Exhibit 10.7
March 2, 1999
Xx. Xxxxxxx X. Xxxxxxx
Pulaski, Virginia 24301
Dear Xxxxxxx:
This will confirm the agreement pursuant to which you will retire as a
member of the Board of Directors of Pulaski Furniture Corporation, and remain as
a consultant to the Company for the three-year period beginning today.
1. Xxxxxxx agrees to repurchase the 68,641 shares of common stock of Pulaski
Furniture Corporation owned by you (including 9,200 shares issuable to you
under the Stock Incentive Plan) for a price of $21.70 a share, this being
the average closing market price for PFC stock for the four-week period
ended Friday, February 19, 1999. Pulaski Furniture Corporation's check in
the amount of $1,489,510 will be delivered to you by Xxxxxxx Xxxxx on March
15, 1999, at a time and place upon which you and he agree.
2. Pulaski agrees to pay you a consulting fee in the amount of $325,855 in
twelve equal quarterly installments with the first such payment being paid
on March 15, 1999, in the amount of $27,154.58. In the event you are to
pass away during the consulting period, the remaining payments will be paid
on the same schedule to the Xxxxxxx X. Xxxxxxx Family Limited Partnership.
3. The SERP and the Deferred Compensation Agreement of December 2, 1997 will
continue in effect in accordance with their terms. For example, when the
deferred compensation payments terminate in approximately 20 years, the
SERP payments will be calculated based on the SERP plan without the offset
previously required when deferred compensation payments were also received.
4. Pulaski Furniture Corporation will maintain your current level of medical
insurance benefits using Medicare and a supplement.
5. The Company will continue to pay the premiums on the life insurance policy
on your life issued by Ohio National Insurance Company, in the principal
amount of $250,000 between ages 65 and 70; $200,000 between 70 and 75; and
$100,000 after age 75.
6. You will vacate your office at Pulaski Furniture Corporation headquarters
by March 31, 1999, and you will take with you the three bachelor chests on
the wall that are full of your materials, as well as the pine bookcase. The
other furniture will remain.
7. You will change your mailing address, but it is understood that you
probably will continue to receive mail at Pulaski Furniture Corporation
headquarters for some time. Xxxxxx Xxxxxxxxx will see that mail addressed
to you is put in the blue pouch with your name and that this is put in the
mail slot so that you can pick it up at your convenience.
8. We have agreed that there should be an internal statement regarding your
retirement and this will be reviewed with you as soon as possible.
9. As stated above, the shares being purchased from you by the Corporation
include 9,200 shares issuable under the Stock Incentive Plan. Xxxxxxx
agrees that it is to pay 25% of the issue value of these shares, as
provided under the Plan, which is intended to pay all or part of the state
and federal withholding taxes on these 9,200 shares.
10. We have discussed having a retirement dinner and that matter is left with
the Board of Directors for resolution.
11. You agree that you will consult with the President and the Board of
Directors of the Corporation from time to time over the next three years on
a basis that is not burdensome to you, and at times that are reasonable in
accordance with your schedule. Pulaski will, of course, pay reasonable
out-of-pocket expenses in connection with any such consultation. You also
agree that you will not compete with the Corporation, directly or
indirectly, during the term of this agreement and within a reasonable range
of any of the Corporation's operations, you will preserve in confidence all
nonpublic information about the Corporation that you have or may acquire in
the future, and you agree not to make adverse statements about the
Corporation or its officers or employees; and you will protect the trade
secrets of the Corporation.
I have signed this letter agreement in the space provided below after
approval by the Board of Directors, and if this letter agreement is agreeable to
you, please sign and return one of the duplicate originals to me.
Sincerely,
/s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
President and Chief Executive Officer
/s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
