EXHIBIT 10.29
AMENDED AND RESTATED SEVERANCE PROTECTION AGREEMENT
THIS AMENDED AND RESTATED SEVERANCE PROTECTION AGREEMENT (the "Agreement")
made as of the 20th day of April, 2004 (the "Effective Date"), by and between
CROWN CRAFTS, INC., a Delaware corporation (the Company"), and E. XXXXXXX
XXXXXXXX, an individual resident of the State of Louisiana (the "Executive").
WITNESSETH:
WHEREAS, the Company and the Executive have entered into that certain
Severance Protection Agreement dated as of September 5, 1998 (the "Original
Agreement"); and
WHEREAS, the Company and the Executive now wish to amend and restate the
Original Agreement in its entirety in the manner hereinafter set forth;
NOW, THEREFORE, in consideration of the respective agreements of the
parties contained herein, it is agreed as follows:
1. TERM OF AGREEMENT. This Agreement shall continue in effect until the
second anniversary of the Effective Date; provided, however, that commencing on
the date one (1) year after the date hereof and on each annual anniversary
thereafter (such date and each annual anniversary thereof shall be hereinafter
referred to as the "Renewal Date"), the term of this Agreement shall
automatically be extended so as to terminate two (2) years from the Renewal
Date, unless either the Company or the Executive shall have given written notice
to the other at least ninety (90) days prior thereto that the term of this
Agreement shall not be so extended; and provided further, however, that
notwithstanding any such notice by the Company not to extend, in the event that
prior to the expiration of this Agreement a Change of Control occurs, then under
no circumstances shall this Agreement terminate prior to the expiration of two
(2) years after the occurrence of such Change in Control.
2. CERTAIN DEFINITIONS.
2.1. ACCRUED COMPENSATION. For purposes of this Agreement, "Accrued
Compensation" shall mean an amount which shall include all amounts earned or
accrued through the "Termination Date" (as hereinafter defined) but not paid as
of the Termination Date, including, without limitation, (i) base salary, (ii)
reimbursement for reasonable and necessary expenses incurred by the Executive on
behalf of the Company during the period ending on the Termination Date, (iii)
vacation pay, (iv) bonuses and incentive compensation (other than the "Pro Rata
Bonus" (as hereinafter defined)), and (v) all other amounts to which the
Executive is entitled under any compensation plan of the Company at the times
such payments are due.
2.2. BASE AMOUNT. For purposes of this Agreement, "Base Amount"
shall mean the greater of the Executive's annual base salary at the highest rate
in effect (i) on, or at any time during the ninety (90) day period prior to, the
Termination Date or (ii) at any time during the ninety (90) day period prior to
a Change in Control and shall include all amounts of the Executive's base salary
that are deferred under any qualified and non-qualified employee benefit plans
of the Company or any other agreement or arrangement.
2.3. BONUS AMOUNT. For purposes of this Agreement, "Bonus Amount"
shall mean the highest annual bonus paid or payable to the Executive in respect
of any of the five (5) full fiscal years ended immediately prior to the
Termination Date or, if greater, the three (3) full fiscal years ended
immediately prior to a Change in Control, including, without limitation, any
bonus or portion thereof earned but deferred (and annualized for any fiscal year
consisting of less than twelve (12) full months or during which the Executive
was employed for less than twelve (12) full months).
2.4. CAUSE. For purposes of this Agreement, a termination of
employment is for "Cause" if the Executive has been convicted of a felony or a
felony prosecution has been brought against the Executive or if the termination
is evidenced by a resolution adopted in good faith by two-thirds (2/3) of the
Board of Directors of the Company (the "Board") that the Executive (i)
intentionally and continually failed substantially to perform his reasonably
assigned duties with the Company (other than a failure resulting from the
Executive's incapacity due to physical or mental illness or from the Executive's
assignment of duties that would constitute "Good Reason" as hereinafter defined)
which failure continued for a period of at least thirty (30) days after a
written notice of demand for substantial performance has been delivered to the
Executive specifying the manner in which the Executive has failed substantially
to perform, or (ii) intentionally engaged in illegal conduct or gross misconduct
which results in material economic harm to the Company; provided, however, that
(A) where the Executive has been terminated for Cause because a felony
prosecution has been brought against him and no conviction or plea of guilty or
plea of nolo contendere or its equivalent results therefrom, then said
termination shall no longer be deemed to have been for Cause and the Executive
shall be entitled to all the benefits provided by Section 3.1.1 hereof from and
after the date on which the prosecution of the Executive has been dismissed or a
judgment of acquittal has been entered, whichever shall first occur; and (B) no
termination of the Executive's employment shall be for Cause as set forth in
clause (ii) above until (x) there shall have been delivered to the Executive a
copy of a written notice setting forth that the Executive was guilty of the
conduct set forth in clause (ii) and specifying the particulars thereof in
detail, and (y) the Executive shall have been provided an opportunity to be
heard in person by the Board (with the assistance of the Executive's counsel if
the Executive so desires). No act, nor failure to act, on the Executive's part,
shall be considered "intentional" unless the Executive has acted or failed to
act, with a lack of good faith and with a lack of reasonable belief that the
Executive's action or failure to act was in the best interests of the Company.
Any act, or failure to act, based upon authority given pursuant to a resolution
duly adopted by the Board or upon the instructions of any senior officer of the
Company or based upon the advice of counsel for the Company shall be
conclusively presumed to be done, or omitted to be done, by the Executive in
good faith and in the best interests of the Company. Any termination of the
Executive's employment by the Company hereunder shall be deemed to be a
termination other than for Cause unless it meets all requirements of this
Section 2.4.
2.5. CHANGE IN CONTROL. For purposes of this Agreement, a "Change
in Control" shall mean any of the following:
2.5.1. An acquisition other than directly from the Company) of any
voting securities of the Company (the "Voting Securities") by any "Person" (as
the term person is used for purposes of Section 13(d) or 14(d) of the Securities
Exchange Act of 1934, as
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amended (the "Exchange Act")) immediately after which such Person has
"Beneficial Ownership" (within the meaning of Rule 13D-3 promulgated under the
Exchange Act) of twenty-five percent (25%) or more of the combined voting power
of the Company's then outstanding Voting Securities; provided, however, in
determining whether a Change in Control has occurred, Voting Securities which
are acquired in a "Non-Control Acquisition" (as hereinafter defined) shall not
constitute an acquisition which would cause a Change in Control. A "Non-Control
Acquisition" shall mean an acquisition by (i) an employee benefit plan (or a
trust forming a part thereof) maintained by (A) the Company or (B) any
corporation or other Person of which a majority of its voting power or its
voting equity securities or equity interest is owned, directly or indirectly, by
the Company (for purposes of this definition, a "Subsidiary"), (ii) the Company
or its Subsidiaries, or (iii) any Person in connection with a "Non-Control
Transaction" (as hereinafter defined);
2.5.2. The individuals who as of the Effective Date are members of
the Board (the "Incumbent Board"), cease for any reason to constitute at least a
majority of the members of the Board; provided, however, that if the election,
or nomination for election by the Company's common shareholders, of any new
director was approved by a vote of at least a majority of the Incumbent Board,
such new director shall, for purposes of this Agreement, be considered as a
member of the Incumbent Board; provided further, however, that no individual
shall be considered a member of the Incumbent Board if such individual initially
assumed office as a result of either an actual or threatened "Election Contest"
(as described in Rule 14a-11 promulgated under the Exchange Act) or other actual
or threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board (a "Proxy Contest"), including by reason of any agreement
intended to avoid or settle any Election Contest or Proxy Contest; or
2.5.3. Approval by shareholders of the Company of:
(i) A merger, consolidation or reorganization
involving the Company, unless such merger, consolidation or
reorganization is a "Non-Control Transaction." A "Non-Control
Transaction" shall mean a merger, consolidation or
reorganization of the Company where:
(A) the shareholders of the Company, immediately
before such merger, consolidation or
reorganization, own directly or indirectly
immediately following such merger, consolidation
or reorganization, at least a majority of the
combined voting power of the outstanding voting
securities of the corporation resulting from such
merger, consolidation or reorganization (the
"Surviving Corporation") in substantially the same
proportion as their ownership of the Voting
Securities immediately before such merger,
consolidation or reorganization,
(B) the individuals who were members of the Incumbent
Board immediately prior to the execution of the
agreement
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providing for such merger, consolidation or
reorganization constitute at least a majority of
the members of the board of directors of the
Surviving Corporation, or a corporation
beneficially directly or indirectly owning a
majority of the Voting Securities of the Surviving
Corporation, and
(C) no Person other than (i) the Company, (ii) any
Subsidiary, (iii) any employee benefit plan (or
any trust forming a part thereof) maintained by
the Company, the Surviving Corporation or any
Subsidiary, or (iv) any Person who, immediately
prior to such merger, consolidation or
reorganization, had Beneficial Ownership of
twenty-five percent (25%) or more of the then
outstanding Voting Securities), has Beneficial
Ownership of twenty-five percent (25%) or more of
the combined voting power of the Surviving
Corporation's then outstanding voting securities;
(ii) A complete liquidation or dissolution of the
Company; or
(iii) An agreement for the sale or other disposition of
all or substantially all of the assets of the Company to any
Person (other than a transfer to a Subsidiary).
Notwithstanding the foregoing, a Change in Control shall not be deemed to
occur solely because any Person (the "Subject Person") acquired Beneficial
Ownership of more than the permitted amount of the then outstanding Voting
Securities as a result of the acquisition of Voting Securities by the Company
which, by reducing the number of Voting Securities then outstanding, increases
the proportional number of shares Beneficially Owned by the Subject Person,
provided, that if a Change in Control would occur (but for the operation of this
sentence) as a result of the acquisition of Voting Securities by the Company,
and after such share acquisition by the Company, the Subject Person becomes the
Beneficial Owner of any additional Voting Securities which increases the
percentage of the then outstanding Voting Securities Beneficially Owned by the
Subject Person, then a Change in Control shall occur.
2.6. DISABILITY. For purposes of this Agreement, "Disability" shall
mean a physical or mental infirmity which impairs the Executive's ability to
substantially perform his duties with the Company for a period of one hundred
eighty (180) consecutive days and the Executive has not returned to his full
time employment prior to the Termination Date as stated in the "Notice of
Termination" (as hereinafter defined).
2.7. GOOD REASON.
2.7.1. For purposes of this Agreement, "Good Reason" shall
mean a good faith determination by the Executive, in the Executive's
sole and absolute judgment, that any one or more of the following
events or conditions has occurred, without the Executive's express
written consent, after a Change in Control:
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(i) the assignment to the Executive of any duties
inconsistent with the Executive's position (including, without
limitation, status, titles and reporting requirements),
authority, duties or responsibilities as in effect immediately
prior to the Change in Control, or any other action by the
Company that results in a material diminution in such
position, authority, duties or responsibilities, excluding for
this purpose isolated and inadvertent action not taken in bad
faith and remedied by the Company promptly after receipt of
notice thereof given by the Executive;
(ii) a reduction by the Company in the Executive's base
salary as in effect immediately prior to the Change in Control
or as the same may be increased from time to time or a change
in the eligibility requirements or performance criteria under
any bonus, incentive or compensation plan, program or
arrangement under which the Executive is covered immediately
prior to the Change in Control which adversely affects the
Executive;
(iii) any failure to pay the Executive any compensation
or benefits to which he is entitled within five (5) days of
the date due;
(iv) a failure to increase the Executive's base salary
at least annually at a percentage of base salary no less than
the average percentage increases (other than increases
resulting solely from the Executive's promotion) granted to
the Executive during the three (3) full fiscal years ended
prior to a Change in Control (or such less number of full
fiscal years during which the Executive was employed);
(v) the Company's requiring the Executive to be based
anywhere other than within twenty-five (25) miles of the
Executive's job location at the time of the Change in Control,
except for reasonably required travel on the Company's
business which is not greater than such travel requirements
prior to the Change in Control;
(vi) without replacement by a plan providing benefits
to the Executive substantially equivalent to or greater than
those discontinued, the failure by the Company to continue in
effect, within its maximum stated term, any pension, bonus,
incentive, stock ownership, purchase, option, life insurance,
health, accident, disability, or any other employee benefit
plan, program or arrangement, in which the Executive is
participating at the time of the Change in Control, or the
taking of any action by the Company that would adversely
affect the Executive's participation or materially reduce the
Executive's benefits under any of such plans;
(vii) the taking of any action by the Company that would
materially adversely affect the physical conditions existing
at the time of the Change in Control in or under which the
Executive performs his
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employment duties, provided that the Company may take action
with respect to such conditions after a Change in Control so
long as such conditions are at least commensurate with the
conditions in or under which an officer of the Executive's
status would customarily perform his employment duties;
(viii) the insolvency or the filing (by any party,
including the Company) of a petition for bankruptcy by the
Company;
(ix) any purported termination of the Executive's
employment for Cause by the Company which does not comply with
the terms of Section 2.4 hereof; or
(x) any breach by the Company of any provision of this
Agreement.
2.7.2. Any event described in subsection 2.7.1(i) through (x) which
occurs prior to a Change in Control but which the Executive reasonably
demonstrates (i) was at the request of a third party who has indicated an
intention, or taken steps reasonably calculated, to effect a Change in
Control or (ii) otherwise arose in connection with, or in anticipation of,
a Change in Control which actually occurs, shall constitute Good Reason
for purposes hereof, notwithstanding that it occurred prior to a Change in
Control.
2.7.3. The Executive's right to terminate his employment pursuant to
this Section 2.7 shall not be affected by his incapacity due to physical
or mental illness.
2.8. NOTICE OF TERMINATION. For purposes of this Agreement, "Notice
of Termination" shall mean a written notice of termination from the Company,
following a Change in Control, of the Executive's employment which indicates the
specific termination provision in this Agreement relied upon and which sets
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the provision so
indicated.
2.9. PRO RATA BONUS. For purposes of this Agreement, "Pro Rata
Bonus" shall mean an amount equal to the Bonus Amount multiplied by a fraction
the numerator of which is the number of days in the fiscal year through the
Termination Date and the denominator of which is 365.
2.10. TERMINATION DATE. For purposes of this Agreement, "Termination
Date" shall mean, in the case of the Executive's death, his date of death, in
the case of Good Reason or termination by the Executive during the Window Period
(as hereinafter defined), the last day of employment, and in all other cases
(other than in the case of a successor or an assignee, which is provided for in
Section 6.1 hereof), the date specified in the Notice of Termination; provided,
however, that if the Executive's employment is terminated by the Company for
Cause or due to Disability, the date specified in the Notice of Termination
shall be at least thirty (30) days from the date the Notice of Termination is
given to the Executive; and provided further that in the case of Disability the
Executive shall not have returned to the full-time performance of his duties
during such period of at least thirty (30) days.
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3. TERMINATION OF EMPLOYMENT.
3.1. If, during the term of this Agreement, the Executive's
employment with the Company shall be terminated within two (2) years following a
Change in Control under any of the following circumstances, the Executive shall
be entitled to the following compensation and benefits:
3.1.1. If the Executive's employment with the Company
shall be terminated (i) by the Company for Cause or
Disability, (ii) by reason of the Executive's death, or (iii)
by the Executive other than for Good Reason or other than
during the 90-day period commencing 90 days after the
occurrence of a Change in Control (the "Window Period"), the
Company shall pay to the Executive all Accrued Compensation.
3.1.2. If the Executive's employment with the Company
shall be terminated for any reason other than as specified in
subsection 3.1.1 (including, without limitation, by the
Executive for Good Reason or for any reason during the Window
Period), the Executive shall be entitled to the following:
(i) the Company shall pay the Executive all
Accrued Compensation and a Pro-Rata Bonus;
(ii) the Company shall pay the Executive as
severance pay and in lieu of any further compensation
for periods subsequent to the Termination Date an amount
in cash equal to three (3) times the sum of (A) the Base
Amount and (B) the Bonus Amount;
(iii) for three (3) years or such longer period
as may be provided by the terms of the appropriate
program, practice or policy (the "Continuation Period"),
the Company shall, at its expense, continue on behalf of
the Executive and his dependents and beneficiaries the
life insurance, disability, medical, dental and
hospitalization benefits generally made available to the
Company's executive salaried employees at any time
during the 90-day period prior to the Change in Control
or at any time thereafter, provided that (A) the
Company's obligation hereunder with respect to the
foregoing benefits shall be limited to the extent that
the Executive obtains any such benefits pursuant to a
subsequent employer's benefit plans, in which case the
Company may reduce the coverage of any benefits it is
required to provide the Executive hereunder as long as
the aggregate coverages and benefits of the combined
benefit plans is no less favorable to the Executive than
the coverages and benefits required to be provided
hereunder, and (B) this clause (iii) shall not be
interpreted so as to limit any benefits to which the
Executive or his dependents or beneficiaries may be
entitled under any of the Company's employee benefit
plans, programs or practices following the Executive's
termination of employment, including, without
limitation, retiree medical and life insurance benefits;
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(iv) the Company shall pay to the Executive in a
single payment an amount in cash equal to the excess, if
any, of (A) the lump sum actuarial equivalent of the
aggregate retirement benefit of the Executive would have
been entitled to receive under the Company's
supplemental and other retirement plans, if any, had (w)
the Executive remained employed by the Company for an
additional three (3) complete years of credited service,
(x) his annual compensation during such period been
equal to his Base Salary and the Bonus Amount, (y) the
Company made employer contributions to each defined
contribution plan, if any, in which the Executive was a
participant at the Termination Date (in an amount equal
to the amount of such contribution for the plan year
immediately preceding the Termination Date) and (z) he
been fully (100%) vested in his benefit under each
retirement plan, if any, in which the Executive was a
participant, over (B) the lump sum actuarial equivalent
of the aggregate retirement benefit, if any, the
Executive is actually entitled to received under such
retirement plans;
(v) (A) the restrictions on any outstanding
incentive awards (including, without limitation,
restricted stock and granted performance shares or
units) under any incentive plan or arrangement shall
lapse and such incentive award shall become 100% vested,
all stock options and stock appreciation rights granted
to the Executive shall become immediately exercisable
and shall become 100% vested, and all performance units
granted to the Executive shall become 100% vested, and
(B) the Executive shall have the right to require the
Company to purchase, for cash, within five (5) days of
the Executive's Termination Date, any shares of stock or
shares purchased upon exercise of any options, at a
price equal to the fair market value of such shares on
the date of purchase by the Company;
(vi) the Company shall, at its sole expense as
incurred, provide the Executive with outplacement
services the scope and provider of which shall be
selected by the Executive, in his sole discretion, and
which shall include the provision of reasonable office
space and secretarial assistance, provided that the
Company's responsibility under this Section 3.1.2(vi)
shall be limited to $30,000; and
(vii) the Company shall reimburse the Executive
(upon presentation by the Executive of a statement for
such expenses) for reasonable moving expenses, if any,
incurred by the Executive in connection with any such
termination except to the extent such expenses are paid
by the Executive's new employer, if any.
3.1.3. The amounts provided for in subsections 3.1.1 and
3.1.2(i), (ii) and (iv) shall be paid (A) in a lump sum in
cash within five (5) days of the Executive's Termination Date,
or (B) at the Executive's option made pursuant to a written
election delivered to the Company before the Change in
Control, in three
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(3) substantially equal annual payments commencing no later
than five (5) days after the Executive's Termination Date.
Should the Executive elect to receive such payments in
installments, the amount of the Company's outstanding
obligation to the Executive shall be credited with interest on
a monthly basis at a rate equal to the "Applicable Federal
Rate," as defined in Section 1274(d) of the Internal Revenue
Code of 1986, as amended (the "Code"), then in effect.
3.1.4. The Executive shall not be required to mitigate
the amount of any payment provided for in this Agreement by
seeking other employment or otherwise, and no such payment
shall be offset or reduced by the amount of any compensation
or benefits provided to the Executive in any subsequent
employment, except as provided in subsection 3.1.2(iii).
3.2. The severance pay and benefits provided for in this
Section 3 shall be in lieu of any other severance or termination pay to which
the Executive may be entitled under any Company severance or termination plan,
program, practice or arrangement.
3.3. The Executive's entitlement to any other compensation or
benefits shall be determined in accordance with the Company's employee benefit
plans and other applicable programs, policies and practices then in effect.
4. NOTICE OF TERMINATION. Following a Change in Control, any purported
termination of the Executive's employment by the Company shall be communicated
by Notice of Termination to the Executive. For purposes of this Agreement, no
such purported termination shall be effective without such Notice of
Termination.
5. EXCISE TAX PAYMENTS.
5.1. Notwithstanding anything contained in this Agreement to the
contrary and without regard to whether the Executive's employment with the
Company has terminated, in the event that any payment or benefit (within the
meaning of Section 280G(b)(2) of the Code) to the Executive or for his benefit,
whether paid or payable or distributed or distributable pursuant to the terms of
this Agreement or otherwise in connection with, or arising out of, his
employment with the Company or a change in ownership or effective control of the
Company or of a substantial portion of its assets (a "Payment" or "Payments"),
would be subject to the excise tax imposed by Section 4999 of the Code or any
interest or penalties are incurred by the Executive 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 the Executive
shall be entitled to receive an additional payment (a "Gross-Up Payment") in an
amount such that after payment by the Executive of any Excise Tax or other tax
(including, without limitation, any interest or penalties payable with respect
thereto), imposed upon the Gross-Up Payment, the Executive retains an amount of
the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
5.2. An initial determination as to whether a Gross-Up Payment is
required pursuant to this Section 5 and the amount of such Gross-Up Payment
shall be made by a nationally-recognized accounting firm selected by the Company
and reasonably acceptable to the Executive (the "Accounting Firm"). The
Accounting Firm shall provide its determination (the
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"Determination"), together with detailed supporting calculations and
documentation, to the Company and the Executive within five (5) days of the
Termination Date, if applicable, or such other time as requested by the Company
or by the Executive (provided the Executive reasonably believes that any of the
Payments may be subject to the Excise Tax), and if the Accounting Firm
determines that no Excise Tax is payable by the Executive with respect to a
Payment or Payments, it shall furnish the Executive with an opinion reasonably
acceptable to the Executive that no Excise Tax will be imposed with respect to
any such Payment or Payments. Within five (5) days of the delivery of the
Determination to the Executive, the Executive shall have the right to dispute
the Determination (the "Dispute"). The Gross-Up Payment, if any, as determined
pursuant to this Section 5.2 shall be paid by the Company to the Executive
within five (5) days of the receipt of the Accounting Firm's determination. The
existence of the Dispute will not in any way affect the right of the Executive
to receive the Gross-Up Payment in accordance with the Determination. If there
is no Dispute, the Determination shall be binding, final and conclusive upon the
Company and the Executive, subject to the application of Section 5.3.
5.3. As a result of the uncertainty in the application of Sections
4999 and 280G of the Code, it is possible that a Gross-Up Payment (or a portion
thereof) will be paid which should not have been paid (an "Excess Payment"), or
a Gross-Up Payment (or a portion thereof) which should have been paid will not
have been paid (an "Underpayment"). An Underpayment shall be deemed to have
occurred (i) upon notice (formal or informal) to the Executive from any
governmental taxing authority that the tax liability of the Executive (whether
in respect of the then current taxable year of the Executive or in respect of
any prior taxable year of the Executive) may be increased by reason of the
imposition of the Excise Tax on a Payment or Payments with respect to which the
Company has failed to make a sufficient Gross-Up Payment, (ii) upon a
determination by a court, (iii) by reason of a determination by the Company
(which shall include the position taken by the Company, or together with its
consolidated group, on its federal income tax return) or (iv) upon the
resolution to the satisfaction of the Executive of the Dispute. If an
Underpayment occurs, the Executive shall promptly notify the Company and the
Company shall pay to the Executive at least five (5) days prior to the date on
which the applicable government taxing authority has requested payment, an
additional Gross-Up Payment equal to the amount of the Underpayment plus any
interest and penalties (other than interest and penalties imposed by reason a
failure to file timely a tax return or pay taxes shown due on a return) imposed
on the Underpayment. An Excess Payment shall deemed to have occurred upon a
"Final Determination" (as hereinafter defined) that the Excise Tax shall not be
imposed upon a Payment or Payments with respect to which the Executive had
previously received a Gross-Up Payment. A Final Determination shall be deemed to
have occurred when the Executive has received from the applicable government
taxing authority a refund of taxes or other reduction in his tax liability by
reason of the Excess Payment and upon either (i) the date a determination is
made by, or an agreement is entered into with, the applicable governmental
taxing authority which finally and conclusively binds the Executive and such
taxing authority, or in the event that a claim is brought before a court of
competent jurisdiction, the date upon which a final determination has been made
by such court and either all appeals have been taken and finally resolved or the
time for all appeals has expired, or (ii) the statute of limitations with
respect to the Executive's applicable tax return has expired. If an Excess
Payment is determined to have been made, the amount of the Excess Payment shall
be treated as a loan by the Company to the Executive and the Executive shall pay
to the Company on demand (but not less than ten (10) days after the
determination of such Excess Payment) the amount of the Excess Payment plus
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interest at an annual rate equal to the rate provided for in Section
1274(b)(2)(B) of the Code from the date the Gross-Up Payment (to which the
Excess Payment relates) was paid to the Executive until the date of repayment to
the Company.
5.4. Notwithstanding anything contained in this Agreement to the
contrary, in the event that, according to the Determination, an Excise Tax is
imposed on any Payment or Payments, the Company shall pay to the applicable
government taxing authorities as Excise Tax withholding, the amount of the
Excise Tax that the Company has actually withheld from the Payment or Payments.
6. SUCCESSORS: BINDING AGREEMENT.
6.1. This Agreement shall be binding upon and shall inure to the
benefit of the Company, its successors and assigns, and the Company shall
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) or assign, by agreement in form and substance
satisfactory to the Executive, to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession or assignment had taken place.
Failure of the Company to obtain such assumption and agreement prior to the
effectiveness of any such succession or assignment shall be a breach of this
Agreement and shall entitle the Executive to compensation from the Company in
the same amount and on the same terms as he would be entitled to hereunder if he
terminated his employment for Good Reason, except that for purposes of
implementing the foregoing, the date on which any such succession or assignment
becomes effective shall be deemed the Termination Date hereunder. As used in the
Agreement, Company shall mean the Company as hereinbefore defined and any
successor or assign that executes and delivers the agreement provided for in
this Section 6.1 or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law.
6.2. This Agreement and all rights of the Executive hereunder shall
inure to the benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devises and legatees. If the Executive should die while any amounts would still
be payable to him hereunder if he had continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to the Executive's devise, legatee or other designee or, if there
be no such designee, to the Executive's estate.
7. FEES AND EXPENSES. The Company shall pay all legal fees and related
expenses incurred by the Executive as they become due as a result of or in
connection with (i) the Executive's termination of employment (including,
without limitation, all such fees and expenses, if any, incurred in contesting
or disputing any such termination of employment), (ii) the Executive seeking to
obtain or enforce any right or benefit provided by this Agreement (including,
without limitation, any such fees and expenses incurred in connection therewith)
or by any other plan or arrangement maintained by the Company under which the
Executive is or may be entitled to receive benefits, (iii) the Executive's
hearing before the Board as contemplated in Section 2.4 of this Agreement, and
(iv) any tax audit or proceeding to the extent attributable to the application
of any Excise Tax with respect to any Payment or Payments hereunder, plus in
each case interest on any delayed payment at the "Applicable Federal Rate,"
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as defined in Section 1274(d) of the Code, as then in effect; provided that the
circumstances set forth in clauses (i) and (ii) of this Section 7 (other than as
a result of the Executive's termination of employment under circumstances
described in Section 2.7.2) occurred on or after a Change in Control.
8. NOTICES. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement (including, without limitation, the
Notice of Termination) shall be in writing and shall be deemed to have been duly
given when personally delivered or sent by certified mail, return receipt
requested, postage prepaid, addressed to the respective addresses last given by
each party to the other, provided that all notices to the Company shall be
directed to the attention of the Board with a copy to the Secretary of the
Company. All notices and communications shall be deemed to have been received on
the date of delivery thereof or on the third business day after the mailing
thereof, except that notice of change of address shall be effective only upon
receipt.
9. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent
or limit the Executive's continuing or future participation in any benefit,
bonus, incentive or other plan or program provided by the Company (except for
any severance or termination policies, plans, programs or practices) and for
which the Executive may qualify, nor shall anything herein limit or reduce such
rights as the Executive may have under any other agreements with the Company
(except for any severance or termination agreement). Amounts which are vested
benefits or which the Executive is otherwise entitled to receive under any plan
or program of the Company shall be payable in accordance with such plan or
program, except as explicitly modified by this Agreement.
10. SETTLEMENT OF CLAIMS. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any setoff, counterclaim, recoupment, defense or other right which
the Company may have against the Executive or others. If the Company effects any
setoff in violation of the immediately preceding sentence, then, in addition to
any other amounts payable to the Executive hereunder, the Company and the
Executive agree that, as reasonable liquidated damages therefor, the Executive
will be entitled to recover from the Company an amount equal to twice the amount
of such setoff.
11. MISCELLANEOUS. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and the Company. No waiver by either
party hereto at any time of any breach by the other party hereto of, or
compliance with, 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.
12. GOVERNING LAW. This Agreement shall be governed by and constructed
and enforced in accordance with the laws of the State of Delaware without giving
effect to the conflict of laws principles thereof.
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13. SEVERABILITY. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the provisions hereof.
14. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto and supersedes all prior agreements, if any,
understandings and arrangements, oral or written, between the parties hereto
with respect to the subject matter hereof. No agreement or representations, oral
or otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not expressly set forth in this Agreement.
This Agreement shall constitute an amendment and restatement of the Original
Agreement in its entirety. It shall not be necessary to make reference to the
Original Agreement, the terms of which are entirely superseded by the provisions
of this Agreement.
15. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together will constitute one and the same instrument.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
and delivered by its duly authorized officer and has caused its proper corporate
seal to be affixed hereto, and the Executive has executed and delivered this
Agreement, all as of the day and year first above written.
CROWN CRAFTS, INC.
[CORPORATE SEAL]
ATTEST: By: /s/ Xxx Xxxxxxx Xxxxxx
--------------------------------
Name: XXX XXXXXXX SAMSON
/s/ Xxxxxx Xxxxxxxx Title: VP, CFO
------------------------
Secretary
/s/ E. Xxxxxxx Xxxxxxxx
-----------------------------------
E. XXXXXXX XXXXXXXX
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