EXHIBIT 10.1
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EMPLOYMENT AGREEMENT
AGREEMENT entered into as of the 11th day of November, 1996, by and
between XXXXXXXX CORPORATION, an Iowa corporation (the "Company"), and XXXXXXX
X. XXXX ("Xxxx").
W I T N E S S E T H:
WHEREAS, Xxxx has been employed by the Company since September 10, 1991,
pursuant to an Employment Agreement of that same date;
WHEREAS, the Company wishes to continue to employ Xxxx pursuant to the
terms and conditions hereof, and in order to induce Xxxx to enter into this
agreement (the "Agreement") and to secure the benefits to accrue from his
performance hereunder is willing to undertake the obligations assigned to it
herein; and
WHEREAS, Xxxx is willing to continue his employment with the Company under
the terms hereof and to enter into the Agreement;
NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto agree as follows:
1. Position; Duties; Responsibilities.
1.1 Xxxx shall serve as Chief Executive Officer and President of the
Company, and, as contemplated by Section 9.6, in such other position as elected
by the Board of Directors of the Company. Xxxx shall at all times report to
and be subject to the supervision, control and direction of the Board of
Directors of the Company. Xxxx shall at all times be the most senior executive
officer of the Company and all other officers shall report to him, except for
Xx. Xxxx X. Xxxx who shall remain as Chairman of the Board through December 31,
1997, and E. T. Xxxxxxxx III. Xxxx shall have such other responsibilities and
authorities consistent with the status, titles and reporting requirements set
forth herein as are appropriate to said positions, subject to change (other
than diminution in position, authority, duties or responsibilities) from time
to time by the Board of Directors of the Company. Anything to the contrary
above notwithstanding, the Board of Directors may elect another employee of the
Company to the office of President, which shall not constitute a breach by the
Company of its obligation to Xxxx under this paragraph so long as the
compensation to be paid to Xxxx under this Agreement is not reduced as a result
of such election.
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1.2 During the course of his employment, Xxxx agrees to devote his
full time and attention and give his best efforts and skills to furthering the
business and interests of the Company, which may include Xxxx volunteering his
time and efforts on behalf of charitable, civic, professional organizations and
boards of other corporations.
2. Term.
The term of employment under this Agreement shall commence as of
January 1, 1997, and shall continue through December 31, 2001, unless sooner
terminated in accordance with this Agreement, and thereafter as herein
provided. Xxxx'x term of employment shall automatically renew for subsequent
one (1) year terms, the first of which would begin on January 1, 2002, subject
to the terms of this Agreement unless either party gives written notice ninety
(90) days or more prior to the expiration of the then existing term of its
decision not to renew.
3. Salary.
3.1 The Company shall pay Xxxx a base salary during the term of
employment at the minimum annual rate of Five Hundred Fifty Thousand Dollars
($550,000) ("Base Salary"), payable in accordance with the standard payroll
practices of the Company.
3.2 It is understood that the Base Salary is to be Xxxx'x minimum
annual compensation during Xxxx'x employment with the Company. The Base Salary
may increase at the discretion of the Compensation/Nominating Committee of the
Company's Board of Directors ("Compensation Committee"). "Base Salary" shall
include all such increased amounts.
4. Long-Term Incentive Plans.
4.1 During the course of his employment, Xxxx shall be eligible to
participate in all long-term incentive plans, including, without limitation,
stock incentive plans adopted by the Company and in effect (collectively,
"Long-Term Incentive Plans"), at levels of awards to be granted by the
Compensation Committee commensurate with the level of Xxxx'x responsibilities,
and performance thereof. In partial consideration for Xxxx'x future employment
with the Company, the Compensation Committee has granted and taken all other
necessary action to award the following grants of non-qualified stock options
under the Company's Stock Incentive Plans, which shall be in lieu of awards of
non-qualified stock options that otherwise would be granted to Xxxx in 1996,
1997 and 1998:
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FMV FMV
Exercise Exercise
Options Price Options Price + 25% Total
------- -------- ------- ------------ -------
July 1, 1996 58,300 $42.187 29,200 $52.734 87,500
August 14, 1996 58,300 $40.625 29,200 $50.781 87,500
January 2, 1997 116,700 TBD 58,300 TBD 175,000
------- ------- -------
TOTAL 233,300 116,700 350,000
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All necessary action to grant the options listed above as January 2,
1997, grants has been taken by the Compensation Committee and the only
remaining action to be taken is the determination of the exercise price of the
options based on the fair market price of the Company stock on January 2, 1997
(average of the high and low selling prices).
The above-listed options will be exercisable on or after the fifth
anniversary of the date of grant. Retirement (as defined under the Company's
qualified retirement plans) will not accelerate the vesting of the above-listed
options. The general terms of the Company's stock incentive plans shall apply
to all grants of options under those plans except as otherwise provided herein
or in the stock option agreements between Xxxx and the Company. Copies of all
stock incentive plans have been provided to Xxxx.
4.2 In the event Xxxx'x employment with the Company is terminated
prior to January 2, 1997, by reason of death or disability (as provided in
Section 9.2), the non-qualified stock options to be granted to Xxxx on January
2, 1997, pursuant to Section 4.1 shall be granted by the Company to Xxxx'x
estate or to Xxxx or Xxxx'x personal representative, as the case may require,
provided that such stock options may not be granted from a Company stock
incentive plan and therefore will be subject to all applicable restrictions
under the regulations of the Securities and Exchange Commission.
4.3 Subject to the next sentence of this Section 4.3, should the non-
qualified stock options to be granted on January 2, 1997, in Section 4.1 not be
timely granted, Xxxx shall have the right to terminate his services hereunder,
by written notice to the Company, effective as of the last day of the month of
receipt by the Company of any such notice but no later than March 31, 1997, and
Xxxx shall have no further obligation of any kind under or arising out of this
Agreement (other than pursuant to Section 10). Should a circumstance or event
not within the reasonable contemplation of the parties at the date hereof arise
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on or before January 2, 1997, that makes it inadvisable or undesirable in the
reasonable judgment of the Compensation Committee to grant to Xxxx the non-
qualified stock options on January 2, 1997, and should the Compensation
Committee on or about such date, because of such intervening circumstance or
event, instead bestow upon Xxxx benefits of reasonably equivalent value and
having comparable payment dates, Xxxx shall thereupon forego his right of
termination under the preceding sentence. Termination of Xxxx'x services under
this Section 4.3 shall be treated as a termination of employment by the Company
other than for Due Cause and shall be governed by the provisions of Section
9.4.
5. Bonus.
5.1 During the course of his employment, Xxxx shall be eligible to
participate in the Xxxxxxxx Management Incentive Plan ("MIP"), for such period
as it continues in effect, subject to the terms of the MIP, and to the
discretion vested in the Compensation Committee under the MIP; provided,
however, that the percentage of Base Salary payable as a target bonus under the
MIP shall not be less than fifty percent (50%) (actual Company financial
results may result in an actual bonus paid to Xxxx equal to less than or more
than fifty percent (50%) of Base Salary).
5.2 All bonuses pursuant to this Section 5 shall be paid to Xxxx in
conformance with the Company's normal bonus pay policies following the end of
the respective fiscal year. For the purpose of this Section 5, the phrase
"paid with respect to the fiscal year" shall include payments made outside of
the fiscal year but for such fiscal year and shall exclude payments made in the
fiscal year that are for another fiscal year.
6. Short-Term Disability.
During any period of short-term disability, the Company will continue
to pay to Xxxx the Base Salary throughout the period of short-term disability,
but in no event beyond April 30, 2006. In addition, Xxxx will continue to
receive all rights and benefits under the benefit plans and programs of the
Company in which Xxxx is a participant as determined in accordance with the
terms of such plans and programs, and Xxxx shall be eligible to receive the
benefit of the bonus for the year or years in which the short-term disability
occurs without reduction for the period of short-term disability. In the event
of Xxxx'x death during a period of short-term disability, the provisions of
Section 9.1 shall apply. For the purposes of this Agreement, short-term
disability shall be defined as the incapacitation of Xxxx by reason of
sickness, accident or other physical or mental disability which continues for a
period not to exceed the fifth month anniversary of the date of the cause or
onset of such incapacitation. In the event Xxxx becomes permanently disabled
(as determined under Section 9.2), the provisions of Section 9.2 shall apply.
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7. Employee Benefit Plans.
7.1 During Xxxx'x employment with the Company and subject to all
eligibility requirements, and to the extent permitted by law, Xxxx will have
the opportunity to participate in all employee benefit plans and programs
generally available to the Company's employees in accordance with the
provisions thereof as in effect from time to time, including, without
limitation, medical coverage, group life insurance, holidays and vacations,
Xxxxxxxx Savings and Investment Plan (401k) and the Xxxxxxxx Employees'
Retirement Income Plan, but not including the Company's short-term and long-
term disability plans.
7.2 In addition to benefits described in Section 7.1, Xxxx shall also
receive or participate in, to the extent permitted by law, the various
perquisites and plans generally available to officers of the Company in
accordance with the provisions thereof as in effect from time to time
including, without limitation, the following perquisites to the extent the
Company continues to offer them: an automobile or automobile allowance, country
club dues, dining club dues, tax and estate planning, supplemental medical plan
and executive life insurance (if insurable). In addition, Xxxx shall
participate in the Xxxxxxxx Replacement Benefit Plan and the Xxxxxxxx
Supplemental Benefit Plan.
7.3 In addition to the other pension benefits, qualified and non-
qualified, to be provided Xxxx under this Section 7, the Company agrees to
continue to provide a non-qualified retirement program for Xxxx as described in
the attached Exhibit A ("SERP"); however, Xxxx'x entitlements to benefits under
such non-qualified retirement programs are subject to termination under the
provisions of Sections 9.3, 9.5 and 9.9 below. Except as provided in Section
9.3, 9.5 and 9.9, the SERP shall not be subject to termination or amendment by
the Company without the consent of Xxxx, which may be withheld for any or no
reason.
If at any time the SERP cannot operate because of prohibitions of law
and Xxxx is otherwise eligible to receive benefits under the terms of the SERP,
the Company agrees to make a payment or payments to Xxxx or, if applicable, to
his estate to provide the economic equivalent (giving effect to the time use of
money) to him or his beneficiaries, provided that no such payments shall be
made if such payments would be prohibited by law. It is the intention of the
parties, should the circumstances contemplated by the preceding sentence occur,
that payments to Xxxx in lieu of payments under the SERP shall be made at the
time and in the manner permissible that most nearly approximates the time and
manner in which payments would have been made under the SERP.
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8. Expense Reimbursements.
During Xxxx'x employment with the Company, Xxxx will be entitled to
receive reimbursement by the Company for all reasonable, out-of-pocket expenses
incurred by him (in accordance with policies and procedures established by the
Company), in connection with his performing services hereunder, provided Xxxx
properly accounts therefor. In consideration of Xxxx'x use of his own
residence while conducting business in New York City, the Company agrees to pay
Xxxx Two Hundred Twenty-five Dollars ($225) for each night Xxxx is reasonably
required to spend in New York City on account of his attention to the Company's
business in New York City or environs.
9. Consequences of Termination of Employment.
9.1 Death. In the event of the death of Xxxx during the term of this
Agreement or during the period when payments are being made pursuant to
Sections 6 or 9.2, this Agreement shall terminate and all obligations to Xxxx
shall cease as of the date of death except that, (a) the Company will pay the
Base Salary until the end of the month of the first anniversary of Xxxx'x death
(but not beyond April 30, 2006), and (b) all rights and benefits of Xxxx under
the benefit plans and programs of the Company including, without limitation,
the SERP in which Xxxx is a participant, will be provided as determined in
accordance with the terms and provisions of such plans and programs. Any bonus
(or amounts in lieu thereof) pursuant to Section 5, payable for the fiscal year
in which Xxxx'x death occurs, shall be determined by the Compensation Committee
at its meeting following the end of such fiscal year pro rata to the date of
death and promptly paid to Xxxx'x estate. All awards of restricted stock,
stock options and any other benefits under the Long-Term Incentive Plans shall
be handled in accordance with the terms of the relevant plan and agreements
entered into between Xxxx and the Company with respect to such awards.
9.2 Disability. If Xxxx shall become permanently incapacitated by
reasons of sickness, accident or other physical or mental disability, as such
incapacitation is certified by a physician chosen by the Company and reasonably
acceptable to Xxxx (if he is not then unable to exercise sound judgment), and
shall therefore be unable to perform his normal duties hereunder, then the
employment of Xxxx hereunder and this Agreement may be terminated by Xxxx or
the Company upon thirty (30) days' written notice to the other party following
such certification. Should Xxxx not acquiesce (or should he be unable to
acquiesce) in the selection of the certifying doctor, a doctor chosen by Xxxx
(or if he is not then able to exercise sound judgment, by his spouse or
personal representative) and reasonably acceptable to the Company shall be
required to concur in the medical determination of incapacitation, failing
which the two doctors shall designate a third doctor whose decision shall be
determinative as of the end of the calendar month in which such concurrence or
third-doctor decision, as the case may be, is made. The Company shall
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thereafter pay to Xxxx, at such times as Base Salary provided for in Section 3
of this Agreement would normally be paid, 100% of Base Salary for the first
twelve months following such termination, 75% of Base Salary for the next
twelve-month period and 50% of Base Salary for the remaining period of what
would have constituted the current term of employment but for termination by
reason of disability (but in no event beyond April 30, 2006). Following the
termination pursuant to this Section 9.2, the Company shall pay or provide to
Xxxx such other rights and benefits of participation under the employee benefit
plans and programs of the Company including, without limitation, the SERP in
which Xxxx is a participant, to the extent that such continued participation is
not otherwise prohibited by applicable law or by the express terms and
provisions of such plans and programs. All benefits provided under this
Section 9.2 shall be in replacement of and not in addition to benefits payable
under the Company's short-term and long-term disability plans. All awards of
restricted stock, stock options and any other benefits under the Long-Term
Incentive Plans shall be handled in accordance with the terms of the relevant
plan and agreements entered into between Xxxx and the Company with respect to
such awards.
9.3 Due Cause. The Company may terminate Xxxx'x employment, remove
him as an officer and director of the Company and terminate this Agreement at
any time for Due Cause. In the event of such termination for Due Cause, Xxxx
shall continue to receive Base Salary payments provided for in this Agreement
only through the date of such termination for Due Cause, and Xxxx shall be
entitled to no further benefits under this Agreement, except that any rights
and benefits Xxxx may have under the employee benefit plans and programs of the
Company, in which Xxxx is a participant, shall be determined in accordance with
the terms and provisions of such plans and programs. Xxxx understands and
agrees that in the event of the termination of employment, removal as an
officer and director and termination of this Agreement pursuant to this Section
9.3: (a) All awards of restricted stock, stock options and any other benefits
under the Long-Term Incentive Plans shall be handled in accordance with the
terms of the relevant plan and agreements entered into between Xxxx and the
Company with respect to such awards; (b) the Company shall have no further
obligation to pay any bonus to Xxxx under the terms of the MIP or this
Agreement; and (c) the Company shall have no obligation to provide benefits
under the SERP, but that the obligations of Xxxx under Section 10 shall remain
in full force and effect. The term "Due Cause" shall mean repeated and gross
negligence in fulfillment of, or repeated failure of Xxxx to fulfill his
material obligations under this Agreement, in either event after due written
notice thereof, or serious willful misconduct by Xxxx in respect of his
obligations hereunder. Due Cause should not include, without limitation, (w)
refusal by Xxxx of an assignment not consistent with the status, titles and
reporting requirements set forth herein or contemplated hereby, or (x) bad
judgment or negligence of Xxxx, or (y) any act or omission (other than one
constituting a material breach of trust committed in willful or reckless
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disregard of the interests of the Company and undertaken for personal gain) in
respect of which a determination could properly have been made by the Board of
Directors of the Company that Xxxx met the applicable standard of conduct
prescribed for indemnification or reimbursement under the Bylaws of the Company
or the laws of Iowa, in each case in effect at the time of such act or
omission, or (z) any act or omission with respect to which notice of
termination is given more than twelve (12) months after the earliest date on
which any non-employee director of the Company who was not a party to such act
or omission knew or should have known of such act or omission.
9.4 At Will. The other provisions of this Agreement notwithstanding,
the Company may terminate Xxxx'x employment, remove him as an officer and
director and terminate this Agreement at any time for whatever reason it deems
appropriate, with or without cause and with or without prior notice. In the
event of such a termination of Xxxx'x employment and this Agreement, Xxxx shall
have no further obligations of any kind under or arising out of the Agreement
(except for the obligations of Xxxx under Section 10) and the Company shall be
obligated only to pay Xxxx the following: (a) Base Salary and the bonus amounts
provided in Section 5 of this Agreement through the end of the then current
term of employment as provided in Section 2 of this Agreement, but no less than
a total of twelve (12) months of Base Salary and target bonus under the MIP or
successor plans; (b) an additional amount equal to Twelve Dollars and Fifty
Cents ($12.50) per share for each share of restricted Company stock awarded to
Xxxx in 1991 for which the restriction period has not lapsed on the date of the
termination of employment pursuant to this Section 9.4 (which per share amount
shall be adjusted in the event of a stock split); and (c) any other amounts due
and owing not then paid. Xxxx agrees that the payments described in this
Section 9.4 shall be full and adequate compensation to Xxxx for all damages
Xxxx may suffer as a result of the termination of his employment pursuant to
this Section 9.4 or Sections 4.3, 9.6, 9.7, 9.8 or 9.10 and hereby waives and
releases the Company from any and all obligations or liabilities to Xxxx
arising from or in connection with Xxxx'x employment with the Company or the
termination of his employment including, without limitation, all rights and
claims Xxxx may have under federal, state or local statutes, regulations or
ordinances or under any common law principles of breach of contract or the
covenant of good faith and fair dealing, defamation, wrongful discharge,
intentional infliction of emotional distress or promissory estoppel; provided,
however, that any rights and benefits Xxxx may have under the employee benefit
plans and programs of the Company, including, without limitation, the SERP, in
which Xxxx is a participant, shall be determined in accordance with the terms
and provisions of such plans and programs. After the date of termination under
this Section 9.4 or Sections 4.3, 9.6, 9.7, 9.8 or 9.10, Xxxx shall not be
treated as an employee for purposes of the Company's employee benefit plans or
programs even though he may continue to receive payments as provided in this
Section 9.4. All awards of restricted stock, stock options and any other
benefits under the Long-Term Incentive Plans shall be handled in accordance
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with the terms of the relevant plan and agreements entered into between Xxxx
and the Company with respect to such awards.
9.5 Employee Voluntary. In the event Xxxx terminates his employment
of his own volition prior to the end of the term of this Agreement, except for
a termination as described in Sections 4.3, 9.6, 9.7, 9.8 or 9.10, such
termination shall constitute a voluntary termination and in such event the
Company's only obligation to Xxxx shall be to make Base Salary payments
provided for in this Agreement through the period ending with the date of such
voluntary termination. Except as may be otherwise expressly provided in
Section 4.3, 6, 7.3, and 9.2, but subject to the following provisions of this
Section 9.5, any rights and benefits Xxxx may have under the employee benefit
plans and programs of the Company, in which he is a participant, shall be
determined in accordance with the terms and provision of such plans and
programs. Xxxx understands and agrees that in the event of the termination of
employment pursuant to this Section 9.5: (a) All awards of restricted stock,
stock options and any other benefits under the Long-Term Incentive Plans shall
be handled in accordance with the terms of the relevant plan and agreements
entered into between Xxxx and the Company with respect to such awards;(b) the
Company shall have no further obligation to pay any bonus to Xxxx under the
terms of the MIP or this Agreement; and (c) the Company shall have no
obligation to provide benefits under the SERP, but that the obligations of Xxxx
under Section 10 shall remain in full force and effect.
9.6 Failure to Elect or Re-elect as Chairman of the Board of
Directors. In the event Xxxx is not elected to the position of Chairman of the
Board of Directors of the Company effective on or about January 1, 1998, Xxxx
shall have the right to terminate his employment with the Company within ninety
(90) days of being notified that such election will not occur by said date or,
if not so notified, on or at any time after January 2, 1998, but before April
1, 1998, and in any such case, such termination shall be deemed to be
termination by the Company without "Due Cause". In the event Xxxx is not
re-elected to or is removed from the position of Chairman of the Board (for
reasons other than for Due Cause), Xxxx shall have the right to terminate his
employment with the Company within ninety (90) days of being notified of such
action, and such termination shall be deemed to be termination by the Company
without "Due Cause," and such termination shall be treated in accordance with
the terms of Section 9.4 above.
If Xxxx shall terminate his employment and such termination is deemed
to be termination by the Company without Due Cause pursuant to this Section or
Sections 4.3, 9.7, 9.8 or 9.10, Xxxx shall be entitled to the same rights and
benefits, and free of all further obligations of any kind under or arising out
of this Agreement (except for obligations under Section 10), all as provided in
connection with a termination pursuant to Section 9.4 above. Xxxx agrees that
the payments described in Section 9.4 shall be full and adequate compensation
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to Xxxx for all damages he may suffer as a result of the termination of his
employment pursuant to this Section or Sections 4.3, 9.7, 9.8 or 9.10, and
hereby waives and releases the Company from any and all obligations or
liabilities to Xxxx arising from or in connection with Xxxx'x employment with
the Company or the termination of his employment including, without limitation,
all rights and claims Xxxx may have under federal, state or local statutes,
regulations or ordinances or under any common law principles of breach of
contract or the covenant of good faith and fair dealing, defamation, wrongful
discharge, intentional infliction of emotional distress or promissory estoppel;
provided, however, that any rights and benefits Xxxx may have under the
employment benefit plans and programs of the Company, including, without
limitation, the SERP, in which Xxxx is a participant, shall be determined in
accordance with the terms and provisions of such plans and programs. All
awards of restricted stock, stock options and any other benefits under the
Long-Term Incentive Plans shall be handled in accordance with the terms of the
relevant plan and agreements entered into between Xxxx and the Company with
respect to such awards.
9.7 Failure to Re-elect as Chief Executive Officer, Director or
Member of Executive Committee. If at any time Xxxx is not re-elected to or is
removed from the office of Chief Executive Officer, or as a Director of the
Company or as a member of the Executive Committee of the Company's Board of
Directors (for reasons other than for Due Cause), Xxxx shall have the right to
terminate his employment with the Company by giving written notice within
ninety (90) days after the date of such action, and such termination shall be
deemed to be termination by the Company without "Due Cause," and such
termination shall be treated in accordance with the terms of Section 9.4 above.
9.8 Effect of Non-Renewal. If at any time the Company gives notice
pursuant to Section 2 of its decision not to renew this Agreement, Xxxx shall
have the right to terminate his employment with the Company, as of such date or
at any time thereafter, in which case, such termination shall be deemed to be
termination by the Company without "Due Cause," and such termination shall be
treated in accordance with the terms of Section 9.4 above.
9.9 Retirement Before Age 65. In the event Xxxx elects to retire
from employment with the Company and commence the available benefits under
certain of the Company's benefit plans and programs prior to attaining age 65,
Xxxx shall receive retirement benefits under the SERP only to the extent and in
the amounts as determined by the Board of Directors of the Company.
Termination of employment pursuant to Section 9.4, 9.6, 9.7, 9.8 or 9.10, shall
not be deemed to be retirement within the meaning of this Section and Xxxx
shall be entitled to retirement benefits under the SERP. All awards of
restricted stock, stock options and any other benefits under the Long-Term
Incentive Plans shall be handled in accordance with the terms of the relevant
plan and agreements entered into between Xxxx and the Company with respect to
such awards.
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9.10 Change in Control. In the event of a "Change in Control," as
that term is defined in the Severance Agreement by and between Xxxx and the
Company dated September 10, 1991 ("Severance Agreement"), and Xxxx'x employment
is not terminated by the Company and Xxxx is not entitled to terminate his
employment with the Company for "Good Reason" or otherwise under terms of the
Severance Agreement, Xxxx may nonetheless terminate this Agreement and his
employment with the Company and such termination shall be deemed to be
termination by the Company without "Due Cause" if the Company remains in
existence following the Change in Control as a subsidiary of the controlling
party with Xxxx as Chief Executive Officer of the Company, and such termination
shall be treated in accordance with the terms of Section 9.4 above.
10. Covenants of Xxxx.
10.1 Xxxx acknowledges that as a result of the services to be
rendered to the Company hereunder, Xxxx will be brought into close contact with
many confidential affairs of the Company, its subsidiaries and affiliates, not
readily available to the public. Xxxx further acknowledges that the services
to be performed under this Agreement are of a special, unique, unusual,
extraordinary and intellectual character; that the business of the Company is
national in scope; that its goods and services are marketed throughout the
United States; and that the Company competes with other organizations that are
or could be located in nearly any part of the United States.
10.2 In recognition of the foregoing, Xxxx covenants and agrees that,
except as is necessary in providing services under this Agreement or to the
extent necessary to comply with law or the valid order of a court or government
agency of competent jurisdiction, Xxxx will not knowingly use for his own
benefit nor knowingly divulge any Confidential Information and Trade Secrets of
the Company, its subsidiaries and affiliated entities, which are not otherwise
in the public domain and, so long as they remain Confidential Information and
Trade Secrets not in the public domain, will not intentionally disclose them to
anyone outside of the Company either during or after his employment. For the
purposes of this Agreement, "Confidential Information and Trade Secrets" of the
Company means information which is secret to the Company, its subsidiaries and
affiliated entities. It may include, but is not limited to, information
relating to the magazines, books, publications, products, services, television
stations, real estate franchise operations, new and future concepts and
business of the Company, its subsidiaries and affiliates, in the form of
memoranda, reports, computer software and data banks, customer lists, employee
lists, books, records, financial statements, manuals, papers, contracts and
strategic plans. As a guide, Xxxx is to consider information originated,
owned, controlled or possessed by the Company, its subsidiaries or affiliated
entities which is not disclosed in printed publications stated to be available
for distribution outside the Company, its subsidiaries and affiliated entities
as being secret and confidential. In instances where doubt does or should
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reasonably be understood to exist in Xxxx'x mind as to whether information is
secret and confidential to the Company, its subsidiaries and affiliated
entities, Xxxx agrees to request an opinion, in writing, from the Company.
10.3 Anything to the contrary in this Section 10 notwithstanding,
Xxxx shall disclose to the public and discuss such information as is customary
or legally required to be disclosed by a Company whose stock is publicly
traded, or that is in the best interests of the Company to do so.
10.4 Xxxx will deliver promptly to the Company on the termination of
his employment with the Company, or at any other time the Company may so
request, all memoranda, notes, records, reports and other documents relating to
the Company, its subsidiaries and affiliated entities, and all property owned
by the Company, its subsidiaries and affiliated entities, which Xxxx obtained
while employed by the Company, and which Xxxx may then possess or have under
his control.
10.5 During and for a period of one (1) year after the termination of
employment with the Company (except that the time period of such restrictions
shall be extended by any period during which Xxxx is in violation of this
Section 10.5), Xxxx will not: (a) knowingly interfere with, disrupt or attempt
to disrupt, any then existing relationship, contractual or otherwise between
the Company, its subsidiaries or affiliated entities, and any customer, client,
supplier, or agent, it being understood that the right to seek or enter into
contractual arrangements with independent contractors, including, without
limitation, consultants, professionals, authors, advertisers and the like,
shall not be abridged by reason of this Section 10; or (b) solicit, or assist
any other entity in soliciting for employment, any person known to Xxxx to be
an agent or executive employee of the Company, its subsidiaries or affiliated
entities.
10.6 Xxxx will promptly disclose to the Company all inventions,
processes, original works of authorship, trademarks, patents, improvements and
discoveries related to the business of the Company, its subsidiaries and
affiliated entities (collectively "Developments"), conceived or developed
during Xxxx'x employment with the Company and based upon information to which
he had access during the term of employment, whether or not conceived during
regular working hours, through the use of the Company time, material or
facilities or otherwise. All such Developments shall be the sole and exclusive
property of the Company, and upon request Xxxx shall deliver to the Company all
outlines, descriptions and other data and records relating to such
Developments, and shall execute any documents deemed necessary by the Company
to protect the Company's rights hereunder. Xxxx agrees upon request to assist
the Company to obtain United States or foreign letters patent and copyright
registrations covering inventions and original works of authorship belonging to
the Company hereunder. If the Company is unable because of Xxxx'x mental or
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physical incapacity to secure Xxxx'x signature to apply for or to pursue any
application for any United States or foreign letters patent or copyright
registrations covering inventions and original works of authorship belonging to
the Company hereunder, then Xxxx hereby irrevocably designates and appoints the
Company and its duly authorized officers and agents as his agent and attorney
in fact, to act for and in his behalf and stead to execute and file any such
applications and to do all other lawfully permitted acts to further the
prosecution and issuance of letters patent or copyright registrations thereon
with the same legal force and effect as if executed by him. Xxxx hereby waives
and quitclaims to the Company any and all claims, of any nature whatsoever,
that he may hereafter have for infringement of any patents or copyright
resulting from any such application for letters patent or copyright
registrations belonging to the Company hereunder.
10.7 Xxxx agrees that the remedy at law for any breach or threatened
breach of any covenant contained in this Section 10 will be inadequate and that
the Company, in addition to such other remedies as may be available to it, in
law or in equity, shall be entitled to injunctive relief without bond or other
security.
10.8 Although the restrictions contained in Section 10.1, 10.2, 10.4
and 10.5 above are considered by the parties hereto to be fair and reasonable
in the circumstances, it is recognized that restrictions of such nature may
fail for technical reasons, and accordingly it is hereby agreed that if any of
such restrictions shall be adjudged to be void or unenforceable for whatever
reason, but would be valid if part of the wording thereof were deleted, or the
period thereof reduced or the area dealt with thereby reduced in scope, the
restrictions contained in Section 10.1, 10.2, 10.4 and 10.5 shall be enforced
to the maximum extend permitted by law, and the parties consent and agree that
such scope or wording may be accordingly judicially modified in any proceeding
brought to enforce such restrictions.
10.9 Notwithstanding that Xxxx'x employment hereunder may expire or
be terminated as provided in Sections 2, 4.3 or 9 above, this Agreement shall
continue in full force and effect insofar as is necessary to enforce the
covenants and agreements of Xxxx contained in this Section 10.
11. Arbitration.
The parties shall use their best efforts and good will to settle all
disputes by amicable negotiations. The Company and Xxxx agree that, with the
express exception of any dispute or controversy arising under Section 9.2 or
Section 10 of this Agreement or as may be required under Section 3(g) of the
Severance Agreement, any controversy or claim arising out of or in any way
relating to Xxxx'x employment with the Company, including, without limitation,
any and all disputes concerning this Agreement and the termination of this
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Agreement that are not amicably resolved by negotiation, shall be settled by
arbitration in Des Moines, Iowa, or such other place agreed to by the parties,
as follows:
(a) Any such arbitration shall be heard before a panel consisting of
one (1) to three (3) arbitrators, each of whom shall be impartial. Except as
the parties may otherwise agree, all arbitrators shall be appointed in the
first instance by the President of the Iowa State Bar Association or, in the
event of his unavailability by reason of disqualification or otherwise, by the
Chairman of the Executive Committee of said Bar Association. In determining
the number and appropriate background of the arbitrators, the appointing
authority shall give due consideration to the issues to be resolved, but his
decision as to the number of arbitrators and their identity shall be final.
(b) An arbitration may be commenced by any party to this Agreement by
the service of a written Request for Arbitration upon the other affected party.
Such Request for Arbitration shall summarize the controversy or claim to be
arbitrated, and shall be referred by the complaining party to the appointing
authority for appointment of arbitrators ten (10) days following such service
or thereafter. If the panel of arbitrators is not appointed by the appointing
authority within thirty (30) days following such reference, any party may apply
to any court within the State of Iowa for an order appointing arbitrators
qualified as set forth below. No Request for Arbitration shall be valid if it
relates to a claim, dispute, disagreement or controversy that would have been
time barred under the applicable statute of limitations had such claim,
dispute, disagreement or controversy been submitted to the courts of the State
of Iowa.
(c) All attorneys' fees and costs of the arbitration shall in the
first instance be borne by the respective party incurring such costs and fees,
but the arbitrators shall have the discretion to award costs and/or attorneys'
fees as they deem appropriate under the circumstances. The parties hereby
expressly waive punitive damages, and under no circumstances shall an award
contain any amount that in any way reflects punitive damages.
(d) Judgment on the award rendered by the arbitrators may be entered
in any court having jurisdiction thereof.
(e) It is intended that controversies or claims submitted to
arbitration under this Section 11 shall remain confidential, and to that end it
is agreed by the parties that neither the facts disclosed in the arbitration,
the issues arbitrated, nor the views or opinions of any persons concerning
them, shall be disclosed by third persons at any time, except to
the extent necessary to enforce an award or judgment or as required by law or
in response to legal process or in connection with such arbitration.
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12. Successors and Assigns.
12.1 Assignment by the Company. This Agreement shall inure to the
benefit of and shall be binding upon the successors and assigns of the Company,
subject, however, to the right of Xxxx to terminate this Agreement under
Section 9.10.
12.2 Assignment by Xxxx. Xxxx may not assign this Agreement or any
part thereof; provided, however, that nothing herein shall preclude one or more
beneficiaries of Xxxx from receiving any amount that may be payable following
the occurrence of his legal incompetency or his death and shall not preclude
the legal representative of his estate from receiving such amount or from
assigning any right hereunder to the person or persons entitled thereto under
his will or, in the case of intestacy, to the person or persons entitled
thereto under the laws of the intestacy applicable to his estate.
13. Governing Law.
This Agreement shall be deemed a contract made under, and for all
purposes shall be construed in accordance with, the laws of the State of Iowa
without reference to the principles of conflict of laws.
14. Entire Agreement.
This Agreement and the attached Exhibits contain all the
understandings and representations between the parties hereto pertaining to the
subject of the employment of Xxxx by the Company and supersedes all
undertakings and agreements, whether oral or in writing, if any there be,
previously entered into by them with respect thereto other than those
agreements listed on the attached Exhibit B.
15. Amendment or Modification; Waiver.
No provision of this Agreement may be amended or modified unless such
amendment or modification is agreed to in writing, signed by Xxxx and by a duly
authorized officer of the Company and approved in advance by the Compensation
Committee. Except as otherwise specifically provided in this Agreement, no
wavier by either party hereto of any breach by the other party of any condition
or provision of the Agreement to be performed by such other party shall be
deemed a waiver of a similar or dissimilar provision or condition at the same
or any prior or subsequent time.
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16. Notices.
Any notice to be given hereunder shall be in writing and delivered
personally or sent by overnight mail, such as Federal Express, addressed to the
party concerned at the address indicated below or to such other address as such
party may subsequently give notice of hereunder in writing:
If to Company:
Chairman of the Compensation/Nominating Committee
Board of Directors
Xxxxxxxx Corporation
0000 Xxxxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000-0000
with a copy to:
Xxxxxx X. Xxxxxxxxx, Esquire
Vice President-General Counsel & Secretary
Xxxxxxxx Corporation
0000 Xxxxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000-0000
If to Xxxx:
X.X. Xxx 0000
Xxxxxxxxxx, Xxxxxxxxxxx 00000
with a copy to:
Xxxxxx Rover, Esquire
White & Case
1155 Avenue of the Americas
New York, N.Y. 10036
17. Severability.
In the event that any provision or portion of this Agreement shall be
determined to be invalid or unenforceable for any reason, the remaining
provisions or portions of this Agreement shall be unaffected thereby and shall
remain in full force and effect to the fullest extent permitted by law.
18. Withholding.
Anything to the contrary notwithstanding, all payments required to be
made by the Company hereunder to Xxxx or his beneficiaries, including his
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estate, shall be subject to withholding and deductions as the Company may
reasonably determine it should withhold or deduct pursuant to any applicable
law or regulation. In lieu of withholding or deducting, such amounts, in whole
or in part, the Company may, in its sole discretion, accept other provision for
payment as permitted by law, provided it is satisfied in its sole discretion
that all requirements of law affecting its responsibilities to withhold such
taxes have been satisfied.
19. Deferred Payments.
Any amounts required under this Agreement to be paid to Xxxx that Xxxx
can and does elect to defer under any Company benefit plan or program shall be
deemed to have been paid to him for purposes of this Agreement.
20. Survivorship.
The respective rights and obligations of the parties hereunder shall
survive any termination of this Agreement to the extent necessary to the
intended preservation of such rights and obligations.
21. Headings.
Headings of the sections of this Agreement are intended solely for
convenience and no provision of this Agreement is to be construed by reference
to the title of any section.
22. Knowledge and Representation.
Xxxx acknowledges that the terms of this Agreement have been fully
explained to him, that Xxxx understands the nature and extent of the rights and
obligations provided under this Agreement, and that Xxxx has been represented
by legal counsel in the negotiation and preparation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first set forth above.
XXXXXXXX CORPORATION
/s/ Xxxxxxx X. Xxxx /s/ E. T. Xxxxxxxx III
------------------- By -------------------------
Xxxxxxx X. Xxxx E. T. Xxxxxxxx III
Chairman of the Executive
Committee
Dated: 11-11-96 Dated: 11-11-96
------------------ ------------------
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The following supplemental exhibits to the Employment Agreement dated November
11, 1996, between Xxxxxxxx Corporation and Xxxxxxx X. Xxxx have been omitted in
this Form 10-Q filing. The Company agrees to provide these exhibits to the
Commission upon request.
Exhibit A Minimum Supplemental Retirement Benefit
Program
Exhibit A-1 Worksheet regarding Minimum Supplemental
Retirement Benefit
Exhibit B Listing of agreements pertaining to the
subject of the employment of Xxxxxxx X.
Xxxx by the Company
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