Exhibit 10I
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into as of this
18th day of July, 2000 (the "Effective Date"), by and between Xxxxxxx
Corporation, a Delaware corporation (the "Company"), and Xxxxx Xxxxxxxx Xxxx,
Xx. (the "Executive").
WHEREAS, the Company desires to employ the Executive, and the
Executive desires to be employed by the Company, on the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and other good and valuable consideration, the
receipt and sufficiency of which hereby are acknowledged, the parties hereto
agree as follows:
1. Employment. On the terms and conditions set forth in this
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Agreement, the Company agrees to employ the Executive, and the Executive agrees
to be employed by the Company, for the term set forth in Section 2 hereof and in
the position and with the duties set forth in Section 3 hereof.
2. Term. The employment of the Executive by the Company as provided in
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Section 1 hereof shall commence on the date of execution of this Agreement (the
"Effective Date") and, unless sooner terminated as hereinafter set forth, shall
end three (3) years thereafter; provided that, unless sooner terminated as
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hereinafter set forth, the term of this Agreement shall be extended
automatically for additional one (1) year periods on the second anniversary date
of this Agreement and each subsequent anniversary date (the "Applicable
Anniversary Notice Date"), unless and until either party provides written notice
to the other party not less than ninety (90) days prior to the Applicable
Anniversary Notice Date that the party is terminating this Agreement, which
termination shall be effective as of the end of the initial term or extended
term, as the case may be.
3. Position and Duties. The Executive shall serve as the Chief
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Operating Officer of the Company, or in another position of equal or greater
title, authority and responsibility, as assigned by the Chief Executive Officer
of the Company or the board of directors of the Company (the "Board"), with
duties and responsibilities as the Chief Executive Officer of the Company or the
Board may from time to time determine and assign to the Executive. The Executive
agrees to serve without additional compensation, if elected or appointed
thereto, as a director of the Company and any of its subsidiaries and in one or
more executive offices of any of the Company's subsidiaries, provided that the
Executive is indemnified for serving in any and all director capacities on a
basis no less favorable than is
currently provided by the Company to any other director of the Company or any of
its subsidiaries. The Executive shall devote the Executive's best efforts and
full business time to the performance of the Executive's duties and the
advancement of the business and affairs of the Company.
4. Place of Performance. In connection with the Executive's employment
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by the Company, the Executive shall be based at the principal executive offices
of the Company which the Company retains the right to change in its discretion
or at such other place as the Company and the Executive mutually agree and
subject to Section 9(c)(iv) hereof.
5. Compensation.
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(a) Base Salary. The Company shall pay to the Executive an annual
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base salary (the "Base Salary") at the rate of $600,000 per year. The Base
Salary shall be reviewed for increases no less frequently than annually on the
same basis as such salary reviews are made with respect to other executive
officers of the Company. If the Executive's Base Salary is increased, the
increased amount shall be the Base Salary for the remainder of the term of the
Executive's employment hereunder. The Base Salary shall be payable biweekly or
in such other installments as shall be consistent with the Company's payroll
procedures.
(b) Annual Bonus. During the first and each succeeding calendar
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year of the term, the Executive shall have a target bonus opportunity of 100% of
the Executive's Base Salary, and a maximum bonus opportunity for extraordinary
performance, expressed as a percentage of the target bonus opportunity, not less
favorable than that provided for the Executive on the Effective Date, or for the
President and Chief Executive Officer, following any appointment to that office,
(the "Annual Bonus"). The amount of the Annual Bonus shall be determined by the
Compensation Committee of the Board in its sole discretion, based upon the
Company's achievement of pre-established, objective budgetary and other
performance goals. For any year in which the Company has a shareholder approved
bonus plan meeting the requirements of Section 162(m) of the Internal Revenue
Code, such bonus shall be determined by such committee in a manner that will
permit the Annual Bonus payable to the Executive to be fully deductible by the
Company. The amount of each Annual Bonus shall be determined and paid not later
than 15 days after the Company's earnings for the preceding fiscal year have
been publicly announced. The Executive shall be entitled to a pro-rata portion
of the target Annual Bonus for any calendar year (or fiscal year, if other than
a calendar year) in which his termination of employment occurs except in the
case of a termination for Cause pursuant to Section 9(b)(ii) or a termination by
the Executive without Good Reason.
(c) Other Benefits. The Company shall maintain in full force and
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effect, and the Executive shall be entitled to participate in, all of the
employee
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benefit and fringe benefit plans and arrangements in effect on the date hereof
in which executives of the Company participate or plans or arrangements
providing the Executive with at least equivalent benefits thereunder (including,
without limitation, the Executive Deferred Incentive Program, and each group
life insurance and accident plan, medical and dental insurance plans, and
disability plan); provided, however, that, changes in such plans or arrangements
may be made, including termination of such plans or arrangements if it occurs
pursuant to a program applicable to all executives of the Company and does not
result in a proportionately greater reduction in the rights of or benefits to
the Executive as compared with any other executive of the Company.
Notwithstanding any other provision of this sub-paragraph, during the term of
the Executive's employment hereunder, the Company shall provide the Executive
with term life insurance (which may include any group life insurance arrangement
provided by the Company to its other employees), covering the Executive's life
in a face amount each year equal to six times the Executive's base salary for
such year through age fifty five, at which time the face amount of such
insurance coverage may be decreased by the Company to four times the Executive's
base salary (the "Age 55 Face Amount") and thereafter the face amount may be
decreased by the Company by ten percent of the Age 55 Face Amount upon each
birthday of the Executive thereafter. The Executive agrees to cooperate with the
Company in obtaining such insurance, including submitting to a physical
examination if required to do so by the insurance carrier. The beneficiary of
this insurance will be designated by the Executive and if not so designated, the
beneficiary will be his estate. Nothing paid to the Executive under any fringe
plan or arrangement presently in effect or made available in the future shall be
deemed to be in lieu of the salary payable to the Executive pursuant to Section
5(a). Any payments or benefits payable to the Executive hereunder in respect of
any calendar year during which the Executive is employed by the Company for less
than the entire such year shall, unless otherwise provided in the applicable
plan or arrangement be pro-rated in accordance with the number of days in such
calendar year during which he is so employed.
(d) Vacation; Holidays. The Executive shall be entitled to all
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public holidays observed by the Company and vacation days in accordance with the
applicable vacation policies in effect for senior executives of the Company,
which shall be taken at a reasonable time or times.
(e) Relocation Assistance Loan. In addition to the Company's
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standard relocation package, a copy of which is attached as Exhibit 1, the
Company shall lend to the Executive, on an interest-free basis, the sum of
$500,000 (the "Loan") to assist him in meeting his relocation expenses, with the
loan proceeds to be payable to the Executive within fourteen (14) days after the
execution by the Executive of a Promissory Note substantially in the form
attached as Exhibit 2. The Company shall also make lump-sum payments sufficient,
after giving effect to all federal, state and other applicable taxes, to make
the Executive whole for any taxes that might be incurred as a result of the
making of, any imputation of interest
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on, or forgiveness of, the Loan. The Executive agrees that in the event that
his employment with the Company is terminated for Cause or without Good Reason
prior to the third anniversary of the Effective Date, he shall repay to the
Company a pro rata portion of the Loan based on the following formula:
Amount of Loan Repayment = $500,000
x
(1095 - Number of Days from the Effective
Date until the Date of Termination) / 1095
Any repayment called for under this Section shall be made to the
Company within fourteen (14) days of the Executive's Date of Termination;
alternatively, at the Company's sole discretion, the loan repayment obligation
may be satisfied, in whole or in part, by the Company offsetting that obligation
against amounts owed to the Executive by the Company. If the Executive's
employment continues beyond the third anniversary of the Effective Date, or if
the Executive's employment is terminated prior to such date for any reason other
than Cause or without Good Reason, then the Company shall forgive the Loan in
its entirety as of the Date of Termination.
(f) Withholding Taxes and Other Deductions. To the extent required
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by law, the Company shall withhold from any payments due Executive under this
Agreement any applicable federal, state or local taxes and such other deductions
as are prescribed by law or Company policy.
(g) Club Memberships. During the term of the Executive's employment
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hereunder, the Company shall reimburse the Executive for the cost of maintaining
annual membership during the term in his existing club and the cost of joining
and maintaining annual membership during the term in a club of his choosing
located within the District of Columbia, or the suburban Maryland or Virginia
area adjacent to the District of Columbia.
(h) Tax and Financial Planning. During the term of the Executive's
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employment hereunder, the Company shall reimburse the Executive for the
reasonable expenses incurred by the Executive in connection with obtaining
professional tax and financial planning advice.
(i) Annual Physical Examination. During the term of the Executive's
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employment hereunder, the Company shall reimburse the Executive for the
reasonable expenses incurred by the Executive in undergoing an annual physical
examination by a licensed physician.
(j) Compensation During Disability. During any period that the
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Executive fails to perform the Executive's duties hereunder as a result of
incapacity due to physical or mental illness (the "Disability Period"), the
Executive shall be treated as fully employed and shall continue to receive, or
receive the benefit of (as
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the case may be) all items described in Section 5 hereof at the rate then in
effect for such period until his employment is terminated pursuant to
Section 9(b)(i) hereof; provided, that payments made to the Executive during
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the first 180 days of the Disability Period shall be reduced by the sum of the
amounts, if any, payable to the Executive at or prior to the time of any payment
under disability benefit plans of the Company and which amounts were not
previously applied to reduce any payment.
6. Expenses. During the term of the Executive's employment hereunder,
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the Executive shall be entitled to receive prompt reimbursement for all
reasonable and customary expenses incurred by the Executive in performing
services hereunder, including all expenses of travel and living expenses while
away from home on business or at the request of and in the service of the
Company, provided that all such expenses are accounted for in accordance with
the policies and procedures established by the Company. The Company shall also
provide the Executive during the term of his employment hereunder with an
automobile allowance of $2,000 per month.
7. Confidential Information.
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(a) The Executive covenants and agrees that the Executive will not
ever, without the prior written consent of the Board or a person authorized by
the Board or except as may be ordered by a court of competent jurisdiction,
publish or disclose to any unaffiliated third party or use for the Executive's
personal benefit or advantage any confidential information with respect to the
Company's past, present, or planned business, including but not limited to all
information and materials related to any Company business, business plan,
product, service, procedure, strategy, method (including the Xxxxxxx Business
System), technique, technology, research, strategy, plan, customer or supplier
information, customer or supplier list, financial data, technical data, computer
files, and computer software, including any of the foregoing that is in any
stage of research, development, or planning, and any other information which the
Executive obtained while employed by, or otherwise serving or acting on behalf
of, the Company or which the Executive may possess or have under his control,
that is not generally known (except for unauthorized disclosures) to the public
or within the industry in which the Company does business. This covenant shall
not limit the Executive's use of such confidential information in the normal
course of his performance of services for the Company.
(b) The Executive acknowledges that the restrictions contained in
Section 7(a) hereof are reasonable and necessary, in view of the nature of the
Company's business, in order to protect the legitimate interests of the Company,
and that any violation thereof would result in irreparable injury to the
Company. Therefore, the Executive agrees that in the event of a breach or
threatened breach by the Executive of the provisions of Section 7(a) hereof, the
Company shall be
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entitled to obtain from any court of competent jurisdiction, preliminary or
permanent injunctive relief restraining the Executive from disclosing or using
any confidential information. Nothing herein shall be construed as prohibiting
the Company from pursuing any other remedies available to it for breach or
threatened breach, including, without limitation, recovery of damages from the
Executive.
(c) The Executive shall deliver promptly to the Company on
termination of employment, or at any other time the Company may so request, all
confidential materials, memoranda, notes, records, reports and other documents
and materials (and all copies thereof), in whatever form or medium, that contain
any of the foregoing, including but not limited to computer data, files,
software, and hardware, relating to the Company's or its affiliates' respective
businesses which the Executive obtained while employed by, or otherwise serving
or acting on behalf of, the Company or which the Executive may then possess or
have under his control.
8. Non-Competition.
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(a) Non-Competition. The Executive covenants and agrees that the
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Executive will not, during the Executive's employment hereunder and for a period
of three (3) years thereafter (to the extent permitted by law), at any time and
in the United States or any other jurisdiction in which the Company is engaged
or has reasonably firm plans to engage in business, enter into any competitive
endeavors and not undertake any commercial activity which is contrary to the
best interests of the Company or its subsidiaries or affiliates, including
becoming an employee, owner (except for passive investments of not more than
three percent (3%) of the outstanding shares of, or any other equity interest
in, any company or entity listed or traded on a national securities exchange or
in an over-the-counter securities market), officer, agent, advisor, consultant
or director of any firm or person which directly competes with a line or lines
of business of the Company.
(b) Injunctive Relief. In the event the restrictions against
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engaging in a competitive activity contained in Section 8(a) hereof shall be
determined by any court of competent jurisdiction to be unenforceable by reason
of their extending for too great a period of time or over too great a
geographical area or by reason of their being too extensive in any other
respect, Section 8(a) hereof shall be interpreted to extend only over the
maximum period of time for which it may be enforceable and over the maximum
geographical area as to which it may be enforceable and to the maximum extent in
all other respects as to which it may be enforceable, all as determined by the
court in the action.
(c) Non-Solicitation. The Executive covenants and agrees that the
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Executive will not, during the Executive's employment hereunder and for a period
of three (3) years thereafter solicit, induce, entice, or encourage or attempt
to solicit, induce, entice, or encourage any employee of the Company or any of
the Company's
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affiliates to render services for any other person, firm, entity, or
corporation or to terminate his or her employment with the Company.
9. Termination of Employment.
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(a) Death. The Executive's employment hereunder shall terminate
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upon the Executive's death.
(b) By the Company. The Company may terminate the Executive's
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employment hereunder under the following circumstances:
(i) The Company may terminate the Executive's employment
hereunder for "Disability." For purposes of this Agreement, the Company shall
have the right to terminate the Executive's employment by reason of "Disability"
if, as a result of the Executive's incapacity due to physical or mental illness,
the Executive shall have been absent from his duties hereunder on a full-time
basis for the entire period of six (6) consecutive months, and within thirty
(30) days after written notice of termination is given shall not have returned
to the performance of his duties hereunder on a full-time basis.
(ii) The Company may terminate the Executive's employment
hereunder with or without "Cause." For purposes of this Agreement, "Cause" shall
mean (A) the willful and continued failure by the Executive to substantially
perform his duties hereunder (other than any such failure resulting from the
Executive's incapacity due to physical or mental illness or any such actual or
anticipated failure after the issuance of a Notice of Termination, as defined in
Section 9(e), by the Executive for Good Reason, as defined in Section 9(c)),
after demand for substantial performance is delivered by the Company that
specifically identifies the manner in which the Company believes the Executive
has not substantially performed his duties, which is not cured within 10 days
after notice of such failure has been given to the Executive by the Company, (B)
the willful engaging by the Executive in misconduct which is materially
injurious to the Company, monetarily or otherwise (including, but not limited
to, conduct that violates Section 8(a) hereof), or (C) the Executive's
conviction of any felony. For purposes of this paragraph, no act, or failure to
act, on the Executive's part shall be considered "willful" unless done, or
omitted to be done by him not in good faith and without reasonable belief that
his action or omission was in the best interest of the Company.
(iii) The Company, in the sole discretion of the Board, may
terminate the Executive's employment hereunder at any time other than for
Disability or Cause, for any reason or for no reason at all.
(c) By the Executive. The Executive may terminate the Executive's
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employment hereunder at any time, with or without "Good Reason." For purposes of
this Agreement, "Good Reason" shall mean any one or more of the following
circumstances:
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(i) A failure by the Company to comply with any material
provision of this Agreement which has not been cured within ten (10) days after
notice of such noncompliance has been given by the Executive to the Company,
including, without limitation, any failure to appoint or continue the Executive
to an office or position as required by this Agreement;
(ii) Any purported termination of the Executive's employment
which is not effected pursuant to a Notice of Termination satisfying the
requirements of Section 9(e) hereof (and for purposes of this Agreement no such
purport ed termination shall be effective);
(iii) The assignment to the Executive of any duties materially
inconsistent with his status as the Chief Operating Officer, or as the President
and Chief Executive Officer of the Company (as applicable at the time when the
events enumerated in this paragraph (iii) occur) or a material adverse
alteration in the nature or status of his responsibilities in connection with
such positions;
(iv) Relocation of the Executive to a location which is not
within Washington, the District of Columbia, or the suburban Maryland or
Virginia area adjacent to the District of Columbia, except for required travel
on the Company's business to an extent substantially consistent with the
Executive's business travel obligations;
(v) The failure by the Company to continue in effect any
compensation or benefit plan in which the Executive participated as of the
Effective Date and which is material to the Executive's aggregate compensation
and benefits hereunder, unless an equitable arrangement (embodied in an ongoing
substitute or alternative plan) has been made with respect to such plan, or the
failure by the Company to continue the Executive's participation therein (or in
such substitute or alternative plan) on a basis not materially less favorable,
both in terms of the amount of benefits provided and the level of the
Executive's participation relative to other participants, as existed at the
Effective Date;
(vi) If there is a Change of Control, merger, acquisition or
other similar affiliation with another entity (a "Corporate Event") and the
Executive does not continue as the Chief Operating Officer, or any other more
senior office or directorship he holds immediately prior to such Corporate
Event, of the most senior resulting entity of the affiliated group of which
Company or the surviving entity is a member after the Corporate Event; or
(vii) The failure of the Company to obtain a satisfactory
agreement from any successor to assume and agree to perform this Agreement.
(d) Change of Control. For the purpose of this Agreement, a "Change
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of Control" shall mean any one or more of the following circumstances:
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(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")) (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of the
greater of (1) 30% or more of either (A) the then-outstanding shares of common
stock of the Company (the "Outstanding Company Common Stock") or (B) the
combined voting power of the then-outstanding voting securities of the Company
entitled to vote generally in the election of directors (the "Outstanding
Company Voting Securities") and (2) the lowest whole number percentage which is
greater than the combined percentage of the Outstanding Company Common Stock or
the Outstanding Company Voting Securities owned by Xxxxxx and Xxxxxxxx Xxxxx and
affiliates (within the meaning of Rule 12b-2 of the Securities Exchange Act of
1934, as amended) of Xxxxxx and Xxxxxxxx Xxxxx (without duplication); provided,
however, that for purposes of this subsection any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company shall not constitute a Change of Control;
or
(ii) Individuals who, as of the date hereof, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though the individual were a member of the Incumbent Board, but
excluding, for this purpose, any individual whose initial assumption of office
occurs as a result of an actual or threatened election contest with respect to
the election or removal of directors or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the Board; or
(iii) Consummation of a reorganization, merger or consolidation
or sale or other disposition of all or substantially all of the assets of the
Company (a "Business Combination"), in each case, unless, following a Business
Combination, all or substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to the Business
Combination beneficially own, directly or indirectly, more than 50% of,
respectively, the then- outstanding shares of common stock and the combined
voting power of the then-outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from the Business Combination (including, without limitation, a
corporation which as a result of the transaction owns the Company or all or
substantially all of the Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to the Business Combination of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as the case may be; or
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(iv) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
(e) Notice of Termination. Any termination of the Executive's
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employment by the Company or the Executive (other than pursuant to Section 9(a)
hereof) shall be communicated by written "Notice of Termination" to the other
party hereto in accordance with Section 11 hereof. For purposes of this
Agreement, a "Notice of Termination" shall mean a notice which shall indicate
the specific termination provision in this Agreement relied upon, if any, and,
if for "Cause" or for "Good Reason", shall set 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.
(f) Date of Termination. For purposes of this Agreement, the "Date
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of Termination" shall mean (i) if the Executive's employment is terminated by
the Executive's death, the date of the Executive's death; (ii) if the
Executive's employment is terminated pursuant to Section 9(b)(i) hereof, thirty
(30) days after Notice of Termination, provided that the Executive shall not
have returned to the performance of the Executive's duties on a full-time basis
during this 30-day period; (iii) if the Executive's employment is terminated
pursuant to Section 9(b)(ii) or 9(c) hereof, the date specified in the Notice of
Termination; and (iv) if the Executive's employment is terminated for any other
reason, the date on which Notice of Termination is given.
10. Compensation Upon Termination.
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(a) If the Executive's employment is terminated by the Executive's
death, the Company shall pay or provide the following amounts to the Executive's
estate, or as may be directed by the legal representatives of the estate, not
later than 14 days from the Date of Termination in the case of the payments
referred to in clauses (i), (ii) and (iii) below and, at the time when such
payments are due, in the case of the payments referred to in clause (iv) below
(the respective "Payment Due Dates") and the Company shall have no further
obligations to the Executive under this Agreement:
(i) Base Salary through the Date of Termination;
(ii) the balance of any annual or long-term cash incentive
awards (if any) earned (but not yet paid) pursuant to the terms of the
applicable programs;
(iii) any deferred compensation (together with any accrued
interest or earnings thereon) including but not limited to deferred bonuses
allocated or credited to the Executive or his account as of the Date of
Termination, or date of payment, if later; and
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(iv) the pro-rata Annual Bonus determined in accordance with
Section 5(b), and any other or additional benefits in accordance with applicable
plans or programs of the company.
For purposes of this Agreement, the amounts listed in subsections (i)
through (iv) above shall be collectively referred to as the "Accrued
Obligations."
(b) (i) If the Company terminates the Executive's employment for
Disability as provided in Section 9(b)(i) hereof, the Company shall pay or
provide the Executive all of the Accrued Obligations, on the respective Payment
Due Dates, and the Company shall have no further obligations to the Executive
under this Agreement except as provided in clause (ii) below; provided, that
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payments made to the Executive during the Disability Period shall be reduced by
the sum of the amounts, if any, payable to the Executive at or prior to the time
of any payment under disability benefit plans of the Company, to the extent not
previously applied to reduce any payment.
(ii) The Company shall maintain in full force and effect, for
the continued benefit of the Executive for twelve months following the Date of
Termination due to Disability, all employee welfare benefit plans and programs
in which the Executive was entitled to participate immediately prior to the Date
of Termination provided that the Executive's continued participation is possible
under the general terms and provisions of such plans and programs. In the event
that the Executive's participation in any such plan or program is barred, the
Company shall arrange to provide the Executive with benefits substantially
similar to those which the Executive would otherwise have been entitled to
receive under such plans and programs from which his continued participation is
barred.
(c) If the Company terminates the Executive's employment for Cause
as provided in Section 9(b)(ii) hereof, or if the Executive terminates his
employment without Good Reason, the Company shall pay or provide, on the
respective Payment Due Dates, the Executive all of the Accrued Obligations,
other than the pro-rata bonus, and the Company shall have no further obligations
to the Executive under this Agreement.
(d) If the Company terminates the Executive's employment other than
for Cause or Disability or if the Executive terminates the Executive's
employment for Good Reason as provided in Section 9(c) hereof, or if the Company
terminates this Agreement by giving notice of termination pursuant to Section 2,
the Company shall pay or provide, on the respective Payment Due Dates or as
otherwise provided below, and shall have no further obligations to the
Executive:
(i) The Accrued Obligations;
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(ii) An amount equal to the sum of (x) the Executive's Base
Salary and (y) the target Annual Bonus for the year of termination, in
substantially equal proportionate installments in accordance with the Company's
normal payroll practices, commencing with the first payroll period in the month
following the month in which the Date of Termination occurs, for a period of two
years;
(iii) The Company shall pay all reasonable legal fees and
expenses incurred by the Executive as a result of such termination, including
the reasonable fees and expenses of enforcing the terms of this Agreement, if
the Executive establishes that he was terminated without Cause or terminated his
employment for Good Reason, or in connection with any tax audit or proceeding to
the extent attributable to the application of Section 4999 of the Internal
Revenue Code of 1986 as amended (the "Code") to any payment or benefit provided
hereunder;
(iv) For two years after the Date of Termination, or any longer
period as may be provided by the terms of the appropriate plan, program,
practice or policy, the Company shall continue benefits to the Executive and the
Executive's family at least equal to those which would have been provided to
them in accordance with the welfare benefit plans, practices, policies and
programs provided by the Company and its affiliated companies (including,
without limitation, medical, prescription, dental, disability, employee life,
group life, accidental death and travel accident insurance plans and programs)
to the extent applicable generally to other peer employees of the Company and
its affiliated companies, as if the Executive's employment had not been
terminated; provided, however, that if the Executive becomes reemployed with
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another employer and is eligible to receive medical or other welfare benefits
under another employer provided plan, the medical and other welfare benefits
described herein shall be secondary to those provided under the other plan
during the applicable period of eligibility; and
(v) To the extent not theretofore paid or provided, the Company
shall timely pay or provide to the Executive any other amounts or benefits
required to be paid or provided or which the Executive is eligible to receive
under any plan, program, policy or practice or contract or agreement of the
Company and its affiliated companies.
(e) Excise Tax Restoration Payment. In the event that it is
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determined that any payment or distribution of any type to or for the benefit of
the Executive made by the Company, by any of its affiliates, by any person who
acquires ownership or effective control or ownership of a substantial portion of
the Company's assets (within the meaning of section 280G of the Code) or by any
affiliate of this person, whether paid or payable or distributed or
distributable pursuant to the terms of an employment agreement or otherwise (the
"Total Payments"), would be subject to the excise tax imposed by section 4999 of
the Code
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or any interest or penalties with respect to the excise tax (the excise
tax, together with any interest or penalties, are collectively referred to as
the "Excise Tax"), then the Executive shall be entitled to receive an additional
payment (an "Excise Tax Restoration Payment") in an amount that shall fund the
payment by the Executive of any Excise Tax on the Total Payments as well as all
income taxes imposed on the Excise Tax Restoration Payment, any Excise Tax
imposed on the Excise Tax Restoration Payment and any interest or penalties
imposed with respect to taxes on the Excise Tax Restoration or any Excise Tax.
(f) Mitigation. The Executive shall not be required to mitigate
----------
amounts payable pursuant to Section 10 hereof by seeking other employment
provided, however, that the Company's obligation to continue to provide the
-------- -------
Executive with fringe benefits pursuant to this Agreement above, shall cease if
the Executive and his family become eligible to participate in fringe benefits
substantially similar to those provided for in this Agreement as a result of the
Executive's employment during the period that the Executive and his family is
entitled to these fringe benefits.
(g) No Additional Payments. Notwithstanding anything to the
----------------------
contrary in this Agreement, the Executive acknowledges and agrees that in the
event of the termination of his employment, even if in breach of this Agreement,
he will be entitled only to those payments specified herein for the
circumstances of his termination, and not to any other payments by way of
damages or claims of any nature, whether under this Agreement or under any other
agreements between the Executive and the Company.
11. Notices. All notices, demands, requests or other communications
-------
required or permitted to be given or made hereunder shall be in writing and
shall be delivered, telecopied or mailed by first class registered or certified
mail, postage prepaid, addressed as follows:
(a) If to the Company:
Xxxxxxx Corporation
0000 00xx Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
(000) 000-0000
Telecopy: (000) 000-0000
Attention: Secretary
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(b) If to the Executive:
Xxxxx Xxxxxxxx Xxxx, Xx.
c/x Xxxxxxx Corporation
0000 00xx Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
(000) 000-0000
Telecopy: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxxx X. Xxxxx, Esq.
Xxxxxxx Xxxx & Xxxxxxxxx
000 0xx Xxxxxx
Xxx Xxxx, XX 00000
(000) 000-0000
Telecopy: (000) 000-0000
or to such other address as may be designated by either party in a notice to the
other. Each notice, demand, request or other communication that shall be given
or made in the manner described above shall be deemed sufficiently given or made
for all purposes three (3) days after it is deposited in the U.S. mail, postage
prepaid, or at such time as it is delivered to the addressee (with the return
receipt, the delivery receipt, the answer back or the affidavit of messenger
being deemed conclusive evidence of delivery) or at such time as delivery is
refused by the addressee upon presentation.
12. Severability. The invalidity or unenforceability of any one or
------------
more provisions of this Agreement shall not affect the validity or
enforceability of the other provisions of this Agreement, which shall remain in
full force and effect.
13. Survival. It is the express intention and agreement of the parties
--------
hereto that the provisions of Sections 7 and 8 hereof shall survive the
termination of employment of the Executive. In addition, all obligations of the
Company to make payments hereunder shall survive any termination of this
Agreement on the terms and conditions set forth herein.
14. Successors and Assigns.
----------------------
(a) This Agreement is personal to the Executive and without the
prior written consent of the Company shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Executive's legal
representatives.
(b) This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns.
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(c) The Company will require any successor or any party that
acquires control of the Company (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company or any party that acquires control of the Company
to assume expressly and agree to perform this Agreement in the same manner and
to the same extent that the Company would be required to perform it if no
succession had taken place. As used in this Agreement, "Company" shall mean the
Company as hereinbefore defined and any successor to its business and/or assets
as aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
15. Resolution of Disputes. Any disputes arising under on in
----------------------
connection with this Agreement shall, at the election of the Executive or the
Company, be resolved by binding arbitration, to be held in Washington, D.C. in
accordance with the rules and procedures of the American Arbitration
Association. Judgment upon the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof. Each party shall bear its own
costs and expenses in connection with any arbitration or court proceeding
(including fees and disbursements of counsel), subject to Section 10(d)(iii)
hereof.
16. Legal Fees. The Company shall promptly pay the legal fees and
----------
expenses incurred by the Executive in connection with negotiation and execution
of this Agreement.
17. Binding Effect. Subject to any provisions hereof restricting
--------------
assignment, this Agreement shall be binding upon the parties hereto and shall
inure to the benefit of the parties and their respective heirs, devisees,
executors, administrators, legal representatives, successors and assigns.
18. Amendment; Waiver. This Agreement shall not be amended, altered or
-----------------
modified except by an instrument in writing duly executed by the parties hereto.
Neither the waiver by either of the parties hereto of a breach of or a default
under any of the provisions of this Agreement, nor the failure of either of the
parties, on one or more occasions, to enforce any of the provisions of this
Agreement or to exercise any right or privilege hereunder, shall thereafter be
construed as a waiver of any subsequent breach or default of a similar nature,
or as a waiver of any provisions, rights or privileges hereunder.
19. Headings. Section and subsection headings contained in this
--------
Agreement are inserted for convenience of reference only, shall not be deemed to
be a part of this Agreement for any purpose, and shall not in any way define or
affect the meaning, construction or scope of any of the provisions hereof.
20. Governing Law. This Agreement, the rights and obligations of the
-------------
parties hereto, and any claims or disputes relating thereto, shall be governed
by
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and construed in accordance with the laws of the State of Delaware (but not
including the choice of law rules thereof).
21. Entire Agreement. This Agreement constitutes the entire agreement
----------------
between the parties hereto with respect to the subject matter hereof, and it
supersedes all prior oral or written agreements, commitments or understandings
with respect to the matters provided for herein other than stock option
agreements and certificates and the Company's employee benefit plans which are
covered by the Employee Retirement Income Security Act of 1974.
22. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be an original and all of which shall be
deemed to constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement,
or have caused this Agreement to be duly executed on their behalf, as of the day
and year first hereinabove written.
XXXXXXX CORPORATION
By: /s/ Xxxxxx X. Xxxxx
-------------------
Name: XXXXXX X. XXXXX
Title: Chairman of the Board
Date of Execution:____________
THE EXECUTIVE:
/s/ X.X. Xxxx, Xx.
-------------------
Xxxxx Xxxxxxxx Xxxx, Xx.
Date of Execution: October 13, 2000
----------------
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PROMISSORY NOTE
$500,000.00 WASHINGTON, D.C.
October 13, 2000
FOR VALUE RECEIVED, the undersigned Xxxxx Xxxxxxxx Xxxx, Xx.
(hereinafter "Xxxx") hereby promises to pay to the order of Xxxxxxx Corporation,
0000 00xx Xxxxxx, Xxxxx 000, X.X., Xxxxxxxxxx, X.X. 00000 (hereinafter called
the "Company") the principal amount of FIVE HUNDRED THOUSAND DOLLARS
($500,000.00), without interest, in the manner set forth herein.
This Note and the indebtedness evidenced hereby are being provided
pursuant to the terms of the employment agreement dated July 18, 2000 (the
"Effective Date") between Xxxx and the Company (the "Employment Agreement").
Subject to the terms and conditions contained herein, if Xxxx is
employed by the Company for the full period from the Effective Date through the
third anniversary of the Effective Date (the "Third Anniversary"), then on the
Third Anniversary the indebtedness evidenced by this Note shall be forgiven by
the Company in full as of such date and this Note shall be marked cancelled. In
the event Xxxx'x employment with the Company is terminated prior to the Third
Anniversary, the following shall apply:
A. If Xxxx'x employment with the Company is terminated for "Cause"
(as defined in the Employment Agreement), Xxxx will repay to the Company, within
fourteen (14) days of such termination date, a pro rata portion of the sums
advanced to him pursuant to this Note based on the following formula:
Amount of principal to be repaid = $500,000
multiplied by
(1,095 minus the number of days from the
Effective Date through the Date of
Termination) divided by 1,095.
B. In the event that Xxxx'x employment with the Company is terminated
either by the Company without Cause (as defined in the Employment Agreement) or
by reason of Xxxx'x death or Disability or by Xxxx for "Good Reason" (each as
defined in the Employment Agreement), then on the date of such employment
termination the indebtedness evidenced by this Note shall be forgiven by the
Company in full as of such date and this Note shall be marked cancelled.
C. In the event Xxxx terminates his employment with the Company other
than for Good Reason, Xxxx shall repay, within fourteen (14) days of such
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termination date, the same principal amount evidenced by this Note as if he had
been terminated for "Cause". The repayment obligation referenced in the
preceding sentence shall not apply in the event of a termination of the
Employment Agreement by reason of Xxxx'x death or Disability.
The Company shall have the right to set off any amounts which Xxxx
owes the Company hereunder against any monies which the Company or any of its
subsidiaries may owe to Xxxx, of any nature whatsoever, including without
limitation, any compensation and any severance owed under the Employment
Agreement or any other benefit owed to or held by Xxxx as an employee of the
Company or any of its subsidiaries, and Xxxx hereby agrees to and authorizes any
such setoff.
If payment of the principal on this Note is not paid in accordance
with the terms aforementioned, then this Note shall be deemed to be in default
and if suit is brought to collect this Note, the Company shall be entitled to
collect, in addition to any principal outstanding, all reasonable costs and
expenses to include, but not necessarily be limited to, reasonable attorneys'
fees and expenses.
Presentment, notice of dishonor and protest are hereby waived by Xxxx.
This Note shall be binding upon Xxxx and his heirs, executors, administrators,
and legal representatives.
No delay or omission on the part of the Company in exercising any
rights hereunder shall operate as a waiver of such rights or of any other right
to the Company, nor shall any delay, omission or waiver on any one occasion be
deemed as a bar to or waiver of the same or any other right on any future
occasion. This note may not be changed or terminated orally.
Xxxx shall have the right to prepay the principal of this Note, in
whole or in part, at any time or times, without penalty.
All rights and obligations hereunder shall be governed by, and
construed and enforced in accordance with, the substantive laws of the State of
Delaware, and this Note is executed as, and shall have effect of, a sealed
instrument. If any provision of this transaction is inconsistent with the laws
and status of the State of Delaware, the rest of the transaction shall not be
affected, and that part that is not in accord with the said laws shall be
adjusted to so comply.
IN WITNESS WHEREOF, the undersigned has executed this Note as an
instrument under seal this 13th day of October, 2000.
/s/ X.X. Xxxx, Xx.
-------------------
Xxxxx Xxxxxxxx Xxxx, Xx.
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