EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into this 14th day of January 2000
by and between LILLY INDUSTRIES, INC. (the "Company"), an Indiana corporation
with its principal place of business in Indianapolis, Indiana, and XXXXXXX X.
XXXXXX ("Executive").
Background
Executive has served as Chairman of the Board of Directors and Chief
Executive Officer of the Company since 1991. The Company recognizes Executive's
service, experience, and knowledge in the coatings industry generally and with
the Company specifically, and desires to retain the future services of Executive
to the date of his retirement, and Executive wishes to continue to be employed
by the Company on the terms set out in this Agreement.
Agreement
In consideration of the mutual promises and covenants made herein, and
intending to be legally bound, the parties agree as follows:
1. Employment. The Company hereby agrees to continue the employment of
Executive as Chairman of the Board of Directors and Chief Executive Officer of
the Company and in such other capacity as the Company and Executive may mutually
agree from time to time. As Chairman and Chief Executive Officer, Executive
shall report directly to, and be subject to the direction of, the Board of
Directors of the Company (the "Board"). Executive shall perform all management
and executive duties incident to the offices of the Chairman and Chief Executive
Officer, and such other duties as, from time to time, may be assigned to him by
the Board. Executive, if so appointed or elected, shall serve as an officer of
the Company or of any other company which is a subsidiary or affiliate of the
Company ("Affiliate") or as a director of an Affiliate, and, if appointed or
elected, shall serve in each of such other capacities without compensation in
addition to the compensation and benefits provided in this Agreement.
2. Employment Term. The employment of Executive under this Agreement
shall commence on January 14, 2000 (the "Commencement Date") and shall continue
until the close of business on January 14, 2002; provided, however, that
commencing on January 14, 2001 and on each anniversary thereafter, the term of
this Agreement shall automatically be extended for an additional one (1) year
unless either the Board or Executive give written notice to the other at least
one (1) year prior thereto that the term of the Agreement shall not be extended.
Notwithstanding the foregoing, the employment of Executive hereunder shall be
subject to resignation or termination in accordance with the provisions of
Section 6. As used in this Agreement, the term "Expiration Date" means January
14, 2002 or, if applicable, the annual anniversary thereafter on which the
employment of Executive shall automatically terminate in accordance with the
provisions of this Section 2, and the term "Employment Term" means the period
beginning on the Commencement Date and ending on the earlier of the Expiration
Date, "Termination Date," "Resignation Date," or other date Executive ceases to
be employed by the Company in accordance with Section 6.
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3. Compensation. Executive shall receive a base salary of no less than
Five Hundred Thousand and No/100 Dollars ($500,000.00) per year beginning on the
Commencement Date ("Annual Base Salary"). In addition, Executive shall receive a
year-end bonus ("Bonus") paid in accordance with the Company's bonus plan for
its corporate executive officers. The Annual Base Salary and Bonus of Executive
shall be set annually by the Board.
4. Other Benefits. In addition to the Annual Base Salary and Bonus,
Executive shall be entitled to the following benefits during the Employment Term
and to the extent specifically so provided for the period after the Employment
Term regardless of the type of termination:
(a) Executive shall have the right to participate in the
Company's group life, supplemental life, medical, dental, accidental
death and dismemberment, long-term disability, and other insurance
programs, sick pay program, flexible spending plan, tuition assistance
plan, 401(k) savings and employee stock purchase plans, incentive and
non- qualified stock option programs, pension plan, and any other
employee benefit plan offered by the Company to its executive officers
as a group, on the same terms as the other executive officers of the
Company.
(b) The Company shall reimburse Executive for all reasonable
travel and other business out-of-pocket expenses incurred by Executive
in the performance of his duties hereunder. Such reimbursements shall
be subject to the policies and procedures established by the Company.
(c) Executive shall be entitled to continued participation in
the Company's Second Unfunded Supplemental Retirement Plan pursuant to
the terms of said plan, as amended by letter dated December 22, 1993.
(d) Executive shall be entitled to continued participation in
the Company's Executive Retirement Plan pursuant to the terms of said
plan, as amended by letter dated June 14, 1996.
(e) Executive shall be entitled to continued participation in
the Company's Replacement Plan pursuant to the terms of said plan.
(f) Executive shall be entitled to the continued protections
and benefits of the Company's Change in Control Agreement, executed on
September 26, 1997.
(g) Executive shall be entitled to continued participation in
the Company's Split Dollar Insurance Agreement providing $2.0 million
of death benefit. Notwithstanding the terms of said agreement, the
Company shall pay the premiums as required under Section 4 thereof
until the policy value is sufficient to be in paid-up status.
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(h) Executive shall be reimbursed for fees and expenses
incurred by him in connection with the preparation of his income taxes
and the receipt of financial and estate planning advice; provided,
however, the reimbursed amount shall be grossed up to cover any income
taxes of Executive arising out of any reimbursement under this
subsection.
(i) Executive shall receive an annual executive physical
examination to be provided by the Company at no cost to Executive, as
approved by the Board.
(j) The Company shall pay all club membership dues of
Executive, as approved by the Board; provided, however, the reimbursed
amount shall be grossed up to cover any income taxes of Executive
arising out of any reimbursement under this subsection.
(k) Executive and his spouse shall be entitled to medical and
dental benefits coverage upon retirement, substantially similar to
existing coverage.
(l) Executive shall be entitled to five (5) weeks of paid
vacation time per year. Such vacation time shall not cumulate year to
year.
(m) If Executive retires or is subject to a Long-Term
Disability, or if the employment of Executive terminates in the
circumstances described in Section 7, the Company shall accelerate and
make immediately exercisable, any and all unmatured options (whether or
not such options are otherwise exercisable) which Executive then holds,
to acquire securities from the Company; provided, however, that
Executive shall have until the original expiration date to exercise any
such outstanding options. If such acceleration causes any incentive
stock option to be converted to a nonqualified stock option, Executive
shall be grossed up for any income taxes to the extent of the tax
savings to the Company as a result of such conversion. This section
shall apply in all cases except if Executive is terminated for cause
under Section 6(c).
5. Employment Duties and Best Efforts. During the Employment Term,
Executive shall work full-time for the Company and shall devote his full
attention, knowledge, skills, energies and best efforts to the performance of
his duties and responsibilities to the Company and its Affiliates and in his
activities to further the businesses and interests of the Company and its
Affiliates. The Board recognizes the benefit to the Company of Executive serving
on other company and not-for- profit boards, so long as such services do not
significantly interfere with the performance of his duties under this Agreement.
Throughout the Employment Term, Executive shall not indirectly engage in any
activity which would significantly interfere with the faithful performance of
his duties under this Agreement.
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6. Termination. Executive's employment may terminate, in addition to
its automatic termination at the Expiration Date under Section 2, as follows:
(a) Termination Upon Death. In the event of Executive's death,
the Employment Term shall cease, and Executive's Beneficiary, as
defined below, shall be entitled to receive: (i) his Annual Base Salary
at the rate then in effect pursuant to Section 3 for a period of six
(6) months following the date of death; (ii) a year-end Bonus (paid in
accordance with the Company's bonus plan) prorated for the months
during which Executive received his Annual Base Salary for that fiscal
year in which his death occurs; and (iii) any medical, pension, death,
disability, supplemental executive retirement plan ("SERP") and/or
other benefits to which Executive is entitled under the terms of this
Agreement or under the terms of any employee benefit plan of the
Company in which he participates and which is in effect at the time of
his death. All compensation hereunder shall be subject to withholding
and other applicable tax laws. Executive's Beneficiary shall mean a
revocable trust created by Executive during his lifetime and in
existence at the date of his death, but only if Executive has given
written notice to the Company of the existence of such trust by
providing the name of the trust, the date created, and the name of the
trustee, or in the absence of such notification, Executive's
Beneficiary shall be his estate.
(b) Termination Upon Long-Term Disability. In the event of
Executive's Long- Term Disability, the Employment Term shall cease, and
Executive shall be entitled to receive: (i) his Annual Base Salary at
the rate then in effect pursuant to Section 3 for a period of six (6)
months following the date the Long-Term Disability first occurs; (ii) a
year- end Bonus (paid in accordance with the Company's bonus plan)
prorated for the months during which Executive received his Annual Base
Salary for that fiscal year in which the Long-Term Disability occurs;
and (iii) any medical, pension, death, disability, SERP and/or other
benefits to which Executive is entitled under the terms of this
Agreement or under the terms of any employee benefit plan of the
Company in which he participates and which is in effect at the time his
Long-Term Disability occurs. Following the expiration of six (6)
months, Executive shall be entitled to benefits under the Company's
long-term disability insurance program, pursuant to the terms
thereunder. For purposes of this Agreement, "Long- Term Disability"
shall mean a physical or mental disability which renders Executive
incapable of performing his duties under this Agreement or comparable
duties for another employer and which disability is reasonably expected
to continue for a period of at least six (6) months or more, as
determined in good faith by the Board based on reasonable medical
evidence, including the opinion of an independent physician mutually
agreed to by Executive and the Company (which agreement shall not be
unreasonably withheld). All compensation hereunder shall be subject to
withholding and other applicable tax laws.
(c) Termination for Cause. In the event Executive:
(i) commits any dishonest, fraudulent, or felonious
act which act has a material adverse effect on the Company;
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(ii) commits any gross dereliction of duties or
willful malfeasance in the discharge of his duties to the
Company or any of its Affiliates having a material adverse
effect on the Company;
(iii) discloses or uses confidential information as
set forth in Section 11 to a party unrelated to the Company or
an Affiliate, other than in the normal and ordinary
performance of service for the Company or Affiliate which has
a material adverse effect on the Company; or
(iv) engages in competition as set forth in Section
12 with the Company or an Affiliate which has a material
adverse effect on the Company;
then the Employment Term shall terminate automatically upon action by
the Board. Such termination shall be treated as a termination for
"Cause" and the "Termination Date" shall be the actual date Executive
terminates employment with the Company, notwithstanding any resignation
under Section 6(e). If, prior to the Expiration Date, the Board
terminates Executive's employment for Cause, Executive shall be
entitled to payment of that portion of the Annual Base Salary under
Section 3 that Executive earned through and including the Termination
Date at the rate of the Annual Base Salary in effect at that time;
provided, however, that Executive shall not be eligible for any Bonus
under Section 3 with respect to any periods before or after said
Termination Date. In no event shall Executive be eligible to receive
any portion of his Annual Base Salary or any other compensation or
benefits under this Agreement with respect to any future periods
beginning on or after the Termination Date, including, but not limited
to, any Bonus under Section 3, except any vested retirement or medical
benefits under any employee benefit plan.
(d) Termination for Good Reason. Executive shall have the
right to terminate his employment with the Company for "Good Reason" by
providing written notice of the termination to the Company
("Termination Notice"). The effective date of Executive's termination
shall be that specified in the Termination Notice, or the actual date
Executive terminates employment with the Company, whichever occurs
earlier (the "Termination Date"). For purposes of this Agreement, "Good
Reason" shall mean:
(i) Any change in Executive's title, authority, or
responsibilities which, in Executive's reasonable judgment,
does not represent a promotion from his status, title,
position or responsibilities under this Agreement;
(ii) The assignment to Executive of any duties or
work responsibilities which, in Executive's reasonable
judgment, are inconsistent with his status, title, position or
work responsibilities under this Agreement;
(iii) A reduction by the Company in Executive's
Annual Base Salary;
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(iv) The relocation of the Company's principal office
or the reassignment of Executive to a location more than forty
(40) miles from the location at which Executive performed his
duties at the Commencement Date of this Agreement (except for
required travel on the Company's business to an extent
substantially consistent with his business travel obligations
immediately prior to the relocation);
(v) The failure by the Company to continue in effect
any Bonus or other compensation plan in which Executive
participates, 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 Executive's participation therein, or any action by
the Company which would directly or indirectly materially
reduce his participation therein or reward opportunities
thereunder;
(vi) The failure by the Company to continue in effect
in substantially equivalent form any employee benefit plan
(including any medical, hospitalization, life insurance or
disability benefit plan in which Executive participates), or
any material fringe benefit or perquisite enjoyed by
Executive, unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has been made with
respect to such plan;
(vii) Any material breach by the Company of any
provision of this Agreement;
(viii) The failure of the Company to obtain a
satisfactory agreement from any successor or assign of the
Company to assume and agree to perform this Agreement;
(ix) A family emergency of Executive which is
approved by the Board, which approval shall not be
unreasonably withheld; or
(x) Executive's terminal illness, if Executive
provides the Board satisfactory evidence of such illness from
his medical doctor(s).
If, prior to the Expiration Date, Executive terminates his employment
with the Company for Good Reason, Executive shall be entitled to
payment of that portion of the Annual Base Salary under Section 3 that
Executive earned through and including the Termination Date, at the
rate of the Annual Base Salary in effect at that time. In addition,
Executive shall be entitled to the separation benefits under Section 7.
(e) Termination With Notice. Executive may resign
from his employment with the Company pursuant to this
Agreement at any time by providing written notice to the Board
of his resignation at least twelve (12) months prior to the
effective date of the
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resignation (the "Resignation Notice"). The effective date of
Executive's resignation shall be that specified in the Resignation
Notice, or the actual date Executive terminates employment with the
Company as the result of a resignation, whichever occurs earlier (the
"Resignation Date"). If, prior to the Expiration Date, Executive
resigns his employment, Executive shall be entitled to payment of that
portion of the Annual Base Salary and prorated Bonus under Section 3
that Executive earned through and including the Resignation Date, at
the rate of the Annual Base Salary in effect at that time. Executive
shall not be eligible to receive any portion of the Annual Base Salary
with respect to any future periods beginning on or after the
Resignation Date, including, but not limited to, any Bonus under
Section 3 which was not due and payable in accordance with the
provisions thereof prior to the Resignation Date. Executive shall be
entitled, however, to any medical, pension, death, disability, SERP
and/or other benefits to which he is entitled under this Agreement or
under the terms of any employee benefit plan of the Company in which he
participates and which is in effect at the time of his Resignation
Date.
(f) Termination Without Cause. The Board may, in its sole
discretion, terminate Executive's employment with the Company pursuant
to this Agreement at any time without Cause, by providing written
notice to Executive at least thirty (30) days prior to the "Termination
Date". The term "Termination Date" shall mean the actual date Executive
terminates employment with the Company as a result of action taken by
the Board, and not as a result of Executive's resignation as provided
in Section 6(e). If, prior to the Expiration Date, the Board terminates
Executive's employment without Cause, Executive shall be entitled to
payment of that portion of the Annual Base Salary under Section 3 that
Executive earned through and including the Termination Date, at the
rate of the Annual Base Salary in effect at that time. In addition,
Executive shall be entitled to the separation benefits under Section 7.
7. Separation Protections. Executive shall be entitled to separation
pay as provided in this Section 7, if the Company terminates Executive's
employment without Cause or if Executive terminates his employment for Good
Reason. In the event of such termination, the Company shall pay or provide
Executive:
(a) Executive's Annual Base Salary at the rate in effect as of
his Termination Date, payable through the Expiration Date as if
Executive had continued in his employment;
(b) An amount equal to all Bonus payments to which Executive
would have been entitled had he continued in his employment through the
Expiration Date;
(c) During the period Executive's Annual Base Salary is
continued under this Section 7, Executive shall be entitled to continue
his (and his spouse's) coverage under the Company's group medical,
dental, accident, life and disability benefit insurance plans in which
Executive was entitled to participate immediately prior to his
Termination Date. In the event Executive's participation in any such
plan, program or arrangement is not legally
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possible under any such plan, or any such plan, program or arrangement
is discontinued or the benefits thereunder are materially reduced, the
Company shall arrange to provide Executive with benefits substantially
similar to those which Executive would have otherwise been entitled to
receive under such plans, programs and arrangements prior thereto at
the Company's cost;
(d) As provided under Section 4(m), the Company shall
accelerate and make immediately exercisable any and all unmatured
options (whether or not such options are otherwise exercisable) which
Executive then holds to acquire securities from the Company; provided,
however, that Executive shall have until the original expiration date
to exercise any such outstanding options.
Any separation payments made under this Section 7 shall be offset by any
severance amounts payable under the September 26, 1997 Change in Control
Agreement, exclusive of any excise taxes and/or gross-up payments. The
separation payments under this Section 7 shall be subject to all applicable
federal and state income and other withholding taxes.
8. Relocation Expenses. At the Expiration Date or upon Executive's
resignation or termination of employment under Section 6, the Company shall pay
or reimburse Executive for all reasonable costs incurred by Executive in
relocating to a location within the continental United States (but outside of
Xxxxxxxx County and the counties contiguous to it) within five (5) years from
the date of Executive's resignation or termination, including all reasonable
costs of moving, selling Executive's residence and purchasing a new residence,
and with full reimbursement of income taxes, but not including any guarantee of
the market value of Executive's residence; provided, however, that any of such
costs which are also paid or reimbursed by any third party shall not be paid or
reimbursed by the Company and Executive shall return any monies already paid or
reimbursed by the Company in such event.
9. Fees and Expenses. The Company shall pay all reasonable legal fees
and related expenses (including the costs of experts, evidence and counsel)
incurred by Executive as a result of (a) Executive's termination of employment
for Good Reason (including all such fees and expenses, if any, incurred in
contesting or disputing any such termination of employment whether or not such
contest or dispute is resolved in Executive's favor), (b) the Company's
termination of Executive's employment without Cause, or (c) Executive seeking to
obtain or enforce any right or benefit provided by this Agreement or by any
other plan or arrangement maintained by the Company under which Executive is or
may be entitled to receive benefits, unless the Company shall ultimately prevail
in establishing termination of Executive's employment for Cause. In addition,
the Company shall gross up any payments under this Section 9 to cover any income
taxes of Executive arising out of any reimbursement under this Section 9.
10. Inventions. Executive agrees that all processes, discoveries,
formulas, improvements, technologies, designs and inventions ("Inventions"),
including new contributions, improvements, ideas and discoveries, whether
patentable or not, conceived, developed, invented or made by him,
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or by him jointly with others, during the Employment Term shall belong to the
Company or its Affiliates. Executive shall further:
(a) promptly disclose such Inventions to the Company;
(b) assign to the Company, without additional
compensation, all patent and other rights to such
Inventions, whether patentable or unpatentable,
including all substitute, continuation-in-part and
reissue applications, patents of addition, and
confirmation relative thereto, for the United States
of America and foreign countries;
(c) sign all papers necessary to carry out the foregoing;
and
(d) give testimony in support of his inventorship.
Furthermore, if any Invention is described in a patent application or is
disclosed to third parties, directly or indirectly, by Executive within one (1)
year after the termination of his Employment Term by the Company, it is to be
presumed that the Invention was conceived or made during the Employment Term.
Executive agrees that he will not assert any rights to any Invention as having
been made or acquired by him prior to June 4, 1990, his original date of
employment by the Company, except for Inventions, if any, disclosed to the
Company in writing prior to said date.
11. Confidentiality Covenant. Executive agrees that while he is
employed by the Company and at all times thereafter he shall not, directly or
indirectly, disclose or use to the detriment of the Company or any of its
Affiliates or for the benefit of any other person or firm any confidential
information or trade secrets of the Company or any of its Affiliates which are
not readily available in the public domain (including, but not limited to, the
identity and particular needs of any customer of the Company or any of its
Affiliates, the methods and techniques of any of the businesses of the Company
or any of its Affiliates, the marketing and business plans and objectives of the
Company or any of its Affiliates, and the formula of any product of the Company
or any of its Affiliates). Furthermore, Executive shall promptly deliver to the
Company upon termination of his employment, or at any time the Company may so
request, all memoranda, notes, records, reports, manuals, drawings, blueprints,
formulas, and other documents (and all copies thereof, excluding Executive's
personal calendar and telephone directory) relating to the businesses of the
Company or any of its Affiliates and all property associated therewith, which he
may then possess or have under his control. This Agreement supplements and does
not supersede Executive's obligations under a statute or the common law to
protect the Company's trade secrets and confidential information.
12. Covenant Not to Compete. The restrictions of this Section 12 shall
apply during the Employment Term and for the two (2) year period following the
end of the Employment Term. If Executive breaches any provision of this
Agreement, the period during which the restrictions of this Agreement apply
shall be extended for an additional period equal to the period of the breach
plus an additional three (3) months. While the restrictions of this Section 12
apply, Executive is
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prohibited from engaging in any direct or indirect competition with the Company
or an Affiliate, including, but not limited to:
(a) Directly or indirectly accepting employment with,
consulting with, or assisting any activity or business that is the same
as, substantially similar to, or competitive with that of the Company
or an Affiliate, including a business that is involved with the sale,
design, development, manufacture, or production of products competitive
with those sold (or anticipated to be sold) by the Company or an
Affiliate. This prohibition shall apply to any employment with,
involvement in, or control of another business, whether as an employee,
owner, manager, sole proprietor, joint venturer, partner, shareholder,
independent contractor, consultant, officer, director, or in any other
capacity. This prohibition shall not prevent the ownership of stock of
less than five percent (5%) of the outstanding shares of any
publicly-held competitor of the Company or Affiliate, provided that (i)
the investment is passive, (ii) Executive has no other involvement with
the corporation, and (iii) Executive makes full disclosure to the
Company of the stock ownership at the time Executive acquires it.
(b) Soliciting, contacting, or servicing any current customer
or client of the Company or Affiliate, or any person who has been a
customer or client of the Company or Affiliate at any time during the
previous three (3) years, or any potential customer or client of the
Company or Affiliate whom Executive has solicited on behalf of the
Company or Affiliate in the previous year.
(c) Directly or indirectly seeking to influence, facilitate,
or encourage any employee of the Company or Affiliate to leave its
employment.
The restrictions outlined above shall be applicable and enforceable
only in the geographical area served by the Company or an Affiliate during the
two (2) years prior to Executive's termination of employment with the Company.
Executive agrees to inform any prospective competing employer about the
existence of this Section 12 before accepting new employment and shall not
agree, as a term of any new employment, that the new employer will defend
Executive or pay his attorneys' fees in the event of a lawsuit brought by the
Company to enforce the terms of this Section 12.
13. Remedies for Breach. Executive acknowledges that breach of the
covenants contained in Sections 10, 11, and 12 would cause the Company immediate
and irreparable harm and that the legal remedies for breach of the covenants
contained in Sections 10, 11 and 12 are inadequate, and therefore agrees that,
in addition to any or all other remedies available to the Company and its
Affiliates, in the event of a breach or a threatened breach of any covenant
contained in Section 10, 11 or 12, the Company or any of its Affiliates may:
(a) Obtain immediate injunctive relief in the form of a
temporary restraining order without notice, preliminary injunction,
and/or permanent injunction against
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Executive to enforce the terms of this Agreement, and the Company shall
not be required to post any bond or other security to obtain such
injunctive relief from the courts; and
(b) Recover from Executive an amount equal to (i) all sums
paid by the Company or any of its Affiliates to him after commencement
of the breach plus (ii) all costs and expenses (including reasonable
attorneys' fees) incurred by the Company or any of its Affiliates in
enforcement of the covenant plus (iii) all revenues derived from the
actions in breach of the covenants which are received by Executive or
by any person or firm on whose behalf Executive breached or threatened
to breach the covenants in Section 10, 11 or 12.
14. Notice. Any notice required to be given by the Company hereunder to
Executive shall be in proper form if signed by the Secretary of the Company or
other person designated by the Board. Until one party shall advise the other in
writing to the contrary, notices shall be deemed delivered
(a) To the Company if delivered to the Secretary of the
Company, or, if mailed, by certified or registered mail, postage
prepaid, to:
Lilly Industries, Inc.
000 Xxxx 000xx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: Chair of Compensation Committee/
Board of Directors
(b) To Executive if delivered to Executive in person or if
mailed, by certified or registered mail, postage prepaid, to the
address as designated by Executive on his most recent personnel form
containing such information.
15. Liability Insurance Coverage and Indemnification. Nothing in this
Agreement shall deprive Executive, either during or subsequent to the
termination of his employment pursuant to this Agreement, of the benefits of the
Company's existing or hereafter obtained liability insurance coverage, subject
to the terms and conditions of such coverage, nor of any right to
indemnification agreement between the Company and Executive, subject to the
limitations on indemnification set forth therein.
16. Consulting. Upon expiration of the Employment Term (including
extensions), Executive agrees to provide consulting services to the Company, as
an independent contractor and as requested by the Company, for a period of
thirty-six (36) months after such expiration. In consideration for Executive's
consulting services, Company shall pay to Executive One Hundred Thousand and
No/100 Dollars ($100,000.00) for each of the three (3) twelve (12) month periods
in such thirty-six (36) month period. Each payment shall be made on the first
day of each twelve (12) month period. This Section 16 shall apply in all cases
except if Executive is terminated for Cause
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under Section 6(c), in the case of death of Executive, or if Executive is
subject to a Long-Term Disability.
17. Non-assignability, Binding Agreement.
(a) By Executive. Executive shall not assign or delegate this
Agreement or any right, duty, obligation, or interest under this
Agreement without the Company's prior written consent; provided,
however, that nothing shall preclude Executive from designating
beneficiaries to receive benefits payable under this Agreement upon his
death, and nothing shall preclude Executive's executors,
administrators, or their legal representatives, from assigning any
rights under this Agreement to any person.
(b) By the Company. The Company shall assign, delegate, or
transfer this Agreement and all of its rights and obligations under
this Agreement to any of its Affiliates or subsidiaries or to any
business entity that, by merger, consolidation, or otherwise, acquires
all or substantially all of the assets of the Company or to which the
Company transfers all or substantially all of its assets.
(c) Binding Effect. Except as limited under Sections 17(a) and
(b), this Agreement shall be binding upon and inure to the benefit of
the parties, any successors to or assigns of the Company, Executive's
heirs, and the personal representatives or executor of Executive's
estate.
18. Severability. If a court of competent jurisdiction makes a final
determination that any term or provision of this Agreement is invalid or
unenforceable, and all rights to appeal the determination have been exhausted or
the period of time during which any appeal of the determination may be perfected
has been exhausted, the remaining terms and provisions shall be unimpaired and
the invalid or unenforceable term or provision shall be deemed replaced by a
term or provision that is valid and enforceable and that most closely
approximates the intention of the parties with respect to the invalid or
unenforceable term or provision, as evidenced by the remaining valid and
enforceable terms and conditions of this Agreement.
19. Amend. No provision of this Agreement may be modified, amended,
waived, or discharged in any manner except by an instrument in writing signed by
Executive and on behalf of the Company by such officer as may be specifically
designated by the Board. No agreement or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
any party which are not expressly set forth in this Agreement.
20. Waiver. The waiver by any party of compliance by any other party
with any provision of this Agreement shall not operate or be construed as a
waiver of any other provision of this Agreement (whether or not similar), or a
continuing waiver or a waiver of any subsequent breach by a party of a provision
of this Agreement. Performance by any party of any act not required of it under
the terms and conditions of this Agreement shall not constitute a waiver of the
limitations on
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its obligations under this Agreement, and no performance shall estop that party
from asserting those limitations as to any further or future performance of its
obligations.
21. Applicable Law and Forum. This Agreement has been entered into in
the State of Indiana and shall be governed by and construed in accordance with
the laws of the State of Indiana. Except as specifically provided elsewhere in
this Agreement, the parties agree that any action in law or equity brought by
any party arising from or in connection with this Agreement or arising from or
in connection with the performance by either party of its obligations hereunder
shall be brought only in the United States District Court for the Southern
District of Indiana, Indianapolis Division or the Circuit Court of Xxxxxx
County, Indiana, and the parties hereto consent to the jurisdiction of such
forums.
22. Prior Employment Agreements. This Agreement is a complete and total
integration of the understanding of the parties with respect to the subject
matter of this Agreement and supersedes all prior or contemporaneous
negotiations, commitments, agreements, writings and discussions with respect to
the subject matter of this Agreement, except those agreements which are
specifically identified herein. Any and all such prior negotiations,
commitments, agreements, writings and discussions shall have no force or effect,
except those agreements which are specifically identified herein.
23. Heading. The headings of the Sections of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction of this Agreement.
24. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same Agreement. Only one counterpart,
signed by the party against which enforcement is sought, needs to be produced to
evidence the existence of this Agreement.
EXECUTED as of the date first written above.
EXECUTIVE LILLY INDUSTRIES, INC.
----------------------------- By:
------------------------------------
Xxxxxxx X. Xxxxxx Xxxxx X. Xxxxxxxxx, Compensation
Committee Chairman, Board of
Directors
By:
------------------------------------
Xxxx X. Xxxxx, Vice President and
Chief Financial Officer
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