Exhibit (c)(14)
1999 AGREEMENT
BETWEEN XXX X. XXXXXX AND XXXXXXXXX'X, INC.
This agreement is to amend the terms of employment of Xxx X. Xxxxxx (the
"Executive"), by Xxxxxxxxx'x, Inc., and Xxxxxxxxx Management Corporation
(together, the "Company") and is entered into as of the 3rd day of February,
1999:
WHEREAS, the extremely high level of mergers and acquisitions activity in
the United States and circumstances affecting the Company and its industry have
created the possibility that it could receive one or more inquiries or proposals
looking toward a possible acquisition or business combination, notwithstanding
the existing resolution of the Board of Directors that the Company is not for
sale; and
WHEREAS, the Executive's compensation and benefit arrangements with the
Company are such that if an acquisition or business combination were to occur
during 1999 there could be a loss to him of substantial value which would
otherwise be realized in the absence of such a transaction; and
WHEREAS, the Board of Directors has determined that it is in the best
interests of the Company and its stockholders to ensure that the Executive's
financial interests are aligned with those of the stockholders in the event of
an acquisition or business combination;
NOW THEREFORE, in consideration of the mutual agreements herein set forth,
and for other good and valuable consideration, the adequacy of which is hereby
acknowledged, the Company and the Executive do hereby agree as follows:
CHANGE IN CONTROL IN 1999
Sections 1.02 through 1.06 below, shall apply if a Change in Control
(as defined in Appendix B to the Severance Plan for Executive Vice Presidents of
Xxxxxxxxx'x Inc., as revised November 12, 1996 [the "Severance Plan"]) occurs
during 1999, notwithstanding any other provision of the Severance Plan to the
contrary. If a Change in Control does not occur during 1999, such provisions
(Sections 1.02 through 1.06) shall automatically be cancelled and of no further
force or effect without further action on the part of either you or the Company.
Sections 1.01 and 1.07 shall apply whether or not there is a Change in Control
during 1999.
Section 1.01 Duties in Connection with a Change in Control. In the
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event the Executive becomes aware of any credible, legitimate, inquiry or
proposal looking to a transaction involving the Company which would constitute a
Change in Control, Executive shall promptly report the same to the Board of
Directors of the Company and shall, to the extent requested by the Board of
Directors, participate in any exchange of information, negotiations or
discussions concerning such potential transaction. In connection therewith,
Executive shall as requested by the Board of Directors, assist the Company's
financial advisor in preparing an offering memorandum or other materials,
participate in presentations and "due-diligence" meetings with
other parties; use his best efforts to achieve the cooperation and continued
support of other members of management and employees of the Company in the
process; and provide leadership and assistance in successfully consummating any
transaction which may be agreed upon and approved by the Board of Directors. All
actions by the Executive in connection with any such process shall be consistent
with the procedures and strategy developed by the Company and its financial
advisor.
Section 1.02 Notice of Termination. Executive agrees that during the
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pendency of any negotiations or transaction during 1999 looking to, or which
would result in, a Change in Control, and for a period of one year following the
date of a Change in Control resulting therefrom, in addition to any other
requirements of the Agreement, the Executive shall provide the Company not less
than 120 days advance notice of his voluntary termination. Compliance with this
Section 1.03 shall be a condition precedent to Executive's right to benefits
provided in Sections 1.03, 1.04 and 1.05 below.
Section 1.03 Supplemental Retirement Income Plan. The Executive's
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Benefit under Section 4.1 of the Company's Supplemental Retirement Income Plan
(the "Retirement Plan") shall be fifty-two and one-half percent (52.5%) of his
Final Average Monthly Compensation and such Benefit shall be fully Vested,
effective upon the date of the Change in Control, notwithstanding any provision
of the Retirement Plan to the contrary. The terms "Benefit", "Final Average
Monthly Compensation" and "Vested" shall have the meanings set forth in the
Retirement Plan. The Retirement Plan shall automatically be amended to reflect
this change upon the date of the Change in Control, without further action of
the Company or the Executive.
Section 1.04 Termination Following Change in Control. Any
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limitations, whether contained in Section 2(B) of the Severance Plan or any
provision of any other plan or program of the Company, which limit payments to
Executive to the maximum amount which the Company shall be entitled to deduct as
a compensation expense on its federal income tax return shall not be applicable,
and the Executive shall be entitled to receive all payments and benefits which
would otherwise be payable if there were no such limitations. In addition, the
definition of "Termination Period" in Appendix B to the Severance Plan shall be
amended by changing "one year" in paragraph E to "two years".
Section 1.05 Gross-Up Payments for Excise Taxes. This Section 1.06
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shall be applicable if there is a Change in Control and the Executive is
entitled to compensation pursuant to paragraph 2 under the caption "Severance
Benefits" of the Severance Plan as a result of termination of his employment
during the Termination Period (as therein defined) other than by reason of a
Nonqualifying Termination (as so defined). In the event that the payments or
benefits provided for in the Agreement or otherwise payable to the Executive
(either before or after the date hereof) constitute "parachute payments" within
the meaning of Section 280G of the Internal Revenue Code of 1986, as amended
(the "Code") and will be subject to the excise tax imposed by Section 4999 of
the Code, then the Executive shall receive (i) a payment from the Company
sufficient to pay such excise tax, and (ii) an additional payment from the
Company sufficient to pay the excise tax and all taxes (including, but not
limited to, federal and state income and employment taxes) arising from the
payments made by the Company to the Executive pursuant to
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this sentence. Unless the Company and Executive otherwise agree in writing, the
determination of Executive's excise tax liability shall be made in writing by
one of the five largest accounting firms in the United States which is mutually
acceptable to the Company and Executive (the "Accountants"). For purposes of
making the calculations required by this Section, the Accountants may make
reasonable assumptions and approximations concerning applicable taxes and may
rely on reasonable, good faith interpretations concerning the application of
Sections 280G and 4999 of the Code. The Company and Executive shall furnish to
the Accountants such information and documents as the Accountants may reasonably
request in order to make a determination under this Section. The Company shall
bear all fees and costs the Accountants may reasonably charge or incur in
connection with any calculations contemplated by this Section. The Company
further agrees that, if at any time it is determined by the appropriate tax
authority that a greater excise tax liability is due than the amount which is
determined by the Accountants, the Executive shall receive a further payment
from the Company sufficient to pay such additional excise tax liability and all
taxes (including, but not limited to, federal and state income and employment
taxes) arising from such further payment.
Section 1.06 Agreement Not to Compete. Executive Agrees that if
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there is a Change in Control during 1999, and if during the two year period
thereafter the Executive shall voluntarily terminate his employment with the
Company, other than for Good Reason (as defined in the Agreement), then for a
period of one year following such termination the Executive shall not engage in
any activities, whether as employer, proprietor, partner, stockholder (other
than the holder of less than 5% of the stock of a corporation, the securities of
which are traded on a national securities exchange or the NASDAQ National Market
System), director, officer, employee or otherwise, in competition with (1) the
businesses conducted at the date hereof by the Company or (2) any business in
which the Company is substantially engaged at the time of the Change in Control.
Section 1.07 Payment of Professional Fees. The Company shall pay the
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reasonable professional fees incurred by the Executive in connection with this
amendment to his employment agreement and related matters.
This Amendment shall at all times be construed, interpreted and
enforced in accordance with the laws of the State of Delaware, notwithstanding
that the laws of any other jurisdiction may be applicable to the Agreement.
IN WITNESS WHEREOF, the Executive and the undersigned duly authorized
officer of the Company have executed and delivered this amendment as of the date
set forth in the first paragraph above.
XXXXXXXXX'X, INC.
By: /s/ Xxxxx X. Xxxxx
______________________________
Xxxxx X. Xxxxx
President and Chief Executive Officer
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XXXXXXXXX MANAGEMENT CORPORATION
By: /s/ Xxxxx X. Xxxxx
______________________________
Xxxxx X. Xxxxx
President and Chief Executive Officer
Xxx X. Xxxxxx
/s/ Xxx X. Xxxxxx
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Xxx X. Xxxxxx
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