EXHIBIT 10.28
MANAGEMENT CONTINUITY AGREEMENT
FOR SENIOR OFFICERS
AGREEMENT by and between Xxxx'x Companies, Inc., a North Carolina
corporation (the "Company") and _______("Executive"), dated as of the 3rd day
of May, 2001.
The Board of Directors of the Company (the "Board"), has determined that
it is in the best interests of the Company and its stockholders to assure that
the Company will have the continued dedication of Executive, notwithstanding
the possibility, threat or occurrence of a Change in Control (as defined
below) of the Company. The Board believes it is imperative to diminish the
inevitable distraction of Executive by virtue of the personal uncertainties
and risks created by a pending or threatened Change in Control and to
encourage Executive's full attention and dedication to the Company currently
and in the event of any threatened or pending Change in Control, and to
provide Executive with compensation and benefits arrangements upon a Change in
Control which ensure that the compensation and benefits expectations of
Executive will be satisfied and which are competitive with those of other
corporations. Therefore, in order to accomplish these objectives, the Board
has caused the Company to enter into this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Certain Definitions.
(a) The "Effective Date" shall mean the first date during the Change
in Control Period (as defined in Section l(b)) on which a Change in Control
(as defined in Section 2) occurs. Anything in this Agreement to the contrary
notwithstanding, if a Change in Control occurs and if Executive's employment
with the Company is terminated prior to the date on which the Change in
Control occurs, and if it is reasonably demonstrated by Executive that such
termination of employment (i) was at the request of a third party who has
taken steps reasonably calculated to effect a Change in Control or (ii)
otherwise arose in connection with or anticipation of a Change in Control,
then for all purposes of this Agreement the "Effective Date" shall mean the
date immediately prior to the date of such termination of employment.
(b) The "Change in Control Period" shall mean the period commencing
on the date hereof and ending on the third anniversary of the date hereof;
provided, however, that commencing on the date one year after the date hereof,
and on each annual anniversary of such date (such date and each annual
anniversary thereof shall be hereinafter referred to as the "Renewal Date"),
unless previously terminated, the Change in Control Period shall be
automatically extended so as to terminate three years from such Renewal Date,
unless at least 60 days prior to the Renewal Date the Company shall give
notice to Executive that the Change in Control Period shall not be so
extended.
2. Change in Control. For the purposes of this Agreement, a "Change in
Control" shall mean:
(a) individuals who, at the Effective Date, constitute the Board
(the "Incumbent Directors") cease for any reason to constitute at least a
majority of the Board, provided that any person becoming a director after the
Effective Date and whose election or nomination for election was approved by a
vote of at least a majority of the Incumbent Directors then on the Board
(either by a specific vote or by approval of the proxy statement of the
Company in which such person is named as a nominee for director, without
written objection to such nomination) shall be an Incumbent Director;
provided, however, that no individual initially elected or nominated as a
director of the Company as a result of an actual or threatened election
contest (as described in Rule 14a-11 under the Exchange Act ("Election
Contest") or other actual or threatened solicitation of proxies or consents by
or on behalf of any "person" (as such term is defined in Section 3(a)(9) of
the Exchange Act and as used in Section 13(d)(3) and 14(d)(2) of the Exchange
Act) other than the Board ("Proxy Contest"), including by reason of any
agreement intended to avoid or settle any Election Contest or Proxy Contest,
shall be deemed an Incumbent Director;
(b) any person becomes a "beneficial owner" (as defined in Rule 13d-
3 under the Exchange Act), directly or indirectly, of securities of the
Company representing 25% or more of the combined voting power of the Company's
then outstanding securities eligible to vote for the election of the Board
(the "Company Voting Securities"); provided, however, that the event described
in this subparagraph (b) shall not be deemed to be a Change in Control of the
Company by virtue of any of the following acquisitions: (i) an acquisition
directly by or from the Company or any affiliated companies; (ii) an
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any affiliated companies, (iii) an acquisition by
an underwriter temporarily holding securities pursuant to an offering of such
securities, or (iv) an acquisition pursuant to a Non-Qualifying Transaction
(as defined in subparagraph (c) below); or
(c) the consummation of a reorganization, merger, consolidation,
statutory share exchange or similar form of corporate transaction involving
the Company that requires the approval of the Company's stockholders, whether
for such transaction or the issuance of securities in the transaction (a
"Reorganization"), or the sale or other disposition of all or substantially
all of the Company's assets to an entity that is not an affiliate of the
Company (a "Sale"), unless immediately following such Reorganization or Sale:
(i) more than 60% of the total voting power of (A) the corporation resulting
from such Reorganization or the corporation which has acquired all or
substantially all of the assets of the Company (in either case, the "Surviving
Corporation"), or (B) if applicable, the ultimate parent corporation that
directly or indirectly has beneficial ownership of 100% of the voting
securities eligible to elect directors of the Surviving Corporation (the
"Parent Corporation"), is represented by the Company Voting Securities that
were outstanding immediately prior to such Reorganization or Sale (or, if
applicable, is represented by shares into which such Company Voting Securities
were converted pursuant to such Reorganization or Sale), and such voting power
among the holders thereof is in substantially the same proportion as the
voting power of such Company Voting Securities among the holders thereof
immediately prior to the Reorganization or Sale, (ii) no person (other than
(A) the Company, (B) any employee benefit plan (or related trust) sponsored or
maintained by the Surviving Corporation or the Parent Corporation, or (C) a
person who immediately prior to the Reorganization or Sale was the beneficial
owner of 25% or more of the outstanding Company Voting Securities) is the
beneficial owner, directly or indirectly, of 25% or more of the total voting
power of the outstanding voting securities eligible to elect directors of the
Parent Corporation (or, if there is no Parent Corporation, the Surviving
Corporation), and (iii) at least a majority of the members of the board of
directors of the Parent Corporation (or, if there is no Parent Corporation,
the Surviving Corporation) following the consummation of the Reorganization or
Sale were Incumbent Directors at the time of the Board's approval of the
execution of the initial agreement providing for such Reorganization or Sale
(any Reorganization or Sale which satisfies all of the criteria specified in
(i), (ii) and (iii) above shall be deemed to be a "Non-Qualifying
Transaction").
3. Employment Period. The Company hereby agrees to continue Executive in
its employ, and Executive hereby agrees to remain in the employ of the Company
subject to the terms and conditions of this Agreement, for the period
commencing on the Effective Date and ending on the second anniversary of such
date (the "Employment Period").
4. Terms of Employment.
(a) Position and Duties.
(i) During the Employment Period, (A) Executive's position
(including status, offices, titles and reporting requirements), authority,
duties and responsibilities shall be at least commensurate in all material
respects with the most significant of those held, exercised and assigned at
any time during the 120-day period immediately preceding the Effective Date
and (B) Executive's services shall be performed at the location where
Executive was employed immediately preceding the Effective Date or any office
or location less than 35 miles from such location.
(ii) During the Employment Period, and excluding any periods of
vacation and sick leave to which Executive is entitled, Executive agrees to
devote reasonable attention and time during normal business hours to the
business and affairs of the Company and, to the extent necessary to discharge
the responsibilities assigned to Executive hereunder, to use Executive's
reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period it shall not be a violation of
this Agreement for Executive to (A) serve on corporate, civic or charitable
boards or committees, (B) deliver lectures, fulfill speaking engagements or
teach at educational institutions and (C) manage personal investments, so long
as such activities do not significantly interfere with the performance of
Executive's responsibilities as an employee of the Company in accordance with
this Agreement. It is expressly understood and agreed that to the extent that
any such activities have been conducted by Executive prior to the Effective
Date, the continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective Date shall
not thereafter be deemed to interfere with the performance of Executive's
responsibilities to the Company.
(b) Compensation.
(i) Base Salary. During the Employment Period, Executive
shall receive an annual base salary ("Annual Base Salary"), which shall be
paid at a monthly rate, at least equal to twelve times the highest monthly
base salary paid or payable, including any base salary which has been earned
but deferred, to Executive by the Company and its affiliated companies in
respect of the twelve-month period immediately preceding the month in which
the Effective Date occurs. During the Employment Period, the Annual Base
Salary shall be reviewed no more than 12 months after the last salary increase
awarded to Executive prior to the Effective Date and thereafter at least
annually. Any increase in Annual Base Salary shall not serve to limit or
reduce any other obligation to Executive under this Agreement. Annual Base
Salary shall not be reduced after any such increase and the term Annual Base
Salary as utilized in this Agreement shall refer to Annual Base Salary as so
increased. As used in this Agreement, the term "affiliated companies" shall
include any company controlled by, controlling or under common control with
the Company.
(ii) Annual Bonus. In addition to Annual Base Salary,
Executive shall be awarded, for each fiscal year ending during the Employment
Period, an annual bonus opportunity (the "Annual Bonus") at least as favorable
as that to which he would have been entitled under the annual bonus plan of
the Company in effect for the last year prior to the Effective Date
(annualized in the event that Executive was not employed by the Company for
the whole of such fiscal year) (the "Recent Annual Bonus"). Each such Annual
Bonus shall be paid no later than the end of the third month of the fiscal
year next following the fiscal year for which the Annual Bonus is awarded,
unless Executive shall elect to defer the receipt of such Annual Bonus.
(iii) Incentive, Savings and Retirement Plans. During the
Employment Period, Executive shall be entitled to participate in all
incentive, savings and retirement plans, practices, policies and programs
applicable generally to other peer executives of the Company and its
affiliated companies ("Peer Executives").
(iv) Welfare Benefit Plans. During the Employment Period,
Executive and/or Executive's family, as the case may be, shall be eligible for
participation in and shall receive all benefits under the welfare benefit
plans, practices, policies and programs provided by the Company and its
affiliated companies (including, without limitation, medical, prescription,
dental, disability, employee life, group life, accidental death and travel
accident insurance plans and programs) ("Welfare Plans") to the extent
applicable generally to Peer Executives.
(v) Expenses. During the Employment Period, Executive
shall be entitled to receive prompt reimbursement for all reasonable expenses
incurred by Executive in accordance with the policies, practices and
procedures of the Company and its affiliated companies to the extent
applicable generally to Peer Executives.
(vi) Fringe Benefits. During the Employment Period,
Executive shall be entitled to fringe benefits in accordance with the plans,
practices, programs and policies of the Company and its affiliated companies
with respect to Peer Executives.
5. Termination of Employment.
(a) Death, Retirement or Disability. Executive's employment shall
terminate automatically upon Executive's death or Retirement (pursuant to the
definition of Retirement set forth below) during the Employment Period. For
purposes of this Agreement, "Retirement" shall mean Executive's voluntary
termination of employment on or after the later of (i) 90 days after Executive
has provided written notice to the Company's corporate secretary of his
decision to retire, or (ii) Executive's attainment of age 60 (but shall not
include Executive's voluntary termination after he has been given notice that
he may be terminated for Cause). If the Company determines in good faith that
the Disability of Executive has occurred during the Employment Period
(pursuant to the definition of Disability set forth below), it may give to
Executive written notice in accordance with Section 12(b) of this Agreement of
its intention to terminate Executive's employment. In such event, Executive's
employment with the Company shall terminate effective on the 30th day after
receipt of such notice by Executive (the "Disability Effective Date"),
provided that, within the 30 days after such receipt, Executive shall not have
returned to full-time performance of Executive's duties. For purposes of this
Agreement, "Disability" shall mean mental or physical disability as determined
by the Board in accordance with standards and procedures similar to those
under the Company's employee long-term disability plan, if any. At any time
that the Company does not maintain such a long-term disability plan,
Disability shall mean any illness or other physical or mental condition of
Executive that renders Executive incapable of performing his customary and
usual duties for the Company, or any medically determinable illness or other
physical or mental condition resulting from a bodily injury, disease or mental
disorder which, in either case, has lasted or can reasonably be expected to
last for at least 180 days out of a period of 365 consecutive days. The Board
may require such medical or other evidence as it deems necessary to judge the
nature and permanency of Executive's condition.
(b) Cause. The Company may terminate Executive's employment during
the Employment Period for Cause. For purposes of this Agreement, "Cause"
shall mean:
(i) the willful and continued failure of Executive to perform
substantially Executive's duties with the Company (other than any such failure
resulting from incapacity due to physical or mental illness and specifically
excluding any failure by Executive, after reasonable efforts, to meet
performance expectations), after a written demand for substantial performance
is delivered to Executive by the Board or the Chief Executive Officer of the
Company which specifically identifies the manner in which the Board or Chief
Executive Officer believes that Executive has not substantially performed
Executive's duties, or
(ii) the willful engaging by Executive in illegal conduct or
gross misconduct which is materially and demonstrably injurious to the
Company.
For purposes of this provision, no act or failure to act, on the part of
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by Executive in bad faith or without reasonable belief that Executive's
action or omission 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 the Chief Executive Officer
or a 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
Executive in good faith and in the best interests of the Company. The
cessation of employment of Executive shall not be deemed to be for Cause
unless and until there shall have been delivered to Executive a copy of a
resolution duly adopted by the affirmative vote of not less than a majority of
the entire membership of the Board at a meeting of the Board called and held
for such purpose (after reasonable notice is provided to Executive and
Executive is given an opportunity, together with counsel, to be heard before
the Board), finding that, in the good faith opinion of the Board, Executive is
guilty of the conduct described in subparagraph (i) or (ii) above, and
specifying the particulars thereof in detail.
(c) Good Reason. Executive's employment may be terminated by
Executive for Good Reason. For purposes of this Agreement, "Good Reason"
shall mean:
(i) the assignment to Executive of any duties inconsistent in
any material respect with Executive's position (including status, offices,
titles and reporting requirements), authority, duties or responsibilities as
contemplated by Section 4(a) of this Agreement, or any other action by the
Company which results in a material diminution in such position, authority,
duties or responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by
Executive;
(ii) any failure by the Company to comply with any of the
provisions of Section 4(b) of this Agreement, other than an isolated,
insubstantial and inadvertent failure not occurring in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by
Executive;
(iii) the failure by the Company (a) to continue in effect any
compensation plan in which Executive participates as of the Effective Date
that is material to Executive's total compensation, unless an equitable
arrangement (embodied in an ongoing substitute or alternative plan) has been
made with respect to such plan, or (b) to continue Executive's participation
therein (or in such substitute or alternative plan) on a basis not materially
less favorable, both in terms of the amount of benefits provided and the level
of Executive's participation relative to Peer Executives; or
(iv) the Company's requiring Executive, without his consent,
to be based at any office or location more than 35 miles from the office or
location at which Executive was based on the date immediately prior to the
Effective Date, or to travel on Company business to a substantially greater
extent than required immediately prior to the Effective Date;
(v) any purported termination by the Company of Executive's
employment otherwise than as expressly permitted by this Agreement; or
(vi) any failure by the Company to comply with and satisfy
Section 11(c) of this Agreement.
Anything in this Agreement to the contrary notwithstanding, a termination
by Executive for any reason during the 30-day period immediately following the
first anniversary of the Effective Date shall be deemed to be a termination
for Good Reason for all purposes of this Agreement.
(d) Notice of Termination. Any termination by the Company for
Cause, or by Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 12(b)
of this Agreement. For purposes of this Agreement, a "Notice of Termination"
means a written notice which (i) indicates the specific termination provision
in this Agreement relied upon, (ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive's employment under the provision so indicated and
(iii) if the Date of Termination (as defined below) is other than the date of
receipt of such notice, specifies the termination date (which date shall be
not more than 30 days after the giving of such notice). If a dispute exists
concerning the provisions of this Agreement that apply to Executive's
termination of employment (other than a determination of "Cause" which shall
be made as provided in Section 5(b)), the parties shall pursue the resolution
of such dispute with reasonable diligence. Within five (5) days of such a
resolution, any party owing any payments pursuant to the provisions of this
Agreement shall make all such payments together with interest accrued thereon
at the rate provided in Section 1274(b)(2)(B) of the Internal Revenue Code of
1986, as amended (the "Code"). The failure by either party to set forth in
the Notice of Termination any fact or circumstance which contributes to a
showing of Good Reason or Cause shall not waive any right of such party
hereunder or preclude such party from asserting such fact or circumstance in
enforcing such party's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i) if
Executive's employment is terminated for any reason other than death,
Retirement or Disability, the date specified in the Notice of Termination, and
(ii) if Executive's employment is terminated by reason of death or Disability,
the Date of Termination shall be the date of death of or Retirement of
Executive or the Disability Effective Date, as the case may be.
6. Obligations of the Company upon Termination.
(a) Good Reason; Other Than for Cause, Death or Disability. If,
during the Employment Period, the Company shall terminate Executive's
employment other than for Cause or Disability or Executive shall terminate
employment for Good Reason, then in consideration for services rendered by
Executive prior to the Date of Termination:
(i) the Company shall pay to Executive in a lump sum in cash
within 30 days after the Date of Termination the aggregate of the following
amounts:
A. the sum of (1) Executive's Annual Base Salary through the
Date of Termination to the extent not theretofore paid, and (2) any accrued
vacation pay to the extent not theretofore paid (the sum of the amounts
described in clauses (1) and (2) shall be hereinafter referred to as the
"Accrued Obligations"); and
B. the amount equal to the present value of the continuation
of Executive's Base Salary for a period of two (2) years after the Date of
Termination; such present value to be determined by applying discount rate
equal to 120 percent of the applicable federal rate provided in Section
1274(d) of the Code, compounded semi-annually (the "Discount Rate"); and
C. the amount equal to the present value of two (2) times
the greater of (i) Executive's annual bonus for the year prior to the year in
which the Change in Control occurred (the "Prior Year"), or (ii) Executive's
target annual bonus for the year in which the Change in Control occurred (the
"Current Year"); such present value to be determined by applying the Discount
Rate and assuming two equal annual payments on each of the first and second
anniversaries of the Date of Termination; and
D. the amount equal to the present value of two (2) times
the annual cost to the Company and Executive of participation in the Welfare
Plans described in Section 4(b)(iv) of this Agreement with respect to either
the Prior Year or the Current Year, which ever year in which such annual cost
was higher; such present value to be determined by applying the Discount Rate
and assuming 24 monthly payments beginning on the Date of Termination; and
(ii) to the extent not theretofore paid or provided, the
Company shall timely pay or provide to Executive any other amounts or benefits
required to be paid or provided or which Executive is eligible to receive
under any plan, program, policy or practice or contract or agreement of the
Company and its affiliated companies (such other amounts and benefits shall be
hereinafter referred to as the "Other Benefits").
(b) Death, Retirement or Disability. If Executive's employment is
terminated by reason of Executive's death, Retirement or Disability during the
Employment Period, this Agreement shall terminate without further obligations
to Executive's legal representatives under this Agreement, other than for
payment of Accrued Obligations and the timely payment or provision of Other
Benefits. Accrued Obligations shall be paid to Executive's estate or
beneficiary, as applicable, in a lump sum in cash within 30 days of the Date
of Termination. With respect to the provision of Other Benefits, the term
Other Benefits as utilized in this Section 6(b) shall include without
limitation, and Executive's estate and/or beneficiaries shall be entitled to
receive, death, retirement or disability benefits then applicable to
Executive.
(c) Cause; Other than for Good Reason. If Executive's employment shall
be terminated for Cause, or if Executive voluntarily terminates employment
during the Employment Period, excluding a termination for Good Reason, this
Agreement shall terminate without further obligations to Executive, other than
for Accrued Obligations and the timely payment or provision of Other Benefits.
In such case, all Accrued Obligations shall be paid to Executive in a lump sum
in cash within 30 days of the Date of Termination.
7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or
limit Executive's continuing or future participation in any plan, program,
policy or practice provided by the Company or any of its affiliated companies
and for which Executive may qualify, nor, subject to Section 12(f), shall
anything herein limit or otherwise affect such rights as Executive may have
under any contract or agreement with the Company or any of its affiliated
companies. Amounts which are vested benefits or which Executive is otherwise
entitled to receive under any plan, policy, practice or program of or any
contract or agreement with the Company or any of its affiliated companies at
or subsequent to the Date of Termination shall be payable in accordance with
such plan, policy, practice or program or contract or agreement except as
explicitly modified by this Agreement.
8. Full Settlement; Cost of Enforcement. 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 set-off, counterclaim,
recoupment, defense or other claim, right or action which the Company may have
against Executive or others. In no event shall Executive be obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to Executive under any of the provisions of this Agreement and such
amounts shall not be reduced whether or not Executive obtains other
employment. The Company agrees to pay as incurred, to the full extent
permitted by law, all legal fees and expenses which Executive may reasonably
incur as a result of any contest (regardless of the outcome thereof) by the
Company, Executive or others of the validity or enforceability of, or
liability under, any provision of this Agreement or any guarantee of
performance thereof (including as a result of any contest by Executive about
the amount of any payment pursuant to this Agreement).
9. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary notwithstanding and
except as set forth below, in the event it shall be determined that any
payment or distribution by Parent or the Company to or for the benefit of
Executive (whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise, but determined without regard to any
additional payments required under this Section 9) (a "Payment") would be
subject to the excise tax imposed by Section 4999 of the Code or any interest
or penalties are incurred by 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 Executive shall be
entitled to receive an additional payment (a "Gross-Up Payment") in an amount
such that after payment by Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including, without limitation,
any income taxes (and any interest and penalties imposed with respect thereto)
and Excise Tax imposed upon the Gross-Up Payment, Executive retains an amount
of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 9(c), all determinations
required to be made under this Section 9, including whether and when a Gross-
Up Payment is required and the amount of such Gross-Up Payment and the
assumptions to be utilized in arriving at such determination, shall be made by
Deloitte & Touche LLP or such other certified public accounting firm
reasonably acceptable to the Company as may be designated by Executive (the
"Accounting Firm") which shall provide detailed supporting calculations both
to the Company and Executive within 15 business days of the receipt of notice
from Executive that there has been a Payment, or such earlier time as is
requested by the Company. All fees and expenses of the Accounting Firm shall
be borne solely by the Company. Any Gross-Up Payment, as determined pursuant
to this Section 9, shall be paid by the Company to Executive within the later
of (i) the due date for the payment of the Excise tax or (ii) five days of the
receipt of the Accounting Firm's determination. Any determination by the
Accounting Firm shall be binding upon the Company and Executive. As a result
of the uncertainty in the application of Section 4999 of the Code at the time
of the initial determination by the Accounting Firm hereunder, it is possible
that Gross-Up Payments which will not have been made by the Company should
have been made ("Underpayment"), consistent with the calculations required to
be made hereunder. In the event that the Company exhausts its remedies
pursuant to Section 9(c) and Executive thereafter is required to make a
payment of any Excise Tax, the Accounting Firm shall determine the amount of
the Underpayment that has occurred and any such Underpayment shall be promptly
paid by the Company to or for the benefit of Executive.
(c) The Executive shall notify the Company in writing of any claim
by the Internal Revenue Service that, if successful, would require the payment
by the Company of a Gross-Up Payment (or an additional Gross-Up Payment).
Such notification shall be given as soon as practicable but no later than ten
business days after Executive is informed in writing of such claim and shall
apprise the Company of the nature of such claim and the date on which such
claim is requested to be paid. The Executive shall not pay such claim prior
to the expiration of the 30-day period following the date on which it gives
such notice to the Company (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If the Company notifies
Executive in writing prior to the expiration of such period that it desires to
contest such claim, Executive shall:
(i) give the Company any information reasonably requested by
the Company relating to such claim,
(ii) take such action in connection with contesting such claim
as the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with respect to
such claim by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order
effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings
relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation of the foregoing provisions
of this Section 9(c), the Company shall control all proceedings taken in
connection with such contest (to the extent applicable to the Excise Tax and
the Gross-Up Payment) and, at its sole option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either direct
Executive to pay the tax claimed and xxx for a refund or contest the claim in
any permissible manner, and Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs Executive to pay
such claim and xxx for a refund, the Company shall advance the amount of such
payment to Executive, on an interest-free basis and shall indemnify and hold
Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such
advance; and further provided that any extension of the statute of limitations
relating to payment of taxes for the taxable year of Executive with respect to
which such contested amount is claimed to be due is limited solely to such
contested amount. Furthermore, the Company's control of the contest shall be
limited to issues with respect to which a Gross-Up Payment would be payable
hereunder and Executive shall be entitled to settle or contest, as the case
may be, any other issue raised by the Internal Revenue Service or any other
taxing authority.
(d) If, after the receipt by Executive of an amount advanced by
the Company pursuant to Section 9(c), Executive becomes entitled to receive
any refund with respect to such claim, Executive shall (subject to the
Company's complying with the requirements of Section 9(c)) promptly pay to the
Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the receipt by Executive
of an amount advanced by the Company pursuant to Section 9(c), a determination
is made that Executive shall not be entitled to any refund with respect to
such claim and the Company does not notify Executive in writing of its intent
to contest such denial of refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not be required
to be repaid and the amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid.
10. No Restriction on Competition. Subject to common law fiduciary
obligations and employment obligations imposed under state and federal law,
including without limitation protection of confidential information and trade
secrets, nothing herein is intended to or shall prohibit Executive from
seeking or obtaining employment with a competitor of the Company following the
Date of Termination.
11. Successors.
(a) This Agreement is personal to Executive and without the prior
written consent of the Company shall not be assignable by Executive otherwise
than by will or the laws of descent and distribution. This Agreement shall
inure to the benefit of and be enforceable by Executive's legal
representatives.
(b) This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns.
(c) 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 assume
expressly 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. 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.
12. Miscellaneous.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of North Carolina, without reference to
principles of conflict of laws. The captions of this Agreement are not part
of the provisions hereof and shall have no force or effect. This Agreement
may not be amended or modified otherwise than-by a written agreement executed
by the parties hereto or their respective successors and legal
representatives.
(b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to Executive:
At the Executive's address of record on file with the Company
If to the Company:
Xxxx'x Companies, Inc.
0000 Xxxxxx Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: General Counsel
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(d) The Company may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be required to
be withheld pursuant to any applicable law or regulation.
(e) Executive's or the Company's failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right Executive or the Company may have hereunder, including, without
limitation, the right of Executive to terminate employment for Good Reason
pursuant to Section 5(c) of this Agreement, shall not be deemed to be a waiver
of such provision or right or any other provision or right of this Agreement.
(f) Executive and the Company acknowledge that, except as may
otherwise be provided under any other written agreement between Executive and
the Company, the employment of Executive by the Company is "at will" and,
subject to Section 1(a) hereof, prior to the Effective Date, Executive's
employment and/or this Agreement may be terminated by either Executive or the
Company at any time prior to the Effective Date, in which case Executive shall
have no further rights under this Agreement. From and after the Effective
Date this Agreement shall supersede any other agreement between the parties
with respect to the subject matter hereof.
IN WITNESS WHEREOF, Executive has hereunto set Executive's hand and,
pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.
EXECUTIVE
_____________________________
(Name)
XXXX'X COMPANIES, INC.
By: __________________________
