company and the Executive desire
to enter into an agreement providing the Company and the Executive with certain
rights and obligations upon the occurrence of a Change of Control or Potential
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. The effective date of this
Agreement shall be the date on which a Change of Control occurs (the "Effective
Date"), provided that, except as provided in Section 1(b), if the Executive is
not employed by the Company on the Effective Date, this Agreement shall be void
and without effect.
(b) Termination of Employment Following a Potential Change of Control.
Notwithstanding Section 1(a), if (i) the Executive's employment is terminated by
the Company without Cause (as defined in Section 6(c)) or by the Executive with
Good Reason (as defined in Section 6(d)) after the occurrence of a Potential
Change of
Control and prior to the occurrence of a Change of Control and (ii) a Change of
Control occurs within one year of such termination, the Executive shall be
deemed, solely for purposes of determining the Executive's rights under this
Agreement, to have remained employed until the Effective Date and to have been
terminated by the Company without Cause immediately after this Agreement becomes
effective.
2. Definitions.
(a) 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 in
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 (or related trust) sponsored or
maintained by the Company or by the Company's Employee Stock Ownership
Plan or related trust 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 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 any class of the Board 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 assets of the Company, 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
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(v) A majority of the Board otherwise determines that a Change in
Control shall have occurred.
(b) Potential Change of Control. For the purposes of this Agreement, a
Potential Change of Control shall be deemed to have occurred if:
(i) a Person commences a tender offer (with adequate financing) for
securities representing at least 30% of the Voting Power of the Company's
securities or announces or otherwise makes known a bona fide intent to
commence such a tender offer, excepting any offers that, if completed,
would result in an acquisition not constituting a Change of Control; or
(ii) the Company enters into an agreement the consummation of which
would constitute a Change of Control; or
(iii) there is commenced a solicitation of proxies for the election
of directors of the Company by anyone other than the Company which
solicitation, if successful, would effect a Change of Control; or
(iv) any other event occurs which is deemed to be a Potential Change
of Control by the Board in its reasonable determination after a
consideration of relevant facts and circumstances.
(c) Board. For purposes of this Agreement, "Board" shall mean the Board of
Directors of the Company.
(d) 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. Subject to Section 6 of this Agreement, the Company
agrees to continue the Executive in its employ, and the Executive agrees to
remain in the employ of the Company, for the period (the "Employment Period")
commencing on the Effective Date and ending on the twenty-four month anniversary
of the Effective Date.
4. Position and Duties. (a) No Reduction in Position. During the
Employment Period, the Executive's position (including titles), authority,
responsibilities and status 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 as contemplated by Section 12(b) of this
Agreement. The Executive's services shall be performed at the
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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 hereunder, to the extent
necessary to discharge such responsibilities, except for (i) time spent in
managing personal, financial and legal affairs and serving on corporate, civic
or charitable boards or committees, in each case only if and to the extent not
substantially interfering with the performance of such responsibilities, and
(ii) 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". Neither the Base Salary nor any increase in Base Salary after
the Effective Date shall serve to limit or reduce any other obligation of the
Company hereunder.
(b) Annual Bonus. During the Employment Period, in addition to the Base
Salary, for each fiscal year of the Company ending during the Employment Period
and for each partial fiscal year during the Employment Period, the Executive
shall be afforded the opportunity to receive an annual bonus or partial bonus,
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, provided that
the amount of bonus which shall be awarded to the Executive during each year of
the Employment Period shall be an amount not less than the average bonus earned
by such Executive during the five fiscal year period of the Company ending
immediately prior to the Effective Date (the "Annual Bonus Opportunity"), with
the average bonus calculated by dividing the total bonuses paid to the Executive
for such five 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 as soon as practicable following the year for which the amount (or prorated
portion) is earned or awarded, unless electively deferred by the Executive
pursuant to any deferral programs or arrangements that the Company may make
available to the Executive.
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(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. During the Employment Period, the
Company will offer such plans and programs to the Executive as were in effect
immediately prior to the Change of Control or, if more favorable to the
Executive when measured against particular plans or programs previously offered,
replacement plans or programs.
(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. During
the Employment Period, the Company will offer such plans and programs to the
Executive as were in effect immediately prior to the Change of Control or, if
more favorable to the Executive when measured against particular plans or
programs previously offered, replacement plans or programs. All payments by the
Company hereunder excepting payments for Accrued Obligations 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 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.
(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.
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(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. 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. (a) Death, Disability or Retirement. Subject to the
provisions of Section 1 hereof, this Agreement shall terminate automatically
upon the Executive's death, termination due to permanent and total disability
("Disability") within the meaning of section 22(e)(3) 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. Notwithstanding anything in this Agreement to
the contrary, following a Change of Control 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; or (iii) the willful
and continued failure by Executive to substantially perform the required duties
with the Company (other than any such failure 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.
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(d) Good Reason. Following the occurrence of a Change of Control or
Potential 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 or Potential Change of Control:
(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, 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, other than an insubstantial or inadvertent
failure remedied by the Company promptly after receipt of notice thereof
given by the Executive;
(iii) any purported termination of the employment of the Executive
by the Company which is not due to the Executive's Disability, death,
retirement, 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 Company's requiring the Executive to be based at any office
or 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 that location at
which the Executive performed services specified under the provisions of
Section 4 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).
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.
(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 10 business 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 180 days of the Executive's having
actual knowledge of the
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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.
7. Obligations of the Company upon Termination. (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 under this Agreement 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) (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 as soon as
practicable, but in no event more than 30 days (or at such earlier date required
by law), 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 Executive (other than on account of Good Reason following a Change of
Control), the Company shall pay the Executive (i) the Earned Salary in cash in a
single lump sum as soon as practicable, but in no event more than 30 days (or at
such earlier date required by law), following the Date of Termination, and (ii)
the Accrued Obligations in accordance with the terms of the applicable plan,
program or arrangement.
(c) Termination by the Company other than for Cause and Termination by the
Executive for Good Reason.
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(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 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 five fiscal years of the Company ending immediately
prior to the Effective Date calculated by dividing the
total bonuses paid to the Executive for such five year
period by the total number of years for which any bonus
was paid; and
(C) the Accrued Obligations.
The Earned Salary and Severance Amount shall be paid in cash in a single lump
sum as soon as practicable, but in no event more than 30 days (or at such
earlier date required by law), following the Date of Termination. Accrued
Obligations shall be paid in accordance with the terms of the applicable plan,
program or arrangement.
(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 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"). To the extent any such
benefits cannot be provided 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. 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.
(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")
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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 which
of the payments and benefits otherwise provided for 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
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(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 the Executive receives reduced payments and benefits, under
this Section 7(d) (or this Section 7(d) is determined not to be applicable
to the Executive because the Accountants conclude that Executive is not
subject to any Excise Tax) and 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 amount equal to such excess parachute payments shall be deemed for all
purposes to be a loan to the Executive made on the date of receipt of such
excess payments, which the Executive shall have an obligation to repay to
the Company on demand, 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. If this Section 7(d) is not applied to reduce the Executive's
entitlements under this Section 7 because the Accountants determine that
the Executive would not receive a greater net-after-tax benefit by
applying this Section 7(d) and it is established pursuant to a Final
Determination that, notwithstanding the good faith of the Executive and
the Company in applying the terms of this Agreement, the Executive would
have received a greater net-after-tax benefit by subjecting the
Executive's payments and benefits hereunder to the Payment Cap, then the
aggregate "parachute payments" paid to the Executive or for the
Executive's benefit in excess of the Payment Cap shall be deemed for all
purposes a loan to the Executive made on the date of
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receipt of such excess payments, which the Executive shall have an
obligation to repay to the Company on demand, 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. If the Executive receives reduced payments and
benefits by reason of this Section 7(d) and it is established pursuant to
a Final Determination that the Executive could have received a greater
amount without exceeding the Payment Cap, then the Company shall promptly
thereafter pay the Executive the aggregate additional amount which could
have been paid without exceeding the Payment Cap, together with interest
on such amount at the applicable Federal rate (as defined in Section
1274(d) of the Code) from the original payment due date to the date of
actual payment by the Company.
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. 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. 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,
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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, 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.
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, 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.
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.
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(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(d), 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. 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.
(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.
(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:
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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
Xxxxxxx Xxxxxx Xxxx, Xxxxxxxx #0
000 Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 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) Effect of Agreement on Rights of Executive. The Executive and the
Company acknowledge that, except as may otherwise be provided under any other
written agreement between the Executive and the Company, the employment of the
Executive by the Company is "at will" and, prior to the Effective Date, the
Executive's employment may be terminated by either the Executive or the Company
at any time prior to the Effective Date, in which case the Executive shall have
no further rights under this Agreement except in circumstances relating to a
Potential Change of Control as provided for herein.
(i) 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.
(j) 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.
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(k) Captions. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect.
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 first above written.
[CORPORATE SEAL] XXXXXXX XXXXX CORPORATION
/s/ H. Xxxxx XxXxxxxx /s/ Xxxxxx X. Xxxxxxx
------------------------------------ ------------------------------------
By: H. Xxxxx XxXxxxxx By: Xxxxxx X. Xxxxxxx
Title: Secretary Title: Executive Vice President and
Chief Resource Officer
EXECUTIVE
/s/ Xxxxxxxx X. Xxxxx /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------ ------------------------------------
Witnessed Xxxxxxx X. Xxxxxxxx
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