Exhibit 10 (xvii)
EXECUTIVE COMPENSATION AGREEMENT
THIS AGREEMENT is dated November 7, 2001, between Bontex, Inc., a
Virginia corporation (the "Company"), and Xxxxxxx X. X. Xxxxxxxx (the
"Employee").
1. EMPLOYMENT. The Company employs Xxxxxxx X. X. Xxxxxxxx as S
enior Vice President and Corporate Controller of the Company, and the Employee
accepts employment upon the terms and conditions of this Agreement.
2. DEFINITIONS. As used in this Agreement, the following
cpitalized terms have the indicated meanings unless the context clearly
requires otherwise:
(a) "Applicable Federal Rate" has the meaning ascribed to that
term in Section 1274(d)(1) of the Internal Revenue Code of 1986, as amended.
(b) "Cause" means (i) the Employee's conviction of a felony
during the term of this Agreement; (ii) the Employee's material breach of this
Agreement which remains uncured sixty (60) days after notice by the Company to
the Employee of such material breach; or (iii) the Employee's dishonesty
directly related to the performance of his duties hereunder. Notwithstanding the
foregoing, the Employee shall not be deemed to have been terminated for Cause
under this Agreement based upon either clause (ii) or (iii) above, unless and
until there shall have been delivered to him a copy of a resolution, duly
adopted by the affirmative vote of not less than a majority (more than 50%) of
the Board of Directors of the Company at a meeting called and held for the
purpose (after reasonable notice to the Employee and an opportunity for him,
together with his counsel, to be heard before the Board of Directors of the
Company), finding that, in the good faith opinion of the Board, the Employee was
guilty of conduct set forth above in either clause (ii) or (iii) and specifying
the particulars thereof in detail.
(c) "Change in Control" means a change in control occurring
after the date of this Agreement of a nature that would be required to be
reported (assuming such event has not been "previously reported") in response to
Item 1(a) of the Current Report on Form 8-K, as in effect on the date hereof,
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended ("Exchange Act"); provided that, notwithstanding the foregoing and
without limitation, such a change in control shall be deemed to have occurred at
such time after the date of this Agreement as (i) any Person (as hereinafter
defined) is or becomes the "beneficial owner" (as defined in Rule 13d-3 or Rule
13d-5 under the Exchange Act as in effect on January 1, 1997), directly or
indirectly, of 20% or more of the combined voting power of the Company's voting
securities; (ii) the members of the Company's Board of Directors on the date of
this Agreement (the "Incumbent Board") cease for any reason to constitute at
least the majority of the Board, provided that any person becoming a director
subsequent to the date hereof whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at least 75% of the directors
comprising the Incumbent 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 objection to such nomination) shall be, for purposes of this
clause (ii) considered as though such person were a member of the Incumbent
Board; (iii) all or substantially all of the assets of the Company are sold,
transferred or conveyed by any means, including, but not limited to, direct
purchase or merger, if the transferee is not controlled by the Company, control
meaning the ownership of more than 75% of the combined voting power of such
entity's voting securities; or (iv) the Company is merged or consolidated with
another corporation or entity and as a result of such merger or consolidation
less than 75% of the outstanding voting securities of the
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surviving or resulting corporation or entity shall be owned in the aggregate by
the former shareholders of the Company. Notwithstanding anything in the
foregoing to the contrary, no change in control shall be deemed to have occurred
for purposes of this Agreement by virtue of any transaction after the date
hereof (i) which results in the Employee (his heirs, assigns or successors in
interest) or a group of Persons which includes the Employee (his heirs, assigns
or successors in interest), acquiring, directly or indirectly, 20% or more of
the combined voting power of the Company's voting securities; or (ii) which
results in the Company, any subsidiary of the Company or any profit-sharing
plan, employee stock ownership plan or employee benefit plan of the Company or
any of its subsidiaries (or any trustee of or fiduciary with respect to any such
plan acting in such capacity) acquiring, directly or indirectly, 20% or more of
the combined voting power of the Company's voting securities; or (iii) which
results in Xxxxxxx Xxxxxxxx, Xxxxx X. Xxxxxxxx, the heirs, successors, executors
or assigns of Xxxx X. Xxxxxxxx and/or the heirs, successors, executors or
assigns of Xxxxx X. Xxxxxxxx acquiring, directly or indirectly, 20% or more of
the combined voting power of the Company's voting securities.
(d) "Date of Termination" means (i) if the Employee's
employment is to be terminated for Disability (as defined in paragraph 9 below),
thirty (30) days after Notice of Termination is given (provided that in the case
of Disability, the Employee shall not have returned to the performance of his
duties on a full-time basis during such thirty (30) day period), (ii) if the
Employee's employment is to be terminated for Cause, the date specified in the
Notice of Termination, (iii) the date of the Employee's death, or (iv) if the
Employee's employment is to be terminated by the Company for any reason other
than Cause, the date specified in the Notice of Termination, which in no event
shall be a date earlier than ninety (90) days after the date on which
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such Notice of Termination is given, unless an earlier date has been expressly
agreed to by the Employee in writing either in advance of, or after, receiving
such Notice of Termination.
(e) "Company" includes any corporation or other entity which
is the surviving or continuing entity in respect of any merger, consolidation or
form of business combination in which the Company ceases to exist.
(f) "Notice of Termination" means a written notice that
indicates the specific termination provision of this Agreement relied upon and
sets forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Employee's employment under the provision so
indicated.
(g) "Person" has the meaning ascribed to that term in
Sections 3(d)(9) and 13(d)(3) of the Exchange Act.
(h) "Retirement" and means the Employee's voluntary
termination of employment after the attainment of age sixty-five (65) or the
attainment of age fifty-five (55) having worked full time for the Company for a
period of ten (10) consecutive employment years.
(i) "Successor" means any Person that succeeds to, or has the
practical ability to control (either immediately or with the passage of time)
the Company's business directly by merger or consolidation, or indirectly by
purchase of the Company's voting securities, all or substantially all of its
assets or otherwise.
3. TERM. (a) The term of this Agreement shall begin on the date
hereof and shall terminate on October 31, 2004.
(b) Notwithstanding anything in this Agreement to the
contrary, this Agreement shall continue in effect for at least a period of
thirty-six (36) months beyond the date
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of a Change in Control of the Company, if one shall have occurred during any
term of this Agreement.
4. COMPENSATION. For all services rendered by the Employee, the
Company shall pay the Employee a base salary of $100,000 a year for the first
year of this Agreement, payable in twenty-four (24) equal installments on the
15th and last day of each month. Salary payments shall be subject to withholding
and other applicable taxes. The base salary herein set forth may be annually
adjusted by the Compensation Committee of the Board of Directors of the Company,
and the Employee shall receive during the term of this Agreement such bonuses as
are approved by the Board of Directors of the Company for Employee and all
fringe benefits offered to Company employees, including medical, dental,
hospital, life and long-term disability insurance coverage. The Company shall
not alter or reduce the compensation or benefits being provided to the Employee
as of the date of this Agreement without prior written consent of the Employee.
5. SERVICES. The Employee shall exert his best efforts and devote
substantially all of his time and attention to the affairs of the Company.
Unless the Employee agrees otherwise, in writing, the Employee shall be the
Corporate Comptroller and Secretary of the Company (the "Positions") and shall
have such responsibilities, duties and authority as are generally associated
with such Positions as may from time to time be assigned to the Employee by the
Board of Directors of the Company.
6. WORKING FACILITIES. The Employee shall have an office at the
Company's plant to which he is assigned, and shall have stenographic and
secretarial help and such other facilities and services as are suitable to his
position and appropriate for the performance of his duties. The
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office and other facilities and services to be provided to the Employee shall
be of no less quality than those available to the Employee as of the date of
this Agreement.
7. REIMBURSEMENT OF EXPENSES. The Company will reimburse the Employee
for all reasonable and necessary expenses incurred by him in carrying out his
duties under this Agreement, including, without limitation, travel and lodging
expenses. The Employee shall be provided credit and travel cards comparable to
those being used as of the date of this Agreement, and the Employee shall
present to the Company from time to time an itemized account of such expenses in
such form as may be required by the Board of Directors of the Company.
8. VACATIONS. The Employee shall be entitled each year to a
vacation of three (3) weeks, and all Company holidays, during which time the
Employee's compensation shall be paid in full.
9. DISABILITY. If the Employee is unable to perform his services
by reason of illness, incapacity or accident for a period of more than six (6)
consecutive months ("Disability"), the Company may terminate the Employee's
employment upon thirty (30) days written notice to the Employee.
10. PAYMENT UPON TERMINATION.
Subject to the provisions of Paragraph 11 below, the following shall
apply in the case of termination of employment:
(a) TERMINATION FOR CAUSE. If the Employee's employment
is terminated by the Company for Cause, the Company shall pay the Employee his
full salary through the Date of Termination at the rate in effect at the time
Notice of Termination is given and all other unpaid
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amounts, if any, to which the Employee is entitled as of the Date of
Termination under any plan or arrangement of the Company at the time such
payments are due.
(b) TERMINATION DUE TO DEATH. If the Employee dies during the
term of this Agreement, the Company shall pay to the estate of the Employee the
compensation which would otherwise be payable to the Employee up to the end of
the month in which his death occurs. In addition, his estate shall be paid, as
additional compensation hereunder, within forty-five (45) days after his date of
death, an amount equal to six (6) months compensation or the balance due under
this Agreement, whichever is less. The Company shall also pay, within sixty (60)
days after the death of the Employee, $5,000 to the widow of the Employee, or if
he is not then survived by his widow, to the Employee's surviving children in
equal shares, or if there are no such surviving children, to the estate of the
Employee.
(c) TERMINATION DUE TO DISABILITY. If the Employee's
employment hereunder is terminated under paragraphs 9 because of the Employee's
Disability, the Employee shall be paid, as additional compensation hereunder,
within forty-five (45) days after the Date of Termination, an amount equal to
six (6) months compensation or the balance due under this Agreement, whichever
is less, and the Employee, or in the case of his death, his spouse, shall
continue to receive from the Company health insurance benefits substantially
similar to those being provided to the Employee prior to the Date of
Termination, for a period of six months from the Date of Termination.
(d) OTHER TERMINATION. If the Employee's employment is
terminated by the Company for reason other than Cause, Change in Control, Death
or Disability, the Company shall pay the Employee the lump sum payment equal to
the greater of (i) the amount the Employee
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would be entitled to under the Company's severance pay policy in effect as of
the date of this Agreement; or (ii) the total salary that the Employee would
have earned had the Employee continued in the Company's employ through the
remaining term of the Agreement, such salary to be at the rate in effect at the
time Notice of Termination is given.
11. TERMINATION FOLLOWING A CHANGE IN CONTROL. Upon termination of the
Employee's employment within thirty-six (36) months following a Change in
Control of the Company, unless such termination is (i) because of the Employee's
death or Retirement, or (ii) by the Company for Cause or Disability, the Company
shall pay to the Employee the benefits provided below in lieu of those provided
in paragraph 10:
(a) The Company shall pay the Employee his full salary
(whether such salary has been paid by the Company or by any of its subsidiaries)
through the Date of Termination at the rate in effect at the time Notice of
Termination is given and all other unpaid amounts, if any, to which the Employee
is entitled as of the Date of Termination under any plan or other arrangement of
the Company, at the time such payments are due;
(b) The Company shall pay to the Employee an amount equal to
2.99 multiplied by the Employee's annualized includable compensation for the
base period, within the meaning of Section 280G(d)(1) of the Internal Revenue
Code of 1986, as amended (the "Code"), provided, however, that if any of such
payment is or will be subject to the excise tax imposed by Section 4999 of the
Code or any similar tax that may hereafter be imposed ("Excise Tax"), such
payment shall be reduced to a smaller amount, even to zero, which smaller amount
shall be the largest amount payable under this paragraph that would not be
subject in whole or in part to the Excise Tax after considering all other
payments to the Employee required to be considered under
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Sections4999 or 280G of the Code. Such payment shall be referred to as the
"Severance Payment." In the event that the Severance Payment is
subsequently determined to be less than the amount actually
paid hereunder, the Employee shall repay the excess to the Company at the time
that the proper amount is finally determined, plus interest on the amount of
such repayment at the Applicable Federal Rate. In the event that the Severance
Payment is determined to exceed the amount actually paid hereunder, the Company
shall pay the Employee such difference plus interest on the amount of such
additional payment at the Applicable Federal Rate at the time that the amount of
such difference is finally determined.
In the event that the amount of the Severance Payment exceeds or is
less than the amount initially paid, such difference shall constitute a loan by
the Company to the Employee, or by the Employee to the Company, as the case may
be, payable on the fifth (5th) day after demand (together with interest at the
Applicable Federal Rate).
The amount of any payment provided for in this subparagraph shall not
be reduced, offset or subject to recovery by the Company or the Company's
Successor by reason of any compensation earned by the Employee as the result of
employment by another employer after the Date of Termination, or otherwise.
(c) The Company shall also pay to the Employee all legal fees
and related expenses incurred by the Employee in connection with this Agreement,
whether or not the Employee prevails (including, without limitation, all such
fees and expenses, if any, incurred in contesting or disputing any such
termination or in seeking to obtain or enforce any right or benefit provided by
this Agreement).
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(d) The Company shall maintain in full force and effect, for
the Employee's continued benefit until the earlier of (i) the death of the
Employee and his spouse; or (ii) the Employee's commencement of full-time
employment with a new employer, all life insurance, medical, health and
accident, and disability plans, programs or arrangements in which the Employee
was entitled to participate immediately prior to the Date of Termination,
provided that the Employee's continued participation is possible under the
general terms and provisions of such plans and programs. In the event that the
Employee's participation in any such plan or program is barred, the Company
shall arrange to provide the Employee with benefits substantially similar to
those which the Employee is entitled to receive under such plans and programs.
12. RESTRICTIVE COVENANT. (a) For a period of three (3) years from the
date that his employment ends or terminates under this Agreement, the Employee
shall not, directly or indirectly, own, manage, operate, control, be employed
by, participate in, or be connected in any manner with the ownership,
management, operation, or control of any business similar to the type of
business conducted by the Company at the time his employment under this
Agreement ends or terminates.
(b) In the event of the Employee's actual or threatened breach
of this paragraph, the Company shall be entitled to a preliminary restraining
order and injunction restraining the Employee from violating its provisions.
Nothing in this Agreement shall be construed to prohibit the Company from
pursuing any other available remedies for such breach or threatened breach,
including the recovery of damages from the Employee.
(c) The Employee acknowledges and agrees that the
Company's remedy at law for any breach of any of the Employee's obligations
hereunder would be inadequate, and agrees
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and consents that temporary and permanent injunctive relief may be granted in
any proceeding which may be brought to enforce any provision hereof, without the
necessity of proof of actual damages.
(d) In the event that any court shall hold that any provision
hereof is too broad or is unreasonable, whether in time, scope, geographic area
or otherwise, it is agreed that such provision shall not be rendered void, but
shall be deemed reformed to be limited to the maximum restriction which is
deemed reasonable by such court under applicable law.
13. DISCLOSURE OF INFORMATION. (a) Employee will not at any time,
either during employment (except pursuant to agreements executed by the Company)
or after employment terminates, directly or indirectly make known or divulge to
any person, firm or corporation the names or addresses of any of the customers,
employees, suppliers or potential customers of the Company or any other
confidential propriety, material or important information of any kind, nature or
description concerning the business of the Company, its manner of operation, or
its plans or data.
(b) The Employee will not, during the period of three (3)
years after the date his employment is terminated or ends, directly or
indirectly, either for himself or for any other person, firm or corporation,
solicit, divert, or take away, or attempt to solicit, divert, or take away, any
of the customers, employees, suppliers or potential customers of the Company.
(c) All books, records, files, forms, reports, memoranda,
papers, accounts and documents relating in any manner to the Company's business,
employees, customers or suppliers, whether prepared or paid for by the Employee
or anyone else, shall be the exclusive property of
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the Company and shall be returned immediately to the Company upon termination
of employment or upon the Company's request at any time.
(d) The parties hereby stipulate that each of the foregoing
matters are important, material and confidential, and affect the effective and
successful conduct of the business of the Company and its reputation and good
will, and in the event of the Employee's breach or threatened breach of this
paragraph, the Company shall be entitled to a preliminary restraining order and
temporary and permanent injunctions restraining and enjoining the Employee from
the prohibited activity. In addition to or in lieu of the above, the Company may
pursue all other remedies available to the Company for such breach or threatened
breach, including the recovery of damages from the Employee.
14. ARBITRATION. In the event of a dispute arising out of or in
connection with this Agreement, including any questions regarding its existence,
validity, breach or termination, either party may give notice in writing to the
other party informing it of the matter in dispute. If the parties are unable to
resolve the dispute within thirty (30) days of the notice, then such dispute
shall be submitted to arbitration and resolved by a three-arbitrator panel. The
party desiring to submit a matter to arbitration shall select one qualified
disinterested arbitrator and shall notify the other party in writing of its
appointment. Within thirty (30) days after receipt of notice of the appointment
of the initial arbitrator, the remaining party shall select a qualified
disinterested arbitrator and shall notify the party initiating the arbitration
procedure of its selection in writing. The two arbitrators so selected shall
then select a third arbitrator who shall act as chairman of the arbitration
panel which shall determine the dispute. The arbitrators so appointed shall hold
such hearing or hearings as the arbitrators may determine in order to permit the
parties to the dispute
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to present such evidence as they may desire. All such arbitration hearings
shall take place in the City of Roanoke, Virginia. The arbitrators shall decide
the issues presented by majority decision. In all other respects the arbitration
proceeding shall be conducted in accordance with the Virginia Uniform
Arbitration Act (the "Arbitration Act"). The award or decision rendered by the
arbitration panel (including an allocation of the costs of arbitration) shall be
final, binding and conclusive, and judgment may be entered upon such award by
any court of competent jurisdiction. The arbitration provisions of this
Agreement shall not prevent any party from obtaining injunctive relief from a
court of competent jurisdiction to enforce the obligations of the other party
hereunder for which such party may require provisional relief pending a decision
on the merits by the arbitration panel. The arbitration panel shall have
authority to award any remedy or relief that a court of competent jurisdiction
could grant in conformity to applicable law, including the authority to award
attorneys' fees or punitive damages. If either party to this Agreement brings an
arbitration or action to enforce its rights under this Agreement, the prevailing
party shall be entitled to recover its costs and expenses, including, without
limitation, reasonable attorneys' fees and fees of experts incurred in
connection with such action, including any appeal to the arbitrators award or
confirmation proceedings with respect thereto, which may be filed pursuant to
the Arbitration Act.
15. INDEMNITY. The Company shall indemnify the Employee and hold
him harmless for any acts or decisions made by him in good faith while
performing services for the Company and use its best efforts to obtain coverage
for the Employee under any insurance policy now in force or hereinafter obtained
during the term of this Agreement covering the other officers and directors of
the Company against lawsuits. The Company will pay all expenses, including
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attorneys' fees, actually and necessarily incurred by the Employee in
connection with the defense of such act, suit or proceeding and in connection
with any appeal thereon, including the costs of court settlements.
16. NOTICES. Any notice required or desired to be given under
this Agreement shall be deemed given if in writing sent by certified mail to his
residence in the case of the Employee, or to its principal office in the case of
the Company.
17. WAIVER OF BREACH. The waiver by the Company of a breach of
any provision of this Agreement by the Employee shall not operate or be
construed as a waiver of any subsequent breach by the Employee. No waiver shall
be valid unless in writing and signed by an authorized officer of the Company.
18. ASSIGNMENT. The Employee acknowledges that the services to
be rendered by him are unique and personal. Accordingly, the Employee may not
assign any of his rights or delegate any of his duties or obligations under this
Agreement. The rights and obligations of the Company under this Agreement shall
inure to the benefit of and shall be binding upon the Successors and assigns of
the Company.
19. ENTIRE AGREEMENT. This Agreement contains the entire understanding
of the parties. It may not be changed orally, but only by an agreement in
writing approved by the Board of Directors of the Company and signed by the
party against whom enforcement of any waiver, change, modification, extension or
discharge is sought. The respective obligations of, and benefits afforded to the
Employee in, paragraphs 10, 11, and 12 shall survive termination of this
Agreement.
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20. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Virginia.
IN WITNESS WHEREOF the parties have executed this Agreement as of
November 7, 2001, pursuant to a resolution of the Board of Directors, duly
convened following timely notice, on the 7th day of November, 2001, and pursuant
to a resolution of the Compensation Committee of the Board of Directors, duly
convened following timely notice, on the 6th day of November, 2001.
BONTEX, INC.
By s/Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx, Chairman
Compensation Committee of the
Board of Directors of Bontex, Inc.
s/Xxxxxxx X. X. Xxxxxxxx
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Xxxxxxx X. X. Xxxxxxxx
00
