Exhibit 10.33
XXXXXX ALUMINUM & CHEMICAL CORPORATION
CHANGE IN CONTROL SEVERANCE AGREEMENT
(EFFECTIVE NOVEMBER 18, 2002) (A)
This Change in Control Severance Agreement (the "Agreement")
is entered into by and between Xxxxxx Aluminum & Chemical Corporation, a
Delaware corporation (the "Corporation"), and __________________ ("Executive") ,
effective _____________, 2002 (the "Effective Date")
WHEREAS, Executive has made, and is expected to continue to
make, major contributions to the short- and long-term profitability, growth and
financial strength of the Corporation;
WHEREAS, the Corporation continues to pursue strategies that
will result in a stronger and more profitable Corporation going forward and may
lead to acquisitions, divestitures or other forms of corporate restructuring;
WHEREAS, the Corporation previously made available to key
managers of the Corporation, including Executive, an Enhanced Severance
Agreement (together with any other employment or similar agreements which
provide for the payment of severance upon a termination of employment,
collectively referred to as the "Prior Agreement"), in order to ensure that such
managers have appropriate protection in the event of a "Change in Control" of
the Corporation, and to permit them to maintain their focus on key goals related
to the Corporation's initiatives;
WHEREAS, the Corporation now desires to supercede and replace
the Prior Agreement by entering into Change in Control Severance Agreements with
certain key managers, including Executive, and Executive also desires to enter
into this Agreement and to be bound by the terms thereof:
NOW, THEREFORE, the Corporation and Executive agree as
follows:
1. TERM OF AGREEMENT. This Agreement shall be effective as of
the Effective Date and, subject to the provisions of Section 3, shall
terminate on the second anniversary of a Change in Control. Upon
execution of this Agreement, the Executive hereby waives the right to
receive any payments or awards under the Prior Agreement and the Prior
Agreement shall be superseded by this Agreement and shall be of no further
force or effect. Any payments made to Executive under this Agreement
shall be first used to satisfy any obligations the Company or the
Corporation may have to the Executive under the Worker Adjustment and
Retraining Act of 1988 or similar statutes or regulation of any
jurisdiction relating to any plant closing or mass lay-off or as otherwise
required by law.
2. DEFINED TERMS. In addition to terms defined elsewhere herein,
the following terms have the following meanings when used in this
Agreement with initial capital letters:
(a) "Base Pay" means the Executive's annual base salary
rate at a rate not less than his or her annual fixed or base
compensation as in effect immediately prior to termination of
employment or, if higher, the Executive's annual fixed or base
compensation in effect within the six month period preceding a
Change in Control, without reduction for contributions to any
qualified or non-qualified employee benefit plan or fringe benefit
plan.
(b) "Bankruptcy Committees" means the committees consisting of a
statutory committee of unsecured creditors and a statutory committee
of asbestos claimants, each appointed by the United States trustee
for the District of Delaware on February 25, 2002, pursuant to
section 1102 of the Bankruptcy Code 11 U.S.C. xx.xx. 101-1330.
(c) "Cause" means (1) the Executive's engaging in fraud,
embezzlement, misconduct or any act of dishonesty with respect to
the Corporation or its affiliates, (2) the Executive's habitual drug
or alcohol use which impairs the ability of the Executive to perform
his duties with the Corporation or its affiliates, (3) the
Executive's indictment with respect to, conviction of, or plea of
guilty or no contest to, any felony, or other comparable crime under
applicable local law (except, in any event, for motor vehicle
violations not involving personal injuries to third parties or
driving while intoxicated), or the Executive's incarceration with
respect to any of the foregoing that, in each case, impairs the
Executive's ability to continue to perform his duties with the
Corporation and its affiliates, or (4) the Executive's material
breach of any written employment agreement or other agreement
between the Corporation and the Executive, or of the Xxxxxx Aluminum
& Chemical Corporation Code of Business Conduct, or failure by
the Executive to substantially perform his or her duties for the
Corporation which remains uncorrected or reoccurs after written
notice has been delivered to the Executive demanding substantial
performance and the Executive has had a reasonable opportunity to
correct such breach or failure to perform.
(d) "Change in Control" means (at any time on or after the
Effective Date):
(1) The sale, lease, conveyance or other disposition of all
or substantially all of the Corporation's assets (including
the assets and stock of the Corporation's direct and indirect
subsidiaries and affiliates) as an entirety or substantially
as an entirety to any person, entity or group of persons
acting in concert other than in the ordinary course of
business; provided, however, that a Change in Control shall
not occur (A) upon any such sale, lease, conveyance or other
disposition to a direct or indirect subsidiary of the
Corporation or (B) if the voting common equity interests of
the ongoing entity are beneficially owned, directly or
indirectly, by the Corporation's shareholders in
substantially the same proportions as such shareholders owned
the Corporation's outstanding voting common equity interests
immediately prior to such event.
(2) Any transaction or series of related transactions (as a
result of a tender offer, merger, consolidation or otherwise)
that results in any "person" (as defined in Section 13(h)(8)
(E) under the Securities Exchange Act of 1934) becoming the
beneficial owner (as defined in Rule l3d-3 under the
Securities Exchange Act of 1934), directly or indirectly, of
more than 50% of the aggregate voting power of all classes of
common equity of the Corporation, except if such person is
(A) a subsidiary of the Corporation, (B) an employee stock
ownership plan or any other tax-qualified benefit plan
maintained by the Corporation or any affiliate thereof , (C)
a corporation or other entity formed to hold the
Corporation's common equity securities and whose shareholders
or owners constituted, at the time such corporation became
such holding company, substantially all the shareholders of
the Corporation, (D) the surviving entity in any transaction
if the shareholders of the Corporation immediately prior to
such transaction continue to own at least 50% of the voting
common equity of such surviving entity immediately following
such transaction, (E) any underwriter temporarily holding
securities pursuant to an offering of such securities, or (F)
Executive or any group of persons including Executive (or any
entity controlled by Executive or any group of persons
including Executive). Notwithstanding the provisions of this
paragraph (2), a Change in Control shall not be deemed to
have occurred solely by virtue of (i) the consummation of a
plan of reorganization of the Corporation under its
bankruptcy proceeding commenced February 12, 2002 under the
United States Bankruptcy Code (11 U.S.C.ss.1101, et seq.)
("Bankruptcy Code") where the ownership of more than 50% of
the common stock of the Corporation is transferred to the
creditors of the Corporation or a channeling trust (the
"Emergence Date"), or (ii) a plan of liquidation or a plan of
asset protection is approved by the Bankruptcy Court in a
proceeding under Chapter 7 or Chapter 11 of the Bankruptcy
Code; provided, however, that if pursuant to such
reorganization, restructuring, liquidation or asset
protection plan, any person (other than a channeling trust or
those set forth in clauses (A) through (F) above) is or
becomes the beneficial owner, directly or indirectly, of
securities of the Corporation representing more than 50% of
the combined voting power of the Corporation's then
outstanding securities, a Change in Control will be deemed to
have occurred. Notwithstanding the foregoing, a Change in
Control of the Corporation shall not be deemed to occur
solely because any person acquires beneficial ownership of
more than 50% of the Corporation's voting common equity as a
result of the acquisition of such equity by the Corporation
which reduces the number of such equity outstanding.
(3) A change in the composition of the Corporation's Board
of Directors over a period of thirty-six (36) consecutive
months or less such that a majority of the then current Board
members ceases to be comprised of individuals who either (a)
have been Board members continuously since the beginning of
such period, or (b) have been elected or nominated for
election as Board members during such period by at least a
majority of the Board members described in clause (a) who
were still in office at the time such election or nomination
was approved by the Board; provided, however, that this
paragraph (3) shall not apply solely by virtue of a change in
the individuals constituting a majority of the Board members
(a) as implemented pursuant to the consummation of a plan of
reorganization of the Corporation in a proceeding under
Chapter 11 of the Bankruptcy Code, or (b) prior to the
Emergence Date as a result of any such change caused by
Maxxam Inc.
Notwithstanding the foregoing, prior to the Emergence Date (a) any event
described in paragraphs (1) and (2) above shall only constitute a Change in
Control if such event is approved by the Bankruptcy Court unless the Unsecured
Creditors Committee and the Asbestos Claimants Committee both object to the
approval of such event in its entirety and neither committee withdraws its
objection, and (b) no transaction involving the disposition by Maxxam Inc. of
its voting securities in the Corporation to any person shall constitute a Change
in Control.
For purposes of the definition of a Change in Control, the term "Corporation"
shall mean Xxxxxx Aluminum Corporation ("KAC") and shall include Xxxxxx Aluminum
& Chemical Corporation ("KACC") at any time that the voting securities of KACC
are held by any person other than KAC.
(e) "Code" means the Internal Revenue Code of 1986, as amended
from time to time. All references to the Code shall be deemed
also to refer to any successor provisions to such sections.
(f) "Disability" means total and permanent disability as a result
of bodily injury, disease or mental disorder which results in
the Executive's entitlement to long term disability benefits
under the Xxxxxx Aluminum Self-Insured Welfare Plan or the
Xxxxxx Aluminum Salaried Employees Retirement Plan.
(g) "Good Reason" means, without Executive's consent, the
occurrence of any of the following events which is not cured by the
Corporation within ten (10) business days following Executive's
written notice to the Corporation of the event constituting Good
Reason; provided, however, that any such written notice received by
the Corporation following the thirty (30) day period after the date
on which Executive first had knowledge of the occurrence of such
event giving rise to Good Reason (or, in the case of multiple
events, the latest to occur of such events) shall not be effective
and Executive shall be deemed to have waived his/her right to
terminate employment for Good Reason with respect to such event:
(1) Demotion, reduction in title, reduction in position or
responsibilities, or change in reporting responsibilities or
reporting level that is materially and adversely inconsistent
with the Executive's position immediately prior to the
Effective Date or the assignment of duties and/or
responsibilities materially and adversely inconsistent with
such position; provided, however, that the Corporation no
longer being a publicly traded entity or having filed
bankruptcy shall not by itself be Good Reason; or
(2) Relocation of the Executive's primary office location
more than fifty (50) miles from the Executive's current
office location; or
(3) Reduction of greater than 10% in the Executive's Base
Pay from the level existing prior to the Effective Date or
reduction ofgreater than 10% in the Executive's long term or
short term Incentive compensation opportunity as provided for
in the KERP approved by the Bankruptcy Court on September 3,
2002 or a reduction in the Executive's eligibility for
participation in the Corporation's benefit plans that is not
commensurate with a similar reduction among similarly
situated employees.
(h) "Incentive" means Executive's target bonus.
(i) "Release Agreement" means an agreement pursuant to which the
Executive releases all current or future claims, known or unknown,
arising on or before the date of the release against the
Corporation, its subsidiaries and its officers, substantially in a
form approved by the Corporation.
(j) "Significant Restructuring" means the sale or other
disposition of one or more business units to which the Executive
provides all or substantially all of Executive's services; provided,
that, any such sale or other disposition to any entity which is an
affiliate of the Corporation shall not be a Significant
Restructuring for this purpose.
3. SEVERANCE UPON CHANGE IN CONTROL. If the Executive's
employment is terminated by the Corporation, or any successor to the
Corporation, or the Executive terminates his or her employment due to Good
Reason, within the period beginning ninety (90) days prior to a Change in
Control and ending on the second anniversary of such Change in Control,
the Executive will be entitled to receive the severance payments and
benefits set forth in Sections 5 and 6 below; provided, however, that no
severance payments shall be made, or continuing benefits provided, under
the Agreement (and the Agreement shall terminate immediately), if any of
the following apply:
(a) The Executive voluntarily resigns or retires from employment
other than for Good Reason;
(b) The Executive is terminated for Cause;
(c) The Executive's employment terminates as a result of death or
Disability;
(d) The Executive declines to sign and return a Release Agreement
or revokes such Release Agreement within the time provided therein;
or
(e) The Executive receives severance compensation or benefit
continuation pursuant to the Xxxxxx Aluminum & Chemical
Corporation Severance Plan or any other Prior Agreement.
4. SEVERANCE DUE TO SIGNIFICANT RESTRUCTURING. If the Executive's
employment is terminated by the Corporation due to Significant
Restructuring, outside of the period beginning ninety (90) days prior to a
Change in Control and ending on the second anniversary of such Change in
Control, the Executive will be entitled to receive the severance payments
and benefits set forth in Sections 5 and 6 below; provided, however, that
no severance payments shall be made, or continuing benefits provided,
under the Agreement, if any of the following apply:
(a) An event described in Section 3(a), (b), (c), (d) or (e)
applies; or
(b) The Corporation or the successor to the Corporation offers
the Executive suitable employment in North America in a
substantially similar capacity as determined in accordance with
Personnel Policy Committee Guidelines and at his or her current
level of Base Pay and short term Incentive, regardless of whether
the Executive accepts or rejects such employment.
5. AMOUNT OF SEVERANCE PAYMENTS. If the Executive's employment
terminates as described in Section 3 or 4 above, and he or she becomes
entitled to severance benefits under this Agreement, the Corporation, or
any successor to the Corporation, shall pay to the Executive the
following:
(a) _____(B) times the sum of the Executive's Base Pay plus the
Executive's most recent short term Incentive target shall be
paid to the Executive in a single sum cash payment as soon as
practicable following the Executive's termination (but in no
event later than 30 days after such termination);
(b) The prorated short term Incentive program in effect for the
year in which the Executive's termination of employment occurs
shall be paid to the Executive in a single sum cash payment as soon
as practicable following the Executive's termination (but in no
event later than 30 days after such termination). The amount of
the prorated short term Incentive program shall be determined by
multiplying the Executive's short term Incentive target for the
full current year by a fraction, the numerator of which is the
number of days from January 1 until the Executive's termination of
employment and the denominator of which is 365. Notwithstanding
the foregoing, if the Executive is terminated on December 31 of any
year, he or she will participate in the actual short term Incentive
program for the year, based on applicable performance measure(s),
and no proration shall apply; and
(c) The prorated long term Incentive program in effect for the
year in which the Executive's termination of employment occurs
shall be paid to the Executive at the time such long term Incentive
program terminates (but in no event later than 30 days after such
termination) if the Corporation is determined at that time to have
achieved the long term Incentive target under such program. The
amount of the prorated long term Incentive program shall be
determined by multiplying the Executive's long term Incentive
target for such long term period by a fraction, the numerator
of which is the number of days from the inception of the long term
program until the Executive's termination of employment and the
denominator of which is 365.
6. CONTINUATION OF BENEFITS. If the Executive's employment
terminates as described in Section 3 or 4 above, and he or she becomes
entitled to severance benefits under this Agreement, the Corporation, or
any successor to the Corporation, shall provide to the Executive the
following:
(a) Continuation of his or her coverage under the Corporation's
medical, dental, vision, life insurance and disability benefit
plans, as if the Executive had continued in employment with the
Corporation uninterrupted for a period of _____(B) years following
the Executive's termination of employment as described in Section 3
or 4 above; provided, however, that the Participant must continue
to pay the monthly medical and life insurance contributions (if
any) paid by active employees of the Company for this coverage to
remain in effect. If the Executive is unable to continue
participating in the Company's benefit plans due to the provisions
of the documents governing such plans or any other reason, the
Company will reimburse the Executive for his or her expenses in
obtaining comparable benefit coverage. Notwithstanding the
foregoing, coverage under any qualified retirement plan and (except
as otherwise required by law) coverage under any cafeteria plan,
dependant care spending account or health care spending account
will cease. The Corporation may satisfy a portion of its
obligations by reimbursing and/or paying the Participant's
applicable COBRA premium with respect to any such plans. The
Company's obligations under this clause (a) shall cease once the
Participant is eligible for comparable coverage from a subsequent
employer. The Corporation may require the health benefit
continuation period required under the continuation coverage
requirements of Section 4980B of the Internal Revenue Code of 1986,
as amended, and Part 6 of Subtitle B of Title I of the Employee
Retirement Income Security Act of 1974, as amended, to run
concurrently with the benefit continuation period hereunder; and
(b) Continuation of all other existing perquisites, including,
without limitation, the continuation of his or her company car
benefit, for a period of ____(B) years following the Executive's
termination of employment as described in Section 3 or 4 above,
with the exception of gas reimbursement. The company reserves the
right to offer a reasonable cash buy-out of the company car
benefit.
7. GROSS-UP FOR TAX PAYMENTS. If any payment or distribution by
the Corporation or any of its affiliates to or for the benefit of
Executive, whether paid or payable or distributed or distributable under
this Agreement or under any other agreement, policy, plan, program or
arrangement, or the lapse or termination of any restriction under any
agreement, policy, plan, program or arrangement (a "Payment"), would be
subject to the excise tax imposed by Section 4999 of the Code by reason of
being considered contingent on a change in ownership or control of the
Corporation, within the meaning of Section 280G of the Code, or to any
similar tax imposed by state or local law, or any interest or penalties
with respect to such tax (such tax or taxes, together with any such
interest and penalties, being hereafter collectively referred to as the
"Excise Tax"), then Executive will be entitled to receive an additional
payment or payments (collectively, a "Gross-Up Payment"). The Gross-Up
Payment will be in an amount such that, after payment by Executive of all
taxes (including any interest or penalties imposed with respect to such
taxes), including any Excise Tax imposed upon the Gross-Up Payment,
Executive retains an amount of the Gross-Up Payment equal to the Excise
Tax imposed on the Payment. Notwithstanding the foregoing, if no Excise
Tax would apply if the aggregate Payments were reduced by five percent
(5%), then the aggregate Payments shall be reduced by the amount necessary
to avoid application of the Excise Tax, in such manner as the Executive
shall direct, and no Gross-Up Payment will be made. The following
provisions shall apply in determining whether a Gross-Up Payment shall
apply:
(a) Unless the Corporation and Executive otherwise agree in
writing, any determination required under this Section 7 shall be
made in writing by nationally recognized independent public
accountants (the "Accounting Firm"), whose determination shall be
conclusive and binding upon Executive and the Corporation for all
purposes. For purposes of making the calculations required by this
Section 7, the Accounting Firm may make reasonable assumptions and
approximations concerning applicable taxes and may rely on
reasonable, good faith interpretations concerning the application
of Sections 280G and 4999 of the Code. The Corporation and
Executive shall furnish to the Accounting Firm such information and
documents as the Accounting Firm may reasonably request in order to
make a determination hereunder. The Corporation shall bear all
costs the Accounting Firm may reasonably incur in connection with
any calculations contemplated hereunder. The Accounting Firm shall
be required to provide its determination within sixty (60) days
after the date of the Executive's termination, and the Corporation
shall be responsible for any income tax, penalty or interest
liability incurred as a result of delay by the Accounting Firm.
(b) If the Accounting Firm determines that no Excise Tax is
payable by Executive, it will, at the same time as it makes such
determination, furnish the Corporation and Executive an opinion
that Executive has substantial authority not to report any Excise
Tax on his or her federal, state or local income or other tax
return. If the Accounting Firm determines that an Excise Tax will
(or would, but for reduction in the Payment) be payable by
Executive, it will, at the same time as it makes such
determination, furnish the Corporation and Executive the detailed
basis for such opinion. The Corporation will make the Gross-Up
payment within five (5) business days thereafter.
(c) If the federal, state and local income or other tax returns
filed by Executive are consistent with the determination of the
Accounting Firm under paragraph (b) above, and the Internal Revenue
Service or any other taxing authority asserts a claim or notice of
deficiency (referred to in this Section 7 as a "claim") against the
Executive that, if successful, would require the payment by the
Corporation of a Gross-Up Payment, the following shall apply.
Executive will not pay such claim prior to the earlier of (1) the
expiration of the thirty (30) calendar day period following the
date on which he or she gives such notice to the Corporation and
(2) the date that any payment of amount with respect to such claim
is due. If the Corporation notifies Executive in writing prior to
the expiration of such period that it desires to contest such
claim, Executive will:
(i) Provide the Corporation with any written records or
documents in his or her possession relating to such claim
reasonably requested by the Corporation;
(ii) Take such action in connection with contesting such
claim as the Corporation shall reasonably request in writing from
time to time, including without limitation accepting legal
representation with respect to such claim by an attorney competent
in respect of the subject matter and reasonably selected by the
Corporation;
(iii) Cooperate with the Corporation in good faith in order
effectively to contest such claim, which may include the payment
of an amount advanced by the Corporation and assertion of a claim
for refund; and
(iv) Permit the Corporation to participate in any proceedings
relating to such claim;
provided, however, that the Corporation will bear and pay directly all costs and
expenses (including interest and penalties) incurred in connection with such
contest and will indemnify and hold harmless Executive, on an after-tax basis,
for and against any Excise Tax or income tax, including interest and penalties
with respect thereto, imposed as a result of such contest and any such payments.
If the Corporation directs Executive to pay the tax claimed, or otherwise fails
to contest the claim as described above, the Corporation will immediately pay to
Executive the amount of the required deficiency payment, including any Excise
Tax or income tax, and interest and penalties with respect thereto.
(d) As a result of the uncertainty in the application of Section
4999 of the Code at the time of the determination, it is possible
that Gross-Up Payments which will not have been made by the
Corporation should have been made ("Underpayment") or Gross-Up
Payments are made by the Corporation which should not have been
made ("Overpayment"), consistent with the calculations required to
be made hereunder. In the event that Executive thereafter is
required to make payment of any Excise Tax or additional Excise
Tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment shall be
promptly paid by the Corporation to or for the benefit of
Executive. In the event the amount of the Gross-Up Payment exceeds
the amount necessary to reimburse Executive for his Excise Tax, the
Accounting Firm shall determine the amount of the Overpayment that
has been made and any such Overpayment shall be promptly paid by
Executive to or for the benefit of the Corporation.
8. Restrictive Covenants.
(a) Noncompetition; Nonsolicitation. For the one year period
following the termination of employment with the Corporation,
Executive agrees that he will not, without the prior written
consent of the Corporation, which shall not unreasonably be
withheld, directly or indirectly, whether as a principal, agent,
employee, consultant, contractor, advisor, representative,
stockholder (other than as a holder of an interest of five percent
(5%) or less in the equity of any corporation whose stock is traded
on a public stock exchange), or in any other capacity:
(i) provide services, advice or assistance to
any business, person or entity which competes with the Corporation
directly, as a primary focus of its business, in the United States
or in any other location in which the Corporation operates, in the
manufacture, sale or delivery of any materials, products or
services which constitute more than twenty percent (20%) of the
Corporation's revenues in the prior twelve month period; or
(ii) intentionally entice, induce or solicit, or attempt to
entice, induce or solicit, any individual or entity having a
business relationship with the Corporation, whether as an employee,
consultant, customer or otherwise, to terminate or cease such
relationship.
By entering into this Agreement, Executive acknowledges that these prohibitions
are reasonable as to time, geographical area and scope of activity and do not
impose a restriction greater than is necessary to protect the Corporation's good
will, proprietary information and business interests.
(b) Confidentiality. Executive shall keep secret and
confidential and shall not disclose to any third party, in any
fashion or for any purpose whatsoever, any information regarding
the Corporation which is (i) not available to the general public,
and/or (ii) not generally known outside the Corporation, to which
Executive has or will have had access at any time during the course
of his or her employment by the Corporation, including, without
limitation, any information relating to: the Corporation's business
or operations; its plans, strategies, prospects or objectives; its
products, technology, Intellectual Property described in Subsection
(g), processes or specifications; its research and development
operations or plans; its customers and customer lists; its
manufacturing, distribution, sales, service, support and marketing
practices and operations; its financial condition and results of
operations; its operational strengths and weaknesses; and, its
personnel and compensation policies and procedures. However, this
provision shall not preclude Executive from providing truthful
information to the extent required by subpoena, court order, search
warrant or other legal process, provided that Executive immediately
notifies the Corporation of such request in order to provide the
Corporation an opportunity to object to such request in the
appropriate forum and to obtain a ruling on such objection.
(c) Cooperation. Upon termination of employment for any reason,
Executive shall fully cooperate with the Corporation in all matters
relating to the winding up of his or her pending work on behalf of
the Corporation and the orderly transfer of any such pending work
to other employees of the Corporation as may be designated by the
Corporation.
(d) Enforcement. Any claim arising out of or relating to this
Agreement or Executive's employment with the Corporation or the
termination thereof, other than an action for injunctive relief as
provided below, shall be resolved by confidential, final and
binding arbitration conducted by Judicial Arbitration and Mediation
Services ("JAMS") to be held in Houston, Texas, under the
then-existing JAMS rules, rather than by litigation in court, trial
by jury, administrative proceeding, or in any other forum.
Judgment upon the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof. The Corporation
shall promptly pay all costs and expenses, including without
limitation reasonable attorneys' fees, incurred by Executive or
his/her beneficiaries in resolving any claim hereunder in which
Executive or his/her beneficiaries shall prevail. In all other
cases the parties shall bear their own costs and expenses, except
that Executive shall pay all costs and expenses, including, without
limitation, reasonable attorney's fees incurred by the Corporation
in resolving such claim if the arbitrator(s) determine such claim
to have been brought by Executive (i) in bad faith or (ii) without
any reasonable basis. Notwithstanding the foregoing, the parties
agree that any breach of Subsection (a) or (b) above is likely to
cause irreparable injury to the Corporation and that damages for
any breach of Subsections (a), (b) or (g) are difficult to
calculate. Therefore, upon breach of Subsections (a), (b) or (g)
hereof, the Corporation shall, at its election, be entitled to
injunctive and other equitable relief from a court or such other
relief or remedies, including damages, to which it may be entitled,
and shall not be required to submit the matter to arbitration.
(e) Return of Property. Upon termination of Executive's
employment for any reason, Executive will return to the Corporation
all property belonging to it, including without limitation,
computer equipment, computer programs, cellular telephones, beepers
or other property belonging to the Corporation, and documents,
property and data of any nature and in any form, including
electronic or magnetic form, reflecting any confidential
information described in Subsection (b) above.
(f) Disparagement. Executive agrees not to make any derogatory,
unfavorable, negative or disparaging statements concerning the
Corporation and its affiliates, officers, directors, managers,
employees or agents, or its and their business affairs or
performance. This provision shall not be construed to limit
Executive's ability to give non-malicious and truthful testimony
should Executive be subpoenaed to do so by competent authority
having jurisdiction.
(g) Intellectual Property. For purposes of this Subsection (g),
the term "Intellectual Property" means all inventions, creations,
trade secrets, patents (utility or design) and other intellectual
property relating to any programming, documentation, technology,
material, product, service, idea, process, plan or strategy
concerning the business or interests of the Corporation that
Executive conceives, develops or delivers to the Corporation, in
whole or in part, at any time during his or her employment with the
Corporation including, without limitation, all copyrights,
inventions, discoveries and improvements, trademarks, designs and
all other intellectual property rights. All such Intellectual
Property shall be considered work made for hire by Executive and
owned by the Corporation. Executive agrees to perform, upon the
request of the Corporation, during or after his or her employment,
such acts as may be necessary or desirable to transfer, perfect and
defend the Corporation's ownership and any resulting registrations
of the Intellectual Property.
(h) Blue Pencil. If, at any time, the provisions of this Section
8 shall be determined to be invalid or unenforceable under any
applicable law, by reason of being vague or unreasonable as to
area, duration or scope of activity, this Agreement shall be
considered divisible and shall become and be immediately amended to
only such area, duration and scope of activity as shall be
determined to be reasonable and enforceable by the court or other
body having jurisdiction over the matter and Executive and the
Corporation agree that this Agreement as so amended shall be
valid and binding as though any invalid or unenforceable provision
had not been included herein.
(i) Acknowledgement. EXECUTIVE ACKNOWLEDGES THAT HE HAS CAREFULLY
READ THIS SECTION 8 AND HAS HAD THE OPPORTUNITY TO REVIEW ITS
PROVISIONS WITH ANY ADVISORS AS HE CONSIDERED NECESSARY AND THAT
EXECUTIVE UNDERSTANDS THIS AGREEMENT'S CONTENTS AND SIGNIFIES SUCH
UNDERSTANDING AND AGREEMENT BY SIGNING BELOW.
9. MISCELLANEOUS.
(a) Waiver. Neither party shall, by mere lapse of time, without
giving notice or taking other action hereunder be deemed to have
waived any breach by the other party of any of the provisions of
this Agreement. Further, the waiver by either party of a particular
breach of this Agreement by the other shall neither be construed
as, nor constitute, a continuing waiver of such breach or of other
breaches by the same or any other provision of this Agreement.
(b) Severability. If for any reason a court of competent
jurisdiction or arbitrator finds any provision of this Agreement to
be unenforceable, the provision shall be deemed amended as
necessary to conform to applicable laws or regulations, or if it
cannot be so amended without materially altering the intention of
the parties, the remainder of the Agreement shall continue in full
force and effect as if the offending provision were not contained
herein.
(c) No Mitigation. Executive shall have no duty to mitigate the
Corporation's obligation with respect to the termination payments
set forth herein by seeking other employment following termination
of his or her employment, nor shall such termination payments be
subject to offset or reductions by reason of any compensation
received by Executive from such other employment. The Corporation's
obligations to make any payments hereunder shall not terminate in
the event Executive accepts other full time employment.
(d) Notices. All notices and other communications required or
permitted to be given under this Agreement shall be in writing and
shall be considered effective upon personal service or upon
depositing such notice in the U.S. Mail, postage prepaid, return
receipt requested and addressed to the Chairman of the Board of the
Corporation at its principal corporate address, and to Executive at
his most recent address shown on the Corporation's corporate
records, or at any other address which he may specify in any
appropriate notice to the Corporation.
(e) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of
which taken together constitutes one and the same instrument and in
making proof hereof it shall not be necessary to produce or account
for more than one such counterpart.
(f) Entire Agreement. The parties hereto acknowledge that each
has read this Agreement, understands it, and agrees to be bound by
its terms. The parties further agree that this Agreement
constitutes the complete and exclusive statement of the agreement
between the parties and supersedes all proposals (oral or written),
understandings, representations, conditions, covenants, and all
other communications between the parties relating to the subject
matter hereof.
(g) Governing Law. This Agreement shall be governed by the law of
the State of Texas.
(h) Assignment and Successors. This Agreement will be binding
upon and inure to the benefit of the Corporation and any successor
to the Corporation, including, without limitation, any persons
acquiring directly or indirectly all or substantially all of the
business or assets of the Corporation whether by purchase, merger,
consolidation, reorganization or otherwise (and such successor will
thereafter be deemed the "Corporation" for the purposes of this
Agreement), but will not otherwise be assignable or delegable by
the Corporation. The Corporation will require any such successor,
by agreement in form and substance identical hereto, expressly to
assume and agree to perform this Agreement in the same manner and
to the same extent the Corporation would be required to perform if
no such succession had taken place. This Agreement will inure
to the benefit of and be enforceable by, if then applicable,
Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees and legatees, but
shall not otherwise be assignable by the Executive, whether by
pledge, creation of a security interest or otherwise.
(i) No Employment Rights. Nothing expressed or implied in this
Agreement will create any right or duty on the part of the
Corporation or Executive to have Executive remain in the employment
of the Corporation prior to or following a Change in Control.
(j) Withholding. Any payments provided for hereunder shall be
paid net of any applicable withholding required under federal,
state or local law and any additional withholding to which the
Executive has agreed.
(k) Amendment. This Agreement may not be amended other than by
written agreement of the Corporation and the Executive.
10. IMPACT ON OTHER AGREEMENTS. This Agreement supercedes and
replaces the Prior Agreement. Severance payments under this Agreement
shall be in lieu of any severance or other termination payments provided
under any other agreement between the Executive and the Corporation.
IN WITNESS WHEREOF, the parties have executed this Agreement
on the date first above written.
Xxxxxx Aluminum & Chemical Corporation
By:
Name:
Title:
Executive
----------------
(A) Form of Change in Control Severance Agreement entered into as of November
18, 2002 with Xxxxxx X. Xxxxx and other executive officers of KAC and
KACC, other than Xxxxxx X. Xxxx, Xxxx X. Xxxxxxx, Xxxxxx X. Xxxxx, Xxxx X.
Xx Xxx and one other executive officer.
(B) For Xxxxxx X. Xxxxx, the multiplier in Section 5(a) is three and the
period of continued coverage and perquisites in Sections 6(a) and 6(b) is
three years.
