EXHIBIT 12
May 5, 1999
Xxxxxx Xxxxxxxx Industries, Inc.
00-000 Xxxxxxxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxxx
Chairman of the Board and Chief Executive Officer
Gentlemen:
Reference is made to the Agreement and Plan of Merger (the "Merger
Agreement") among Falcon Products, Inc. ("Falcon"), SY Acquisition, Inc.
("Sub") and Xxxxxx Xxxxxxxx, Inc. ("Xxxxxx Xxxxxxxx") of even date herewith
providing for, among other things, the acquisition of Xxxxxx Xxxxxxxx by
Xxxxxx, indirectly through Sub.
In addition to the covenants and agreements of Falcon and Sub contained in
Article VI of the Merger Agreement, Falcon and Sub have also agreed, effective
as of the "Effective Time" (as defined in the Merger Agreement) as follows:
1. Xxxxxx Xxxxxxxx shall continue the employment of Xxxx X. Xxxxxxxxx for
the remainder of calendar year 1999 at his current annual base salary
and on such other terms as set forth in the form of Employment Agreement
previously furnished to you with respect to the continued employment of
those individuals named in Section 6.13 of the Merger Agreement,
including participation in the Xxxxxx Xxxxxxxx 1999 Senior Management
Incentive Plan, except that the duration of the covenant of non-
competition set forth in Section 6 shall be one year.
2. Falcon shall cause Xxxxxx Xxxxxxxx to adopt the severance policy
described in Annex I attached hereto.
The foregoing undertakings by Falcon and Sub shall be a supplement to the
Merger Agreement.
Very truly yours,
Falcon Products, Inc.
/s/ Xxxxxxxx X. Xxxxxx
By: _________________________________
Chairman and Chief Executive
Officer
Title: ______________________________
SY Acquisition, Inc.
/s/ Xxxxxxxx X. Xxxxxx
By: _________________________________
President
Title: ______________________________
ANNEX I TO LETTER SUPPLEMENT
SEVERANCE POLICY
All office and administrative employees in Morristown, Tennessee and the
executive office in Chicago, Illinois, as well as Middle Managers, will
receive severance pay based on the following schedule:
Period of service Amount of severance
----------------- -------------------
Less than five years......................... 1 week's salary per year
Five years but less than ten years........... 1 1/2 weeks' salary per year
Ten or more years............................ 2 weeks' salary per year
in the event of the termination by Xxxxxx Xxxxxxxx of the employment of any
of them for any reason other than cause, disability, or retirement. "Cause"
means (i) the breach by the Employee of the terms of his or her employment
which is not cured within five (5) days following receipt of written notice,
(ii) neglect of duty, (iii) gross negligence, (iv) reckless or willful
misconduct, or (v) the conviction (or plea of nolo contendere) of a crime
which constitutes a felony in the jurisdiction involved. "Disability" means
that the Employee is unable to perform his or her duties as a result of
physical or mental incapacity which continues for a period of thirteen (13)
consecutive weeks or twenty-six (26) weeks in any fifty-two (52) week period.
"Middle Manager" means a person who on the date of the Agreement and Plan of
Merger was an Employee of Xxxxxx Xxxxxxxx (other than the persons named in
Section 6.13 of the Agreement), has the word manager in his or her title, and
either (i) manages at least three other full time Employees (makes hiring
decisions, conducts performance appraisals, etc.) or (ii) has spending
authority in excess of $1,000.
