AGREEMENT
This Agreement, made and entered on February 5, 1997, is by
and between XXXXXX & XXXXX CORPORATION, a Tennessee corporation
("T&B"), and T. XXXXX XXXXXXXX, who currently resides at 0000
Xxxxxxx Xxxxxxx, Xxxxxxx, Xxxxxxxxx ("Xxxxxxxx"):
RECITALS
Xxxxxxxx is currently serving as Chairman of the Board and
Chief Executive Officer of T&B;
Xxxxxxxx plans to retire as an employee of T&B effective May
7, 1997 (the "Retirement Date");
T&B desires to secure the continuing services of Xxxxxxxx as
Chairman of the Board following the Retirement Date;
To facilitate an orderly succession in executive and policy-
making positions within T&B, T&B and Xxxxxxxx consider it
advisable that Xxxxxxxx continue to make his services available
to T&B, as provided in this Agreement; and
T&B and Xxxxxxxx consider it advisable that Xxxxxxxx be
compensated for his services to T&B as provided in this
Agreement.
NOW, THEREFORE, IN CONSIDERATION of the mutual promises,
covenants and agreements set forth below, the parties agree as
follows.
1. RETIREMENT OF XXXXXXXX; PRIOR CONTRACTS ARE TERMINATED.
Xxxxxxxx shall retire from employment with T&B as of the
Retirement Date. Effective on that Date, all existing employment
agreements between Xxxxxxxx and T&B, whether written or oral and
irrespective of stated expiration dates, shall be terminated and
cease to have any effect, other than for any cash or benefits
which are payable to Xxxxxxxx prior to the Retirement Date but
which remain unpaid. Included among such terminated contracts is
the Employment Agreement between T&B and Xxxxxxxx dated September
2, 1987, as amended November 6, 1995, providing for employment
after a change of control of T&B.
2. RETIREMENT AWARDS, PAYMENTS AND BENEFITS.
In consideration and recognition of Xxxxxxxx'x long and
valued services to T&B as employee, executive officer, President,
Chief Executive Officer and Chairman of the Board, T&B agrees to
make the following awards of stock options and restricted stock
to Xxxxxxxx at that time in 1997 when T&B grants stock options
and restricted stock awards to its executive officers and
employees, and shall make such additional awards and provide such
other benefits to Xxxxxxxx as are set forth below:
(a) Stock Options. T&B will grant to Xxxxxxxx stock
options to purchase 52,340 shares of T&B common stock of which
26,170 shares represent the grant that would be made to him in
fiscal 1997 as Chief Executive Officer (the "Normal Grant") and
26,170 shares represent a grant pursuant to this Agreement in
recognition of his retirement. No other stock option grants will
be made to Xxxxxxxx during the term of this Agreement.
(b) Restricted Stock Award. T&B will grant to
Xxxxxxxx a restricted stock award of 28,182 shares of T&B common
stock of which 14,091 shares represent the Normal Grant and
14,091 shares represent a grant pursuant to this Agreement in
recognition of his retirement. The shares granted in this
restricted stock award shall vest in accordance with the terms of
T&B's "1993 Management Stock Ownership Plan," except that no
portion of this award shall fail to vest in the future on the
basis that at the scheduled time for such vesting Xxxxxxxx is no
longer an employee of T&B. However, should Xxxxxxxx violate the
provisions of either Section 5(a) or 5(b) below, resulting in
material injury to T&B, at a time when restrictions on this award
have not yet been released, such award shall not vest and the
restricted shares shall be forfeited and revert to T&B. No other
restricted stock awards will be made to Xxxxxxxx during the term
of this Agreement.
(c) Special Stock Award. T&B will grant to Xxxxxxxx a
one-time, special stock award of 32,302 shares of T&B common
stock. Xxxxxxxx'x rights in the shares of the special stock
award shall vest when granted; however, the shares shall be held
in escrow and released to Xxxxxxxx in three substantially equal
installments on May 7, 1998, May 7, 1999 and May 7, 2000,
respectively. This award is subject to the condition that should
Xxxxxxxx breach the provisions of either Section 5(a) or 5(b)
below, resulting in material injury to T&B, then any deferred
installments of this award that remain in escrow shall be
forfeited and shall revert to T&B.
(d) Bonus. T&B shall pay Xxxxxxxx an incentive cash
bonus in March 1998, determined in accordance with T&B's
practice, as if Xxxxxxxx had served as the Chief Executive
Officer of T&B for the entire fiscal year 1997. No other cash
bonus will be paid to Xxxxxxxx during the term of this Agreement.
(e) Change of Control; Death; Documentation. T&B and
Xxxxxxxx shall execute applicable documentation for the stock
options, restricted stock award and special stock award granted
Xxxxxxxx in Sections 2(a), 2(b) and 2(c), in accordance with
standard T&B practice; provided, however, such documents shall
include provisions such that if Xxxxxxxx dies or if there is a
change in control of T&B before May 7, 2000, any unvested stock
options shall become immediately exercisable, and all
restrictions on the restricted stock award shall immediately
lapse.
(f) Definition of Change in Control. For purposes of
Section 2(e) of this Agreement, a "change in control" of T&B
shall mean a change in control of a nature that would be required
to be reported in response to Item 6(e) of Schedule 14A of Regulation
14A promulgated under the Securities Exchange Act of 1934, as amended
("Exchange Act"); provided that, without limitation, such a change in
control shall be deemed to have occurred if:
(i) any person or group of persons is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of T&B
representing twenty-five percent (25%) or more of the combined
voting power of T&B's then outstanding voting securities; or
(ii) individuals who, at the date hereof
constitute all the members of the Board of Directors, shall cease
for any reason to constitute at least a majority of the
Directors, unless the election of each Director who was not a
Director on the date hereof was approved by a vote of at least
seventy-five percent (75%) of the Directors then still in office
who were Directors on the date hereof; or
(iii) there shall be consummated (A) any
consolidation or merger of T&B in which T&B is not the continuing
or surviving corporation or pursuant to which shares of T&B
common stock would be converted into cash, securities or other
property, other than a merger of T&B in which the holders of the
T&B common stock immediately prior to the merger have the same
proportionate ownership of common stock of the surviving
corporation immediately after the merger, or (B) any sale, lease,
exchange or other transfer (in one transaction or a series of
related transactions) of all, or substantially all, of the assets
of T&B; or
(iv) the stockholders of T&B approve a plan or
proposal for the liquidation or dissolution of T&B.
(g) Executive Retirement Plan. Pursuant to Section
1.11 of the T&B Executive Retirement Plan, Xxxxxxxx shall be
granted such additional months of age to be treated as having
retired at age 60, so that he will become entitled as of the
Retirement Date to benefits attributable to a retirement age of
60 years.
(h) Other Retiree Benefits. As of May 7, 1997,
Xxxxxxxx shall be entitled to all standard benefits, perquisites
and executive benefits which T&B provides for retiring senior
corporate executives, including, but not limited to, Major
Medical coverage for him and his wife for as long as either
lives.
3. XXXXXXXX'X POST-RETIREMENT SERVICE AS CHAIRMAN OF THE
BOARD OF DIRECTORS OF T&B.
(a) Term. The Board of Directors agrees to elect
Xxxxxxxx to the office of Chairman of the Board, and Xxxxxxxx
agrees to perform such services for T&B in accordance with the
terms and provisions of this Agreement for the period ("Term")
which commences on May 7, 1997 and ends on the earliest of: (i)
May 6, 2000; (ii) the termination date of this Agreement in
accordance with Section 5 hereof, or (iii) the date of Xxxxxxxx'x
death.
(b) Duties.
(1) Title; Assignment of Duties. During the
Term, Xxxxxxxx shall serve as Chairman of the Board of T&B.
Xxxxxxxx'x duties shall include, but are not limited to, the
direction of the affairs of the Board of Directors of T&B, as
well as the performance of all duties customarily performed by a
person holding the office of Chairman of the Board and any other
duties assigned Xxxxxxxx by the Board of Directors. Xxxxxxxx'x
duties shall also include the performance of projects requested
by T&B's Chief Executive Officer, which shall be appropriate to
Xxxxxxxx'x experience and senior corporate executive status.
(2) Xxxxxxxx'x obligations. In the performance
of his duties, Xxxxxxxx shall:
(i) devote his knowledge, skill, attention
and energies to the performance of his duties, faithfully,
competently, diligently and to the best of his ability;
(ii) comply with all T&B policies and rules
and regulations from time to time adopted; and
(iii) refrain from, directly or indirectly,
engaging in, rendering any service to, or undertaking any
employment with respect to any other business, profession,
occupation or endeavor for any person, firm, corporation,
association or other entity, without the prior consent of the
Board of Directors of T&B, as reflected in the minutes of the
meetings of the Board or any of its committees;
provided, however, nothing in this Section 2(b) shall be
construed as preventing Xxxxxxxx either from investing his assets
in such a form or manner as shall not require any services on his
part in the operation of the affairs of any entity in which such
investment is made, or from serving as a director of any other
company, as long as such activities do not interfere with the
performance of Xxxxxxxx'x duties under this Agreement.
(c) Compensation, Benefits and Expenses. During
the Term of this Agreement, T&B shall compensate and reimburse
Xxxxxxxx as follows:
(i) Fee. T&B shall pay to Xxxxxxxx, in
consideration of his services as Chairman of its Board, a
Chairman's fee of no less than $500,000 per year, payable in
twenty-four (24) substantially equal installments. The Board of
Directors of T&B may, in its discretion, from time to time
increase the fee. Except for this fee, and the benefits
described below, Xxxxxxxx shall receive no additional fees, stock
awards, retirement benefits or other compensation for serving as
a member of the Board or of a committee of the Board.
(ii) T&B Benefits. During the Term, T&B shall
provide Xxxxxxxx and his "dependents" (as that term may be
defined under the applicable T&B benefit plan(s)) all benefits
provided other T&B retired senior corporate executives and their
dependents.
(iii) Perquisites. During the Term, T&B will
continue to pay membership fees arising from Xxxxxxxx'x
membership in the TPC Southwind Golf Club, Memphis, Tennessee,
which he uses for T&B business purposes. Until May 6, 2000, T&B
will continue to provide Xxxxxxxx an automobile allowance
according to existing practice.
(iv) Office. During the Term, T&B shall
provide Xxxxxxxx with an office in the executive section of T&B's
headquarters building and with secretarial support.
(v) Expenses. Xxxxxxxx shall be entitled to
receive prompt reimbursement for all reasonable expenses incurred
by him during the Term (in accordance with the policies and
procedures established for T&B senior executive officers) in
performing services hereunder.
4. TERMINATION; DISABILITY; DEATH.
(a) Termination by T&B. The Board of Directors of T&B
may terminate this Agreement and may remove Xxxxxxxx as a
director for cause. For the purpose of this Agreement, the Board
shall have "cause" to terminate this Agreement upon (i) the
willful failure by Xxxxxxxx to substantially perform his duties
hereunder (including, under the circumstances set forth in
subsection (c) below, for Xxxxxxxx'x incapacity due to physical
or mental disability); or (ii) the willful engaging by Xxxxxxxx
in xxxxx misconduct materially injurious to T&B; or (iii) the
willful violation by Xxxxxxxx of the provisions of Sections 3(b)
and 5 hereof, provided that such a violation results in material
injury to T&B.
For the purpose of this Section 4(a), no act or
failure to act on Xxxxxxxx'x part shall be considered "willful"
unless done or omitted to be done by him not in good faith and
without a reasonable belief that his action or omission was in
the best interests of T&B. Notwithstanding the foregoing, this
Agreement shall not be deemed to have been terminated for cause
unless and until there shall have been delivered to Xxxxxxxx a
copy of a resolution, duly adopted by the affirmative vote of not
less than a majority of the entire membership of the Board
excluding Xxxxxxxx, at a meeting of the Board called and held for
that purpose (after reasonable notice to Xxxxxxxx and an
opportunity for him, together with his counsel, to be heard
before the Board), finding that, in the good faith opinion of the
Board, Xxxxxxxx was guilty of conduct set forth above in clause
(i), (ii) or (iii) of the first sentence of this subsection (a)
above, and specifying the particulars thereof in detail.
If Xxxxxxxx'x service on the Board should be
terminated for cause, T&B shall pay him all fees due through the
end of the month of his termination and shall have no further
obligations to Xxxxxxxx under the post-retirement provisions of
this Agreement.
(b) Termination by Xxxxxxxx. Xxxxxxxx may terminate
his membership on T&B's Board of Directors by giving sixty (60)
days' advance written notice to T&B of his intention to
terminate. If the basis for that decision is T&B's breach of a
material provision of this Agreement or the termination of
Xxxxxxxx without affording him the notice and hearing required by
subsection (a) above, then Xxxxxxxx shall continue to receive the
compensation and benefits due under this Agreement until the
breach has been cured and/or all procedural requirements for
Xxxxxxxx'x termination have been observed. If Xxxxxxxx should
terminate his Board membership for any other reason, such an
action shall result in Xxxxxxxx'x loss of all entitlement to fees
and other benefits accruing to him by virtue of his service as
non-employee Chairman of the Board. However, Xxxxxxxx shall not
forfeit those stock options, special stock award, restricted
stock award and other benefits set forth in Section 2(a) through
(i), all of which were granted to him as entitlements in
connection with his retirement as an employee and executive
officer of T&B. Following any such termination by Xxxxxxxx, he
shall continue to be bound by the restrictions set forth in
Sections 5(a) and 5(b) below.
(c) Disability.
(i)Definition; Termination. Xxxxxxxx'x service
as Chairman hereunder shall be terminated if, as a result of his
physical or mental disability, he shall not have been performing
his duties and obligations hereunder on a regular basis for a
period of at least six (6) consecutive months, and within thirty
(30) days after written notice of termination is given by the
Board (which may occur before or after the end of such six-month
period) he shall not have returned to the performance of his
duties and obligations hereunder on a regular basis nor stated a
reasonably early time when he would do so.
(ii) Amounts Due Upon Becoming Disabled. For any
period during the Term in which Xxxxxxxx fails to perform his
duties hereunder as a result of physical or mental disability, he
shall continue to receive his full fee at the rate then in
effect, reduced by the amounts, if any, paid to him under T&B's
disability benefit plan, any other disability plan and under the
Social Security disability insurance program.
(d) Death. If Xxxxxxxx'x services as Chairman of
T&B's Board of Directors should be terminated by his death during
the Term, then T&B shall pay Xxxxxxxx'x estate as follows:
(i) Xxxxxxxx'x estate shall receive his full
contractual benefits under this Agreement through the end of the
month next following the date of his death. Following this date,
all the benefits described in Section 3(c) above, at subsections
(i), (iii), (iv) and (v), shall terminate. The benefits
described in Section 3(c)(ii) shall survive Xxxxxxxx'x death,
however, and inure to the benefit of a living spouse and
dependents, if any.
(ii) As set forth in Section 2(e) above, upon
Xxxxxxxx'x death during the Term, all his then outstanding stock
options shall become immediately exercisable, and any outstanding
restricted shares will immediately vest and their restrictions
lapse. Upon appropriate official request, these options and
shares will be transferred to the persons or beneficiaries of
Xxxxxxxx'x choice, as more fully set forth in Section 8(b),
below.
5. COVENANTS AS TO CONFIDENTIAL INFORMATION AND
COMPETITIVE CONDUCT.
(a) Unauthorized Disclosure. During the Term and
afterward, Xxxxxxxx shall not, without the consent of the Board
as reflected in the minutes of the meetings of the Board or any
of its committees, disclose to any person -- other than an
employee of T&B, or a person to whom disclosure is reasonably
necessary or appropriate in connection with the performance by
Xxxxxxxx of his duties on behalf of T&B, or as may be required by
a court or governmental agency with appropriate authority -- any
material confidential information obtained by him, either while
employed by T&B or during the Term, with respect to any of T&B's
(and its subsidiaries') plans, strategies, products,
improvements, formulas, designs or styles, processes, customers,
methods of distribution or methods of manufacture, the disclosure
of which he knows could be materially damaging to T&B; provided,
however, that confidential information shall not include any
information known generally to the public (other than as a result
of unauthorized disclosure by Xxxxxxxx) or any information of a
type not otherwise considered confidential by persons engaged in
the same business or a business similar to that conducted by T&B.
(b) Restrictive Covenant During the Term. Xxxxxxxx
shall not, directly or indirectly, render services to, or invest
in, or loan funds to, any person, firm, corporation, association
or other entity which competes, directly or indirectly, with any
T&B business, without the prior consent of the Board as reflected
in the minutes of the meetings of the Board or any of its
committees. This restriction shall not apply to investments in
funds, such as an S&P 500 Index fund, which may include some
companies in competition with T&B, but for which Xxxxxxxx has no
specific power of direction.
(c) T&B Remedies. In the event of an actual or
threatened breach by Xxxxxxxx of the provisions of this Section
5, T&B shall be entitled to terminate this Agreement as provided
in Section 4 and to seek immediate injunctive relief restraining
Xxxxxxxx from conduct in breach or threatened breach of the
covenants contained in this Section 5. Nothing herein shall be
construed as prohibiting T&B from pursuing any other remedies
available to it for such breach or threatened breach, including
the recovery of damages.
6. ARBITRATION. Any dispute or controversy arising under
or in connection with this Agreement (except as provided in
Section 5(c) as to injunctive relief) shall be settled by
arbitration in Memphis, Tennessee in accordance with the rules of
the American Arbitration Association then in effect, unless the
parties mutually agree otherwise in writing. Judgment may be
entered on the arbitrator's award in any court having jurisdiction.
7. WAIVER OF BREACH. No waiver by either party hereto of
any breach by the other party of any condition or provision of
this Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions
at the same, or at any prior or subsequent, time.
8. SUCCESSORS: BINDING AGREEMENT.
(a) Obligations of T&B's Successor. T&B shall require
any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all, or substantially all or a
majority of the business and/or assets of T&B, by agreement in
form and substance satisfactory to Xxxxxxxx, expressly to assume
and agree to perform this Agreement in the same manner and to the
same extent that T&B would be required to perform it if no such
succession had taken place.
(b) Rights of Xxxxxxxx'x Successors. This Agreement
and all rights of Xxxxxxxx hereunder shall inure to the benefit
of, and be enforceable by, Xxxxxxxx'x personal or legal
representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If Xxxxxxxx should die
while any amounts would still be due and payable to him hereunder
if he had continued to live, all such amounts, unless otherwise
provided for herein, shall be paid in accordance with the terms
of this Agreement to Xxxxxxxx'x devisee, legatee or other
designee or, if there be no such devisee, legatee or other
designee, to Xxxxxxxx'x estate. Xxxxxxxx shall designate to T&B
the appropriate person(s) to contact upon his death (or
disability), and shall notify T&B in writing of any changes in
designation.
(c) Assignment. Neither this Agreement nor any rights
or obligations hereunder may be assigned by Xxxxxxxx. T&B may
assign this Agreement and its rights and obligations hereunder
without the consent of Xxxxxxxx, subject to the provisions in
subsection (a) above.
9. NOTICE. All notices and all other communications
required or provided for in this Agreement shall be in writing
and shall be deemed to have been duly given when mailed by United
States registered mail, return receipt requested, postage
prepaid, addressed as follows:
If to Xxxxxxxx:
T. Xxxxx Xxxxxxxx
0000 Xxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxx 00000
If to T&B:
Xxxxxx & Xxxxx Corporation
0000 Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxx 00000
Attention: President
or to such other address as either party may have furnished to
the other in writing at the addresses provided above, except that
notices of change of address shall be effective only upon
receipt.
10. MISCELLANEOUS PROVISIONS.
(a) Governing Law. This Agreement shall be governed
by and construed under the laws of the State of Tennessee,
excepting its choice of law provisions. If, under such law, any
portion of this Agreement is at any time deemed to be in
conflict with any applicable statute, rule, regulations or
ordinance, such portion shall be deemed to be modified or altered to conform
thereto or, if that is not possible, to be omitted from this
Agreement; the invalidity of any such portion shall not affect
the force, effect, validity and enforceability of the remaining
portions of this Agreement.
(b) Headings. The descriptive headings of the
several paragraphs of this Agreement are inserted for convenience
of reference only and shall not constitute a part of this
Agreement.
(c) Amendments. The provisions of this Agreement
may not be amended, modified, repealed, waived, extended or
discharged except by an agreement in writing signed by the party
against whom enforcement of any amendment, modification, repeal,
waiver, extension or discharge is sought. No person, other than
pursuant to a resolution of the Board of Directors of T&B, shall
have authority on behalf of T&B to agree to amend, modify,
repeal, waive, extend or discharge any provision of this
Agreement or anything in reference xxxxxxx.XX WITNESS WHEREOF,
T&B has caused this Agreement to be executed and its corporate
seal to be affixed and attested by its authorized officer, and
Xxxxxxxx has executed this Agreement, as of the 5th day of
February, 1997.
XXXXXX & XXXXX CORPORATION
By:/s/Xxxxx Xxxxxxxxxx
Attest:
By:/s/Xxxxxx X. Way
/s/T. Xxxxx Xxxxxxxx
T. XXXXX XXXXXXXX
