AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Exhibit 10.1
Execution Copy
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This AMENDED AND RESTATED EMPLOYMENT AGREEMENT, dated as of November 10, 2008, is by and
between X.X. Xxxxxxxxx Corporation, a Delaware corporation (the “Company”), and Xxxxxx X. Xxxx (the
“Executive”) (hereinafter this “Agreement”).
WHEREAS, Executive previously served as Senior Vice President, General Counsel and Corporate
Secretary of the Company under the terms of an Employment Agreement, dated January 1, 2001, as
amended on February 27, 2001 (the “Prior Agreement”); and
WHEREAS, effective April 16, 2008, Executive ceased serving in his prior position and
transitioned to an operational role within the Company and the Company now wishes to appoint
Executive as the Interim Controller and Interim Chief Accounting Officer, and Executive wishes to
accept such appointment; and
WHEREAS, both parties wish to continue the employment relationship on the terms and conditions
set forth in this Agreement, and to replace the Prior Agreement with this Agreement; and
WHEREAS, the Compensation and Benefits Committee of the Board of Directors of the Company (the
“Committee”) has authorized the Company’s execution of this Agreement; and
NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and for
other good and valuable consideration, the validity and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. Term of Employment. Executive shall be employed by the Company commencing on the
date of this Agreement (the “Commencement Date”) and continuing until the latest date the Company
files the 2008 Annual Reports on Form 10-K for each of X.X. Xxxxxxxxx Corporation, Dex Media, Inc,
and Dex Media West LLC with the Securities and Exchange Commission and furnishes/posts the 2008
Condensed Consolidated Financial Statements for each of X. X. Xxxxxxxxx Inc. and Dex Media East
LLC, as required by the respective bank credit agreement, but in any case no later than March 31,
2009, unless otherwise expressly agreed by Executive and the Company (the “Financial Statement
Filing Date”), unless the employment relationship is earlier terminated as provided in Section 7 of
this Agreement (the “Employment Term”).
2. Position.
(a) Effective as of November 21, 2008, Executive shall serve as an executive officer in the
position of Interim Controller and Interim Chief Accounting Officer of the Company and, at the
Company’s discretion, any of its subsidiaries.
(b) During the Employment Term, Executive will devote his best efforts to the performance of
his duties hereunder and will not engage in any other business, profession or
occupation for compensation or otherwise which would conflict with the rendition of such
services either directly or indirectly, without the prior written consent of the Board; provided
that nothing herein shall be deemed to preclude Executive from serving on business, civic or
charitable boards or committees, as long as such activities do not materially interfere with the
performance of Executive’s duties hereunder. The Company acknowledges that Executive is in the
process of seeking new employment as a general counsel. During the Employment Term, Executive
shall not be precluded from (i) continuing any discussions with potential employers that he has
been in contact with, or otherwise made aware of, prior to the Commencement Date or (ii) responding
to calls or other inquiries that arise during the Employment Term; provided, however, Executive
shall not initiate any new search efforts on his own behalf during the Employment Term.
3. Base Salary. During the Employment Term, the Company shall pay Executive an
annualized base salary (“Base Salary”) of $240,000, payable in accordance with the payroll and
personnel practices of the Company from time to time.
4. Employee Benefits. During the Employment Term, Executive shall be eligible for
employee benefits (including fringe benefits, vacation, pension and profit sharing plan
participation and life, health, accident and disability insurance) substantially comparable to
those he enjoys immediately prior to the Commencement Date.
5. Business Expenses. Reasonable travel, entertainment and other business expenses
incurred by Executive in the performance of his duties hereunder shall be reimbursed by the Company
in accordance with Company policies from time to time. Provided that all such reimbursements shall
be made by March 15 of the year following the year in which the expenses were incurred.
6. Additional Compensation.
(a) Severance and Deferred Compensation Payments. On January 5, 2009, the Company
shall pay to Executive in a lump sum an amount equal to the sum of (i) one million twenty-thousand
dollars ($1,020,000) plus (ii) the entire balance of Executive’s accounts under the Company’s
Deferred Compensation Plan as of December 31, 2008 (the “January 2009 Payment”). The January 5,
2009 Payment, which has been elected in accordance with IRS Notice 2007-86, shall be paid without
regard to whether Executive has separated from service with the Company. Payment under clause
6(a)(i) is subject to Executive’s compliance with Section 8 of this Agreement. The parties agree
that this Section 6(a) supersedes all prior agreements between the parties with regard to the
amount, time and form of payment of any and all cash severance payments and the time and form of
payment of any and all deferred compensation benefits (other than benefits, if any, payable under
the X.X. Xxxxxxxxx Pension Benefit Equalization Plan), including the provisions of the Company’s
Deferred Compensation Plan and Executive’s deferral elections thereunder and that, except as
expressly provided in Sections 7(c) or (d) below (regarding reimbursement of COBRA costs and the
costs of obtaining comparable term life insurance coverage for a specified period of time) and
except as provided under the X.X. Xxxxxxxxx Pension Benefit Equalization Plan, the payments called
for under this Section 6(a) will satisfy in full any obligations the Company may have to pay
severance and
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deferred compensation benefits to Executive and the Company shall have no such obligations
thereafter.
(b) Pro Rata Bonus. In consideration for his service as Senior Vice President,
General Counsel and Corporate Secretary, the Compensation and Benefits Committee of the Board of
Directors (the “Compensation Committee”) shall exercise its discretion, as allowed under Section 4
of Executive’s Award Agreement, dated March 30, 2007, to provide Executive a pro rata bonus (“Pro
Rata Bonus”) under the Annual Incentive Plan (“AIP”) equal to the product of (i) $255,000, (ii) the
AIP payout factor (expressed as a percentage) approved by the Compensation Committee applicable to
all executive officers for the 2008 fiscal year and (iii) 0.50. The Pro Rata Bonus is payable in
lump sum when such awards under the AIP are generally distributed to current employees for the 2008
fiscal year, but no later than March 15, 2009; provided, however, that nothing in this Section 6(b)
shall prevent the Compensation Committee from exercising its full discretion as described in the
2005 Plan in awarding, reducing, or refraining from awarding an annual bonus to Executive based
upon the same factors consistently applied to other currently employed executives at a senior level
comparable to Executive’s prior position as General Counsel. The Pro Rata Bonus shall be paid
without regard to whether Executive has separated from service with the Company, except that in the
event that Executive terminates his employment voluntarily before the end of the Employment Term
pursuant to Section 7(b), then Executive agrees that he shall forfeit the Pro Rata Bonus payable
under this Section 6(b).
(c) Bonus for Project ACT. In consideration of his service as Executive Sponsor of
Project ACT through October 31, 2008, Executive shall be eligible to receive a special bonus of up
to $40,000 payable in lump sum at the conclusion of the Project (but in no event later than March
31, 2009) in the event that the Company realizes the financial and other objectives of Project ACT,
as determined in the reasonable discretion of the Chairman and Chief Executive Officer of the
Company. In the event that Executive terminates his employment voluntarily before the end of the
Employment Term pursuant to Section 7(b), then Executive agrees that he shall forfeit the Project
ACT bonus payable under this Section 6(c).
(d) Additional Bonus. Executive also shall be eligible to receive a special bonus
equal to the product of (i) $120,000 and (ii) the AIP payout factor (expressed as a percentage)
approved by the Compensation Committee applicable to all executive officers for the 2008 fiscal
year (“Additional Bonus”), payable in a lump sum on the later of (i) the date such awards are
generally distributed to AIP participants or (ii) ten (10) business days following the Financial
Statement Filing Date; provided, however, that in all cases the Additional Bonus will be paid on or
before April 15, 2009. In the event that Executive terminates his employment voluntarily before
the end of the Employment Term pursuant to Section 7(b), or the Company terminates Executive’s
employment for cause under Section 7(a), then Executive agrees that he shall forfeit the Additional
Bonus payable under this Section 6(d). Executive will not be eligible to participate in the AIP or
any other bonus program for 2009.
7. Termination of Employment. Executive’s employment shall terminate (“Termination”)
hereunder on the Financial Statement Filing Date, unless it is earlier terminated by Executive or
the Company in accordance with this Section 7. Following Termination,
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Executive’s entitlements hereunder shall be as set forth in this Section 7.
(a) For Cause by the Company. The Company may terminate Executive’s employment for
Cause immediately upon written notice to Executive. In such event, Executive shall be entitled to
receive his Base Salary through the date of Termination. Executive shall not be entitled to any
further compensation or severance payments, except for those payments and benefits set forth in
Sections 6(a), (b) and (c) and Section 7(d) of this Agreement, to which he will remain entitled.
All other benefits due Executive following the Termination shall be determined in accordance with
the plans, policies and practices of the Company. “Cause” shall mean (i) Executive’s willful and
continued failure substantially to perform the duties of his position (other than as a result of
total or partial incapacity due to physical or mental illness), (ii) any willful act or omission by
the Executive constituting dishonesty, fraud or other malfeasance, which in any such case is
demonstrably injurious to the financial condition or business reputation of the Company or any of
its affiliates, or (iii) the Executive’s conviction of a felony under the laws of the United States
or any state thereof or any other jurisdiction in which the Company or any of its subsidiaries
conducts business which materially impairs the value of Executive’s services to the Company or any
of its subsidiaries. For purposes of this definition, no act or failure to act shall be deemed
“willful” unless effected by Executive not in good faith and without a reasonable belief that such
action or failure to act was in or not opposed to the best interests of the Company.
(b) Termination for Other than Cause or by Resignation. Either the Executive or the
Company may terminate the employment of Executive hereunder at any time for any reason upon written
notice to the other party provided thirty (30) days in advance of the anticipated date of
Termination. Upon such notice, Executive shall be entitled to receive his Base Salary through the
date of Termination, plus payments and benefits in accordance with Sections 6(a), (b) and (c) and
7(d) of this Agreement. Executive shall not be entitled to any further compensation or severance
payments. All other benefits due Executive following Executive’s termination of employment shall
be determined in accordance with the plans, policies and practices of the Company.
(c) Death or Disability. Executive’s employment hereunder shall terminate upon his
death and may be terminated by the Company upon his Disability during the Employment Term. Upon
termination of Executive’s employment hereunder upon Executive’s Disability or death, Executive or
his estate (as the case may be) shall be entitled to receive Base Salary through the date of
Termination, plus payments made in accordance with Sections 6(a), (b) and (c). In addition, if
Executive’s employment is terminated as a result of a Disability, and subject to Executive’s
compliance with Section 8 of this Agreement, Executive shall be entitled to be reimbursed for the
additional costs to Executive, including any additional tax costs associated with such
reimbursements, of continuing group health and dental benefits under COBRA at a level equivalent to
those benefits in which he participated prior to the Termination Date for a period of twenty nine
(29) months from the Termination Date (“COBRA Benefit Continuation Period”). Following the end of
the 29-month COBRA Benefit Continuation Period, and continuing until Executive reaches the age of
65 or is no longer subject to a Disability, whichever date is earlier, Executive shall also be
entitled to be reimbursed for the additional reasonable costs of obtaining equivalent health and
dental insurance coverage,
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including any additional tax costs associated with such reimbursements, through an insurance
policy or policies he purchases on his own. Executive shall bear full responsibility for applying
for COBRA coverage and for obtaining coverage under any other insurance policy subject to
reimbursement under this Section 7(c), and nothing herein shall constitute a guarantee of COBRA
continuation coverage or benefits or a guarantee of eligibility for health or dental insurance
coverage. Reimbursements under this Section 7(c) shall be made on a monthly basis, but no later
than the last day of the calendar year following the year in which the expenses were incurred.
Under no circumstances will Executive be entitled to a cash payment in lieu of reimbursements for
the actual costs of premiums for health or dental coverage hereunder. The amount of expenses
eligible for reimbursement during any calendar year shall not be affected by the amount of expenses
eligible for reimbursement in any other calendar year. The term Disability as used in this Section
7(c) shall be defined in accordance with permanent disability under Internal Revenue Code §
409A(a)(2)(c).
(d) Benefits. Following the date of Termination, except in the case of Executive’s
death or Disability, and subject to Executive’s compliance with Section 8 of this Agreement,
Executive shall be entitled to:
(i) reimbursement for the actual costs incurred by Executive, including any additional tax
costs associated with such reimbursements, of continued coverage under the Company’s group health,
medical and dental benefit plans under COBRA at the same level as Executive participated as of the
Effective Date of this Agreement, for a period of 18 months. Executive shall bear full
responsibility for applying for COBRA coverage and for obtaining coverage under any other insurance
policy subject to reimbursement under this Section 7(d)(i), and nothing herein shall constitute a
guarantee of COBRA continuation coverage or benefits or a guarantee of eligibility for health or
dental insurance coverage. Reimbursements under this Section 7(d)(i) shall be made on a monthly
basis, but in no event later than the last day of the calendar year following the year in which the
expenses were incurred. Under no circumstances will Executive be entitled to a cash payment or
other benefit in lieu of reimbursements for the actual costs of premiums for health or dental
coverage hereunder. The amount of expenses eligible for reimbursement during any calendar year
shall not be affected by the amount of expenses eligible for reimbursement in any other calendar
year. Benefits under this Section 7(d)(i) shall terminate if Executive becomes employed during the
eighteen (18) month period following the Date of Termination and eligible for coverage under
another group health and dental plan. Executive shall provide the Company with notice of such
employment within thirty (30) days of commencement; and
(ii) reimbursement for the actual costs incurred by Executive, including any additional tax
costs associated with such reimbursements, in obtaining term life insurance coverage equivalent in
coverage to that elected by Executive as of the Effective Date of this Agreement, following the
date of Termination and continuing until the last day of the eighteenth month or, if sooner, until
comparable life insurance coverage is available to Executive in connection with subsequent
employment or self-employment. Executive shall bear full responsibility for applying for life
insurance coverage subject to reimbursement under this Section 7(d)(ii), and nothing herein shall
constitute a guarantee of eligibility for life insurance coverage. Reimbursements under this
Section 7(d)(ii) shall be made on a monthly basis, but in no event later than the last day of the
calendar year following the year in which the expenses
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were incurred. Under no circumstances will Executive be entitled to a cash payment or other
benefit in lieu of reimbursements for the actual costs of premiums for term life insurance coverage
hereunder. The amount of expenses eligible for reimbursement during any calendar year shall not be
affected by the amount of expenses eligible for reimbursement in any other calendar year. Executive
shall provide the Company with notice of any subsequent employment or self-employment under which
life insurance coverage becomes available within thirty (30) days of commencement such employment.
8. Release of Claims. Any provision of this Agreement to the contrary
notwithstanding, Executive shall be obligated to execute and not revoke within the time periods
described a valid general release of claims (“General Release”) from time-to-time in favor of the
Company in connection with certain payments made or benefits provided under Section 6(a)(i) and
Sections 7(c) and (d) of this Agreement, as a condition to receiving such payments and benefits
under this Agreement. Executive’s General Release shall be in the form used generally by the
Company at the time the release is to be used, substantially in the form attached as Exhibit A.
The Company has provided Executive with the final General Release provided for in this Agreement in
connection with the payment due under Section 6(a)(i) (the “Section 6(a) General Release”) and
Executive shall return an executed Section 6(a) General Release on or before December 29, 2008, but
not before December 14, 2008. The Company will provide Executive with a final General Release
applicable to the benefits to be provided under Sections 7(c) or (d), as applicable, (the “Section
7 General Release”) on or before the date of Termination. The Section 7 General Release shall be
executed and returned by Executive to the Company within thirty (30) days following receipt, but
not before the date of Termination. No General Release from Executive shall be deemed to be
effective until the 7-day revocation period has expired. In addition, the Company shall execute a
release of claims against Executive upon providing benefits under Sections 7(c) or (d), as
applicable.
9. Indemnification. The Company will indemnify Executive (and his legal
representative or other successors) to the fullest extent permitted (including a payment of
expenses in advance of final disposition of a proceeding) by applicable law, as in effect at the
time of the subject act or omission, or by the Certificate of Incorporation and By-Laws of the
Company, as in effect at such time or on the Commencement Date, or by the terms of any
indemnification agreement between the Company and Executive, whichever affords or afforded greatest
protection to Executive, and Executive shall be entitled to the protection of any insurance
policies the Company may elect to maintain generally for the benefit of its directors and officers
(and to the extent the Company maintains such an insurance policy or policies, Executive shall be
covered by such policy or policies, in accordance with its or their terms to the maximum extent of
the coverage available for any Company officer or director), against all costs, charges and
expenses whatsoever incurred or sustained by him or his legal representatives (including but not
limited to any judgment entered by a court of law) at the time such costs, charges and expenses are
incurred or sustained, in connection with any action, suit or proceeding to which Executive (or his
legal representatives or other successors) may be made a party by reason of his having accepted
employment with the Company or by reason of his being or having been a director, officer or
employee of the Company, or any subsidiary of the Company, or his serving or having served any
other enterprise as a director, officer or employee at the request of the Company. Executive’s
rights under this Section 9 shall continue without time limit for so long as he may be subject to
any such liability, whether or not the Employment Term may have
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ended.
10. Non-Competition.
(a) Executive acknowledges and recognizes the highly competitive nature of the businesses of
the Company and its affiliates and accordingly agrees that during the Employment Term and for a
period of one year after the date of Termination thereof:
(i) Executive will not directly or indirectly engage in any business which is in competition
with any line of business conducted by the Company or its affiliates (including without limitation
by performing or soliciting the performance of services for any person who is a customer or client
of the Company or any of its affiliates) whether such engagement is as an officer, director,
proprietor, employee, partner, investor (other than as a holder of less than 1% of the outstanding
capital stock of a publicly traded corporation), consultant, advisor, agent, sales representative
or other participant, in any location in which the Company or any of its affiliates conducted any
such competing line of business; and
(ii) Executive will not directly or indirectly assist others in engaging in any of the
activities in which Executive is prohibited from engaging in by clause (i) above; and
(iii) Executive will not directly or indirectly induce any employee of the Company or any of
its affiliates to engage in any activity in which Executive is prohibited to engage by this
Section, or to terminate his or her employment with the Company or any of its affiliates, and will
not directly or indirectly employ or offer employment to any person who was employed by the Company
or any of its affiliates unless such person shall have ceased to be employed by the Company or any
of its affiliates for a period of at least 12 months; and
(iv) Executive will not directly or indirectly solicit clients, subscribers or suppliers of
the Company or telephone companies for which the Company serves as sales agent or induce any such
person to terminate its relationships with the Company.
(b) It is expressly understood and agreed that although Executive and the Company consider the
restrictions contained in this Section 10 to be reasonable, if a final judicial determination is
made by a court of competent jurisdiction that the time or territory or any other restriction
contained in this Agreement is an unenforceable restriction against Executive, the provisions of
this Agreement shall not be rendered void but shall be deemed amended to apply as to such maximum
time and territory and to such maximum extent as such court may judicially determine or indicate to
be enforceable. Alternatively, if any court of competent jurisdiction finds that any restriction
contained in this Agreement is unenforceable, and such restriction cannot be amended so as to make
it enforceable, such finding shall not affect the enforceability of any of the other restrictions
contained herein.
11. Confidentiality; Nondisparagement.
(a) Executive will not at any time (whether during or after his employment with the Company)
disclose or use for his own benefit or purposes or the benefit or purposes of
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any other person, firm, partnership, joint venture, association, corporation or other business
organization, entity or enterprise other than the Company and any of its subsidiaries or
affiliates, any trade secrets, information, data, or other confidential information relating to
customers, development programs, costs, marketing, trading, investment, sales activities,
promotion, credit and financial data, manufacturing processes, financing methods, plans, employees,
organizational structure or the business and affairs of the Company generally, or of any subsidiary
or affiliate of the Company, provided that the foregoing shall not apply to information which is
not unique to the Company or which is generally known to the industry or the public other than as a
result of Executive’s breach of this covenant. Executive agrees that upon termination of his
employment with the Company for any reason, he will return to the Company immediately all
memoranda, books, papers, plans, information, letters and other data, and all copies thereof or
therefrom, in any way relating to the business of the Company and its affiliates, except that he
may retain personal notes, notebooks and diaries. Executive further agrees that he will not retain
or use for his account at any time any trade names, trademark or other proprietary business
designation used or owned in connection with the business of the Company or its affiliates.
(b) Executive will not at any time (whether during or after his employment with the Company)
knowingly make any statement, written or oral, or take any other action relating to the Company or
its officers or directors that would disparage or otherwise harm the Company, its business or its
reputation or those of any of its officers and directors.
12. Material Inducement; Specific Performance. Executive acknowledges and agrees that
the covenants entered into by Executive in Section 10 and 11 are essential elements of the parties’
agreement as expressed herein, are a material inducement for the Company to enter into this
Agreement and the breach thereof would be a material breach of this Agreement. Executive further
acknowledges and agrees that the Company’s remedies at law for a breach or threatened breach of any
of the provisions of Section 10 or Section 11 would be inadequate and, in recognition of this fact,
Executive agrees that, in the event of such a breach or threatened breach, in addition to any
remedies at law, the Company, without posting any bond, shall be entitled to obtain equitable
relief in the form of specific performance, temporary restraining order, temporary or permanent
injunction or any other equitable remedy which may then be available.
13. Litigation Support. Executive agrees that he will assist and cooperate with the
Company in connection with the defense or prosecution of any claim that may be made against or by
the Company or its affiliates, or in connection with any ongoing or future investigation or dispute
or claim of any kind involving the Company or its affiliates, including any proceeding before any
arbitral, administrative, judicial, legislative, or other body or agency, including testifying in
any proceeding, to the extent such claims, investigations or proceedings relate to services
performed or required to be performed by Executive, pertinent knowledge possessed by Executive, or
any act or omission by Executive. Executive further agrees to perform all acts and to execute and
deliver any documents that may be reasonably necessary to carry out the provisions of this Section.
14. Legal Fees. The Company will pay or reimburse Executive, as incurred, all legal
fees and costs incurred by Executive in enforcing his rights under the Agreement, if Executive’s
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position substantially prevails.
15. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of North Carolina.
(b) Entire Agreement/Amendments. This Agreement contains the entire understanding of
the parties with respect to the employment of Executive by the Company and supercedes any and all
prior and/or contemporaneous agreements, either oral or written, including without limitation the
Prior Agreement, other than the agreements evidencing any grants of stock options, stock
appreciation rights and other equity-based awards, between the parties thereto, with respect to the
subject matter hereof. There are no restrictions, agreements, promises, warranties, covenants or
undertakings between the parties with respect to the subject matter herein other than those
expressly set forth herein and in the incentive compensation and other employee benefit plans and
arrangements of the Company referenced herein. This Agreement may not be altered, modified, or
amended except by written instrument signed by the parties hereto.
(c) No Waiver. The failure of a party to insist upon strict adherence to any term of
this Agreement on any occasion shall not be considered a waiver of such party’s rights or deprive
such party of the right thereafter to insist upon strict adherence to that term or any other term
of this Agreement.
(d) Severability. In the event that any one or more of the provisions of this
Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions of this Agreement shall not be affected
thereby.
(e) Assignment. This Agreement shall not be assignable by Executive and shall be
assignable by the Company only with the consent of Executive except as set forth in Section 17(h);
provided that no such assignment by the Company shall relieve the Company of any liability
hereunder, whether accrued before or after such assignment.
(f) No Mitigation. 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
employment, if obtained, or compensation or benefits payable in connection therewith, shall reduce
any amounts or benefits to which Executive is entitled hereunder except as provided for in Section
7(d).
(g) Arbitration. Any dispute between the parties to this Agreement arising from or
relating to the terms of this Agreement or the employment of Executive by the Company shall be
submitted to arbitration in Raleigh, North Carolina under the auspices of the American Arbitration
Association.
(h) Successors; Binding Agreement
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(i) The Company will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or assets of the
Company 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 had taken place.
Such assumption and agreement shall be obtained prior to the effectiveness of any such succession.
As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise. Prior to a change in control, the term “Company”
shall also mean any affiliate of the Company to which Executive may be transferred and the Company
shall cause such successor employer to be considered the “Company” bound by the terms of this
Agreement and this Agreement shall be amended to so provide. Following a change in control the
term “Company” shall not mean any affiliate of the Company to which Executive may be transferred
unless Executive shall have previously approved of such transfer in writing, in which case the
Company shall cause such successor employer to be considered the “Company” bound by the terms of
this Agreement and this Agreement shall be amended to so provide.
(ii) This Agreement shall inure to the benefit of and be binding upon personal or legal
representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.
If Executive should die while any amount would still be payable to Executive hereunder if
Executive had continued to live, all such amounts, unless otherwise provided herein, shall be paid
in accordance with the terms of this Agreement to the devisee, legatee or other designee of
Executive or, if there is no such designee, to the estate of Executive.
(i) Notice. For the purpose of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed to have been duly given when
delivered or mailed by United States registered mail, return receipt requested, postage prepaid,
addressed to the Executive at the address appearing from time to time in the personnel records of
the Company and to the Company at the address of its corporate headquarters, directed to the
attention of the Board with a copy to the Secretary of the Company, or in either case to such other
address as either party may have furnished to the other in writing in accordance herewith, except
that notice of change of address shall be effective only upon receipt.
(j) Withholding Taxes. The Company may withhold from any amounts payable under this
Agreement such Federal, state or local taxes as shall be required to be withheld pursuant to any
applicable law or regulation.
(k) Counterparts. This Agreement may be signed in counterparts, each of which shall
be an original, with the same effect as if the signatures thereto and hereto were upon the same
instrument.
(l) Survivability. Notwithstanding anything to the contrary set forth herein, the
following provisions of this Agreement shall survive any termination of Executive’s employment
hereunder and/or termination of this Agreement: Sections 7 through 21.
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16. Executive’s Release. (a) Except with respect to Executive’s rights hereunder,
Executive, Executive’s representatives, successors and assigns release and forever discharges the
Company and its successors, assigns, subsidiaries, affiliates, directors, officers, executives,
employees, attorneys, agents and trustees or administrators of any Company plan from any and all
claims, demands, debts, damages, injuries, actions or rights of action of any nature whatsoever
(collectively “Executive’s Claims”), whether known or unknown, which Executive had, now has or may
have (provided, however, that Executive’s Claims accruing after the Effective Date shall not be
released hereby) against the Company, its successors, assigns, subsidiaries, affiliates, directors,
officers, executives, attorneys, agents and trustees or administrators of any Company plan,
including, without limitation, Executive’s Claims relating to or arising out of Executive’s
employment with the Company, or for compensation for such employment, including any claims for
compensation under the Company’s Deferred Compensation Plan or for severance under any severance
plan or practice maintained by the Company. Executive represents that Executive has not filed any
action, complaint, charge, grievance or arbitration against the Company or any of its successors,
assigns, subsidiaries, affiliates, directors, officers, Executives, attorneys, agents and trustees
or administrators of any Company plan.
(b) Executive covenants that neither Executive, nor any of Executive’s respective heirs,
representatives, successors or assigns, will commence, prosecute or cause to be commenced or
prosecuted against the Company or any of its successors, assigns, subsidiaries, affiliates,
directors, officers, executives, attorneys, agents and trustees or administrators of any Company
plan any action or other proceeding based upon any claims, demands, causes of action, obligations,
damages or liabilities which are to be released by this Agreement, nor will Executive seek to
challenge the validity of this Agreement, except that this covenant not to xxx does not affect
Executive’s future right to enforce appropriately in a court of competent jurisdiction the terms of
this Agreement.
(c) By releasing the claims described in this Section 16, Executive does not waive any claims
that cannot be waived as a matter of law, including without limitation any claims filed with the
Equal Employment Opportunity Commission, the U.S. Department of Labor or claims under the Age
Discrimination in Employment Act that arise after the Effective Date of this Agreement.
17. Review of Release. Executive acknowledges that (a) Executive has been advised to
consult with an attorney before executing this Agreement and that Executive has been advised by an
attorney or has knowingly waived Executive’s right to do so, (b) Executive has been offered a
period of at least twenty-one (21) days to consider the release of claims included in this
Agreement, such period commencing on November 6, 2008, the date this Agreement, including
Executive’s release herein, was first delivered to Executive, (c) Executive has a period of seven
(7) days from the date he executes this Agreement within which to revoke it and that this Agreement
will not become effective or enforceable until the expiration of this seven (7) day revocation
period, (d) Executive fully understands the terms and contents of this Agreement and freely,
voluntarily, knowingly and without coercion enters into this Agreement, and (e) the waiver or
release by Executive of rights or claims Executive may have under Title VII of the Civil Rights Act
of 1964, the Executive Retirement Income Security Act of 1974, the Age
11
Discrimination in Employment Act of 1967, the Older Workers Benefit Protection Act, the Fair
Labor Standards Act, the Americans with Disabilities Act, the Rehabilitation Act, the Worker
Adjustment and Retraining Act (all as amended) and/or any other local, state or federal law dealing
with employment or the termination thereof is knowing and voluntary and, accordingly, that it shall
be a breach of this Agreement to institute any action or to recover any damages that would be in
conflict with or contrary to this acknowledgment or the releases Executive has granted hereunder.
Executive understands and agrees that the Company’s agreement to the terms of this Agreement,
payment of money and other benefits to Executive and Executive’s signing of this Agreement, does
not in any way indicate that Executive has any viable claims against the Company or that the
Company admits any liability whatsoever. Since first receiving this Agreement on November 6, 2008,
Executive has had an opportunity to consider it carefully, and has proposed additional terms, most
of which have since been incorporated into this revised Agreement. Executive acknowledges and
agrees that the changes made as a result of his proposals are not material and do not restart the
running of the twenty-one (21) day review period set forth above.
18. The Company’s Release. (a) Except with respect to the Company’s rights
hereunder, the Company, its representatives, successors and assigns releases and forever discharges
the Executive and his successors, assigns, executors, attorneys and agents from any and all claims,
demands, debts, damages, injuries, actions or rights of action of any nature whatsoever
(collectively “Company Claims”), whether known or unknown, which the Company had, now has or may
have (provided, however, that Company Claims accruing after the Effective Date shall not be
released hereby) against Executive, his successors, assigns, attorneys and agents, including,
without limitation, Company Claims relating to or arising out of Executive’s employment with the
Company. The Company represents that it has not filed any action, complaint, charge, grievance or
arbitration against Executive or any of his successors, assigns, attorneys or agents.
(b) The Company covenants that neither the Company, nor any of the Company’s representatives,
successors or assigns, will commence, prosecute or cause to be commenced or prosecuted against
Executive or any of his successors, assigns, attorneys or agents any action or other proceeding
based upon any claims, demands, causes of action, obligations, damages or liabilities which are to
be released by this Agreement, nor will the Company seek to challenge the validity of this
Agreement, except that this covenant not to xxx does not affect the Company’s future right to
enforce appropriately in a court of competent jurisdiction the terms of this Agreement.
19. Section 409A.
(a) Savings Clause To the extent any of the payments or benefits required under this
Agreement are, or in the opinion of counsel to the Company or Executive, could be interpreted in
the future to create, a nonqualified deferred compensation plan that does not meet the requirements
of Section 409A(a)(2), (3) and (4) of the Internal Revenue Code (the “Code”) and all regulations,
guidance, or other interpretative authority thereunder (the “Section 409A Requirements”), the
Company and Executive hereby agree to execute any and all amendments to this Agreement or otherwise
reform this Agreement as deemed necessary by either of such
12
counsel, and prepared by counsel to the Company, to either cause such payments or benefits not
to be a nonqualified deferred compensation plan or to meet the Section 409A Requirements. In
amending or reforming this Agreement for Code Section 409A purposes, the Company shall maintain, to
the maximum extent practicable, the original intent and economic benefit of this Agreement without
subjecting Executive to additional tax or interest; provided further, however, the Company shall
not be obligated to pay any additional material amount to Executive as a result of such amendment.
(b) Delayed Distribution to Key Employees. If the Company determines, in accordance
with Sections 409A and 416(i) of the Code and the regulations promulgated thereunder, in the
Company’s sole discretion, that Executive is a Key Employee of the Company on the date his
employment with the Company terminates and that a delay in severance pay and benefits provided
under this Agreement is necessary for compliance with Section 409A(a)(2)(B)(i), then any severance
payments and any continuation of benefits or reimbursement of benefit costs provided under this
Agreement and not otherwise exempt from Section 409A shall be delayed for a period of six (6)
months (the “409A Delay Period”). In such event, any such severance payments and the cost of any
such continuation of benefits provided under this Agreement that would otherwise be due and payable
to Executive during the 409A Delay Period shall be paid to Executive in a lump sum cash amount in
the month following the end of the 409A Delay Period. For purposes of this Agreement, “Key
Employee” shall mean an employee who, on an Identification Date (“Identification Date” shall mean
each December 31) is a key employee as defined in Section 416(i) of the Code without regard to
paragraph (5) of that section. If Executive is identified as a Key Employee on an Identification
Date, then Employee shall be considered a Key Employee for purposes of this Agreement during the
period beginning on the first April 1 following the Identification Date and ending on the following
March 31. For clarification purposes and the avoidance of doubt, the parties acknowledge that this
Section 19(b) is not applicable to the payments under Section 6 of this Agreement.
(c) Separation from Service. A termination of employment shall not be deemed to have
occurred for purposes of any provision of this Agreement providing for the payment of any amounts
or benefits following or upon a termination of employment unless such termination also constitutes
a “Separation from Service” within the meaning of Section 409A and, for purposes of any such
provision of this Agreement, references to a “termination,” “termination of employment,”
“separation from service” or like terms shall mean Separation from Service. An event will not be
considered a termination of Executive’s employment if it is reasonably anticipated that Executive
will continue to provide services for the Company or any entity treated as a single employer with
the Company for purposes of Section 409A (as an employee, independent contractor, consultant, or
otherwise) after the event, unless it is reasonably anticipated that the level of such services
after the event will be no more than 20 percent of the average level of Executive’s services
performed over the 36-month period preceding the event.
(d) Separate Payments. Each payment required under this Agreement shall be considered
a separate payment for purposes of Section 409A.
20. Equity Awards. Pursuant to Section 12(b) of the X. X. Xxxxxxxxx Corporation
13
2005 Stock Award and Incentive Plan (“2005 Plan”), upon Executive’s request, the Compensation
and Benefits Committee shall approve the transfer to Executive’s ex-wife of up to one-half of: (i)
Executive’s currently vested Non-qualified Stock Options and SARs, and (ii) Executive’s currently
unvested Non-qualified Stock Options and SARs when and if they become vested. The parties agree to
execute such administrative documentation as is reasonably required from time-to-time to accomplish
such transfers. In addition, the Company acknowledges and agrees that upon the Termination of
Executive’s employment, the time during which Executive and his ex-wife may exercise Executive’s
then vested Non-qualified Stock Options and SARs will be extended to twelve (12) months from the
date of Termination, but not later than the expiration of the term of any such Non-qualified Stock
Options and SARs.
21. Effective Date. This Agreement is effective as of the date the 7-day revocation
period under Section 17 expires (“Effective Date”). Until the Effective Date, the Prior Agreement
shall remain in full force and effect in accordance with its terms without regard to this
Agreement.
[SIGNATURES ON FOLLOWING PAGE]
14
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and
year first above written.
| Xxxxxx X. Xxxx | ||||
| /s/ Xxxxxx X. Xxxx | ||||
| X.X. XXXXXXXXX CORPORATION | ||||
| By: | /s/ Xxxxxx X. Blondy | |||
| Name: Xxxxxx X. Blondy Title: Executive Vice President & Chief Financial Officer |
||||
EXHIBIT A
FORM OF GENERAL RELEASE OF CLAIMS BY EXECUTIVE
THIS GENERAL RELEASE AGREEMENT (the “General Release Agreement”) dated as of this ___day of
____________, made by and between Xxxxxx X. Xxxx (hereinafter referred to as “Executive”), and X.X.
Xxxxxxxxx Corporation (hereinafter, unless the context indicates to the contrary, deemed to include
its subsidiaries, partnerships and affiliates and referred to as the “Company”).
WHEREAS, Executive has been employed by the Company pursuant to the terms and conditions of an
Amended and Restated Employment Agreement, dated as of November 10, 2008 (the “Restated Employment
Agreement”);
WHEREAS, Section 8 of the Restated Employment Agreement provides that in order for Executive
to receive payment under Section 6(a)(i) thereof and the benefits under Sections 7(c) or (d)
thereof, as applicable, he must timely execute, and not revoke, this General Release Agreement at
each relevant time; and
WHEREAS, capitalized terms used herein without definition shall have the meanings given to
such terms in the Restated Employment Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and promises provided in the
Restated Employment Agreement, including but not limited to the benefits to be provided to
Executive thereunder, and in connection with [for the Section 6(a) General Release: the payment to
be made to Executive under Section 6(a)(i) of the Restated Employment Agreement][ for the Section
7 General Release: the benefits to be provided to Executive under Section 7(c) or (d), as
applicable, of the Restated Employment Agreement], Executive agrees as follows:
1. Release.
a. Except with respect to Executive’s rights under the Restated Employment Agreement and
under any pension or 401 (k) retirement plans and equity award agreements applicable to Executive
as of the date of the Restated Employment Agreement, Executive, Executive’s representatives,
successors and assigns release and forever discharges the Company and its successors, assigns,
subsidiaries, affiliates, directors, officers, executives, employees, attorneys, agents and
trustees or administrators of any Company plan from any and all claims, demands, debts, damages,
injuries, actions or rights of action of any nature whatsoever (collectively “Executive’s
Claims”), whether known or unknown, which Executive had, now has or may have (provided, however,
that Executive’s Claims accruing after the Effective Date shall not be released hereby) against
the Company, its successors, assigns, subsidiaries, affiliates, directors, officers, executives,
attorneys, agents and trustees or administrators of any Company plan, including, without
limitation, Executive’s Claims relating
to or arising out of Executive’s employment with the Company, or for compensation for such
employment, including any claims for compensation under the Company’s Deferred Compensation Plan
or for severance under any severance plan or practice maintained by the Company. Executive
represents that Executive has not filed any action, complaint, charge, grievance or arbitration
against the Company or any of its successors, assigns, subsidiaries, affiliates, directors,
officers, Executives, attorneys, agents and trustees or administrators of any Company plan.
b. Executive covenants that neither Executive, nor any of Executive’s respective heirs,
representatives, successors or assigns, will commence, prosecute or cause to be commenced or
prosecuted against the Company or any of its successors, assigns, subsidiaries, affiliates,
directors, officers, executives, attorneys, agents and trustees or administrators of any Company
plan any action or other proceeding based upon any claims, demands, causes of action, obligations,
damages or liabilities which are to be released by this General Release Agreement, nor will
Executive seek to challenge the validity of this General Release Agreement, except that this
covenant not to xxx does not affect Executive’s future right to enforce appropriately in a court
of competent jurisdiction the applicable terms of the Restated Employment Agreement.
c. By releasing the claims described in this Section 1, Executive does not waive any claims
that cannot be waived as a matter of law, including without limitation any claims filed with the
Equal Employment Opportunity Commission, the U.S. Department of Labor or claims under the Age
Discrimination in Employment Act that arise after the Effective Date of this General Release
Agreement.
2. Review of Release. Executive acknowledges that (a) Executive has been advised to
consult with an attorney before executing this General Release Agreement and that Executive has
been advised by an attorney or has knowingly waived Executive’s right to do so, (b) Executive has
been offered a period of at least twenty-one (21) days to consider the release of claims included
in this General Release Agreement, such period commencing on [insert date], the date this General
Release Agreement was delivered to Executive, (c) Executive has a period of seven (7) days from
the date he executes this General Release Agreement within which to revoke it and that this
General Release Agreement will not become effective or enforceable until the expiration of this
seven (7) day revocation period, (d) Executive fully understands the terms and contents of this
General Release Agreement and freely, voluntarily, knowingly and without coercion enters into this
General Release Agreement, and (e) the waiver or release by Executive of rights or claims
Executive may have under Title VII of the Civil Rights Act of 1964, the Executive Retirement
Income Security Act of 1974, the Age Discrimination in Employment Act of 1967, the Older Workers
Benefit Protection Act, the Fair Labor Standards Act, the Americans with Disabilities Act, the
Rehabilitation Act, the Worker Adjustment and Retraining Act (all as amended) and/or any other
local, state or federal law dealing with employment or the termination thereof is knowing and
voluntary and, accordingly, that it shall be a breach of this General Release Agreement to
institute any action or to recover any damages that would be in conflict with or contrary to this
acknowledgment or the releases Executive has granted hereunder. Executive understands and agrees
that the Company’s acknowledgment of this General Release Agreement, payment of money and other
-2-
benefits to Executive and Executive’s signing of this General Release Agreement, does not in
any way indicate that Executive has any viable claims against the Company or that the Company
admits any liability whatsoever. This General Release Agreement shall be executed and returned to
the Company by Executive on or before [insert date], but not before [insert date].
3. Restated Employment Agreement. Executive shall enjoy his rights under and
continue to be bound by the terms of the Restated Employment Agreement and nothing herein shall
relieve Executive or the Company of any obligations under such Restated Employment Agreement that
otherwise apply.
4. Severability. If for any reason any one or more of the provisions of this General
Release Agreement shall be held or deemed to be inoperative, unenforceable or invalid by a court
of competent jurisdiction, such circumstances shall not have the effect of rendering such
provision invalid in any other case or rendering any other provisions of this General Release
Agreement inoperative, unenforceable or invalid. In any such event, such provision shall be read
by such court to be as broad and restrictive as possible without being found to be inoperative,
unenforceable or invalid.
5. Governing Law. This General Release Agreement shall be construed in accordance
with the laws of the State of North Carolina, without giving effect to the conflict of laws
provisions thereof, except to the extent superseded by applicable federal law.
6. Effective Date. This General Release Agreement shall be effective as of the date
the 7-day revocation period under Section 2 expires (“Effective Date”).
7. Counterparts. This General Release Agreement may be signed in counterparts, each
of which shall be deemed an original, with all counterparts taken together representing one and
the same General Release Agreement, with the same effect as if all of the signatures were upon the
same instrument.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.
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IN WITNESS WHEREOF, Executive has hereunder executed this General Release Agreement.
| Xxxxxx X. Xxxx | ||||
| Date: | ||||
| ACKNOWLEDGED: | ||||
| X.X. XXXXXXXXX CORPORATION | ||||
| Name: | ||||
| Title: | ||||
