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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), is made and entered
into on this 3rd day of September, 1996, by and between XXXXX X. XXXX (the
"Executive"), and XXX RIVER INC., a Georgia corporation (the "Company");
W I T N E S S E T H:
WHEREAS, the Executive has been employed by the Company as the Chief
Financial Officer of the Company since November, 1989; and
WHEREAS, the Company desires to continue to employ the Executive, and
the Executive desires to continue to be employed by the Company, on the terms
and conditions contained herein; and
WHEREAS, to induce the Executive to continue in the employ of the
Company, the Company wishes to enter into this Agreement;
NOW, THEREFORE, in consideration of the mutual promises and
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:
Section 1. Employment
1.1. Duties. Subject to the terms hereof, the Company hereby
employs the Executive as the Chief Financial Officer of the Company, and the
Executive hereby accepts such employment. The Executive agrees that during the
employment of the Executive pursuant to this Agreement, the Executive shall
devote his full business time and attention to the business of the Company.
1.2. Other Activities. The Executive may, without limitation,
(i) serve on corporate, civic or charitable boards or committees, (ii) deliver
lectures, fulfill speaking engagements or teach at educational institutions and
(iii) manage personal investments, provided such activities do not materially
interfere with the performance of the Executive's responsibilities to the
Company hereunder. The parties hereto expressly understand and agree that to
the extent the Executive has engaged in any such activities prior to the date
of this Agreement, any subsequent conduct of activities similar in nature and
scope to such previous activities shall not be deemed to materially interfere
with the performance of the Executive's duties hereunder.
Section 2. Compensation; Expenses
2.1. Salary. Commencing on the date of this Agreement, the
Company shall pay the Executive a base salary (the "Base Salary") at a rate
equal to the rate being paid to the Executive immediately prior to the
execution of this Agreement. During the term of this Agreement, the Chief
Executive Officer of the Company shall determine the Base Salary payable to the
Executive in consultation with the Board.
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2.2. Bonus. In addition to the Base Salary, the Company shall
pay the Executive, for each fiscal year ending during the term of this
Agreement, an annual bonus (the "Bonus") pursuant to the MIP in existence as of
the date hereof, or any comparable or successor plan. The Bonus shall be
payable in cash promptly after the date on which the audited financial
statements of the Company are first available for the fiscal year for which the
Bonus is awarded, unless the Executive shall otherwise timely elect to defer
the receipt of such Bonus under any deferred compensation plan of the Company
then in effect. Under no circumstances shall the MIP, as in effect as of the
date hereof, including, without limitation, any performance targets that have
been established with respect thereto, be amended during the term of this
Agreement without the consent of the Executive, which consent shall be
evidenced by a writing to such effect or the affirmative vote by the Executive
at the Board meeting approving any such amendment to the MIP.
2.3. Expenses. The Executive shall be reimbursed promptly for
all reasonable business-related expenses incurred by the Executive in
accordance with the policies and procedures of the Company applicable to other
senior executives thereof.
Section 3. Term; Termination of Agreement
3.1. Term; Termination. Provided that the Executive is employed
on September 2, 1996, the employment of the Executive pursuant to this
Agreement shall continue until the earlier of (i) September 3, 2001, or (ii)
the occurrence of any of the following events:
(a) the death or total disability of the Executive (total disability
meaning the failure of the Executive to perform his normal required services
hereunder for a period of six consecutive months during the term hereof by
reason of the Executive's mental or physical disability) (a "Disability
Termination Event");
(b) termination by the Company of the Executive's employment
hereunder for "Good Cause," which shall exist upon the occurrence of any of the
following: (i) the Executive is convicted of, pleads guilty to, or confesses to
any felony or any act of fraud, misappropriation or embezzlement, (ii) the
Executive engages in a fraudulent act to the material damage or prejudice of
the Company, or (iii) the Executive otherwise fails to comply with the terms of
this Agreement, breaches any obligation or violates any duty to the Company
under applicable law or deviates from any written policies or directives of the
Board, in any such case to the material detriment of the Company, and, within
30 days after written notice from the Board of such failure, breach, violation
or deviation, the Executive has not corrected such failure (in any such case, a
"Good Cause Termination Event");
(c) termination by the Company of the Executive's employment
hereunder for any reason other than as a result of a Good Cause Termination
Event (a "No Cause Termination Event");
(d) termination by the Executive of the Executive's employment
hereunder for "Good Reason", which shall mean (i) the assignment to the
Executive of any duties inconsistent in any material respect with the
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Executive's position (including status, offices, titles and reporting
requirements), authority or duties or responsibilities as contemplated by
Section 1 hereof or any other action by the Company that results in a material
diminishment in such position (including, without limitation, reduction in the
Executive's Base Salary from that in effect on the date hereof), authority,
duties or responsibilities, other than action or inaction on the part of the
Company that is corrected by the Company within 30 days after receipt of
written notice thereof given by the Executive, (ii) any material failure by the
Company to comply with the terms of this Agreement, including, without
limitation, Sections 2 and 5 hereof, which is not corrected by the Company
within 30 days after receipt of written notice thereof given by the Executive,
(iii) the Company's requiring the Executive to be based at any office or
location more than 40 miles away from that at which the Executive is based as
of the date of this Agreement, except for travel reasonably required consistent
with past practices, in the performance of the Executive's responsibilities, or
(iv) any purported termination by the Company of the Executive's employment
pursuant to this Agreement other than as permitted herein, in each such case
without the prior written consent of the Executive (in any such case, a "Good
Reason Termination Event"); or
(e) voluntary termination by the Executive of the Executive's
employment hereunder other than for "Good Reason" (as defined above) (a
"Voluntary Termination Event"):
(f) the occurrence of a "Change in Control" in respect of the
Company, which shall mean any event or series of events which result in any
"Person" (as hereinafter defined) and its "Affiliates" (as hereinafter defined)
or any group of Persons (as the term "group" is used in Section 13(d) of the
Securities Exchange Act of 1934, as amended, and the rules thereunder), other
than Xxxxxx X. Xxxxxx, Xx. and Metropolitan Life Insurance Company and his or
its Affiliates as a group, owning or controlling capital stock of the Company
possessing the voting power (under ordinary circumstances) to elect a majority
of the Board (a "Control Termination Event"). For purposes of this Agreement,
"Person" shall mean an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization or a governmental entity or any department, agency or political
subdivision thereof. For purposes of this Agreement, "Affiliate" shall mean (i)
with respect to any particular natural Person, such Person's spouse,
descendants (whether natural or adopted) and other relatives, and (ii) with
respect to any particular Person, any other Person, controlling, controlled by
or under common control with such particular Person.
3.2. Notice of Termination. Any termination of the Executive's
employment hereunder by the Company or the Executive (other than by reason of
death) shall be communicated by a Notice of Termination to the other party
hereto given in accordance with the requirements of Section 7.10 of this
Agreement and in the case of terminations contemplated by Sections 3.1(a) and
(b) of this Agreement, no termination shall become effective sooner than 10
days after the date of delivery of the Notice of Termination. 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, and
(ii) sets forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment under the
provision so indicated.
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Section 4. Result of Termination
4.1. Termination As Result Of Voluntary or Good Cause Termination
Events. If the Executive's employment hereunder is terminated prior to the
fifth anniversary of the date hereof as a result of the occurrence of a
Voluntary Termination Event or a Good Cause Termination Event, as of the date
of the termination of Executive's employment hereunder, the Company shall have
no further obligation to pay to the Executive any Base Salary, Bonus or any
other benefits pursuant to this Agreement; provided, however, that the Company
shall pay to the Executive any vested compensation previously deferred by the
Executive and not paid as of the date of such termination; provided, further,
however, that the Company shall have the right to deduct from any such deferred
compensation any amounts owed to the Company by the Executive pursuant to any
promissory notes or Company advances. If such termination occurs prior to the
end of any pay period, the Executive shall be entitled to receive a portion of
the Base Salary and Bonus for such pay period prorated to the date on which the
Executive's employment is terminated.
4.2. Termination As Result of No Cause, Control or Good Reason
Termination Event. If the Executive's employment hereunder is terminated as a
result of the occurrence of a No Cause Termination Event, a Control Termination
Event or a Good Reason Termination Event, the Company shall pay to the
Executive (a) an amount equal to 100% of the aggregate Base Salary then in
effect that would have been payable to the Executive pursuant to this Agreement
if the Executive had remained employed by the Company for the twenty-four
consecutive months immediately following the termination of his employment
hereunder, (b) if such termination occurs prior to the end of any pay period, a
portion of the Base Salary and Bonus for such pay period prorated to the date
on which the Executive's employment is terminated, (c) any vested compensation
previously deferred by the Executive and not yet paid, and (d) all reasonable
business-related expenses incurred by the Executive prior to such termination
for which the Executive would have been reimbursed pursuant to Section 2.5
hereof (the amounts referred to in clauses (a), (b), (c) and (d) being the
"Severance Payments"). The Severance Payments shall be paid by the Company to
the Executive within 10 days after such termination. In addition to the
Severance Payments, the Company shall continue to provide to the Executive all
benefits set forth in Section 5.1 for twenty-four consecutive months following
such termination (the "Severance Benefits"). To the extent that all or any
portion of the Severance Payments and the Severance Benefits is subject to
excise tax under Section 280G and 4999 of the Internal Revenue Code of 1986, as
amended, the Company shall pay to the Executive any amounts necessary to
reimburse the Executive in full for any such excise tax payable by the
Executive in respect of the Severance Payments and the Severance Benefits and
for any income taxes payable by the Executive in respect of such payments by
the Company to the Executive (the "Tax Reimbursement"). Upon the written
request of the Executive at any time within one year after the date of the
termination of the Executive's employment hereunder as a result of the
occurrence of a No Cause Termination Event, a Control Termination Event or a
Good Reason Termination Event, the Company shall reimburse any reasonable
expenses incurred by the Executive in relocating the Executive and his
dependents to any location within the 48 contiguous United States that is more
than 40 miles from the Executive's residence on the date of such termination to
the extent any such expenses are not reimbursed by a new employer of the
Executive (the "Relocation Expenses"), and the Company shall also pay to the
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Executive such additional amounts necessary to reimburse the Executive in full
for any taxes payable with respect to Relocation Expenses paid by the Company
to the Executive (the "Relocation Tax Expense"). Other than the Severance
Payments, the Severance Benefits, the Tax Reimbursement, the Relocation
Expenses and the Relocation Tax Expense, the Company shall have no further
obligation to pay the Executive the Base Salary, Bonus or any other benefits
pursuant to this Agreement.
4.3. Termination As Result of Disability Termination Event. If the
Executive's employment hereunder is terminated as a result of a Disability
Termination Event, as of the date of the termination of the Executive's
employment hereunder, the Company shall have no further obligation to pay the
Executive any Base Salary, Bonus or any other benefits pursuant to this
Agreement; provided, however, that the Company shall pay to the Executive any
vested compensation previously deferred by the Executive and not paid as of the
date of such termination. If such termination occurs prior to the end of any
pay period, the Executive shall be entitled to receive a portion of the Base
Salary and Bonus for such pay period prorated to the date on which the
Executive's employment is terminated. Notwithstanding the foregoing, if this
Agreement is terminated as a result of the (a) death of the Executive, the
Executive's family shall be entitled to receive benefits at least equal to
those provided by the Company to surviving families of senior executives of the
Company under such plans, programs and policies relating to family death
benefits, if any, in effect on the date of the Executive's death, or (b) total
disability of the Executive as described in Section 3.1(a), in addition to the
benefits contemplated by Section 5.2, the Executive shall be entitled to
receive disability and other benefits at least equal to those provided by the
Company to disabled employees and their families in accordance with such plans,
programs and policies relating to disability, if any, in effect on the date of
the Executive's total disability.
Section 5. Additional Employment Benefits
5.1. Benefits. The Company shall provide the Executive with
such medical, dental, life and disability insurance as the Board shall
authorize from time to time for the benefit of senior executives of the Company
generally. In addition, the Executive shall have the right to participate in
all incentive, savings and retirement plans available to senior executives of
the Company generally and to receive such additional fringe benefits as the
Board shall authorize from time to time for the benefit of senior executives of
the Company generally.
5.2. Vacation. The Executive shall receive at least four (4)
weeks of paid vacation time each calendar year during the term of his
employment hereunder, which vacation shall be prorated if the Executive's
employment hereunder is terminated prior to December 31 of any year.
Section 6. Covenants
6.1. Confidential Information. Other than in connection with
performing his duties in good faith hereunder, the Executive hereby agrees that
he will hold in confidence any confidential information relating to the
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business or operations of the Company ("Confidential Information") and that he
will not use or disclose the same to any third party for any reason (unless
disclosure is compelled by judicial or administrative process, or in the
reasonable opinion of the Executive's counsel, by other requirements of law).
Confidential Information shall not include information (a) known by the
Executive prior to his employment by the Company in any capacity, (b)
ascertained by the Executive other than in his capacity as the Chief Financial
Officer of the Company, (c) ascertainable or obtained from public or published
sources, or (d) that is or becomes known to the public (other than through a
breach of this Agreement).
6.2. Nonsolicitation. If the Executive's employment hereunder
is terminated as a result of the occurrence of a Voluntary Termination Event or
a Good Cause Termination Event, the Executive agrees that he shall not, during
the two year period after the date of such termination, without the Company's
prior written consent, directly or indirectly, knowingly solicit or encourage
to leave the employment of the Company, any salaried employee of the Company or
hire any salaried employee (other than the personal secretary of the Executive
or a relative of the Executive) who has left the employment of the Company
within one year of such termination of the Executive's employment; provided,
however, that the Executive shall not be prohibited from hiring any employee of
the Company whose employment has been terminated by the Company without good
cause.
Section 7. Miscellaneous
7.1. Indemnification. The Company shall indemnify and hold the
Executive harmless to the fullest extent permitted under applicable law as it
presently exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the Company to
provide broader indemnification rights than said law permitted prior to such
amendment) against all expense, liability and loss (including attorneys' fees,
judgements, fines, ERISA excise taxes or penalties and amounts to be paid in
settlement) incurred in connection with any asserted or threatened action, suit
or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he was an officer, director or employee of the Company
or its former parent, Braelan Corp. ("Braelan") or was serving at the request
of the Company or Braelan as an officer, director, employee, fiduciary or agent
of another corporation or other entity. In the event that the Executive shall
receive written notice of any claim or proceeding against him that, if
successful, might result in a claim under this Section 7.1, the Executive shall
give written notice to the Company of such claim or proceeding and shall permit
the Company to participate in the defense of such claim or proceeding by
counsel of the Company's own choosing and at the expense of the Company. In
addition, upon the written request of the Company, the Company may assume at
its own expense the defense of any such claim or proceeding, provided that the
Executive may participate at his expense in any such defense to the extent he
may deem necessary or appropriate to protect his interests. Upon the final
determination of any such claim or proceeding, the defense of which has been
assumed by the Company, the Company shall fully discharge at its own expense
all liability of the Executive and shall be entitled at its own expense, but
without any liability of the Executive therefor, to compromise or settle any
such claim or proceeding upon terms reasonably satisfactory to both the Company
and the Executive.
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7.2. No Disclosure. Each party hereto agrees that if the
Executive's employment by the Company is terminated for any reason whatsoever,
each party hereto will keep confidential and not make any public disclosures
concerning the circumstances relating to such termination.
7.3. No Litigation. The Executive represents and warrants to
the Company that there are no litigation proceedings pending or, to his
knowledge, threatened against the Executive in his individual capacity or in
any capacity that might give rise to a claim for indemnification under Section
7.1 hereof.
7.4. Binding Effect. This Agreement shall inure to the benefit
of and shall be binding upon the Executive and his executor, administrator,
heirs, personal representative and assigns, and the Company and its respective
successors and assigns; provided, however, that the Executive shall not be
entitled to assign or delegate any of his rights or obligations hereunder
without the prior written consent of the Company.
7.5. No Mitigation. In no event shall the Executive be
obligated to seek employment in mitigation of amounts payable to the Executive
pursuant to Section 4 hereof, and, other than as specifically provided in
Section 4.2, the employment of the Executive after the termination of the
Executive's employment by the Company shall not affect in any way or offset any
amounts payable to the Executive pursuant to this Agreement.
7.6. Fees. The Company agrees to pay to the Executive to the
fullest extent permitted by law all fees and expenses (including reasonable
attorneys' fees) incurred by the Executive in seeking to enforce any provision
of this Agreement, provided that the Executive shall refund such fees and
expense payments if it is finally judicially determined that the Executive is
not entitled to any relief.
7.7. Governing Law. This Agreement shall be deemed to be made
in, and in all respects shall be interpreted, construed and governed by and in
accordance with, the laws of the State of Georgia, without reference to
principles of conflict of laws. No provision of this Agreement or any related
document shall be construed against or interpreted to the disadvantage of any
party hereto by any court or other governmental or judicial authority by reason
of such party having or being deemed to have structured or drafted such
provision.
7.8. Survival of Certain Agreements. The agreements and
covenants set forth in Section 6.1 hereof shall survive the termination of the
Executive's employment under this Agreement for any reason.
7.9. Headings. The section and paragraph headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
7.10. Notices. Unless otherwise agreed to in writing by the parties
hereto, all communications provided for hereunder shall be in writing and shall
be deemed to be given when delivered in person or five (5) business days after
being sent by first class mail, certified, return receipt requested, and
addressed as follows:
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(a) If to the Executive, addressed to:
Xx. Xxxxx X. Xxxx
000 Xxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
(b) If to the Company, addressed to:
Xxx River Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Board of Directors
c/o Corporate Secretary
or to such other person or address as shall be furnished in writing by any
party to the other prior to the giving of the applicable notice or
communication.
7.11. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
7.12. Entire Agreement. This Agreement is intended by the parties
hereto to be the final expression of their agreement with respect to the
subject matter hereof and is the complete and exclusive statement of the terms
thereof, notwithstanding any representations, statements or agreements to the
contrary heretofore made. This Agreement may be modified only by a written
instrument signed by each of the parties hereto.
7.13. Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any
benefit, bonus, incentive or other plan or program provided by the Company or
any of its Affiliates for which the Executive may qualify, nor shall anything
herein limit or otherwise affect such rights as the Executive may have under
any other agreements with the Company or any of its Affiliates. Amounts which
are vested benefits or which the Executive is otherwise entitled to receive
under any plan or program of the Company or any of its Affiliates at or
subsequent to the date on which his employment hereunder is terminated shall be
payable in accordance with such plan or program.
7.14. Severability. In the event that any provision of this
Agreement shall be deemed invalid or unenforceable, the remaining provisions of
this Agreement shall remain in full force and effect.
7.15. Prior Agreement. This Agreement succeeds an Employment
Agreement dated September 3, 1991, which expires on September 2, 1996 and
remains in full force and effect through and including such date, with this
Agreement to take effect on September 3, 1996 in renewal and amendment of such
prior Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
THE COMPANY
XXX RIVER INC.
By:---------------------------
Xxxxxx X. Xxxxxx, Xx.
Chairman and CEO
[CORPORATE SEAL]
ATTEST:
By:---------------------------
Title:------------------------
THE EXECUTIVE
-----------------------------
Xxxxx X. Xxxx
