EXHIBIT 10.1
SEPARATION AGREEMENT
This Separation Agreement (the "Agreement") is made and entered into this
3rd day of June, 2004, by and between Xxxxxxx Enterprises, Inc., a Louisiana
corporation (the "Company") and Xxxxxxx X. Xxxx (the "Employee").
WHEREAS, the Company has entered into an Employment Agreement with the
Employee dated as of November 1, 2001, as amended by Amendment No. 1 dated as of
April 1, 2002 and Amendment No. 2 dated as of January 22, 2004, and as
supplemented by First Supplement to Appendix A to Employment Agreement dated as
of January 23, 2002 and Second Supplement to Appendix A to Employment Agreement
dated as of April 2004 (as so amended and supplemented, the "Employment
Agreement");
WHEREAS, the Company has entered into a Change of Control Agreement with
the Employee dated as of November 1, 2001, as amended by Amendment No. 1 dated
as of January 22, 2004 (as so amended, the "Change of Control Agreement");
WHEREAS, the Employee has informed the Company that he wishes to retire
early and that he is willing to assist the Company with an orderly transition,
as provided herein; and
WHEREAS, the parties desire to enter into this Agreement to supersede the
Employment Agreement and the Change of Control Agreement, except as expressly
provided herein.
NOW THEREFORE, in consideration of the mutual promises herein contained
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and intending to be legally bound hereby, the parties
hereto agree as follows:
1. Effective Time. This Agreement shall be effective immediately upon
its execution and delivery by the parties hereto.
2. Employment. Employee hereby resigns from all positions with the
Company and its subsidiaries, including as President and Chief Executive Officer
of the Company, except that Employee shall continue to be employed by the
Company as its Chairman of the Board through October 31, 2004, subject to
earlier termination as provided in paragraph 7. Employee hereby resigns as a
director of the Company, effective as of the close of business on October 31,
2004. While employed hereunder, in addition to his duties as a director of the
Company, the Employee's duties shall be to cooperate with the Company in
effecting an orderly transition, as may be reasonably requested by the Company's
Board of Directors or the Company's interim Chief Executive Officer or Chief
Executive Officer.
3. Compensation and Benefits. While the Employee is employed pursuant
to this Agreement, the Company shall provide the Employee with the following
compensation and benefits:
(a) The Company shall pay the Employee a salary at an annual rate
of $650,000, which shall be payable to the Employee at such
intervals as other salaried employees of the Company are paid.
(b) The Employee shall be eligible to participate in all benefit
programs provided to other employees of the Company. In
addition, the Company shall provide the Employee with the
following fringe benefits and perquisites:
(i) an automobile allowance of $850 per month. In addition,
the Company will reimburse the Employee for all
gasoline, maintenance, repairs and insurance for
Employee's personal car, as if it were a Company-owned
vehicle;
(ii) reimbursement for membership dues, including assessments
and similar charges, in one or more clubs deemed useful
for business purposes in an amount not to exceed $8,000
per fiscal year of the Company, or such additional
amounts as may be approved by the Compensation Committee
of the Board of Directors; and
(iii) first class air travel while on Company business;
provided, that the Employee shall not travel on Company
business unless requested to do so by the Company's
Board of Directors or the Company's interim Chief
Executive Officer or Chief Executive Officer.
(c) The Employee shall be reimbursed for reasonable out-of-pocket
expenses incurred from time to time on behalf of the Company
in the performance of his duties under this Agreement, upon
the presentation of such supporting invoices, documents and
forms as the Company reasonably requests.
(d) The Employee shall not be eligible to receive a bonus.
4. Post-Employment Payments. Commencing promptly after the termination
of Employee's employment by the Company on October 31, 2004, the Company shall
pay to the Employee $1,000,000 (One Million Dollars), payable in equal
installments over a two-year period at such intervals as other salaried
employees of the Company are paid.
5. Options and Restricted Stock. The Employee's stock options and
restricted stock shall remain in effect in accordance with their terms, it being
acknowledged that those options and restricted stock that vest in accordance
with their terms on October 31, 2004 shall vest as so provided, and that those
options and restricted stock that vest thereafter shall be forfeited; provided,
however, that if the Employee's employment hereunder terminates pursuant to
paragraph 7 or voluntarily by Employee in breach of this Agreement prior to
October 31, 2004, options and restricted stock scheduled to vest on October 31,
2004 shall be forfeited.
6. Employee Benefits. Upon termination of the Employee's employment on
October 31, 2004, the Employee shall be entitled to such benefits under Company
benefit plans in which he is a participant as if he had voluntarily terminated
his employment on October 31, 2004, in accordance with the terms and conditions
of such plans, including such benefits as he may be entitled to under the
Company's Supplemental Executive Retirement Plan, Supplemental Retirement and
Deferred Compensation Plan and 401(k) plan.
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7. Termination of Employment. The Employee's status as an employee of
the Company shall terminate immediately and automatically upon the Employee's
death. The Employee's status as an employee may be terminated for "Disability"
as provided in Article III, Section 2 of the Employment Agreement. The Company
may terminate the Employee's status as an employee for Cause, as defined in the
Employment Agreement except that references to the Employment Agreement shall be
to this Agreement. If Employee's employment is terminated due to death or
Disability, the Company shall have no further obligation to Employee or his
legal representatives under this Agreement, other than the obligation to pay
accrued salary through the date of termination of employment, to make any
payments due pursuant to employee benefit plans maintained by the Company in
which Employee participated, and as otherwise required by law; provided,
however, that the Company shall make the payments described in paragraph 4 of
this Agreement to Employee or his legal representatives, as the case may be,
commencing promptly after October 31, 2004. If Employee's employment is
terminated by the Company for Cause, the Company shall have no further
obligation to Employee or his legal representatives under this Agreement
(including having no obligation to make the payments described in paragraph 4 of
this Agreement), other than the obligation to pay accrued salary through the
date of termination of employment, to make any payments due pursuant to employee
benefit plans maintained by the Company in which Employee participated, and as
otherwise required by law. If Employee's employment is terminated hereunder for
any reason other than death, the Employee shall resign as a director of the
Company effective immediately.
8. Nondisclosure, Noncompetition and Proprietary Rights. The provisions
of Article V (Nondisclosure, Noncompetition and Proprietary Rights) of the
Employment Agreement and the related Appendix B thereto shall remain in full
force and effect, and Employee hereby agrees to such provisions as of the date
hereof, as if they were set forth in this Agreement in their entirety, except
that Employment Term shall mean the term of Employee's employment hereunder and
Date of Termination shall mean the date of Employee's termination of employment
hereunder, and that the fourth and fifth sentences of Section 4 of Article V are
hereby amended to read as follows: "In particular, the Employee acknowledges
that the payments provided under paragraph 4 of this Agreement are conditioned
upon the Employee fulfilling any noncompetition and nondisclosure agreements
contained herein. In the event the Employee shall at any time materially breach
or threaten to breach any noncompetition or nondisclosure agreements contained
herein, the Company may suspend or eliminate payments under paragraph 4 of this
Agreement during the period of such breach or threatened breach. The Company and
Employee acknowledge that Employee's voluntary compliance with the
noncompetition and nondisclosure provisions hereof constitutes a significant
part of the consideration for the Company's agreement to make the payments
specified in paragraph 4. Therefore, the Company and Employee acknowledge that
it is the intent of this Agreement that if Employee engages in conduct described
as prohibited conduct under this paragraph 8, the Company may suspend or
eliminate payments under paragraph 4 during the period of such conduct, even if
the parties' contractual prohibitions on such conduct are determined to be
invalid, illegal or unenforceable under applicable law." For avoidance of doubt,
the reference in Section 3 of Article V of the Employment Agreement (and similar
reference in Article 9 of the Supplemental Executive Retirement Plan) to the
jurisdictions in which the Employee "regularly (a) makes contact with customers
of the Company or any of its subsidiaries, (b) conducts the business of the
Company or any of its subsidiaries or (c) supervises the activities of other
employees of the Company or any of its subsidiaries" shall refer to those
jurisdictions in which
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the Employee engaged in such activities as the Company's President and Chief
Executive Officer. The Employee agrees that pursuant to this Agreement and the
Supplemental Executive Retirement Plan, he will, among other things, be
restricted from being employed in an executive, managerial or supervisory
capacity by a business enterprise engaged in the Death Care Business within any
of the Subject Areas for the relevant term.
9. Indemnity Agreement. The Indemnity Agreement dated as of May 30,
1991, as amended by Amendment No. 1 dated as of September 18, 1996, by and
between the Company and the Employee shall survive this Agreement and remain in
full force and effect in accordance with its terms.
10. Cooperation and Nondisparagement. During and after his employment by
the Company hereunder, the Employee agrees to assist the Company and its
subsidiaries from time to time with respect to litigation involving the Company
and/or its subsidiaries without additional compensation, as may be reasonably
requested by the Company; provided, that the Company shall reimburse the
Employee for his travel and other out-of-pocket expenses reasonably incurred in
providing such cooperation and assistance. During and after his employment by
the Company hereunder, the Employee agrees to refrain from making any statements
and from taking any actions that disparage or could reasonably be expected to
harm the reputation of the Company and its subsidiaries or any of their
directors, officers or employees, and agrees that he will not voluntarily assist
or otherwise participate in any action or proceeding undertaken by any other
person that disparages or could reasonably be expected to materially harm the
reputation of the Company and its subsidiaries or any of their directors,
officers or employees. Should the Employee breach this paragraph 10 during or
after his employment, he shall, among other remedies available to the Company,
forfeit the right to payments pursuant to paragraph 4 and shall repay to the
Company any such amounts previously paid by the Company.
11. Press Release. The Company shall afford the Employee the opportunity
to review and comment on the press release to be issued by the Company regarding
the matters addressed in this Agreement.
12. Release. The Employee hereby and forever, irrevocably and
unconditionally, waives and releases any and all rights, claims and causes of
action against the Company and its subsidiaries of whatever kind or nature,
known or unknown, asserted or unasserted, that may have arisen prior to or that
may exist as of the date of the Employee's execution and delivery of this
Agreement. It is understood and agreed that the parties covered by the
Employee's release include the Company's and its subsidiaries' present and
former shareholders, members or other owners, officers, directors, employees,
agents, insurers, assigns, predecessors and successors, and that any reference
to the Company and its subsidiaries in this paragraph is understood to include
all of the foregoing persons or entities. Finally, it is understood and agreed
that this release covers only claims existing or arising out of events, actions
or circumstances occurring prior to and as of the time of the Employee's
execution of this Agreement.
13. Effect on Employment Agreement and Change of Control Agreement. The
Change of Control Agreement shall terminate effective as of the effective time
of this
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Agreement. This Agreement supersedes and replaces the Employment Agreement in
its entirety, except to the extent expressly provided in this Agreement.
14. Arbitration.
(a) Any claim or controversy arising out of any provision of this
Agreement (other than paragraph 8 hereof), or the breach or
alleged breach of any such provision, shall be settled by
arbitration administered by the American Arbitration
Association (the "AAA") under its National Rules for the
Resolution of Employment Disputes (the "Rules"), and judgment
on the award rendered by the arbitrator(s) may be entered in
any court having jurisdiction thereof.
(b) If no party to the arbitration makes a claim in excess of $1.0
million, exclusive of interest and attorneys' fees, the
proceedings shall be conducted before a single neutral
arbitrator selected in accordance with the Rules. If any party
makes a claim that exceeds $1.0 million, the proceedings shall
be conducted before a panel of three neutral arbitrators, one
of whom shall be selected by each party within 15 days after
commencement of the proceeding and the third of whom shall be
selected by the first two arbitrators within 10 days after
their appointment. If the two arbitrators selected by the
parties are unable or fail to agree on the third arbitrator,
the third arbitrator shall be selected by the AAA. Each
arbitrator shall be a member of the bar of the State of
Louisiana and actively engaged in the practice of employment
law for at least 15 years.
(c) The place of arbitration shall be New Orleans, Louisiana.
(d) Any award in an arbitration initiated under this paragraph 14
shall be limited to actual monetary damages, including if
determined appropriate by the arbitrator(s) an award of costs
and fees to the prevailing party. "Costs and fees" mean all
reasonable pre-award expenses of the arbitration, including
arbitrator's fees, administrative fees, travel expenses,
out-of-pocket expenses such as copying, telephone, witness
fees and attorneys' fees. The arbitrator(s) will have no
authority to award consequential, punitive or other damages
not measured by the prevailing party's actual damages, except
as may be required by statute.
(e) The award of the arbitrators shall be in writing, shall be
signed by a majority of the arbitrators, and shall include
findings of fact and a statement of the reasons for the
disposition of any claim.
15. Binding Effect.
(a) This Agreement shall be binding upon and inure to the benefit
of the Company and any of its successors or assigns.
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(b) This Agreement is personal to the Employee and shall not be
assignable by the Employee without the consent of the Company
(there being no obligation to give such consent) other than
such rights or benefits as are transferred by will or the laws
of descent and distribution.
(c) The Company shall require any successor to or assignee of
(whether direct or indirect, by purchase, merger,
consolidation or otherwise) all or substantially all of the
assets or businesses of the Company (i) to assume
unconditionally and expressly this Agreement and (ii) to agree
to perform all of the obligations under this Agreement in the
same manner and to the same extent as would have been required
of the Company had no assignment or succession occurred, such
assumption to be set forth in a writing reasonably
satisfactory to the Employee. In the event of any such
assignment or succession, the term "Company" as used in this
Agreement shall refer also to such successor or assign.
16. Notices. All notices hereunder must be in writing and shall be
deemed to have been given upon delivery by: (a) hand (against a receipt
therefor), (b) certified or registered mail, postage prepaid, return receipt
requested, or (c) a nationally recognized overnight courier service (against a
receipt therefor). All such notices must be addressed as follows:
If to the Company, to:
Xxxxxxx Enterprises, Inc.
000 Xxxxxxxx Xxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxx 00000
Attn: Chief Executive Officer
with a copy to:
Jones, Walker, Waechter, Poitevent, Carrere & Xxxxxxx, L.L.P.
000 Xx. Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000-0000
Attn: X.X. XxXxxxxx, XX
If to the Employee, to:
Xxxxxxx X. Xxxx
At his home address as reflected on the Company's records
or such other address as to which any party hereto may have notified the other
in writing.
17. Withholding. The Employee agrees that the Company has the right to
withhold, from the amounts payable pursuant to this Agreement, all amounts
required to be withheld under applicable income and/or employment tax laws, or
as otherwise stated in documents granting rights that are affected by this
Agreement.
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18. Severability. If any term or provision of this Agreement, or the
application thereof to any person or circumstance, shall at any time or to any
extent be invalid, illegal or unenforceable in any respect as written, the
Employee and the Company intend for any court construing this Agreement to
modify or limit such provision temporally, spatially or otherwise so as to
render it valid and enforceable to the fullest extent allowed by law. Any such
provision that is not susceptible of such reformation shall be ignored so as to
not affect any other term or provision hereof, and the remainder of this
Agreement, or the application of such term or provision to persons or
circumstances other than those as to which it is held invalid, illegal or
unenforceable, shall not be affected thereby and each term and provision of this
Agreement shall be valid and enforced to the fullest extent permitted by law.
19. Waiver of Breach. The waiver by either party of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach thereof.
20. Remedies Not Exclusive. Except as provided in paragraph 14 hereof,
no remedy specified herein shall be deemed to be such party's exclusive remedy,
and accordingly, in addition to all of the rights and remedies provided for in
this Agreement, the parties shall have all other rights and remedies provided to
them by applicable law, rule or regulation.
21. Company's Reservation of Rights. The Employee acknowledges and
understands that the Employee serves at the pleasure of the Board and that the
Company has the right at any time to terminate Employee's status as an employee
of the Company, or to change or diminish his status during the term of his
employment hereunder, subject to the rights of the Employee to claim the
benefits conferred by this Agreement.
22. JURY TRIAL WAIVER. THE PARTIES HEREBY WAIVE TRIAL BY JURY IN ANY
JUDICIAL PROCEEDING TO WHICH THEY ARE PARTIES INVOLVING, DIRECTLY OR INDIRECTLY,
ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS
AGREEMENT.
23. 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 shall constitute one and the same instrument.
24. Further Assurances. Each party hereto agrees to execute and deliver
such other documents, and to perform such other acts, as the other party hereto
may reasonably request for the purpose of carrying out the intent of this
Agreement.
25. Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof, and no
statements, oral or written from any source, will alter or vary the provisions
contained herein.
26. Governing Law. This Agreement shall be construed and enforced in
accordance with and governed by the internal laws of the State of Louisiana
without regard to principles of conflicts of laws, except as expressly provided
in Article V, Section 6 of the Employment Agreement (as incorporated in
paragraph 8 of this Agreement) with respect to the resolution of disputes
arising under, or the Company's enforcement of, Article V of the Employment
Agreement (or paragraph 8 of this Agreement).
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
XXXXXXX ENTERPRISES, INC.
By:
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Xxxxx X. XxXxxxxxx
Compensation Committee Chairman
EMPLOYEE:
-----------------------------------------
Xxxxxxx X. Xxxx
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