Exhibit 10(k)
THE BLACK & XXXXXX CORPORATION
Amended and Restated
EMPLOYMENT AGREEMENT
This AMENDED AND RESTATED EMPLOYMENT AGREEMENT is made as of this 1st
day of November, 1995, between The Black & Xxxxxx Corporation, a Maryland
corporation (the "Corporation"), and Xxxxx X. Xxxxxxxxx (the "Executive").
The Corporation desires to continue to have the benefits of the
Executive's knowledge and experience as a full-time employee, and the
Executive desires to continue in full-time employment with the Corporation.
Accordingly, in consideration of the mutual covenants and
representations contained herein, the parties agree as follows:
1. Full-Time Employment of Executive.
a. Duties and Status.
(1) The Corporation hereby engages the Executive
as Chairman and Chief Executive Officer for the employment period as defined in
paragraph 3.a. and the Executive accepts such employment on the terms and
conditions set forth in this Agreement. During the employment period, the
Executive shall be assigned to corporate headquarters located at Towson,
Maryland. The Executive shall exercise such authority and perform such duties as
are commensurate with the By-Laws of the Corporation and the normal duties of a
Chairman and Chief Executive Officer of a publicly traded corporation, and shall
perform such other reasonably related managerial duties and responsibilities for
the Corporation as may be assigned to him by the Board of Directors of the
Corporation.
(2) During the employment period, the Executive
shall (a) devote his full time and efforts to the business of the Corporation
and, unless approved by the Board of Directors of the Corporation, will not
engage in consulting work or any trade or business for his own account or for or
on behalf of any other person, firm or corporation which competes, conflicts or
interferes with the performance of his duties hereunder in any way, and (b)
accept such additional office or offices to which he may be elected by the Board
of Directors of the Corporation, provided that the performance of the duties of
such office or offices shall be consistent with the scope of the duties provided
for in subparagraph (1) of this paragraph a.
b. Compensation and General Benefits.
(1) The Corporation shall pay the Executive an
annual salary which is not less than the greater of (i) his annual base salary
from the Corporation on the date hereof or (ii) any subsequently established
higher annual base salary. Such salary shall be payable in periodic equal
installments which are not less frequent than the periodic installments relating
to his salary immediately prior to the date hereof. Such salary shall be subject
to normal periodic review for increases based on the policies of the Corporation
and contributions to the enterprise.
(2) In addition to the salary provided by sub-
paragraph (1) of this paragraph b, the Corporation shall provide thrift, stock
option, retirement, group life, supplemental life, long-term disability,
accident, dental and health insurance programs and other perquisites and
benefits available to the Corporation's principal executive officers. The
Executive shall also be entitled to participate in any other employee benefit
programs that may be established by the Corporation and in which other
executives of the Corporation are entitled to participate, including, without
limitation, any annual incentive plan, performance equity plan, and supplemental
executive retirement plan as in effect from time to time.
2. Competition; Confidential Information.
The Executive and the Corporation recognize that, due
to the nature of his engagements hereunder and the relationship of the Executive
to the Corporation, the Executive will have access to, and may assist in
developing, confidential and proprietary information relating to the business
and operations of the Corporation and its affiliates. The Executive acknowledges
that such information will be of central importance to the business of the
Corporation and its affiliates and that disclosure of it to or its use by others
could cause substantial loss to the Corporation. The Executive and the
Corporation also recognize that an important part of the Executive's duties will
be to develop good will for the Corporation through his personal contact with
others having business relationships with the Corporation and its affiliates,
and that there is a danger that this good will, a proprietary asset of the
Corporation and its affiliates, may follow the Executive if and when his
relationship with the Corporation is terminated. The Executive accordingly
agrees as follows:
a. Non-Competition. During the employment period, as defined
in Section 3.a., the Executive will not, directly or indirectly, either
individually or as owner, partner, agent, employee, consultant or otherwise,
except for the account of and on behalf of the Corporation or its affiliates,
engage in any activity competitive with the business of the Corporation or its
affiliates, nor will he, in competition with the Corporation or its affiliates,
solicit or otherwise attempt to establish any business relationships with any
person, firm or corporation which was, at any time during the employment period,
a customer or supplier of the Corporation. However, nothing in this Section 2
shall be construed to prevent the Executive from owning, as an investment, not
more than 5% of a class of equity securities issued by any competitor of the
Corporation and publicly traded and registered under Section 12 of the
Securities Exchange Act of 1934.
b. Confidential Information. During and at all times after the
expiration of the employment period, the Executive (1) will not disclose any
trade secrets, customer lists, production processes, business plans, or other
proprietary information which is treated as confidential by the Corporation or
its affiliates which is now known to him or which hereafter may become known to
him as a result of his employment or association with the Corporation and (2)
will not at any time, directly or indirectly, disclose any such information to
any person, firm or corporation, or use the same in any way other than in
connection with the business of the Corporation or its affiliates.
c. Corporation's Remedies for Breach. It is recognized that
damages in the event of breach of this Section 2 by the Executive would be
difficult, if not impossible, to ascertain, and it is, therefore, agreed that
the Corporation, in addition to and without limiting any other remedy or right
it may have, shall have the right to an injunction or other equitable relief in
any court of competent jurisdiction, enjoining any such breach. The existence of
this right shall not preclude any other rights and remedies at law or in equity
which the Corporation may have.
3. Employment Period.
a. Duration. The employment period, which commenced prior to
the date of this Agreement, shall continue until this Agreement is terminated by
(1) the death or substantially total disability of the Executive, (2) mutual
agreement, (3) action of the Corporation for justifiable cause as provided in
paragraph 3.b., (4) action of the Corporation or notice by the Executive as
provided in paragraph 3.c., or (5) the voluntary resignation of the Executive
upon 30 days prior written notice.
b. Performance and Termination - Employment Period. Subject to
the performance of the covenants and agreements made by the Corporation herein,
the Executive will perform his duties during the employment period in good faith
and will observe faithfully the covenants and agreements made by him herein. The
Corporation shall not terminate the employment of the Executive during the
employment period except for substantial and serious cause involving dishonesty,
gross negligence, material and persistent failure of the Executive to perform
his duties hereunder, or material breach of express obligations of this
Agreement within the control of the Executive. The termination of the
Executive's employment for reasons other than those specified in the preceding
sentence shall be deemed to be a termination of employment without justifiable
cause and shall be an immediate termination of this Agreement. After such
termination, the Executive shall be immediately entitled to the severance pay
and benefits provided in Section 3.c. of this Agreement. No breach or default
by the Executive shall be deemed to have occurred hereunder unless written
notice thereof shall have been given by the Corporation to the Executive and
the Executive shall have failed to cure such breach or default within 30 days
after he receives the notice.
c. Executive's Remedies for Breach.
(1) This Agreement shall be immediately terminat-
ed without further notice if the Corporation terminates the employment of the
Executive without justifiable cause. This Agreement may also be terminated upon
written notice from the Executive to the Board of Directors if: (i) the
Corporation shall fail to observe or perform any covenant to be observed or
performed by the Corporation, or (ii) the Corporation shall materially change
the Executive's duties so that he is no longer performing the functions of the
Chairman and Chief Executive Officer, or (iii) the Corporation shall otherwise
materially breach this Agreement.
(2) If this Agreement is terminated for any reason
identified in paragraph 3.c.(1), all rights, duties and obligations shall cease
except that the provisions of paragraph 2.b. of this Agreement shall remain in
force and except that the Corporation shall be obligated to provide the
following benefits:
(A) The Corporation shall pay the Executive
his full base salary through the date of termination at the rate in effect at
the time of his termination, plus all other amounts to which he is entitled
under any compensation plan of the Corporation, at the time such payments are
due, except as otherwise provided below.
(B) In lieu of any further salary payments
to the Executive for periods subsequent to his termination, the Corporation
shall pay as severance pay to the Executive a lump sum severance payment
(together with the payments provided in paragraph C, below, the
"Severance Payments") equal to his Performance Equity Plan ("PEP") Maximum
Payment plus three times the sum of his (x) annual base salary in effect
immediately prior to the Executive's termination and (y) Annual Incentive Plan
("AIP") Maximum Payment for the year in which the date of termination occurs.
PEP Maximum Payment shall mean an amount equal to the value of 150% of the
Performance Shares that are forfeited by the Executive pursuant to the PEP as a
result of the Executive's termination. For purposes of calculating the PEP
Maximum Payment, the per share value of the shares of common stock of the
Corporation (the "Corporation's Shares") shall be the closing price per share of
the Corporation's Shares as reported on the New York Stock Exchange (the "NYSE")
on or nearest to the date of termination (or, if not listed on the NYSE, on a
nationally recognized exchange or quotation system on which volume in the
Corporation's Shares is highest). The provisions of this paragraph 3.c.(2)(B)
shall not in any way affect the Executive's rights under the PEP. AIP Maximum
Payment shall mean the maximum payment that the Executive could have received
under the AIP.
(C) The Corporation shall pay to the Execu-
tive any deferred compensation, including but not limited to deferred bonuses
and amounts deferred under the Executive Deferred Compensation Plan, allocated
or credited to the Executive or his account as of the date of termination.
(D) The Corporation shall also pay to the
Executive all legal fees and expenses incurred by him as a result of such
termination (including 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 or in connection with any tax
audit or proceeding to the extent attributable to the application of Section
4999 of the Code to any payment or benefit provided hereunder).
(E) If the payments provided under para-
graphs (B) and (C) above (the "Contract Payments") or any other portion of
the Total Payments (as defined below) will be subject to the tax imposed by
Section 4999 of the Code (the "Excise Tax"), the Corporation shall pay to the
Executive at the time specified in paragraph (F) below, an additional amount
(the "Gross-Up Payment") such that the net amount retained by the Executive,
after deduction of any Excise Tax on the Contract Payment and such other Total
Payments and any federal and state and local income tax and Excise Tax upon the
payment provided for by this paragraph, shall be equal to the Contract Payments
and such other Total Payments. For purposes of determining whether any of the
payments will be subject to the Excise Tax and the amount of such Excise Tax,
(i) any other payments or benefits received or to be received by the Executive
in connection with a change in control of the Corporation or his termination of
employment (whether payable pursuant to the terms of this Agreement or any other
plan, arrangement or agreement with the Corporation, its successors, any person
whose actions result in a change in control of the Corporation or any
corporation affiliated (or which, as a result of the completion of a transaction
causing a change in control of the Corporation, will become affiliated) with the
Corporation within the meaning of Section 1504 of the Code (together with the
Contract Payments, the "Total Payments") shall be treated as "parachute
payments" within the meaning of Section 280G(b)(2) of the Code, and all "excess
parachute payments" within the meaning of Section 280G(b)(1) shall be treated as
subject to the Excise Tax, unless in the opinion of tax counsel selected by the
Corporation's independent auditors and acceptable to the Executive the Total
Payments (in whole or in part) do not constitute parachute payments, or such
excess parachute payments (in whole or in part) represent reasonable
compensation for services actually rendered within the meaning of Section
280G(b)(4)(B) of the Code either to the extent such reasonable compensation is
in excess of the base amount within the meaning of Section 280G(b)(3) of the
code, or are otherwise not subject to the Excise Tax, (ii) the amount of the
Total Payments that shall be treated as subject to the Excise Tax shall be equal
to the lesser of (A) the total amount of the Total Payments or (B) the amount of
excess parachute payments within the meaning of Section 280G(b)(1) (after
applying clause (i), above) and (iii) the value of any non-cash benefits or any
deferred payment or benefit as determined by the Corporation's independent
auditors in accordance with the principles of Sections 280G(d)(3) and (4) of the
Code. For purposes of determining the amount of the Gross-Up Payment, the
Executive shall be deemed to pay federal income taxes at the highest marginal
rate of federal income taxation in the calendar year in which the Gross-Up
Payment is to be made and state and local income taxes at the highest marginal
rate of taxation in the state and locality of the Executive's residence on the
date of termination, net of the maximum reduction in federal income taxes
which could be obtained from deduction of such state and local taxes. In the
event that the Excise Tax is subsequently determined to be less than the amount
taken into account hereunder at the time of termination of the Executive's
employment, he shall repay to the Corporation at the time that the amount of
such reduction in Excise Tax is finally determined the portion of the Gross-Up
Payment attributable to such reduction (plus the portion of the Gross-Up Payment
attributable to the Excise Tax and federal and state and local income tax
imposed on the Gross-Up Payment being repaid by the Executive if such repayment
results in a reduction in Excise Tax and/or a federal and state and local
income tax deduction) plus interest on the amount of such repayment at the rate
provided in Section 1274(d) of the Code. In the event that the Excise Tax is
determined to exceed the amount taken into account hereunder at the time of the
termination of the Executive's employment (including by reason of any
payment the existence or amount of which cannot be determined at the time of the
Gross-Up Payment), the Corporation shall make an additional Gross-Up Payment in
respect of such excess (plus any interest payable with respect to such excess)
at the time that the amount of such excess is finally determined.
(F) The payments provided for in paragraphs
(B), (C), and (E) above shall be made not later than the fifth day
following the date of the Executive's termination, provided, however, that if
the amounts of such payments cannot be finally determined on or before such day,
the Corporation shall pay to the Executive on such day an estimate, as
determined in good faith by the Corporation, of the minimum amount of such
payments and shall pay the remainder of such payments (together with interest at
a rate equal to 120% of the rate provided in Section 1274(d) of the Code) as
soon as the amount thereof can be determined but in no event later than the
thirtieth day after the date of the Executive's termination. In the event that
the amount of the estimated payments exceeds the amount subsequently determined
to have been due, such excess shall constitute a loan by the Corporation to the
Executive payable on the fifth day after demand by the Corporation
(together with interest at a rate equal to 120% of the rate provided in Section
1274(d) of the Code). The payments provided for in paragraph (D) above shall
be made from time to time, in each instance not later than the fifth day
following a written request for payment by the Executive.
(G) For a 36-month period after the termina-
tion of the Executive, the Corporation shall provide the Executive with life,
disability, accident and health insurance benefits substantially similar to
those which he is receiving immediately prior to termination. Benefits otherwise
receivable by the Executive pursuant to this subparagraph (G) shall be reduced
to the extent comparable benefits are actually received by the Executive during
the 36-month period following his termination, and any such benefits actually
received by the Executive shall be reported to the Corporation.
(H) If upon the Executive's termination he
is not eligible because of age or lack of credited service to receive benefits
under the provisions of the Corporation's Supplemental Executive Retirement Plan
(the "SERP"), then upon his attaining at least age 55, the Corporation will pay
the Executive the same benefits that he would have been entitled to receive
under the SERP as if he had remained an employee of the Corporation until the
greater of age 55 or his actual age on the date of his termination plus the
Additional Age Credit defined below. If upon the Executive's termination he is
eligible to receive benefits under the provisions of the SERP, then the
Corporation will pay him the benefits that he would have been entitled to
receive under the provisions of the SERP as if he had accumulated the
Additional Age Credit defined below. Additional Age Credit shall mean 36
additional months of age. For the purpose of this paragraph in determining
"Final Average Pay" under the SERP, the greater of "Final Average Pay"
(as defined in the SERP) or the Executive's "Pay" (as defined in the SERP) for
the 12-month period prior to his termination of employment will be used.
(I) The Executive shall not be required to
mitigate the amount of any payment provided for in this Paragraph 3.c.(2) by
seeking other employment or otherwise, nor shall the amount of any payment or
benefit provided for in this Paragraph 3.c.(2) be reduced by any compensation
earned by the Executive as the result of employment by another employer, by
retirement benefits, by offset against any amount claimed to be owed by the
Executive to the Corporation, or otherwise except as specifically provided in
this Paragraph 3.c.(2).
(J) In addition to all other amounts payable
to the Executive under this Paragraph 3.c.(2), the Executive shall be entitled
to receive all benefits payable to him under the Black & Xxxxxx Retirement Plan,
Thrift Plan and any other plan or agreement relating to retirement benefits.
d. If termination of the Executive's employment occurs under
circumstances to which both this Agreement and a change of control agreement
between the Corporation and the Executive apply, the Executive will be entitled
to the benefits of the more favorable agreement, but not to both.
e. No payments made under the provisions of paragraph 3.c.(2)
of this Agreement shall be offset against payments to which the Executive may be
entitled under the SERP and vice versa.
4. Waivers.
The waiver by the Corporation of a breach by the Executive of
any provision of this Agreement shall not operate or be construed as a waiver of
any subsequent breach by him.
5. Binding Effect.
The rights and obligations of the Corporation under this
Agreement shall inure to the benefit of and shall be binding upon the successors
and assigns of the Corporation.
6. Entire Agreement.
Except as otherwise herein provided, this Agreement and
attachments hereto constitute the entire understanding of the Executive and the
Corporation with respect to the subject matter hereof and supersedes any and all
prior understandings, written or oral. This Agreement may not be changed or
canceled orally, but only by an instrument in writing signed by the parties.
This Agreement shall be governed by the laws of the State of Maryland and the
invalidity or unenforceability of any provisions hereof shall in no way affect
the validity or enforceability of any other provision.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written.
ATTEST: THE BLACK & XXXXXX CORPORATION
/S/ XXXXXXX X. XXXXX By /S/ XXXXXXXX X. XXXX
Xxxxxxxx X. Xxxx, Chairman,
Organization Committee
WITNESS:
/S/ XXXXXX X. XXXXX /S/ XXXXX X. XXXXXXXXX (SEAL)
Xxxxx X. Xxxxxxxxx
