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EXHIBIT 10.1
XXXXXXXX XXXXXXXXX AGREEMENT
AGREEMENT, dated as of March 23, 1998 by and between Wolverine
Tube, Inc., a Delaware corporation ("Wolverine"), and Xxxxxx X. Xxxxxxxx, an
individual residing at 000 Xxxxxxxxxx Xxxxx, Xxxxxxx, XX 00000 (the
"Executive").
W I T N E S S E T H:
WHEREAS, Wolverine recognizes the Executive's expertise in
connection with his employment by Wolverine or its subsidiaries or affiliates
(collectively, the "Company"); and
WHEREAS, the Company desires to provide the Executive with
severance benefits or the opportunity for continued employment in a different
position if the Executive's employment in his current position is terminated for
the reasons set forth herein and the Executive refrains from engaging in certain
activities in the event his employment is terminated, upon the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, the parties hereto hereby agree as follows:
1. Termination of Employment.
(a) Termination for Cause; Resignation Without Good Reason.
(i) If the Executive's employment is terminated by the Company
for Cause, as defined in Section 1(a)(ii) hereof, or if the Executive resigns
from his employment hereunder, other than for Good Reason, as defined in Section
1(a)(iii) hereof, the Executive shall be entitled to only (A) severance benefits
as provided by the Company procedure and practice and (B) payment of the pro
rata portion of the Executive's salary through and including the date of
termination or resignation.
(ii) For purposes of this Agreement, termination for "Cause"
shall mean termination of the Executive's employment by the Company because of
(A) the Executive's conviction for, or guilty plea to, a felony or a crime
involving moral turpitude, (B) the Executive's commission of an act of
substantial personal dishonesty in connection with his employment by the
Company, (C) a substantial breach of fiduciary duty in connection with his
employment with the Company which shall include, but not be limited to, (1)
investment in any person or organization with the knowledge that such person or
organization has or proposes to have dealings with the Company, such person or
organization competes with the Company, or the Company is considering an
investment in such person or organization. (The reference to "organization"
excludes federal credit unions, publicly owned insurance companies and
corporations the stock of which is listed on a national securities exchange or
quoted on
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NASDAQ if the direct and beneficial stock ownership of the Executive, including
members of his immediate family, is not more than one percent (1%) of the total
outstanding stock of such corporation); (2) a loan (including a guaranty of a
loan) from or to any person or organization having or proposing any dealings
with the Company or in competition with the Company; (3) participation directly
or indirectly in any transaction involving the Company other than as an officer
or employee of the Company; (4) acceptance from any person or organization
having or proposing any dealings with the Company or in competition with the
Company of any gratuity, gift, entertainment or favor which exceeds either
nominal value or common courtesies which are generally accepted business
practice; or (5) service as an officer, director, partner or employee of, or
consultant to, any person or organization having or proposing dealings with the
Company or in competition with the Company; (D) the Executive's failure to
execute or follow the written policies of the Company; or (E) the Executive's
repeated failure to follow reasonable management directives or instruction as
provided by the Board of Directors of the Company (the "Board").
(iii) For purposes of this Agreement, resignation for "Good
Reason" shall mean the resignation of the Executive after (A) notice in writing
is given to him of his relocation, without the Executive's consent, to a place
of business more than 35 miles from the location of the Company's headquarters
in Huntsville, Alabama, (B) a reduction in the Executive's benefits or pay or
(C) a substantial adverse alteration occurs in the nature or status of the
Executive's responsibilities from those in effect on the date hereof,
disregarding change in title only.
(iv) The date of termination for Cause shall be the date of
receipt by the Executive of written notice of such termination. The date of
resignation without Good Reason shall be the date of receipt by the Company of a
written notice of such resignation.
(b) Termination Without Cause; Resignation for Good Reason.
(i) If the Executive's employment is terminated by the Company
Without Cause, or if the Executive resigns from his employment for Good Reason,
subject to the Executive's continuing compliance with Section 2 of this
Agreement, the Executive shall be entitled to receive the following benefits:
(A) The Company shall pay to the Executive (x) in the
event of such termination or resignation within one (1) year following a Change
in Control, as defined in Section 1(b)(v) hereof, an amount equal to two (2)
year's salary; or (y) in all other such events, an amount equal to two (2)
year's salary; in either case to be paid at the rate in effect immediately prior
to the Severance Date (as defined in Section 1(b)(iii)) plus pay at the same
rate for all vacation time accrued during the calendar year in which the
Severance Date occurs, with such payment either, at Executive's option:
(X) as a lump sum within 30 days after the
Severance Date, or
(Y) as a series of payments in accordance
with the Company's normal payroll procedures following the Severance Date.
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(B) The Company shall reimburse the Executive for any
costs incurred by the Executive in electing COBRA continuation coverage under
only the Company's medical plan and maintaining life insurance coverage
comparable to that maintained for him by the Company for the period from the
Severance Date until the earlier to occur of:
(X) the date which is 12 months after the
Severance Date (18 months if Section 1(b) applies, or
(Y) the date on which the Executive is
covered under the medical plan of another employer.
(ii) The Executive shall have no further right under this
Agreement or otherwise to receive any bonus or other compensation with respect
to the year in which such termination or resignation occurs and later years.
(iii) The date of termination of employment without Cause
shall be the date specified in a written notice of termination to the Executive
and the date of resignation for Good Reason shall be the date of receipt by the
Company of written notice of resignation (both such dates hereinafter referred
to as the "Severance Date").
(iv) Termination of the Executive's employment as a result of
his death or disability (if such Executive is eligible for benefits under the
Company's long-term disability plan) shall constitute a termination by the
Company with Cause for purposes of this Agreement.
(v) For purposes of this Agreement, "Change in Control" shall
mean:
(A) The Company is merged, consolidated or
reorganized into or with another corporation or other legal person, and as a
result of such merger, consolidation or reorganization less than a majority of
the combined voting power of the then-outstanding securities of such corporation
or person immediately after such transaction are held in the aggregate by the
holders of Voting Stock (as that term is hereafter defined) of the Company
immediately prior to such transaction;
(B) The Company sells or otherwise transfers all or
substantially all of its assets to another corporation or other legal person,
and as a result of such sale or transfer less than a majority of the combined
voting power of the then-outstanding securities of such corporation or person
immediately after such sale or transfer is held in the aggregate by the holders
of Voting Stock of the Company immediately prior to such sale or transfer;
(C) There is a report filed on Schedule 13D or
Schedule 14D-1 (or any successor schedule, form or report), each as promulgated
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), disclosing that (x) any person (as the term "person" is used in Section
13(d)(3) or Section 14(d)(2) of the Exchange Act) has become the beneficial
owner (as the term "beneficial owner" is defined under
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Rule 13d-3 or any successor rule or regulation promulgated under the Exchange
Act) of securities representing 15% or more of the combined voting power of the
then-outstanding securities entitled to vote generally in the election of
directors of the Company ("Voting Stock"), or (y) any person has, during any
period, increased the number of shares of Voting Stock beneficially owned by
such person by an amount equal to or greater than 15% of the outstanding shares
of Voting Stock; provided, however, that transfers of shares of Voting Stock
between a person and the affiliates or associates (as such terms are defined
under Rule 12b-2 or any successor rule or regulation promulgated under the
Exchange Act) of such person shall not be considered in determining any increase
in the number of shares of Voting Stock beneficially owned by such person;
(D) The Company files a report or proxy statement
with the Securities and Exchange Commission pursuant to the Exchange Act
disclosing in response to Form 8-K or Schedule 14A (or any successor schedule,
form or report or item therein) that a change in control of the Company has
occurred or will occur in the future pursuant to any then-existing contract or
transaction; or
(E) If, during any period of two consecutive years,
individuals who at the beginning of any such period constitute the Directors of
the Company cease for any reason to constitute at least a majority thereof;
provided, however, that for purposes of this clause (v) each Director who is
first elected, or first nominated for election by the Company's stockholders, by
a vote of at least two-thirds of the Directors of the Company (or a committee
thereof) then still in office who were Directors of the Company at the beginning
of any such period will be deemed to have been a Director of the Company at the
beginning of such period.
Notwithstanding the foregoing provisions of Sections (C) or (D) unless otherwise
determined in a specific case by majority vote of the Board, a "Change in
Control" shall not be deemed to have occurred for purposes of Sections (C) or
(D) solely because (1) the Company, (2) an entity in which the Company directly
or indirectly beneficially owns 50% or more of the voting securities (a
"Subsidiary"), or (3) any employee stock ownership plan or any other employee
benefit plan of the Company or any Subsidiary either files or becomes obligated
to file a report or a proxy statement under or in response to Schedule 13D,
Schedule 14D-1, Form 8-K or Schedule 14A (or any successor schedule, form or
report or item therein) under the Exchange Act disclosing beneficial ownership
by it of shares of Voting Stock, whether in excess of 15% or otherwise, or
because the Company reports that a change in control of the Company has occurred
or will occur in the future by reason of such beneficial ownership.
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2. Secrecy and Non-Solicitation.
(a) Confidentiality. The Executive recognizes that the services
performed by him are special, unique and extraordinary in that, by reason of his
employment, he may acquire confidential information and trade secrets concerning
the operation of the Company, the use or disclosure of which could cause the
Company substantial loss and damages which could not be readily calculated and
for which no remedy at law would be adequate. Accordingly, the Executive
covenants and agrees with the Company that for a period of at least three (3)
years after his termination from the Company for any reason, he will not, except
in performance of the Executive's obligations to the Company, or with the prior
written consent of the Company pursuant to the authority granted by a resolution
of the Board, directly or indirectly, disclose any secret or confidential
information that he may learn or has learned by reason of his association with
the Company or use any such information. The term "confidential information"
includes, without limitation, information not previously disclosed to the public
or to the trade by the Company's management with respect to the Company's
products, facilities and methods, trade secrets and other intellectual property,
systems, procedures, manuals, confidential reports, products price lists,
customer lists, financial information (including the revenues, costs or profits
associated with any of the Company's products), business plans, prospects,
employee or employees, compensation, or opportunities but shall exclude any
information already in the public domain which has been disclosed to the public
during the normal course of the Company's business.
(b) Customer Protection. During the Executive's employment and for a
period of two (2) years following the termination of the Executive's employment
for any reason, the Executive covenants and agrees that he will not solicit or
attempt to solicit any business from the Company's customers, including actively
sought prospective customers, with whom the Executive had Material Contact
during his employment, for the purpose of providing products or services
competitive with those provided by the Company. Material Contacts exist between
the Executive and each customer or prospective customers with whom the Executive
has dealt within the twelve months prior to the last day worked, whose dealings
with Wolverine were coordinated or supervised by the Executive, or about whom
the Executive obtained trade secrets or confidential information as a result of
the Executive's association with the Company.
(c) Nonsolicitation of Employees. The Executive further agrees that,
during the Executive's employment and for a period of two (2) years following
the termination of the Executive's employment for any reason, the Executive
shall not directly or indirectly, on his behalf or on behalf of any person or
other entity, solicit or induce, or attempt to solicit or induce, any person
who, on the date hereof or at anytime during the term of this Agreement, is an
employee of the Company, to terminate his or her employment with the Company,
whether expressed in a written or oral agreement or understanding or is
otherwise an "at-will" employee.
(d) The Company shall be entitled to obtain a temporary restraining
order and/or a preliminary or permanent injunction restraining the Executive
from engaging in activities prohibited by this Section 2 or such other relief as
may be required to specifically enforce any of the covenants in this Section 2.
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3. Amendment; Waiver. This Agreement may not be modified, amended or waived in
any manner except by an instrument in writing signed by both parties hereto;
provided, however, that any such modification, amendment or waiver on the part
of the Company shall have been previously approved by the Board. The waiver by
either party of compliance with any provision of this Agreement by the other
party shall not operate or be construed as a waiver of any other provision of
this Agreement, or of any subsequent breach by such party of a provision of this
Agreement.
4. Withholding. Payments to the Executive of all compensation contemplated under
this Agreement shall be subject to all applicable legal requirements with
respect to the withholding of taxes and similar deductions.
5. Governing Law. All matters affecting this Agreement, including the validity
thereof, are to be governed by, and interpreted and construed in accordance
with, the laws of the State of Alabama applicable to contracts executed in and
to be performed in that State. Nothing in this agreement shall affect the rights
of either party under state or federal laws affecting employment.
6. Notices. Any notice hereunder by either party to the other shall be given in
writing by personal delivery or certified mail, return receipt requested. If
addressed to the Executive, the notice shall be delivered or mailed to the
Executive at the address first set forth above, or if addressed to the Company,
the notice shall be delivered or mailed to Xxxxxxxxx Xxxxxxxxx Xxxx, Xxxxx 000,
0000 Xxxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxx 00000, or such address as the
Company or the Executive may designate by written notice at any time or from
time to time to the other party. A notice shall be deemed given, if by personal
delivery, on the date of such delivery or, if by certified mail, on the date
shown on the applicable return receipt.
7. Supersedes Previous Agreements. This Agreement supersedes all prior or
contemporaneous negotiations, commitments, agreements and writings with respect
to the subject matter hereof, all such other negotiations, commitments,
agreements and writings will have no further force or effect, and the parties to
any such other negotiation, commitment, agreement or writing will have no
further rights or obligations thereunder.
8. Counterparts. This Agreement may be executed by either of the parties hereto
in counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument.
9. Headings. The headings of sections herein are included solely for convenience
of reference and shall not control the meaning or interpretation of any of the
provisions of this Agreement.
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IN WITNESS WHEREOF, the Company has caused the Agreement to be
signed by its officer pursuant to the authority of its Board, and the Executive
has executed this Agreement, as of the day and year first written above.
WOLVERINE TUBE, INC.
By: /s/ Xxxx X. Xxxxxxx
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Name: Xxxx X. Xxxxxxx
Title: Chairman
EXECUTIVE
/s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
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