EXHIBIT 10.20
EXECUTIVE SEVERANCE AGREEMENT
THIS EXECUTIVE SEVERANCE AGREEMENT, made and entered into effective as of
August 1, 2002 (the "Agreement"), is by and between Infinity, Inc., a Colorado
corporation (the "COMPANY") and Xxxxxxx X. Xxxx (the "EMPLOYEE").
WHEREAS, EMPLOYEE has rendered outstanding service to COMPANY and his
experience and knowledge of the affairs of COMPANY are extremely valuable to
COMPANY; and in recognition of EMPLOYEE's service to COMPANY and as an
inducement to him to continue in the employ of COMPANY, COMPANY has offered
him, among other things, this Agreement, and EMPLOYEE has accepted the offer.
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements herein contained, COMPANY and EMPLOYEE agree as
follows:
1. TERM of AGREEMENT. This Agreement shall commence on the date first
above written and shall continue until December 31, 2003, provided, however,
that this Agreement may not be terminated and shall remain in full force and
effect for at least eighteen (18) months following a Change in Control (such
period being referred to in this Agreement as the "Protected Period"), and
such additional time as may be necessary to give effect to its terms.
2. TERMINATION of EMPLOYMENT AFTER A CHANGE IN CONTROL. EMPLOYEE shall
be entitled to the benefits specified in Section 3 if, within 18 months after
a Change in Control occurs (a) EMPLOYEE is terminated for any reason other
than for cause, or (b) EMPLOYEE resigns for Good Reason.
COMPANY may terminate EMPLOYEE's employment for Cause, which shall mean
only (A) upon the willful and continued failure by EMPLOYEE to perform
substantially EMPLOYEE's duties with COMPANY, other than any such failure
resulting from EMPLOYEE's incapacity due to physical or mental illness, which
failure continues unabated after a demand for substantial performance is
delivered to EMPLOYEE by the Board that specifically identified the manner in
which the Board believes that EMPLOYEE has not substantially performed
EMPLOYEE's duties, (B) EMPLOYEE willfully engages in gross misconduct
materially and demonstrably injurious to COMPANY, or (C) upon fraud,
misappropriation or embezzlement related to the business of COMPANY on the
part of EMPLOYEE. For purposes of this paragraph, an act or failure to act on
EMPLOYEE's part shall be considered "willful" if done or omitted to be done by
EMPLOYEE otherwise than in good faith and without reasonable belief that
EMPLOYEE's action or omission was in the best interest of COMPANY.
Notwithstanding the foregoing, EMPLOYEE shall not be deemed to have been
terminated by the COMPANY for Cause unless and until COMPANY shall have
delivered to EMPLOYEE a copy of a resolution duly adopted by the affirmative
vote of not less than three-quarters of the entire membership of the Board, at
a meeting of the Board called and held for the purpose (after reasonable
notice to EMPLOYEE and an opportunity for EMPLOYEE, together with EMPLOYEE's
counsel, to be heard before the Board), finding that in the good-faith opinion
of the Board EMPLOYEE was guilty of conduct constituting Cause hereunder and
specifying the particulars thereof in reasonable detail.
EMPLOYEE may terminate employment for Good Reason, which, for the
purposes of this Agreement, shall mean any of the following: (A) EMPLOYEE is
assigned duties after a Change in Control materially inconsistent with
EMPLOYEE's duties and responsibilities immediately before the date of such
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Change in Control, or (B) EMPLOYEE's annual salary is reduced during the
period of this Agreement, or (C) EMPLOYEE's reporting responsibilities, titles
or offices are materially changed in an adverse manner from those in effect
immediately prior to such Change in Control.
No benefits hereunder are payable prior to the date on which a Change in
Control occurs unless otherwise approved by the Board of Directors of COMPANY.
3. COMPENSATION UPON TERMINATION. If during the Protected Period
COMPANY shall terminate EMPLOYEE other than for cause, or EMPLOYEE shall
terminate employment either for Good Reason or with the consent of the Board,
then, subject to Section 4 and the following provisions hereof, COMPANY shall
pay to EMPLOYEE, in a single lump sum by certified or bank cashier's check
within five days of such Date of Termination, the sum of the amounts specified
in subparagraphs (A) through (C) below and also shall provide EMPLOYEE the
continued employee welfare benefits as provided in subparagraph (D) below:
(A) An amount equal to two times the sum of EMPLOYEE's annual base
salary;
(B) An amount equal to the Bonus EMPLOYEE received from COMPANY for
the annual period immediately preceding the commencement of the Protected
Period. For the purposes of this paragraph, the term "Bonus" refers to an
amount which is the difference between EMPLOYEE's salary for that period and
the amount reported for the period on EMPLOYEE's W2 form for federal income
tax purposes;
(C) An amount equal to that portion of EMPLOYEE's base salary
earned, but not paid, and vacation earned, but not taken, to the date of
termination, and all other amounts previously deferred by EMPLOYEE or earned
but not paid as of such date under all COMPANY incentive or deferred
compensation plans or programs;
(D) COMPANY shall at all times during the two year period following
the date of termination (the "Continuation Period") maintain in full force and
effect for the continued benefit of EMPLOYEE and EMPLOYEE's eligible
dependents all life (including executive life), accidental death and
dismemberment, and medical and dental insurance benefits available to EMPLOYEE
and EMPLOYEE's eligible dependents by virtue of being an employee of the
COMPANY immediately prior to such termination, provided, that EMPLOYEE's
continued participation is possible under the general terms and provisions of
such plans and programs (or any successor thereto). In the event that
participation by EMPLOYEE in any such plan or program after the date of
termination is barred pursuant to the terms thereof, COMPANY shall obtain at
COMPANY's expense and without any additional cost or liability to EMPLOYEE
comparable coverage under individual policies for EMPLOYEE (and EMPLOYEE's
dependents). At the end of the Continuation Period (except as provided below
with respect to COBRA benefits, if elected by EMPLOYEE), COMPANY shall arrange
to make available to EMPLOYEE and his eligible dependents comparable insurance
coverage by enabling EMPLOYEE to convert EMPLOYEE's coverage under COMPANY's
group plans or programs to an individual policy for the benefit of EMPLOYEE
and EMPLOYEE's eligible dependents, or to assume any individual policies
obtained by the COMPANY for EMPLOYEE's benefit, with EMPLOYEE paying the full
premiums after the end of the Continuation Period. Nothing in this
subparagraph (D) shall operate to reduce, or be construed as reducing,
EMPLOYEE's (or a beneficiary's) group health plan continuation rights under
COBRA in any manner and upon the end of the Continuation Period EMPLOYEE (or
EMPLOYEE's beneficiary(ies)), if otherwise eligible, will be entitled to elect
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COBRA continuation coverage for the full period applicable as if that were
EMPLOYEE's termination date. In the event EMPLOYEE becomes covered by another
employer's group plan or programs as a result of EMPLOYEE's employment during
the Continuation Period, COMPANY's plans or programs shall be liable for
benefits only to the extent such benefits are not covered by the subsequent
employer's plans or programs;
(E) COMPANY shall sell to EMPLOYEE the sports tickets owned by
COMPANY at COMPANY's cost; and
(F) COMPANY shall, at its sole expense, provide the EMPLOYEE with
outplacement services the scope and provider of which shall be selected by the
EMPLOYEE in his sole discretion.
As a condition to the receipt of any benefit under this Agreement,
EMPLOYEE must first execute and deliver to COMPANY a release releasing
COMPANY, its officers, directors, employees and agents from any and all claims
and from any and all causes of action of any kind or character that EMPLOYEE
may have arising out of EMPLOYEE's employment with COMPANY or the termination
of such employment, but excluding (i) any claims and causes of action that
EMPLOYEE may have arising under or based upon this Agreement, (ii) rights
under stock-based incentive plans arising in connection with a Change in
Control, (iii) rights under directors' and officers' indemnification
insurance, (iv) rights of indemnity under articles of incorporation, bylaws,
contracts, law, or otherwise, and (v) rights under COMPANY's stock option
plan(s) and other arrangements for deferred compensation.
4. GROSS-UP OF PARACHUTE PAYMENTS. If EMPLOYEE's employment is
terminated following a "change in control" of COMPANY, within the meaning of
Section 28OG of the Internal Revenue Code of 1986, as amended (the "Code"),
and it shall be determined that any payment or distribution by COMPANY or any
other person to or for the benefit of EMPLOYEE (a "Payment") would be subject
to the excise tax imposed by Section 4999 of the Code or any interest or
penalties are incurred by EMPLOYEE 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 COMPANY shall pay an
additional payment (a "Gross-Up Payment") in an amount such that after payment
by EMPLOYEE of all taxes (including any interest or penalties imposed with
respect to such taxes), including, without limitation, any income or other
taxes (and any interest and penalties imposed with respect thereto) and Excise
Tax imposed upon the Gross-Up Payment, EMPLOYEE retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
5. NO MITIGATION OF DAMAGES AND EXPENSES. The provisions of this
Agreement are not intended to, nor shall they be construed to, require that
EMPLOYEE seek or accept other employment following a termination of employment
and, except to the extent provided in Section 3(F) of this Agreement, amounts
payable and welfare benefits provided under this Agreement to EMPLOYEE shall
not be reduced by EMPLOYEE's acceptance of (or failure to seek or accept)
employment with another person. COMPANY's obligations to make the payments
and provide the welfare benefits provided for in this Agreement shall not be
affected by any set off, counterclaim, recoupment, defense or other claim,
rights or action that COMPANY may have against EMPLOYEE or others.
6. CHANGE IN CONTROL. For purposes of this Agreement, a Change in
Control shall be deemed to have occurred upon, and shall mean: (i) The
acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
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"Exchange Act")) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 35% or more of either (1) the then
outstanding shares of Common Stock of COMPANY or (2) the combined voting power
of the then outstanding voting securities of COMPANY entitled to vote
generally in the election of directors, or (ii) Individuals who, as of the
date hereof, constitute COMPANY's Board of Directors (the "Incumbent Board"),
cease for any reason to constitute at least a majority of COMPANY's Board of
Directors; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by
COMPANY's stockholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board, or (iii) Approval by the
stockholders of COMPANY of a reorganization, merger or consolidation.
7. SUCCESSOR; BINDING AGREEMENT. COMPANY will require any successor,
whether direct or indirect, by purchase, merger, consolidation or otherwise,
of all or substantially all of the business and/or assets of COMPANY,
expressly to assume and agree to perform this Agreement in the same manner and
to the same extent as COMPANY would have been required if no such succession
had taken place.
8. MISCELLANEOUS.
8.1 No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in
writing signed by EMPLOYEE and by an authorized officer of COMPANY. No waiver
by either party of any breach by the other party of any condition or
provisions of this Agreement shall be deemed a waiver of any other provision
of this Agreement.
8.2 The interpretation, construction and performance of this
Agreement shall be governed by and construed and enforced in accordance with
the laws of the State of Kansas without regard to the principle of conflicts
of laws.
8.3 The invalidity or unenforceability of any provisions of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, each of which shall remain in full force and
effect.
8.4 This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
8.5 Descriptive headings are for convenience only and shall not
control or affect the meaning or construction of any provision of this
Agreement.
8.6 This Agreement has been approved by the Board, and has been duly
executed and delivered by EMPLOYEE and on behalf of COMPANY by its duly
authorized representative.
8.7 This document sets forth the entire understanding and agreement
between the parties and supersedes all other prior agreements concerning the
effect of a Change in Control on the relationship between COMPANY and
EMPLOYEE.
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IN WITNESS WHEREOF, COMPANY and EMPLOYEE have entered into this Agreement
effective the date first above written.
INFINITY, INC.
By:/s/ Xxx X. Xxxxx
Authorized Representative
EMPLOYEE:
/s/ Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxx, President
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