EXHIBIT 10(h)
EXECUTIVE INCOME SECURITY AGREEMENT
AGREEMENT dated as of __________________, 200_, by and between
Xxxxxx-Xxxxxx, Inc., a Florida corporation having its principal offices at 00 X.
Xxx Xxxxxxxx Xxxxxx, Xxx Xxxx, Xxxxxxxxxx, 00000 (the "Company"), and
_____________ (the "Executive").
The Company considers the continued services of key executives of the
Company to be in the best interests of the Company and its shareholders.
The Company desires to assure, and has determined that it is appropriate
and in the best interests of the Company and its shareholders to reinforce and
encourage, the continued attention and dedication of key executives of the
Company to their duties of employment without personal distraction or conflict
of interest in circumstances arising from the possibility or occurrence of a
change in control of the Company.
The Compensation and Corporate Governance Committee of the Board of
Directors of the Company (the "Committee") has authorized the Company to enter
into agreements with those key executives of the Company who are designated by
the Committee, such agreements to set forth the severance compensation which the
Company agrees under certain circumstances to pay such executives.
The Executive is a key executive of the Company and has been designated by
the Committee as an executive to be offered such a severance compensation
agreement with the Company.
In consideration of the premises and the covenants and agreements
contained herein, and other good and valuable consideration, the Company and the
Executive agree as follows:
1. CHANGE IN CONTROL OF THE COMPANY. For purposes of this Agreement, a
"Change in Control of the Company" shall be deemed to have occurred if:
(a) individuals who, as of the date of this Agreement, constitute
the entire Board of Directors of the Company ("Incumbent Directors") cease for
any reason to constitute at least a majority of the Board of Directors of the
Company (the "Board"); PROVIDED, HOWEVER, that any individual becoming a
director subsequent to the date of this Agreement whose election, or nomination
for election by the Company's shareholders, was approved by a vote of at least a
majority of the then Incumbent Directors (other than any such individual whose
initial assumption of office is the result of an actual or threatened election
contest relating to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other
than the Company) shall also be an Incumbent Director;
(b) any merger, consolidation or reorganization of the Company (or,
if the capital stock of the Company is affected, any Subsidiary (as defined
below)) or any sale, lease, or other disposition (in one transaction or a series
of transactions contemplated or arranged by any party as a single plan) of all
or substantially all of the assets of the Company (each of the foregoing being
an "Acquisition Transaction") shall have been effected and (A) the shareholders
of the Company immediately prior to such Acquisition Transaction do not
immediately after such Acquisition Transaction beneficially own, directly or
indirectly, shares representing in the aggregate more than 65% of (I) the
then-outstanding common stock of the corporation surviving or resulting from
such merger, consolidation or recapitalization or acquisition of such assets of
the Company, as the case may be (the "Surviving Corporation") (or of its
ultimate parent corporation, if any) and (II) the Combined Voting Power (as
defined below) of the then outstanding Voting Securities (as defined below) of
the Surviving Corporation (or of its ultimate parent corporation, if any); (B)
the Incumbent Directors at the time of the initial approval of such Acquisition
Transaction do not immediately after such Acquisition Transaction constitute a
majority of the Board of Directors of the Surviving Corporation (or of its
ultimate parent corporation, if any); or (C) any Person (including any
corporation resulting from such Acquisition Transaction and any employee benefit
plan (or related trust) of such corporation) beneficially owns, directly or
indirectly, 20% or more of either (i) the then-outstanding shares of common
stock of the corporation resulting from such Acquisition Transaction or (ii) the
Combined Voting Power of all then-outstanding Voting Securities of the Surviving
Corporation except to the extent that such ownership existed prior to the
Acquisition Transaction; or
(c) the shareholders of the Company shall approve any plan or
proposal for the liquidation or dissolution of the Company; or
(d) any Person (as defined below) shall become the beneficial owner
(as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934,
as amended (the "Exchange Act")), directly or indirectly, of securities of the
Company representing in the aggregate 20% or more of either (i) the then
outstanding shares of Company Common Stock ("Common Stock"), or (ii) the
Combined Voting Power of all then outstanding Voting Securities of the Company;
PROVIDED, HOWEVER, that notwithstanding the foregoing, a Change in Control of
the Company shall not be deemed to have occurred for purposes of this clause (d)
solely as the result of:
(A) an acquisition of securities by the Company which, by
reducing the number of shares of Common Stock or other Voting Securities
outstanding, increases (I) the proportionate number of shares of Common
Stock beneficially owned by any Person to 20% or more of the shares of
Common Stock then outstanding or (II) the proportionate voting power
represented by the Voting Securities beneficially owned by any Person to
20% or more of the Combined Voting Power of all then outstanding Voting
Securities; or
(B) an acquisition of securities directly from the Company,
except that this subsection (B) shall not apply to:
(I) any conversion or exercise of a security
that was not acquired directly from the Company; or
(II) any acquisition of securities if the Incumbent
Directors at the time of the initial approval of such
acquisition would not immediately after (or otherwise as a
result of) such acquisition constitute a majority of the Board;
PROVIDED, HOWEVER, that if any Person referred to in subsections (A) or
(B) of this clause (d) shall thereafter become the beneficial owner of any
additional shares of Company Common Stock or other Voting Securities of
the Company (other than pursuant to a stock split, stock dividend or
similar transaction or an acquisition exempt under such subsection (B)),
then a Change in Control of the Company shall be deemed to have occurred
for purposes of this clause (d).
(e) Notwithstanding anything contained in this Agreement to the
contrary, if the Executive's employment is terminated prior to a Change in
Control of the Company and the Executive reasonably demonstrates that such
termination (i) was at the request of a Third Party (as defined below) or
(ii) otherwise occurred in connection with or in anticipation of a Change
in Control of the Company, then for all purposes of the Agreement, the
date of such Change in Control of the Company shall mean the date
immediately prior to the date of such termination of the Executive's
employment.
(f) For purposes of this Agreement:
(i) "Person" shall mean any individual, entity (including,
without limitation, any corporation, partnership, trust, joint venture,
association or governmental body and any successor to any such entity) or
group (as defined in Sections 13(d)(3) or 14(d)(2) of the Exchange Act and
the rules and regulations thereunder); PROVIDED, HOWEVER, that Person
shall not include the Executive, the Company, any of its Subsidiaries, any
employee benefit plan (or related trust) of the Company or its
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Subsidiaries or any entity organized, appointed or established by the
Executive, the Company or any of its Subsidiaries for or pursuant to the
terms of any such plan, or any of their affiliates;
(ii) "Voting Securities" shall mean all securities of a
corporation having the right under ordinary circumstances to vote in an
election of the board of directors of such corporation; and
(iii)"Combined Voting Power" shall mean the aggregate votes
entitled to be cast generally in the election of directors of a
corporation by holders of then outstanding Voting Securities of such
corporation.
(iv) "Third Party" shall mean a third party who has indicated an
intention, or taken steps reasonably calculated, to effect a Change in
Control of the Company.
2. TERMINATION FOLLOWING CHANGE IN CONTROL OF THE COMPANY.
(a) GENERAL. If a Change in Control of the Company shall have
occurred while the Executive is an employee of the Company, the Executive shall
be entitled to the compensation provided in Section 3 hereof upon the subsequent
termination of the Executive's employment with the Company at any time during
the Term (as defined below) of this Agreement, whether such termination is
effected by the Executive or by the Company, unless such termination occurs as a
result of (i) the Executive's death, (ii) the Executive's Disability (as defined
below), (iii) the Executive's Retirement (as defined below), (iv) the
termination by the Company of the employment of the Executive for Cause (as
defined below), or (v) the termination by the Executive of his employment other
than for Good Reason (as defined below).
(b) DISABILITY. For purposes of this Agreement, "Disability" shall
mean a physical or mental infirmity which has rendered the Executive unable to
substantially perform his or her duties (such term to include performance of the
Executive's part-time duties if the Executive is employed on a part-time basis)
with the Company for a period of 180 consecutive days, unless within 30 days
after the date a Notice of Termination (as defined below) is given by the
Company after an absence for such period the Executive shall have returned to
the full-time performance of such duties.
(c) RETIREMENT. For purposes of this Agreement, "Retirement" shall
mean termination, whether by the Company or by the Executive, of the Executive's
employment with the Company on or after the Executive's early retirement date or
normal retirement date, as the case may be, under the Company's retirement
policy then generally applicable to its salaried employees or in accordance with
any retirement plan or arrangement with respect to the Executive established by
the Company with the Executive's consent.
(d) CAUSE. For purposes of this Agreement, the Company shall have
"Cause" to terminate the Executive's employment only if the Executive (i) has
willfully engaged in illegal conduct or gross misconduct which is materially and
demonstrably injurious to the Company, (ii) has engaged in fraud,
misappropriation, embezzlement or any other act or acts of dishonesty resulting
or intended to result directly or indirectly in a substantial gain or personal
enrichment to the Executive at the expense of the Company, or (iii) has
willfully and continually failed substantially to perform his or her duties with
the Company (other than a failure resulting from the Executive's incapacity due
to physical or mental illness), which failure has continued for a period of at
least 30 days after a written notice of demand for substantial performance has
been delivered to the Executive specifying in reasonable detail the manner in
which the Executive has failed to substantially perform. Notwithstanding the
foregoing, the Executive shall not be deemed to have been terminated for Cause
unless and until there shall have been delivered to the Executive a copy of a
resolution (x) duly adopted by three-quarters (3/4) of the entire membership of
the Committee, or of the Board, at a meeting called and held for such purpose
after reasonable notice to the Executive and an opportunity for the Executive,
together with the Executive's counsel, to be heard before the Committee or the
Board, as the case may be, and (y) finding that in the good faith opinion of the
Committee or the Board, as the case may be, the Executive was guilty of conduct
described in the first sentence of this Section 2(d) and specifying the
particulars of such conduct in detail. For purposes of this provision, no act or
failure to act, on the part of the Executive, shall be considered "willful"
unless it is done, or omitted to be done, by the Executive in bad faith or
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without reasonable belief that the Executive's action or omission was in the
best interests of the Company. Any act, or failure to act, based upon authority
given pursuant to a resolution duly adopted by the Board, or, for any Executive
other than the Chief Executive Officer of the Company, upon the instructions of
the Chief Executive Officer of the Company, or based upon the advice of counsel
for the Company, shall be conclusively presumed to be done, or omitted to be
done, by the Executive in good faith and in the best interests of the Company.
(e) GOOD REASON. For purposes of this Agreement, "Good Reason" shall
mean the occurrence after a Change in Control of the Company of any of the
following without the Executive's express written consent.
(i) The assignment to the Executive by the Company of duties
or responsibilities inconsistent in some material respect with the
Executive's title, position, duties, responsibilities and status with the
Company immediately prior to a Change in Control of the Company, or a
change in the Executive's titles or offices with the Company from those
held by the Executive immediately prior to a Change in Control of the
Company, excluding for these purposes an isolated, insubstantial and
inadvertent action not taken in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by the Executive,
or any removal of the Executive from or any failure to reelect or
reappoint the Executive to any of such positions except in connection with
the termination of the Executive's employment as a result of the
Executive's death, Disability or Retirement, by the Company for Cause or
by the Executive other than for Good Reason;
(ii) Any reduction by the Company in the Executive's base
salary as in effect on the date hereof or as such base salary may be
increased from time to time during the Term of this Agreement or any
failure to pay the Executive any compensation or benefits to which he is
entitled within five days of the date due;
(iii) Any failure by the Company either to continue in effect
any benefit plan or arrangement (including, without limitation, the
Company's Employees Stock Purchase Plan, Section 401(k) plan, Retirement
Plan for Employees, Retirement Benefit Restoration Plan, or substitute
plans adopted by the Company prior to a Change in Control of the Company,
group life insurance plan and medical, dental, accident and disability
plans) in which the Executive shall be participating at the time of a
Change in Control of the Company or to provide other plans or arrangements
providing the Executive with substantially similar benefits, or the taking
by the Company of any action which would directly or indirectly materially
adversely affect the Executive's participation in or materially reduce the
Executive's benefits under any such benefit plan or arrangement or deprive
the Executive of any material fringe benefit enjoyed by the Executive at
the time of a Change in Control of the Company.
(iv) Any failure by the Company either to continue in effect
any incentive or compensation plan or arrangement (including, without
limitation, the Company's Incentive Compensation Plan and Employee Stock
Option Plan, or substitute plans adopted by the Company prior to a Change
in Control of the Company) in which the Executive shall be participating
at the time of a Change in Control of the Company, or to provide other
plans or arrangements providing the Executive with substantially similar
benefit levels and/or reward opportunities, or the taking by the Company
of any action which would directly or indirectly materially adversely
affect the Executive's participation (including the level of the
Executive's participation relative to other participants and the terms of
benefit levels and/or reward opportunities) or materially reduce the
Executive's benefits under any such plan or arrangement;
(v) Any relocation of the Executive's base of employment to a
location more than 20 miles away from the location at which the Executive
performed the Executive's duties of employment prior to a Change in
Control of the Company, except for required travel by the Executive on
business of the Company to an extent substantially consistent with the
Executive's business travel obligations at the time of a Change in Control
of the Company;
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(vi) Any failure by the Company to provide the Executive with
the number of paid vacation days per year to which the Executive is
entitled at the time of a Change in Control of the Company;
(vii) Any material breach by the Company of any provision of
this Agreement;
(viii) Any failure by the Company to obtain from any successor
to the Company a satisfactory agreement to assume and perform this
Agreement, as contemplated by Section 8(a) hereof;
(ix) The insolvency or the filing (by any party, including the
Company) of a petition for bankruptcy of the Company, which petition is
not dismissed within sixty days; and
(x) Any purported termination of the Executive's employment
by the Company, other than as a result of the Executive's death, which is
not effected pursuant to a Notice of Termination satisfying the
requirements of Section 2(f) hereof (and, if applicable, Section 2(d)
hereof).
Any event or condition described in subsections (i) through (x) above which
occurs prior to a Change in Control of the Company but which the Executive
reasonably demonstrates (A) was at the request of a Third Party, or (B)
otherwise arose in connection with, or in anticipation of, a Change in Control
of the Company, shall constitute Good Reason for purposes of this Agreement,
notwithstanding that it occurred prior to the Change in Control of the Company.
(f) NOTICE OF TERMINATION. Any purported termination of the
Executive's employment with the Company other than as a result of the
Executive's death shall be communicated by a Notice of Termination to the
Executive, if such termination is by the Company, or to the Company, if such
termination is by the Executive. For purposes of this Agreement, "Notice of
Termination" shall mean a written notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated. For
purposes of this Agreement, no purported termination of the Executive's
employment with the Company other than as a result of the Executive's death
shall be effective without such a Notice of Termination having been given.
(g) DATE OF TERMINATION. For purposes of this Agreement, "Date of
Termination" shall mean: (i) if the Executive's employment by the Company is
terminated by the Company for Disability, the thirtieth day after the date on
which the Notice of Termination is given, provided that the Executive shall not
have returned to the full-time performance of the Executive's duties of
employment during such 30-day period; (ii) if the Executive's employment by the
Company is terminated by the Executive for Good Reason, such date as shall be
specified in the Notice of Termination (which date shall not be fewer than 20
nor more than 60 days after the date on which the Notice of Termination is
given); or (iii) if the Executive's employment by the Company is terminated for
any other reason, the twentieth day after the date on which the Notice of
Termination is given.
3. COMPENSATION UPON TERMINATION AFTER A CHANGE IN CONTROL OF THE COMPANY.
(a) If after a Change in Control of the Company the Executive's
employment by the Company shall terminate at any time during the Term of this
Agreement for any reason other than (a) the Executive's death, (b) the
Executive's Disability, (c) the Executive's Retirement, (d) the termination by
the Company of the Executive's employment for Cause, or (e) the termination by
the Executive of his employment other than for Good Reason, then not later than
the fifth business day following the Date of Termination, the Company shall
(subject only to any applicable payroll and other taxes required to be withheld)
pay or cause to be paid to the Executive a lump sum cash payment (the "Severance
Payment") equal to three times the greater of (i) the sum of the salary and cash
bonus payable to the Executive for the last full calendar year preceding the
Severance Payment or (ii) the sum of the Executive's annualized salary and the
maximum cash bonus the Executive could have earned for the then current calendar
year.
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(b) THREE YEARS OF LIFE INSURANCE AND HEALTH PLAN COVERAGE. The
coverage described in this subsection (b) shall be provided for a "Continuation
Period" beginning on the Date of Termination and ending on the earlier of (1)
the third anniversary of the Date of Termination or (2) the date of the
Executive's death. During the Continuation Period, the Executive (and, where
applicable, the Executive's dependents) shall be entitled to continue
participation in the group term life insurance plan and in the health care plan
for Executives maintained by the Company as if the Executive were still an
Executive of the Company. The coverage provided under this subsection (b) shall
run concurrently with and shall be offset against any continuation coverage
under Part 6 of Title I of the Employee Retirement Income Security Act of 1974,
as amended. Where applicable, the Executive's compensation for purposes of such
plans shall be deemed to be equal to the Executive's compensation (as defined in
such plans) in effect on the Date of Termination. To the extent that the Company
finds it undesirable to cover the Executive under the group life insurance and
health plans of the Company, the Company shall provide the Executive (at its own
expense) with the same level of coverage under individual policies.
(c) ACCELERATED VESTING. All stock and stock options held by the
Executive shall become fully vested on the effective date of the Change in
Control.
4. ADDITIONAL PAYMENTS.
(a) In the event that any payment or benefit (within the meaning of
Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the
"Code")), to the Executive or for his or her benefit paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise in connection with, or arising out of, his or her employment (a
"Payment" or "Payments"), would be subject to the excise tax imposed by Section
4999 of the Code or any interest or penalties are incurred by the Executive with
respect to such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "Excise Tax"), then
the Executive will be entitled to receive from the Company an additional payment
(a "Gross-Up Payment") in an amount such that after payment by the Executive of
all taxes (including any interest or penalties, other than interest and
penalties imposed by reason of the Executive's failure to file timely a tax
return or pay taxes shown due on his or her return), imposed with respect to
such Gross-Up Payment, including any Excise Tax imposed upon the Gross-Up
Payment, the Executive retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Payments.
(b) An initial determination as to whether a Gross-Up Payment is
required pursuant to this Agreement and the amount of such Gross-Up Payment
shall be made at the Company's expense by an accounting firm selected by the
Company and reasonably acceptable to the Executive which is designated as one of
the five largest accounting firms in the United States (the "Accounting Firm").
The Accounting Firm shall provide its determination (the "Determination"),
together with detailed supporting calculations and documentation, to the Company
and the Executive within five days of the Date of Termination if applicable, or
such other time as requested by the Company or by the Executive (provided the
Executive reasonably believes that any of the Payments may be subject to the
Excise Tax) and if the Accounting Firm determines that no Excise Tax is payable
by the Executive with respect to a Payment or Payments, it shall furnish the
Executive with an opinion reasonably acceptable to the Executive that no Excise
Tax will be imposed with respect to any such Payment or Payments. Within ten
days of the delivery of the Determination to the Executive, the Executive shall
have the right to dispute the Determination (the "Dispute"). The Gross-Up
Payment, if any, as determined pursuant to this Section 4(b) shall be paid by
the Company to the Executive within five days of the receipt of the
Determination. The existence of the Dispute shall not in any way affect the
Executive's right to receive the Gross-Up Payment in accordance with the
Determination. If there is no Dispute, the Determination shall be binding, final
and conclusive upon the Company and the Executive subject to the application of
Section 4(c) below.
(c) As a result of the uncertainty in the application of Sections
4999 and 280G of the Code, it is possible that a Gross-Up Payment (or a portion
thereof) will be paid which should not have been paid (an "Excess Payment") or a
Gross-Up Payment (or a portion thereof) which should have been paid will not
have been paid (an "Underpayment"). An Underpayment shall be deemed to have
occurred (i) upon notice (formal or informal) to the Executive from any
governmental taxing authority that the Executive's tax liability (whether in
respect of the Executive's current taxable year or in respect of any prior
taxable year) may be increased by reason of the imposition of the Excise Tax on
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a Payment or Payments with respect to which the Company has failed to make a
sufficient Gross-Up Payment, (ii) upon a determination by a court, (iii) by
reason of determination by the Company (which shall include the position taken
by the Company, together with its consolidated group, on its federal income tax
return) or (iv) upon the resolution of the Dispute to the Executive's
satisfaction. If an Underpayment occurs, the Executive shall promptly notify the
Company and the Company shall promptly, but in any event, at least five days
prior to the date on which the applicable government taxing authority has
requested payment, pay to the Executive an additional Gross-Up Payment equal to
the amount of the Underpayment plus any interest and penalties (other than
interest and penalties imposed by reason of the Executive's failure to file
timely a tax return or pay taxes shown due on the Executive's return) imposed on
the Underpayment. An Excess Payment shall be deemed to have occurred upon a
Final Determination (as hereinafter defined) that the Excise Tax shall not be
imposed upon a Payment or Payments (or portion thereof) with respect to which
the Executive had previously received a Gross-Up Payment. A Final Determination
shall be deemed to have occurred when the Executive has received from the
applicable government taxing authority a refund of taxes or other reduction in
the Executive's tax liability by reason of the Excise Payment and upon either
(x) the date a determination is made by, or an agreement is entered into with,
the applicable governmental taxing authority which finally and conclusively
binds the Executive and such taxing authority, or in the event that a claim is
brought before a court of competent jurisdiction, the date upon which a final
determination has been made by such court and either all appeals have been taken
and finally resolved or the time for all appeals has expired or (y) the statute
of limitations with respect to the Executive's applicable tax return has
expired. If an Excess Payment is determined to have been made, the amount of the
Excess Payment shall be treated as a loan by the Company to the Executive and
the Executive shall pay to the Company on demand (but not less than 10 days
after the determination of such Excess Payment and written notice has been
delivered to the Executive) the amount of the Excess Payment plus interest at an
annual rate equal to the Applicable Federal Rate provided for in Section 1274(d)
of the Code from the date the Gross-Up Payment (to which the Excess Payment
relates) was paid to the Executive until the date of repayment to the Company.
(d) Notwithstanding anything contained in this Agreement to the
contrary, in the event that, according to the Determination, an Excise Tax will
be imposed on any Payment or Payments, the Company shall pay to the applicable
government taxing authorities as Excise Tax withholding, the amount of the
Excise Tax that the Company has actually withheld from the Payment or Payments.
5. NO MITIGATION; OBLIGATIONS ABSOLUTE; NO EFFECT ON OTHER RIGHTS
(a) The Executive shall not be required to mitigate the amount of
any payment provided for in Section 3 hereof by seeking other employment or
otherwise; nor shall the amount of any payment or benefits provided for in
Section 3 hereof be reduced by any compensation or benefits earned by the
Executive as the result of employment by another employer, or by retirement
benefits, after the effective date of termination of the Executive's employment
with the Company or otherwise.
(b) The obligations of the Company to make the payments to the
Executive, and to make the arrangements provided for herein shall be absolute
and unconditional and shall not be reduced by any circumstances, including
without limitation any setoff, counterclaim, recoupment, defense or other right
which the Company may have against the Executive or any third party at any time.
(c) The provisions of this Agreement, and any payment provided for
herein, shall not supersede or in any way limit the rights, benefits, duties or
obligations which the Executive may now or in the future have under any benefit,
incentive or other plan or arrangement of the Company or any other agreement
with the Company.
(d) Except as required by law, no right to receive payments under
this Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation or to execution,
attachment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action shall be null, void
and of no effect.
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6. NOT AN EMPLOYMENT AGREEMENT. This Agreement is not, and nothing herein
shall be deemed to create, a contract of employment between the Executive and
the Company. The Company may terminate the employment of the Executive by the
Company at any time, subject to the terms of any employment agreement between
the Company and the Executive that may then be in effect.
7. TERM OF AGREEMENT. The term of this Agreement (the "Term") shall
commence on the date hereof and shall continue through the third following
December 31st; PROVIDED, HOWEVER, that commencing on the first December 31st
after the date hereof, and on each anniversary of such first December 31st (such
date and each anniversary thereof shall be hereinafter referred to as the
"Renewal Date"), unless previously terminated, the Agreement shall be
automatically extended so as to terminate three years from such Renewal Date,
unless at 60 days prior to the Renewal Date the Company shall give Notice to the
Executive that the Term will not be extended. Notwithstanding any such notice
not to extend the Term, if a Change in Control of the Company shall have
occurred during the original or extended Term of this Agreement, this Agreement
shall continue in effect for a period of not less than 36 months beyond the date
of such Change in Control of the Company.
8. SUCCESSORS; BINDING AGREEMENT; ASSIGNMENT
(a) This Agreement shall be binding upon and shall inure to the
benefit of the Company, its successors and assigns. Neither this Agreement nor
any right or interest hereunder shall be assignable or transferable by the
Company other than to a successor. The Company shall require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business or assets of the Company, by agreement
in form and substance reasonably satisfactory to the Executive, expressly,
absolutely and unconditionally to assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place. As used in this Agreement,
"Company" shall mean (i) the Company as hereinbefore defined, and (ii) any
successor to all or substantially all of the Company's business or assets which
executes and delivers an agreement provided for in this Section 8(a) or which
otherwise become bound by all the terms and provisions of this Agreement by
operation of law.
(b) This Agreement shall inure to the benefit of and be enforceable
by the Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive should
die while any amount would be payable to the Executive hereunder if the
Executive had continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to the
Executive's devisee, legatee or other designee or, if there be no such designee,
to the Executive's estate. Neither this Agreement nor any right or interest
arising hereunder may be assigned or transferred by the Executive or his or her
heirs, beneficiaries or legal representatives. In the event of the Executive's
death or a judicial determination of his or her incompetence, reference in this
Agreement to the Executive shall be deemed, where appropriate, to refer to the
Executive's executor, heirs or other legal representative.
9. NOTICES. For purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when personally delivered or when mailed by
United States certified or registered mail, return receipt requested, postage
prepaid, addressed to (i) the respective addresses set forth in this Agreement,
provided that all notices to the Company shall be directed to the attention of
the Committee with a copy directed to the Secretary of the Company, or (ii) such
other address for a party as such party may have furnished to the other in
writing in accordance with this Section 9; except that notices of change of
address shall be effective only upon receipt.
10. CONFIDENTIALITY. The Executive shall retain in confidence any and all
confidential information concerning the Company or any of its Subsidiaries and
their respective businesses which is now or hereafter becomes known to the
Executive, except information (i) ascertainable or obtained from public
information, (ii) received by the Executive at any time after the Executive's
employment by the Company shall have terminated from a third party not employed
by or otherwise affiliated with the Company or under an obligation to the
Company to maintain the confidentiality of that information, or (iii) which is
or becomes known to the public by any means other than a breach of this Section
10.
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11. SUBSIDIARY. For purposes of this Agreement, "Subsidiary" shall mean
any corporation, partnership or other entity, at least 50% of the outstanding
voting power for the election of directors or other management is then owned,
directly or indirectly, by the Company or another Subsidiary of the Company.
12. MODIFICATION; WAIVER OR DISCHARGE. No provision of this Agreement may
be modified, waived or discharged unless such waiver, modification or discharge
is agreed to in a writing signed by the Executive and the Company. No waiver by
either party at any time of any breach by the other party of, or of compliance
by the other party with, any condition or provision of this Agreement to be
performed or complied with by such other party shall be deemed a waiver of any
similar or dissimilar provision or condition of this Agreement or any other
breach of or failure to comply with the same condition or provision at the same
time or at any prior or subsequent time. No agreements or representations, oral
or otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not expressly set forth in this Agreement.
13. GOVERNING LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Florida without giving effect to its conflict of laws rules.
14. HEADINGS OF NO EFFECT. The Section headings contained in this
Agreement are included solely for convenience of reference and shall not in any
way affect the meaning or interpretation of any of the provisions of this
Agreement.
15. FEES AND EXPENSES. The Company shall pay all legal fees and related
expenses (including the costs of experts, evidence and counsel) incurred by the
Executive as they become due as a result of (i) termination of the Executive's
employment after a Change in Control of the Company (including all such fees and
expenses, if any, incurred in contesting or disputing any such termination of
employment), (ii) the Executive seeking to obtain or enforce any right or
benefit provided by (x) this Agreement (including, but not limited to, any such
fees and expenses incurred in connection with the dispute) or (y) any other plan
or arrangement maintained by the Company under which the Executive is or may be
entitled to receive benefits, and (iii) the Executive's hearing before the Board
as contemplated by the definition of Cause.
16. DISPUTE CONCERNING TERMINATION.
(a) If within 20 days after any Notice of Termination is given or,
if later, prior to the Date of Termination (as determined without regard to this
Section 16(a)), the party receiving such Notice of Termination notifies the
other party that a dispute exists concerning the termination, the Date of
Termination shall be the date on which the dispute is finally resolved, either
by mutual written agreement of the parties or by a final judgment, order or
decree of a court of competent jurisdiction (which is not appealable or with
respect to which the time of appeal therefrom has expired and no appeal has been
perfected); PROVIDED that the Date of Termination shall be extended by a notice
of dispute only if such notice is given in good faith and the party giving such
notice pursues the resolution of such dispute with reasonable diligence.
(b) In the event of any dispute between the Company and the
Executive with respect to the subject matter of this Agreement and the
enforcement of rights hereunder, the Executive may, in his or her sole
discretion by notice to the Company, require such dispute or difference to be
submitted to arbitration. The arbitrator or arbitrators shall be selected by
agreement of the parties or, if they cannot agree on an arbitrator or
arbitrators within 30 days after the Executive has notified the Company of the
submission of the question for settlement by arbitration, then the arbitrator or
arbitrators shall be selected by the American Arbitration Association (the
"AAA") in San Jose, California, upon the application of the Executive. The
determination reached in such arbitration shall be final and binding on both
parties without any right of appeal or further dispute. Execution of the
determination by such arbitrator may be sought in any court of competent
jurisdiction. The arbitrators shall not be bound by judicial formalities and may
abstain from following the strict rules of evidence and shall interpret this
Agreement as an honorable engagement and not merely as a legal obligation.
Unless otherwise agreed by the parties, any such arbitration shall take place in
San Jose, California, and shall be conducted in accordance with the Rules of
AAA. The Company shall pay all costs of the arbitration.
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(c) If a purported termination occurs following a Change in Control
of the Company and during the Term of this Agreement, and such termination is
disputed in accordance with Section 16(a) , the Company shall continue to pay
the Executive the full compensation in effect when the notice giving rise to the
dispute was given (including, but not limited to, salary) and continue the
Executive as a participant in all compensation, benefit and insurance plans in
which the Executive was participating when the notice giving rise to the dispute
was given, until the dispute is finally resolved in accordance with Section
16(a). Amounts paid under this Section 16(c) are in addition to all other
amounts due under this Agreement and shall not be offset against or reduce any
other amounts due under this Agreement.
17. SEVERABILITY. If any one or more of the provisions of this Agreement
shall be held to be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions of this Agreement shall not be
affected thereby. To the extent permitted by applicable law, each party hereto
waives any provision of law which renders any provision of this Agreement
invalid, illegal or unenforceable in any respect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
XXXXXX-XXXXXX, INC.
By: /s/ P. XXXXXXX XXXXXX
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P. Xxxxxxx Xxxxxx
Chairman and Chief Executive Officer
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[Name of Executive]
[Address]
