Exhibit 10.20
EXECUTIVE SEVERANCE AGREEMENT
This AGREEMENT, dated as of September 27, 1996 is entered into
by and between Titanium Hearth Technologies, Inc., a Delaware corporation (the
"Company") and William C. Acton ("Executive").
TERMS AND CONDITIONS
In consideration of the respective covenants and agreements of
the parties contained in this Agreement, the parties agree as follows:
1. GENERAL. This Agreement is not an employment contract nor
does it in any way alter the status of Executive as an at-will employee of the
Company serving at the pleasure of the Company's Board of Directors. Executive's
employment with the Company may be terminated without notice (except as required
by section 2 hereof) at any time, for any reason by the Company or by Executive.
Executive shall be entitled to the severance benefits set
forth in section 3 of this Agreement upon termination of Executive's employment
by the Company unless such termination is for Cause (as defined below).
Executive's termination of employment with the Company by virtue of death,
disability (as defined below), or retirement shall not be considered as a
termination of Executive by the Company. For purposes of this Agreement, "Cause"
shall mean (i) Executive's conviction of any criminal violation involving
dishonesty, fraud or breach of trust or any felony, or (ii) Executive's gross
negligence or misconduct in the performance of his duties that materially and
adversely affects the financial condition of the Company or could reasonably
have a material and adverse effect on the Company or its business. The Executive
shall be deemed to have a "disability" if, by reason of physical or mental
incapacity, Executive becomes unable to perform his normal duties, and Executive
shall be deemed to have a disability if Executive is absent from employment for
more than 90 days in the aggregate (excluding infrequent and temporary absence
due to ordinary transitory illness) during any 12-month period.
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Executive shall be entitled to the severance benefits set
forth in section 3 of this Agreement upon termination of Executive's employment
with the Company by Executive only if such termination is for Good Reason. For
purposes of this Agreement, Executive shall be deemed to have resigned for "Good
Reason" if Executive resigns from employment with the Company within 90 days
following the occurrence of any one of the following events without Executive's
consent: (i) the assignment of Executive to any duties substantially
inconsistent with his position, duties, responsibilities or status with the
Company immediately prior to such assignment, or a substantial reduction of the
duties or responsibilities, as compared with the duties or responsibilities
immediately prior to such reduction; or (ii) a Substantial Reduction in Pay,
which shall mean a substantial reduction by the Company in the amount of
Executive's annual base salary as in effect as of the date of this Agreement or
as the same may be increased from time to time, except for across-the-board
salary reductions similarly affecting all executives of the Company.
2. NOTICE OF CERTAIN TERMINATIONS. In the event that either
(i) the Company shall terminate Executive for Cause or (ii) Executive shall
resign for Good Reason, then any such termination shall be communicated by
written notice to the other party. Any such notice shall specify (i) the
effective date of termination (the "Termination Date"), which shall not be more
than 30 days after the date the notice is delivered; and (ii) in reasonable
detail the facts and circumstances underlying a determination that the
termination is for Cause or for Good Reason, as the case may be. If within 15
days after any notice is given, the party receiving such notice notifies the
other party in good faith that a good faith dispute exists concerning the
characterization of the termination, the Termination Date shall be the date on
which such dispute is finally resolved either by written agreement of the
parties or by a final judicial determination. Notwithstanding the pendency of
any such dispute, the Company shall continue Executive and his dependents as
participants in all medical, dental and any other health insurance and similar
benefit plans of the Company in which he or they were participating when the
notice giving rise to the dispute was given, until the dispute is finally
resolved. Benefits provided under this section 2 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.
3. SEVERANCE BENEFITS. Subject to the conditions set forth in
section 1, if Executive is terminated by the Company without Cause or if
Executive resigns for Good Reason, within 15 days after the Termination Date,
the Company shall pay to Executive (subject to any applicable payroll or other
taxes required to be withheld) a lump sum amount equal to Executive's base
salary as of the Termination Date for a period of 18 months, provided, however,
that if the Termination Date occurs after the third anniversary of the effective
date of this Agreement, such amount shall equal Executive's base salary as of
the Termination Date for a period of 12 months, and provided further, that if
Executive resigns for Good Reason following a Substantial Reduction in Pay,
Executive's base salary for this purpose shall be such base salary prior to the
Substantial Reduction in Pay. In addition, upon any termination of Executive's
employment with the Company, the Company shall, within 15 days following the
Termination Date, pay to Executive (subject to any applicable payroll or other
taxes required to be withheld) an amount equal to (i) accrued but unpaid salary
through the Termination Date and (ii) unpaid salary with respect to any vacation
days accrued but not taken as of the Termination Date.
Executive is not required to seek other employment or
otherwise mitigate the amount of any payments to be made by the Company pursuant
to this Agreement. The payments provided in this Agreement shall not be reduced
by any compensation earned by Executive as the result of employment by another
employer after the Termination Date, or otherwise.
4. CONFIDENTIALITY AND PROPRIETARY RIGHTS.
(a) Executive recognizes and acknowledges that the trade secrets and
proprietary information and procedures of the Company and its affiliates, as
they may exist from time to time, are valuable, special and unique assets of the
Company and its affiliates' business, access to and knowledge of which are
essential to the performance of Executive's duties hereunder. Executive agrees
to hold as the Company and its affiliates' property, all memoranda, books,
papers, letters, formulas and other data, and all copies thereof and therefrom,
in any way relating to the Company and its affiliates' business and affairs,
whether made by him or otherwise coming into his possession, and on termination
of his employment, or on demand of the Company or any of its affiliates, at any
time, to deliver the same to the Company or any of its affiliates.
(b) Executive hereby agrees he will not at any time during his employment
or thereafter disclose to any third party (other than in the ordinary course of
business of the Company or any of its affiliates) or use for the benefit of
himself or any third party any Confidential Information (as such term is defined
in section 4(d) below) without prior written authorization of the Company or one
of its affiliates.
(c) Executive hereby sells, transfers and assigns to the Company all of his
entire right, title and interest to the Proprietary Rights (as such term is
defined in section 4(e) below) and agrees to promptly take all action and sign
and deliver all instruments as the Company or any of its affiliates may require
at any time hereafter: (i) to vest or perfect in the Company and its successors,
assigns and nominees all right, title and interest in and to the Proprietary
Rights; (ii) to assist the Company or any of its affiliates in filing or
prosecuting any application for registration, in Executive's name, the Company's
name, the name of any of its affiliates or any other name, in any country, for
any patent, trademark, service mark, copyright, mask work or other registration
on the Proprietary Rights, or any modification, reissue, division, continuation,
revival or extension thereof; or (iii) in conducting any legal or administrative
proceedings for securing, protecting or enforcing any of the foregoing or
otherwise relating to the Proprietary Rights. Executive further agrees to
disclose to the Company or any of its affiliates promptly all information,
details and data pertaining to the Proprietary Rights to the extent such
information, details or data are not presently known to the Company or any of
its affiliates.
(d) As used in this Agreement, "Confidential Information" shall mean
information which is not generally known to the public in the form available to
Executive and which was or is used, developed or obtained by the Company or any
of its affiliates relating to the business of the Company or any of its
affiliates, or research and development, including, but not limited to, all
client or customer lists, marketing strategies and techniques, trade secrets,
engineering or other know-how or other information pertaining to the financial
condition, business, research and development or prospects of the Company or any
of its affiliates.
(e) As used in this Agreement "Proprietary Rights" shall mean any and all
inventions, discoveries, research, engineering methods, systems, formulas,
designs, mask works, copyrights, software, data, processes, products, projects,
improvements and developments all whether or not published, confidential,
protected or susceptible of protection by patent, trademark, service mark,
copyright or other form of legal protection and whether or not any attempt has
been made to secure such protection, which were made, conceived or reduced to
practice at any time by Executive or by any other employee or consultant of the
Company or any of its affiliates, or in whole or in part at the expense of, on
the premises of, or with the assistance of the employees or consultants of, with
the equipment or supplies or those of the employees or consultants of, the
Company or any of its affiliates, and any and all other Confidential
Information.
5. NON-COMPETITION AND NON-SOLICITATION AGREEMENT.
(a) In consideration of the Company's agreements as set forth in this
Agreement, as well as other agreements, Executive agrees that during his
employment and for a period of two (2) years thereafter (provided, however, that
such two year period shall be extended by any period during which Executive is
in violation of this section 5), he will not in any way, directly or indirectly,
except in the proper exercise of his employment pursuant to this Agreement:
(i) engage in, represent, furnish consultant services to, be
employed by, or have any interest (whether as owner, principal,
director, officer, partner, agent, consultant, stockholder, or
otherwise) in any business that is engaged in designing, constructing,
fabricating or operating a hearth melting furnace for the melting of
(A) titanium or titanium alloys or (B) any other specialty metal in
which the Company or any of its affiliates is actively doing business
as of the Termination Date. Such restrictions shall apply in the
specific geographic and customer markets served by the Company or any
of its affiliates at any time during or upon termination of,
Executive's employment (which shall include but not be limited to the
United States). This section 5(a)(i) shall not prevent Executive from
owning up to one percent (1%) of the outstanding stock of any publicly
traded company which competes with the Company provided Executive does
not participate in the business of such entity;
(ii) (A) solicit, offer employment to, otherwise attempt to
hire, or assist in the hiring of any employee of the Company or any of
its affiliates, (B) encourage, induce, assist, or assist others in
inducing any such person to terminate his or her employment with the
Company or any of its affiliates, or (C) in any way interfere with the
relationship between the Company or any of its affiliates and their
employees; or
(iii) (A) contact or solicit, or direct or assist others to
contact or solicit, for the purpose of promoting any person's or
entity's attempt to compete with the Company or any of its affiliates,
in any business carried on by the Company or any of its affiliates
during Executive's employment, any customers, suppliers or other
business associates of the Company or any of its affiliates that were
existing or identified prospective customers, suppliers or associates
during Executive's employment, or (B) otherwise interfere in any way in
the relationships between the Company or any of its affiliates and
their customers, suppliers and business associates.
(b) If Executive resigns prior to the third anniversary of the Effective
Date (as defined in section 17 of this Agreement) under circumstances in which
Executive is not entitled to severance benefits pursuant to section 3 of this
Agreement, then the Company will (unless the obligations of Executive under this
section 5 have been waived by the Company) pay to the Executive (subject to any
applicable payroll or other taxes required to be withheld) an amount equal to
Executive's base salary as of the Termination Date, payable in equal monthly
installments of 1/24 of such base salary.
(c) Executive agrees that this covenant is reasonable with respect to its
duration, geographic area and scope. It is the desire and intent of the parties
that the provisions of this section 5 shall be enforced to the fullest extent
permissible under the laws and public policies applied in each jurisdiction in
which enforcement is sought. Accordingly, if any particular portion of this
section 5 shall be adjudicated to be invalid or unenforceable, this section 5
shall be deemed amended to delete therefrom the portion thus adjudicated to be
invalid or unenforceable, such deletion to apply only with respect to the
operation of this section 5 in the particular jurisdiction in which such
adjudication is made.
6. FURTHER ASSISTANCE. During Executive's employment by the
Company and thereafter, Executive will not make any disclosure, issue any public
statements or otherwise cause to be disclosed any information which is designed,
intended or might reasonably be anticipated to discourage suppliers or customers
of the Company or any of its affiliates or otherwise have a negative impact or
adverse effect on the Company or any of its affiliates. Following Termination
Date, Executive will provide assistance reasonably requested by the Company in
connection with actions taken by Executive during Executive's employment by the
Company, including but not limited to assistance in connection with any lawsuits
or other claims against the Company arising from events during Executive's
employment by the Company.
7. COMPLETE AGREEMENT. This Agreement, those documents
expressly referred to herein and other documents executed by the parties of even
date embody the complete agreement between the parties in respect to the subject
matter of this Agreement, and supersede and preempt any prior understandings,
agreements or representations by or among the parties, written or oral, which
may have related to the subject matter hereof in any way. The provisions herein
shall be regarded as divisible, and if any of such provisions or any part
thereof are declared invalid or unenforceable, the validity and enforceability
of the remainder of such provisions or parts thereof and the applicability
thereof shall not be affected thereby. All rights of Executive and Executive's
beneficiaries under this Agreement shall at all times be entirely unfunded and
no provision shall at any time be made with respect to segregating assets of the
Company or payment of any amounts due hereunder. Neither Executive nor his
beneficiaries shall have any interest in or rights against any specific assets
of the Company, and Executive and his spouse or other beneficiary shall have
only the rights of a general unsecured creditor of the Company.
8. COUNTERPARTS. This Agreement may be executed in separate counterparts,
each of which is deemed to be an original and all of which taken together
constitute one and the same agreement.
9. SUCCESSORS AND ASSIGNS. This Agreement is intended to bind
and inure to the benefit of and be enforceable by Executive, the Company and
their respective successors and assigns; provided that in no event shall
Executive's obligations under this Agreement be delegated or transferred by
Executive, nor shall Executive's rights be subject to encumbrance or to the
claims of Executive's creditors. This Agreement is for the sole benefit of the
parties hereto and shall not create any rights in third parties other than the
Company's affiliates.
10. REMEDIES. The Company will be entitled to enforce its
rights under this Agreement specifically, to recover damages by reason of any
breach of any provision of this Agreement and to exercise all other rights to
which it may be entitled. Executive agrees and acknowledges that money damages
may not be an adequate remedy for breach of the provisions of this Agreement and
that the Company may in its sole discretion apply to any court of law or equity
of competent jurisdiction for specific performance and/or injunctive relief in
order to enforce or prevent any violations of the provisions of this Agreement.
In the event that either party files an action against the other in any court to
collect, enforce, protect or preserve its rights under this Agreement, the
prevailing party in such action shall be entitled to receive reimbursement from
such other party of all reasonable costs and expenses, including attorneys'
fees, which such prevailing party incurred in prosecuting or defending such
action, as the case may be.
11. REPRESENTATIONS AND WARRANTIES OF EXECUTIVE. Executive
represents and warrants that he has full power and authority to enter into this
Agreement and to perform his obligations hereunder. This Agreement constitutes
the valid and legally binding obligation of Executive, enforceable in accordance
with its terms and conditions. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby will not (a) conflict
with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate modify
of cancel or require any notice under any contract, lease, sublease, license,
franchise, permit, indenture, agreement or mortgage for borrowed money,
instrument of indebtedness, security interest or other obligation or liability
to which Executive is a party or by which he is bound or to which any of his
assets is subject (including but not limited to employment, nondisclosure and
confidentiality agreements) or (b) violate any statute, regulation, rule,
judgment, order, decree or other restriction of any government, government
agency or court to which Executive is subject.
12. CHOICE OF LAW. All questions concerning the construction,
validity and interpretation of this Agreement will be governed by the internal
law, and not the law of conflicts, of the State of Colorado.
13. MODIFICATIONS AND WAIVERS. No provision of this Agreement
may be modified, altered or amended except by an instrument in writing executed
by the parties hereto. No waiver by any party hereto of any breach by any other
party hereto of any term or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar terms or
provisions at the time or at any prior or subsequent time.
14. HEADINGS. The headings contained herein are solely for the purpose of
reference, are not part of this Agreement and shall not in any way affect the
meaning or interpretation of this Agreement.
15. NOTICES. Except as otherwise expressly set forth in this
Agreement, all notices, requests and other communications to be given or
delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be given (and, except as otherwise provided in this Agreement,
shall be deemed to have been duly given if so given) in person, by cable,
telegram, facsimile transmission, mailed by first class registered or certified
mail, postage, prepaid or sent by overnight courier to the parties at the
following addresses (or such other address as shall be furnished in writing by
like notice, provided, however, that notice of change of address shall be
effective only upon receipt):
NOTICES TO EXECUTIVE:
215 Welsh Pool Road
Lionville, Pennsylvania 19353
NOTICES TO THE COMPANY:
1999 Broadway, Suite 4300
Denver, Colorado 80202
Attn.: General Counsel
16. EXPENSES. Each party will pay its own expenses in connection with this
Agreement and the performance of the transactions and obligations contemplated
by this Agreement.
17. EFFECTIVE DATE. This Agreement is entered into in
anticipation of the acquisition, by the Company, of substantially all of the
assets of Axel Johnson Metals, Inc. pursuant to an asset purchase agreement. The
parties agree that this Agreement shall become effective upon the closing of
such acquisition (the "Effective Date"), but shall be null and void and of no
further effect if such acquisition does not close on or prior to December 31,
1996.
U U U U U
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed on the day and year first above written.
EXECUTIVE
/S/ ROBERT E. MUSGRAVES
TITANIUM HEARTH TECHNOLOGIES, INC.
BY: ROBERT E. MUSGRAVES
Its:President
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