EXHIBIT 2.3
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered
into as of March 31, 2000 by and between WABASH VALLEY
MANUFACTURING, INC., an Indiana corporation (the "Company"),
and Xxxxxxx X. Xxxxxxxx (the "Executive").
Recitals
A. The Executive is currently employed as Vice President of
the Company.
B. The Executive possesses intimate knowledge of the
business and affairs of the Company, its policies, methods
and personnel.
C. The Company recognizes that the Executive has contributed
to its growth and success, and desires to assure the
Executive's employment by the Company following the
acquisition of the Company by WinsLoew Furniture, Inc. and
to compensate him therefor pursuant to this Agreement.
D. The Executive is willing to make his services available
to the Company on the terms and conditions hereinafter set
forth.
Agreement
NOW, THEREFORE, in consideration of the premises and mutual
covenants set forth herein, the parties agree as follows:
17. Employment.
17.1 General. The Company hereby agrees to employ the
Executive, and the Executive hereby agrees to serve the
Company on the terms and conditions set forth herein.
17.2 Duties of Executive. During the term of this
Agreement, the Executive shall serve as Vice President of
the Company, shall diligently perform all services as may be
assigned to him by the Company's Board of Directors or any
authorized Committee of the Board of Directors (the full
Board or such Committee, as the case may be, is referred to
herein as the "Board"), and shall exercise such power and
authority as may from time to time be delegated to him by
the Board. The Executive shall devote his full time and
attention to the business and affairs of the Company, render
such services to the best of his ability, and use his best
efforts to promote the interests of the Company. Unless he
otherwise consents in writing, Executive shall perform his
duties under this Agreement based at the Wabash Valley
Manufacturing, Inc. office located in Silver Lake, Indiana,
subject to routine business travel and to temporary
assignment to other locations mutually approved by the
Company and Executive not to exceed thirty (30) days per
year.
18. Term.
18.1 Initial Term. The initial term of this Agreement, and
the employment of the Executive hereunder, shall be for the
five-year period commencing on the date hereof (the
"Initial Term"), unless sooner terminated in accordance with
the terms and conditions hereof.
18.2 Renewal Terms. The Initial Term of this Agreement,
and the employment of the Executive hereunder, may be
renewed and extended for such period or periods as may be
mutually agreed to by the Company and the Executive in a
written supplement to this Agreement signed by the Executive
and the Company ("Written Supplement"). If this Agreement
is not so renewed and extended prior to the expiration of
the Initial Term, this Agreement, and the employment of the
Executive hereunder, shall automatically terminate upon the
expiration of the Initial Term.
19. Compensation.
19.1 Base Salary. The Executive shall receive a base
salary at the annual rate of not less than $100,000 (the
"Base Salary") during the Initial Term of this Agreement,
with such Base Salary payable in installments consistent
with the Company's normal payroll schedule, subject to
applicable withholding and other taxes. The Base Salary
shall be adjusted annually to reflect, at a minimum, any
increase from the previous year in the national Consumer
Price Index. The Base Salary shall also be reviewed, at
least annually, for merit increases and may, by action and
in the discretion of the Board, be increased at any time or
from time to time. The Base Salary, if so increased, shall
not thereafter be decreased for any reason. If the term of
this Agreement shall be renewed and extended as provided in
Section 2.2 hereof, then during such renewal term of his
employment hereunder, the Executive shall be paid a base
salary as set forth in the Written Supplement.
19.2 Incentive Compensation.
(a) In addition to the Base Salary, the Executive shall be
entitled to receive annual incentive compensation
("Incentive Compensation"), in the amount determined
pursuant to this Section 3.2, for each fiscal year ending
during the term of this Agreement, commencing with fiscal
2000, for which the Company has Operating Earnings (as
hereafter defined) of at least seventy-five percent (75%) of
the Target Earnings (as hereinafter defined) of the Company
for such year. For purposes of this Section 3.2, "Operating
Earnings" shall mean the consolidated operating earnings of
the Company as determined in accordance with generally
accepted accounting principles ("GAAP"), consistently
applied with the Company's past practices, provided,
however, that such Operating Earnings shall not reflect
(i.e., shall not be reduced by) any amortization of
goodwill. The determination of Operating Earnings made by
the Company shall be final and binding on the parties to
this Agreement. For purposes of this Section 3.2, the
"Target Earnings" of the Company shall be as determined by
the Board of Directors. The Board of Directors shall have
the right to modify, at any time and in its sole discretion,
any previously established "Target Earnings" for reasons
such as, but not limited to, any acquisition, disposition,
merger, reorganization, liquidation, dissolution or other
transaction involving the Company or any of its
subsidiaries, or other extraordinary or significant events
or changes in circumstances relating to the Company or any
of its subsidiaries, businesses or operations.
(b) The amount of the Executive's Incentive Compensation
for each fiscal year shall be determined as follows:
I. If the Operating Earnings for the year do not exceed
the Target Earnings for the year, the Incentive Compensation
shall be calculated by (A) multiplying (i) fifty percent
(50%) of the Executive's Base Salary for the year (the
"Maximum Bonus") by (ii) the remainder of (w) the fraction
obtained by dividing the Operating Earnings by the Target
Earnings, less (x) 0.75, and then (B) multiplying the
resulting product by three (3); or
II. If the Operating Earnings for the year exceed the
Target Earnings for the year, the Incentive Compensation
shall be calculated by (A) multiplying (i) the Maximum Bonus
by (ii) the remainder of (y) the fraction obtained by
dividing the Operating Earnings by the Target Earnings, less
(z) 1.0, and then (B) multiplying the resulting product by
two (2), and then adding 75% of the Maximum Bonus; provided,
however, that in no event shall the Incentive Compensation
for any year exceed the Maximum Bonus.
III. For example, (A) if Operating Earnings are 75% of the
applicable Target Earnings or less, the Executive's
Incentive Compensation for that year would be zero, (B) if
Operating Earnings are 90% of the applicable Target
Earnings, the Executive's Incentive Compensation for that
year would be 45% of the Maximum Bonus, (C) if Operating
Earnings are 100% of the Target Earnings, the Executive's
Incentive Compensation for that year would be 75% of the
Maximum Bonus, (D) if the Operating Earnings are 110% of the
Target Earnings, the Executive's Incentive Compensation for
that year would be 95% of the Maximum Bonus, and (E) if the
Operating Earnings are 120% of the Target Earnings, the
Executive's Incentive Compensation for that year would be
limited to 100% of the Maximum Bonus.
(c) For purposes of this Agreement, the amount of
Incentive Compensation payable with respect to any fiscal
year (net of any tax or other amount properly withheld
therefrom) shall be paid by the Company to Executive within
one hundred twenty (120) days after the end of the fiscal
year; provided, however, that any amount paid shall be
subject to increase or decrease based upon the results of
any audited financial statements with respect to such year.
20. Expense Reimbursement and Other Benefits.
20.1 Reimbursable Expenses. During the term of the
Executive's employment hereunder, the Company, upon the
submission of proper substantiation by the Executive, shall
reimburse the Executive for all reasonable expenses actually
and necessarily paid or incurred by the Executive in the
course of and pursuant to the business of the Company.
20.2 Other Benefits. The Executive shall be entitled to
participate in all medical and hospitalization, group life
insurance, and any and all other plans as are presently and
hereinafter provided by the Company to its executives. The
Executive shall be entitled to vacations in accordance with
the Company's prevailing policy for its executives;
provided, however, that in no event may a vacation be taken
at a time when to do so could, in the reasonable judgment of
the Board, adversely affect the Company's business.
20.3 Working Facilities. The Company shall furnish the
Executive with an office, secretarial help and such other
facilities and services suitable to his position and
adequate for the performance of his duties hereunder
21. Termination.
21.1 Termination for Cause. The Company shall at all times
have the right, upon written notice to the Executive, to
terminate the Executive's employment hereunder for "Cause"
(as defined below in this paragraph 5.1). Upon any
termination pursuant to this Section 5.1, the Executive
shall be entitled to be paid his Base Salary to the date of
termination and the Company shall have no further liability
hereunder (other than for reimbursement for reasonable
business expenses incurred prior to the date of termination,
subject, however to the provisions of Section 4.1). For
purposes of this Agreement, the term "Cause" shall mean (i)
the willful failure or refusal of the Executive to perform
the duties or render the services assigned to him from time
to time by the Board, (ii) gross negligence or misconduct by
the Executive in the performance of his duties to the
Company, (iii) the charging or indictment of the Executive
in connection with a felony, (iv) the association, directly
or indirectly, of the Executive, for his profit or financial
benefit, with any person, firm, partnership, association,
entity or corporation that competes, in any material way,
with the Company, (v) the disclosing or using of any
material trade secret or confidential information of the
Company at any time by the Executive, except as required in
connection with his duties to the Company, or (vi) the
breach by the Executive of his fiduciary duty or duty of
trust to the Company.
21.2 Disability. The Company shall at all times have the
right, upon written notice to the Executive, to terminate
the Executive's employment hereunder, if the Executive
shall, as the result of mental or physical incapacity,
illness or disability, become unable to perform his duties
hereunder for in excess of ninety (90) days in any 12-month
period. Upon any termination pursuant to this Section 5.2,
the Company shall pay to the Executive any unpaid amounts of
his Base Salary and Incentive Compensation accrued through
the effective date of termination and the Company shall have
no further liability hereunder (other than for reimbursement
for reasonable business expenses incurred prior to the date
of termination, subject, however to the provisions of
Section 4.1).
21.3 Death. In the event of the death of the Executive
during the term of his employment hereunder, the Company
shall pay to the estate of the deceased Executive any unpaid
amounts of his Base Salary and Incentive Compensation
accrued through the date of his death and the Company shall
have no further liability hereunder (other than for
reimbursement for reasonable business expenses incurred
prior to the date of the Executive's death, subject, however
to the provisions of Section 4.1).
21.4 Termination Without Cause. At any time the Company
shall have the right to terminate the Executive's employment
hereunder by written notice to the Executive; provided,
however, that, the Company shall (i) pay to the Executive
any unpaid Base Salary and Incentive Compensation accrued
through the effective date of termination specified in such
notice, and (ii) pay Executive's Base Salary in the manner
set forth in Section 3.1 hereof until the date which is six
months following such effective date (the "Severance Date").
The Company shall have no further liability hereunder (other
than for reimbursement for reasonable business expenses
incurred prior to the date of termination, subject, however
to the provisions of Section 4.1).
21.5 Voluntary Resignation. At any time, the Executive
shall have the right to terminate his employment hereunder
by written or oral notice to the Company of his voluntary
resignation. Upon any termination pursuant to this Section
5.5, the Executive shall be entitled to be paid his Base
Salary to the date of termination and the Company shall have
no further liability hereunder (other than for reimbursement
for reasonable business expenses incurred prior to the date
of termination, subject, however, to the provisions of
Section 4.1).
22. Restrictive Covenants.
22.1 Non-competition. While employed by the Company and
for a period of one year (except that such period shall be
six months if Executive's employment is terminated pursuant
to Section 5.4 hereof) following the later of the date his
employment is terminated hereunder or, if applicable, the
Severance Date, the Executive shall not, directly or
indirectly, engage in or have any interest in any sole
proprietorship, partnership, corporation or business or any
other person or entity (whether as an employee, officer,
director, partner, agent, security holder, creditor,
consultant or otherwise) that directly or indirectly engages
in competition with the Company in any state, country,
commonwealth, territory or other place in which the Company
sells its products (it being agreed that for all purposes of
this Section 6, "the Company" shall include all of its
subsidiaries).
22.2 Nondisclosure. The Executive shall not divulge,
communicate, use to the detriment of the Company or for the
benefit of any other person or persons, or misuse in any
way, any trade secrets or confidential information
pertaining to the business of the Company. Any confidential
information, trade secrets or data now known or hereafter
acquired by the Executive with respect to the business of
the Company (which shall include, but not be limited to,
information concerning the Company's financial condition,
prospects, customers, sources of leads, methods of doing
business, and the manner of design, manufacture, financing,
marketing and distribution of the Company's products) shall
be deemed a valuable, special and unique asset of the
Company that is received by the Executive in confidence and
as a fiduciary, and Executive shall remain a fiduciary to
the Company with respect to all of such information.
22.3 Nonsolicitation of Employees and Customers. While
employed by the Company and for a period of three years
(except that the period with respect to the prohibitions in
clause (ii) hereof shall be six months if Executive's
employment is terminated pursuant to Section 5.4 hereof)
following the later of the date his employment is terminated
hereunder or, if applicable, the Severance Date, the
Executive shall not, directly or indirectly, for himself or
for any other person, firm, corporation, partnership,
association or other entity, (i) attempt to employ or enter
into any contractual arrangement with any employee or former
employee of the Company, unless such employee or former
employee has not been employed by the Company for a period
in excess of six months, and/or (ii) call on or solicit any
of the actual or targeted prospective customers or clients
of the Company, nor shall the Executive make known the names
and addresses of such customers or any information relating
in any manner to the Company's trade or business
relationships with such customers.
22.4 Books and Records. All books, records, and accounts
relating in any manner to the customers or clients of the
Company, whether prepared by the Executive or otherwise
coming into the Executive's possession, shall be the
exclusive property of the Company and shall be returned
immediately to the Company on termination of the Executive's
employment hereunder or on the Company's request at any
time.
23. Injunction. It is recognized and hereby acknowledged
by the parties hereto that a breach by the Executive of any
of the covenants contained in Section 6 of this Agreement
will cause irreparable harm and damage to the Company, the
monetary amount of which may be virtually impossible to
ascertain. As a result, the Executive recognizes and hereby
acknowledges that the Company shall be entitled to an
injunction from any court of competent jurisdiction
enjoining and restraining any violation of any or all of the
covenants contained in Section 6 of this Agreement by the
Executive or any of his affiliates, associates, partners or
agents, either directly or indirectly, and that such right
to injunction shall be cumulative and in addition to
whatever other remedies the Company may possess.
24. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of
Florida.
25. Entire Agreement. This Agreement constitutes the
entire agreement between the parties hereto with respect to
the subject matter hereof and, upon the commencement of the
Initial Term of this Agreement, shall supersede all prior
agreements, understandings and arrangements, both oral and
written, between the Executive and the Company (or any of
its respective affiliates) with respect to such subject
matter. All such prior agreements, understandings and
arrangements for the provision of services by the Executive
to the Company and the compensation of the Executive in any
form shall automatically terminate upon the commencement of
the Initial Term of this Agreement, and each party shall
thereupon and thereby, without any further action, release
and forever discharge the other (and the other's affiliates)
from any and all liabilities and obligations of any nature
arising out of or in connection with any and all such prior
agreements, understandings or arrangements. This Agreement
may not be modified in any way unless by a written
instrument signed by both the Company and the Executive.
26. Notices. Any notice required or permitted to be given
hereunder shall be deemed given when delivered by hand or
when deposited in the United States mail, by registered or
certified mail, return receipt requested, postage prepaid,
(i) if to the Company, to the address of the Company's
principal offices in Birmingham, Alabama (with a copy to
Trivest, Inc., 0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxxx Xxxxx,
Xxxxx, Xxxxxxx 00000, Attention: Chief Financial Officer,
and (ii) if to the Executive, to his address as reflected on
the payroll records of the Company, or to such other address
as either party hereto may from time to time give notice of
to the other.
27. Benefits; Binding Effect. This Agreement shall be for
the benefit of and binding upon the parties hereto and their
respective heirs, personal representative, legal
representatives, successors and, where applicable, assigns,
including, without limitation, any successor to the Company,
whether by merger, consolidation, sale of stock, sale of
assets or otherwise; provided, however that the Executive
shall not delegate his employment obligations hereunder, or
any portion thereof, to any other person.
28. Severability. The invalidity of any one or more of
the words, phrases, sentences, clauses or sections contained
in this Agreement shall not affect the enforceability of the
remaining portions of this Agreement or any part thereof,
all of which are inserted conditionally on their being valid
in law, and, in the event that any one or more of the words,
phrases, sentences, clauses or sections contained in this
Agreement shall be declared invalid, this Agreement shall be
construed as if such invalid word or words, phrase or
phrases, sentence or sentences, clause or clauses, or
section or sections had not been inserted. If such
invalidity is caused by length of time or size of area, or
both, the otherwise invalid provision will be considered to
be reduced to a period or area which would cure such
invalidity.
29. Waivers. The waiver by either party hereto of a
breach or violation of any term or provision of this
Agreement shall not operate nor be construed as a waiver of
any subsequent breach or violation.
30. Damages. Nothing contained herein shall be construed
to prevent the Company or the Executive from seeking and
recovering from the other damages sustained by either or
both of them as a result of its or his breach of any term or
provision of this Agreement. In the event that either party
hereto brings suit for the collection of any damages
resulting from, or for the injunction of any action
constituting, a breach of any of the terms or provisions of
this Agreement, then the party found to be at fault shall
pay all reasonable court costs and attorneys' fees of the
other.
31. Section Headings. The section headings contained in
this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this
Agreement.
32. No Third Party Beneficiary. Nothing expressed or
implied in this Agreement is intended, or shall be
construed, to confer upon or give any person other than the
Company, the parties hereto and their respective heirs,
personal representatives, legal representatives, successors
and assigns, any rights or remedies under or by reason of
this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first above written.
WABASH VALLEY MANUFACTURING, INC.
By:
Xxxxx X. Xxxxxxxx
President
EXECUTIVE
Xxxxxxx X. Xxxxxxxx
