EXHIBIT 10.5
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EXECUTIVE EMPLOYMENT AGREEMENT
This Employment Agreement is made as of the 22nd day of December, 2000,
between Xxxxxx Corporation (the "Company"), and Xxxxxx X. Xxxxxx ("Executive").
The parties agree as follows:
1. Employment and Duties. The Company employs the Executive as Vice-
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Chairman and a member of the Board of Directors of the Company. The Executive
agrees to devote full time and attention during normal business hours to the
business of the Company and its subsidiaries and affiliates and to perform
duties normally and properly incident to his position and such further duties as
may be assigned to him by the Board of Directors of the Company. The duties to
be performed by the Executive under this Agreement shall be primarily performed
by him in the Richmond, Virginia metropolitan area, provided, however, that the
Executive shall travel to the extent reasonably necessary to perform his duties
hereunder. The Executive shall not be required to reside or maintain a
residence outside of the Richmond metropolitan area.
2. Term. The Company employs the Executive and the Executive agrees to
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serve the Company for a term of one year from the date of this Agreement. The
term of this Agreement shall automatically be extended for additional terms of 1
year, unless either party notifies the other in writing at least 60 days before
the expiration of the term of this Agreement that it does not wish to extend the
term. If the Company notifies the Executive that it does not wish to extend the
term of this Agreement, the Company shall be deemed to have terminated
Executive's employment without cause and Executive shall be entitled to the
benefits specified in Paragraph 7 of this Agreement. If the Executive notifies
the Company that Executive does not wish to extend the term of this Agreement,
Executive shall be
deemed to have voluntarily left the employ of the Company and the Company's
obligations to the Executive under this Agreement shall terminate.
3. Salary. During the term of this Agreement, the Company shall pay the
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Executive a salary at a rate of not less than three hundred ninety five thousand
dollars ($395,000) per year which sum shall be payable in bi-weekly
installments. The executive shall be entitled to participate in the Company's
bonus program and the Company agrees to review the Executive's salary no less
frequently than annually. In the event of an increase in salary or the payment
of a bonus, the other terms and conditions of this Agreement shall remain in
full force and effect. The salary in effect at any given time is sometimes
referred to in this Agreement as "Base Salary." There shall be withheld from all
amounts due the Executive such federal and state income taxes, FICA and other
amounts as may be required to be withheld under applicable law.
4. Other Benefits. During the term of this Agreement, the Executive
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shall be entitled to (i) participate in such employee benefit plans and programs
as are generally available to other officers of the Company who hold positions
of similar responsibility to those of Executive, (ii) reimbursement, in
accordance with policies and procedures established by the Company from time to
time, for all items of expense reasonably and necessarily incurred by Executive
on behalf of the Company, (iii) such holidays as are generally available to
employees of the Company, and (iv) five (5) weeks of annual vacation leave,
which shall be non-cumulative and not subject to compensation if not taken.
5. Termination by Death or Disability.
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(a) Should the Executive die during the term of employment, the Company
shall be obligated to pay any salary and benefits to which the Executive may be
entitled until the end
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of the bi-weekly payroll period in which the death occurs, and the Company shall
pay to the Executive's personal representatives amounts equal to and payable at
the same time as the installments of Base Salary theretofore regularly paid to
the Executive for a period of twelve months beginning as of the date of death.
(b) Should the executive be unable to perform substantially all duties of
employment for 90 consecutive days because of a physical or mental disability,
the Company shall then have the right to terminate the Executive's employment by
giving the Executive 30 days written notice. After the date of termination, the
Company shall pay to the Executive or the Executive's personal representatives
amounts equal to and payable at the same time as the installments of Base Salary
theretofore regularly paid to the Executive for a period of twelve months
beginning as of the date of termination.
The onset of a condition of disability under this Agreement shall be
determined by the Board of Directors on the basis of (i) a written opinion of a
licensed physician certified in his field of specialization and acceptable to
the Board, or (ii) the receipt of, or entitlement by the Executive to disability
benefits under any insurance policy or employee benefit plan provided or made
available by the Company or under Federal Social Security laws.
6. Termination for Cause. The Company, by action of its Board of
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Directors, may at any time elect to terminate its obligations under this
Agreement for "cause" and remove the Executive from employment. Termination for
cause shall be made upon 30 days written notice, and upon expiration of the 30-
day notice period, all obligations of the Company to the Executive under this
Agreement shall cease.
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For purposes of this Agreement "cause" shall be only the following:
(a) continued and deliberate neglect by the Executive, after receipt
of notice thereof, of employment duties other than as a result of Executive's
physical or mental disability;
(b) willful misconduct of the Executive in connection with the
performance of his duties, including by way of example but not limitation,
misappropriation of funds or property of the Company; securing or attempting to
secure personally any profit in connection with any transaction entered into on
behalf of the Company or violation of any code of conduct or standards of ethics
applicable to employees of the Company;
(c) conduct by the Executive which may result in material injury to
the reputation of the Company if the Executive were retained in his position
with the Company, including by way of example but not limitation, commission of
a felony, bankruptcy, insolvency or general assignment for the benefit of
creditors;
(d) active disloyalty such as aiding a competitor; or
(e) a breach by the Executive of paragraph 8 or 9 of this Agreement.
7. Other Termination.
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(a) If the Executive resigns or voluntarily leaves the employ of the
Company, the Company's obligations to the Executive under this Agreement shall
terminate and the Company shall have no further liability to the Executive under
this Agreement; provided, however, if Executive voluntarily leaves the employ of
the Company by virtue of the Company's failure to comply with any terms of this
Agreement, then the Executive shall be entitled to the identical compensation
and benefits set forth in Section 7 (b) hereof.
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The Company, by action of its Board of Directors, may at any time elect to
terminate its obligations under this Agreement without cause and remove the
Executive from employment on 30 days' written notice. If the Company elects to
terminate Executive's employment without cause, then the Executive shall be
entitled to receive, subject to compliance by the Executive with the provisions
of Sections 8 and 9 of this Agreement, the compensation and benefits due under
this Agreement for a period of twenty-four (24) months from the date of
termination.
8. Confidential Information and Trade Secrets. As consideration for and
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to induce the employment of the Executive by the Company, the Executive agrees
that:
(a) Except to the extent such information is generally known to the
public or in the industry in which the Company and its subsidiaries and
corporate affiliates are engaged all information relating to or used in the
business and operations of the Company and its subsidiaries and corporate
affiliates (including, without limitation, marketing methods and procedures,
customer lists, lists of professionals referring customers to the Company and
its subsidiaries and corporate affiliates, sources of supplies and materials and
business systems and procedures), whether prepared, compiled, developed or
obtained by the Executive or by the Company or any of its subsidiaries or
corporate affiliates prior to or during the term of this Agreement, are and
shall be confidential information and trade secrets ("Confidential Information")
and the exclusive property of the Company, its subsidiaries and corporate
affiliates.
(b) All records of and materials relating to Confidential
Information, whether in written form or in a form produced or stored by any
electrical or mechanical means or process and whether prepared, compiled or
obtained by the Executive or by the Company or
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any of its subsidiaries or corporate affiliates prior to or during the term of
this Agreement, are and shall be the exclusive property of the Company or its
subsidiaries or corporate affiliates, as the case may be.
(c) Except in the regular course of his employment or as the Company
may expressly authorize or direct in writing, the Executive shall not, during or
after the term of this Agreement and his employment by the Company, copy,
reproduce, disclose or divulge to others, use or permit others to see any
Confidential Information or any records of or materials relating to any such
Confidential Information. The Executive further agrees that during the term of
this Agreement and his employment by the Company he shall not remove from the
custody or control of the Company or its subsidiaries or corporate affiliates
any records of or any materials relating to such Confidential Information and
that upon the termination of this Agreement he shall deliver the same to the
Company and its subsidiaries and corporate affiliates.
9. Covenants.
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A. As consideration for and to induce the employment of the
Executive by the Company, the Executive agrees that, except in the regular
course of his employment or as the Company may expressly authorize or direct in
writing, the Executive shall not, during the term of this Agreement and for a
period of two (2) years immediately following the termination of this Agreement,
directly or indirectly, either as an individual for his own account, as a
partner or joint venturer with any other person or entity, as an employee,
consultant, advisor, agent or representative of any other person or entity or as
an officer, director or shareholder of any corporation, (i) own, manage,
operate, join, control or participate in the ownership, management, operation or
control of, or serve as an employee,
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consultant, advisor, agent or representative of any corporation, association,
partnership, proprietorship or other business entity that is engaged in any
business activity, directly or indirectly, in competition with any of the
business operations or activities of the Company or any of its subsidiaries or
corporate affiliates, or (ii) employ or offer to employ or retain the services
of any officer, employee or agent then employed or retained by the Company or
any of its subsidiaries or corporate affiliates or induce, encourage or solicit
any such officer, employee or agent to leave the employment or service of the
Company or any of its subsidiaries or corporate affiliates. This provision shall
not, however, restrict the Executive from making any investments in any company
whose stock is listed on a national securities exchange or actively traded in
the over-the-counter market, so long as investment does not give Executive the
right to control or influence the policy decisions of any such business or
enterprise which is or might be directly or indirectly in competition with any
of the business operations or activities of the Company or any of its
subsidiaries or corporate affiliates.
B. The Executive acknowledges that he has granted to the Company the
exclusive right in perpetuity to use his surname as part of its corporate name
for and in connection with all business of whatever kind and character conducted
previously or in the future by the company or any of its subsidiaries or
corporate affiliates. The Executive hereby covenants and agrees that he shall
not hereafter grant to any other person, firm or corporation the right to use
and he shall not himself use (except in the regular course of his employment by
the Company hereunder or as the Company may expressly authorize or direct in
writing) his name as part of the corporate, firm or trade name or trademark of
any firm, entity, corporation or business that engages in any business activity
directly or indirectly in
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competition with any of the business operations or activities of the Company or
any of its subsidiaries or corporate affiliates.
10. Survival of Covenants and Remedies. The agreements made by the
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Executive in paragraphs 8 and 9 shall survive the termination of this Agreement
and the Executive's employment. Each such agreement by the Executive shall be
construed as an agreement independent of any other provision of this Agreement,
and the existence of any claim or cause of action by the Executive against the
Company shall not constitute a defense to the enforcement of the provisions of
paragraphs 8 or 9. The Executive acknowledges and agrees that the Company will
sustain irreparable injury in the event of a breach or threatened breach by the
Executive of the provisions of paragraphs 8 or 9 and that the Company does not
and will not have any adequate remedy at law for such breach or threatened
breach. Accordingly, the Executive agrees that if he breaches or threatens to
breach any such covenant or agreement, the Company shall be entitled to
immediate injunctive relief. The foregoing shall not, however, be deemed to
limit the Company's remedies at law or inequity for any such breach or
threatened breach.
11. Deferred Compensation Benefits
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(a) To induce the Executive to remain in the employ of the Company
and in consideration and recognition of the services heretofore and hereafter to
be rendered by the Executive and Executive's covenants contained herein, the
Company hereby agrees to provide the Executive with a deferred compensation
benefit ("Deferred Compensation Benefit"). For so long as Executive is a full
time employee of the Company, on each anniversary of the date of this Agreement
or the date of termination of the Agreement, as the case may be, the Company
will credit to the Deferred Compensation Benefit for the period an
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amount equal to eight percent (8%) of the Executive's Base Salary during the
year or other period ending on such date. The Company shall credit interest at
the rate of eight percent (8%) per annum from the date on which each amount is
credited to the Deferred Compensation Benefit. The Executive's initial Deferred
Compensation Benefit shall also include the total Supplemental Retirement
Benefit previously accrued by the Executive under a prior version of this
Agreement with the Company's subsidiary, Xxxxxx North America, Inc.
(b) The aggregate amount of the Deferred Compensation Benefit shall
be payable at the time or time elected by the Executive. If the Executive fails
to elect a time for payment, the Deferred Compensation Benefit shall be paid at
the earlier of the Executive's death or the termination of the Executive's
employment with the Company. The Executive may change the time for payment of
the Deferred Compensation Benefit by filing a new election with the Company,
provided that any election shall not be effective until six months after it is
filed with the Company.
(c) In its sole discretion, the Company shall determine the form of
payment of the Deferred Compensation Benefit from one of the following forms,
except as provided in (d) below:
(1) A single lump-sum payment in cash to the Executive or his
designated beneficiary.
(2) Payments made to the Executive or his designated beneficiary in
equal monthly installments for a period of years.
(d) The Company shall make all payments pursuant to the election of
the Executive under Section 11(c), unless any such payments would be non-
deductible to the
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Company under the provisions of Section 162(m) of the Internal Revenue Code. If
the payment would be non-deductible, the Company shall make the payment as soon
as the payment is deductible by the Company, but no later than thirty (30) days
after the end of the Company's taxable year during which the Executive last was
a "covered employee" as defined in Treas. Reg. Section 1.162-27(c)(2).
(e) At the request of the Executive or his beneficiary, the Company,
in its sole discretion, may accelerate and pay all or part of the Deferred
Compensation Benefit in the event of Hardship. Hardship is a severe financial
hardship to the Executive (or beneficiary) resulting from a sudden and
unexpected illness or accident of the Executive or of a dependent of the
Executive, loss of the Executive's property due to casualty, or other similar
extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the Executive.
(f) The Deferred Compensation Benefit shall be unfunded. The Company
shall not segregate any assets that at any time may represent the Deferred
Compensation Benefit.
12. Notices. All notices, consents and other communications under this
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Agreement shall be in writing and shall be deemed to have been given, delivered
or made when delivered personally or when mailed by registered or certified
mail, postage prepaid and return receipt requested, addressed to the Company at
its principal office in Richmond, Virginia, and to the Executive at his
residence as shown upon the employment records of the Company, or to such other
address as either party may by notice specify to the other.
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13. Modification. No provision of this Agreement, including any provision
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of this paragraph, may be modified, deleted or amended in any manner except by
an agreement in writing executed by Executive and the Company.
14. Benefit. All of the terms of this Agreement shall be binding upon,
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inure to the benefit of and be enforceable by the Company and its successors and
assigns and by the Executive and his heirs and personal representatives.
15. Construction. This Agreement is executed and delivered in the
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Commonwealth of Virginia and shall be construed and enforced in accordance with
the laws of such state .
16. Severability. The invalidity or unenforceability of any provision of
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this Agreement shall not affect the validity or enforceability of any other
provision.
In addition, if, at the time of enforcement of this Agreement, a court
holds that any restriction stated in this Agreement is unreasonable under the
circumstances then existing, the parties agree that the maximum restriction
reasonable under such circumstances shall be substituted for the stated
restriction.
17. Headings. The underlined headings provided in this Agreement are for
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convenience only and shall not affect the interpretation of this Agreement.
18. Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed an original.
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Executive
XXXXXX CORPORATION
By: _______________________________
Title: ______________________________
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