EXHIBIT 10.1
CHANGE OF CONTROL SEVERANCE AGREEMENT
AGREEMENT by and between Xxxxxx Fiber Properties, Inc., a Delaware
corporation (the "Company"), and Xxxxx X. Xxxxx (the "Executive"), effective as
of the 8th day of April, 1997.
The Company wishes to assure that it will have the continued dedication of
the Executive, notwithstanding the possibility, threat or occurrence of a Change
of Control (as defined below) of the Company. The Board of Directors of the
Company (the "Board") believes it is imperative to diminish the inevitable
distraction of the Executive by virtue of the personal uncertainties and risks
created by a pending or threatened Change of Control, to encourage the
Executive's full attention and dedication to the Company upon a Change of
Control, and to provide the Executive with compensation arrangements upon a
Change of Control which provide the Executive with individual financial security
and which are competitive with those of other corporations and, in order to
accomplish these objectives, the Board has caused the Company to enter into this
Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. CERTAIN DEFINITIONS.
(a) "Accrued Obligations" shall have the meaning set forth in Section 5
hereof.
(b) "Annual Bonus Target" shall be the specific amount determined at the
beginning of the year under the Company's bonus program by the Compensation
Committee or other authorized person as the amount of bonus Executive would
receive for the year in which a Date of Termination occurs assuming 100%
achievement of agreed-upon performance targets.
(c) The "Change of Control Date" shall be the first date during the
"Agreement Period" (as defined in Section1(c)) in which a Change of Control
occurs. Provided, however, that if the Executive's employment is terminated by
the Company prior to the date on which a Change of Control occurs, and the
Executive can reasonably demonstrate that such termination by the Company was in
contemplation of a Change of Control, then for all purposes of this Agreement
the "Change of Control Date" shall mean the date immediately prior to the date
of such termination.
(d) The "Agreement Period" is the period commencing on the date hereof and
ending on the earlier to occur of (i) the second anniversary of such date or
(ii) the day of the Executive's retirement after attaining age 65
("Retirement").
(e) "Change of Control" shall mean:
(i) The acquisition by any person, entity or "group", within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934
(the "Exchange
Act"), other than the Company or any of its wholly-owned subsidiaries, or any
employee benefit plan of the Company and/or any of its wholly-owned
subsidiaries, of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 40% or more of either the then
outstanding shares of the Company's Common Stock or the combined voting power of
the Company's then outstanding voting securities in a single transaction or
series of related transactions; or
(ii) Individuals who, as the date hereof, constitute the Board (as of
the date hereof the "Continuing Directors") cease for any reason to constitute
at least a 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 in advance by a vote of at least two-thirds
of the Continuing Directors (other than a nomination of an individual whose
initial assumption of office is in connection with an actual or threatened
solicitation with respect to the election or removal of the directors of the
Company, as such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) shall be, for purposes of this Agreement, considered as
though such person were a Continuing Director; or
(iii) Approval by the stockholders of the Company of a reorganization,
merger, consolidation, liquidation or dissolution of the Company or of the sale
(in one transaction or a series of related transactions) of all or substantially
all of the assets of the Company (excluding a transaction in which the
stockholders of the Company immediately prior to such transaction retain
beneficial ownership, directly or indirectly, of 60% or more of the outstanding
equity of the resulting or successor entity from such transaction); or
(iv) Any other event that two-thirds of the Continuing Directors in
its sole discretion shall determine constitutes a Change of Control.
(f) "Cause" for termination of Executive's employment shall be deemed to
exist if the Board of Directors of the Company should determine that Executive
has committed of any of the following: (i) fraud; (ii) misappropriation of
corporate property or funds; (iii) embezzlement; (iv) malfeasance in office; (v)
misfeasance in office which is willful or grossly negligent; or (vi) nonfeasance
in office which is willful or grossly negligent.
(g) "Company" as used herein includes Xxxxxx Fiber Properties, Inc. and any
of its subsidiaries and divisions and, subject to Section 13(b) hereof, any
successor.
(h) "Good Reason" means (i) any purported termination by the Company of
Executive's employment for Cause which is finally determined by arbitration
under Section 14(h) of this Agreement not to be for Cause or (ii) continued
breach by the Company, after written notice and the inability to cure such
breach within thirty (30) days following receipt of such notice, of the
provisions of Section 3 or Section 13(b) of this Agreement.
(i) "Termination Multiplier" shall be three if the Date of Termination is
within the first eighteen months following a Change of Control, and if
thereafter it shall be a fraction the numerator of which shall be the number of
days remaining in the Protection Period after the Date of Termination and the
denominator of which shall be 365.
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2. PROTECTION PERIOD. The Company hereby agrees to provide to Executive the
benefits and protections described herein, in consideration of the services
provided to the Company by Executive after the date of this Agreement and of the
agreements of Executive herein, for the period commencing on the Change of
Control Date and ending on the earlier to occur of (a) the third anniversary of
the Change of Control Date or (b) the day of the Executive's Retirement.
3. TERMS OF EMPLOYMENT.
(a) Position and Duties. (i) During the Protection Period, (A) Executive's
position (including status, offices, titles and reporting requirements),
authority, duties and responsibilities shall be at least commensurate in all
material respects with the most significant of those held, exercised and
assigned at any time during the 90-day period immediately preceding the Change
of Control Date and (B) except when traveling in the normal course of business,
Executive's services shall be performed at the location where Executive was
employed immediately preceding the Change of Control Date or any office or
location less than twenty-five (25) miles from such location; provided, however,
that Executive shall be deemed conclusively to have agreed to the terms of any
alternative job assignment unless, within thirty (30) days after being informed
by the Company of such alternative job assignment, Executive informs the Company
in writing that Executive deems such alternative job assignment to be
inconsistent with the requirements of clause (A) and/or clause (B) above and the
reasons therefor and the Company fails to rectify any such inconsistencies
within thirty (30) days of receiving such Notice. No change in status, office,
title or reporting requirements shall be deemed to have occurred by reason of a
change in the personnel holding any position in the Company or by reason of a
change which is inherent in the occurrence of the transaction constituting a
Change of Control.
(ii) During the Protection Period, and excluding any periods of
vacation and sick leave to which Executive is entitled, Executive agrees to
devote his full time and attention spent on business matters to the business and
affairs of the Company and, to the extent necessary to discharge the
responsibilities assigned to Executive hereunder, to use Executive's reasonable
best efforts to perform faithfully and efficiently such responsibilities. During
the Protection Period it shall not be a violation of this Agreement for
Executive to (A) serve on corporate, civic or charitable boards or committees,
(B) deliver lectures, fulfill speaking engagements or teach at educational
institutions, (C) manage personal investments and (D) perform such other
activities as the Board of Directors may approve, so long as such activities do
not interfere with the performance of Executive's responsibilities as an
employee of the Company in accordance with this Agreement. It is expressly
understood and agreed that to the extent that any such activities have been
conducted by Executive prior to the Change of Control Date, the continued
conduct of such activities (or the conduct of activities similar in nature and
scope thereto) subsequent to the Change of Control Date shall not thereafter be
deemed to interfere with the performance of Executive's responsibilities to the
Company.
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(b) Compensation.
(i) Base Salary. During the Protection Period, Executive shall receive
a base salary ("Base Salary") at a monthly rate at least equal to the highest
monthly base salary paid to Executive by the Company during the 90-day period
immediately preceding the Change of Control Date. During the Protection Period,
Executive's Base Salary shall be reviewed at least annually and may be increased
at any time and from time to time as the Company shall deem to be consistent
with increases in base salary awarded in the ordinary course of business to
other key executives of the Company. During the Protection Period, Executive's
Base Salary shall not be reduced after any such increase, except as part of, and
in an amount not greater proportionately than, any across-the-board cut in the
pay of other key executives of the Company.
(ii) Annual Bonus and Incentive Plans and Programs. In addition to
Base Salary, during the Protection Period, Executive shall be entitled to
receive an annual cash bonus and to participate in other incentive plans and
programs, which bonus and other incentive plans and programs shall, in the
aggregate, provide Executive with benefits and reward opportunities at least as
favorable as the benefits and reward opportunities provided by the Company for
Executive under such bonus and other incentive plans and programs in effect at
any time during the 90-day period immediately preceding the Change of Control
Date.
(iii) Savings, Retirement and Welfare Plans and Programs; Expenses and
Fringe Benefits. During the Protection Period, Executive and/or Executive's
family, as the case may be, shall be eligible for participation in and shall
receive all benefits under savings, retirement, welfare benefit (including
without limitation, medical, prescription, dental, disability, salary
continuance, executive life, group life, accidental death and travel accident
insurance) expense reimbursement and fringe benefit plans, programs and policies
which, in the aggregate, provide to Executive and/or Executive's family, as the
case may be, at least as much benefit as such plans, programs and policies
provided to Executive and/or Executive's family at any time during the 90-day
period immediately preceding the Change of Control Date. This shall include,
without limitation, continued use of the Company's aircraft, so long as the
Company continues to own a corporate aircraft, in accordance with practices and
policies of the Company which are at least comparable to those in effect during
the 90-day period immediately preceding the Change of Control Date.
(iv) Office and Support Staff. During the Protection Period, Executive
shall be entitled to an office and to secretarial and other assistance at least
comparable to those provided to Executive at any time during the 90-day period
immediately preceding the Change of Control Date.
(v) Vacation. During the Protection Period, Executive shall be
entitled to paid vacation in accordance with the policies which are at least
comparable to those applicable to Executive at any time during the 90-day period
immediately preceding the Change of Control Date.
(vi) Relocation. If Executive agrees to be based more than twenty-five
(25) miles from Executive's current location, Executive shall be entitled to
relocation benefits
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which are at least comparable to those enjoyed by Executive at any time during
the 90-day period immediately preceding the Change of Control Date.
4. TERMINATION.
(a) Termination. Executive's employment may be terminated at any time
during the Protection Period for any of the following reasons:
(i) Death. This Agreement shall terminate automatically upon
Executive's death.
(ii) Disability. The Company may terminate this Agreement, after
having established Executive's Disability (pursuant to the definition of
"Disability" set forth below), by giving to Executive written notice of its
intention to terminate Executive's employment. In such a case, Executive's
employment with the Company shall terminate effective on the 30th day after
receipt of such notice (the "Disability Change of Control Date"), if, within the
30 days after such receipt, Executive shall not have returned to full-time
performance of Executive's duties. For purposes of this Agreement, "Disability"
means a condition which has lasted for at least 90 consecutive days in any 365
day period and is determined by a physician selected by the Company or its
insurers and acceptable to Executive or Executive's legal representative (such
agreement as to acceptability not to be withheld unreasonably) to prevent
Executive from discharging his responsibilities as an employee of the Company in
accordance with this Agreement.
(iii) Cause. The Company may terminate Executive's employment for
Cause.
(iv) Good Reason. Executive's employment may be terminated by
Executive for Good Reason.
(b) Notice of Termination. Any termination by the Company for Cause or by
Executive for Good Reason shall be communicated by Notice of Termination to the
other party hereto given in accordance with Section 14(b) of this Agreement. 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, (ii) sets forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of Executive's employment under the provision
so indicated and (iii) if the termination date is other than the date of receipt
of such notice, specifies the termination date.
(c) Date of Termination. If the Executive's employment is terminated by the
Company other than for Cause, Death or Disability or by Executive for Good
Reason, the Date of Termination shall be two (2) weeks after delivery of the
Notice of Termination. If Executive's employment is terminated by reason of
death or Disability, the Date of Termination shall be Executive's date of death
or Disability Change of Control Date, as the case may be. If Executive's
employment is terminated by the Company for Cause or by Executive for other than
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Good Reason, the Date of Termination means the date of receipt of the Notice of
Termination or any later date that may be specified therein.
5. OBLIGATIONS OF THE COMPANY UPON TERMINATION.
(a) Death. If, during the Protection Period, Executive's employment is
terminated by reason of Executive's death, this Agreement shall terminate
without further obligations to Executive's legal representatives under this
Agreement, other than those obligations accrued or earned by Executive hereunder
as of the Date of Termination, including, for this purpose (i) Executive's full
Base Salary, plus a proportionate part of Executive's Annual Bonus target,
through the Date of Termination as in effect on the Date of Termination, (ii)
any accrued vacation pay not yet paid by the Company and (iii) any other amounts
or benefits owing to Executive under the then applicable benefit plans or
policies of the Company (such amounts and benefits specified in clauses (i),
(ii) and (iii) are hereinafter referred to as "Accrued Obligations"). The
Company shall pay the amounts specified in clauses (i) and (ii) promptly after
the Date of Termination (and in no case later than 30 days after the Date of
Termination) and shall pay the amounts and benefits in clause (iii) promptly
when due.
(b) Disability. If, during the Protection Period, Executive's employment is
terminated by reason of Executive's Disability, this Agreement shall terminate
without further obligations to Executive, other than the Accrued Obligations, on
Executive's Disability Change of Control Date. Anything in this Agreement to the
contrary notwithstanding, Executive shall be entitled after the Disability
Change of Control Date to receive disability and other benefits at least equal
to those provided by the Company to disabled Executives and/or their families in
accordance with such plans, programs and policies relating to Disability, if
any, applicable to Executive at any time during the 90-day period immediately
preceding the Change of Control Date.
(c) Termination by the Company for Cause; Termination by Executive for
other than Good Reason. If, during the Protection Period, Executive's employment
shall be terminated by the Company for Cause or by Executive other than for Good
Reason, this Agreement shall terminate without further obligations to Executive,
other than for the payment of Base Salary through the Date of Termination.
(d) Termination by Executive for Good Reason; Termination by the Company
for Other Than for Cause, Death or Disability. If, during the Protection Period,
the Company shall terminate Executive's employment other than for Cause, death
or Disability, or the employment of Executive shall be terminated by Executive
for Good Reason, Executive shall be entitled to the following payments and
benefits determined in full compliance with the obligations of the Company
pursuant to this Agreement; provided that in the case of the payments and
benefits specified in subparagraphs (i)B, (i)C, (ii) and (iii) Executive shall
have executed and delivered to the Company an effective release of claims in the
form attached hereto as Exhibit A with such changes thereto which, in the
opinion of counsel for the Company, are required to provide the Company with
protection from any future claims by Executive arising out of his employment or
the cessation thereof:
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(i) Tthe Company shall pay to Executive the amounts payable pursuant
to subparagraphs A and D on the first normal salary payment date occurring after
the Date of Termination and shall pay to Executive the amounts payable pursuant
to subparagraphs B and C on the fifth day following the expiration of any
revocation period (without revocation occurring) of the release referred to
above:
A. to the extent not theretofore paid, Executive's full Base
Salary, plus a proportionate part of Executive's Annual Bonus Target,
through the Date of Termination, as in effect on the Date of Termination;
and
B. the Annual Bonus Target applicable to Executive immediately
preceding the Date of Termination multiplied by the Termination Multiplier;
and
C. Executive's annual Base Salary, as in effect on the Date of
Termination multiplied by the Termination Multiplier; and
D. all other amounts accrued or earned by Executive through the
Date of Termination and amounts otherwise owing under the then existing
plans and policies at the Company, including all amounts of previously
deferred compensation; and
(ii) all of Executive's stock options and other stock awards will be
fully vested.
(iii) for the period from the Date of Termination through the third
anniversary of the Date of Termination if such occurred within the first 18
months following the Change of Control or, if the Date of Termination is
thereafter, through the end of the Protection Period, the Company shall continue
group health benefits as to which Executive or Executive's qualified
beneficiaries would be entitled to continuation coverage under the provisions of
COBRA to Executive and/or Executive's family at least equal to those which would
have been provided to them in accordance with the health and dental plans,
programs and policies provided by the Company to employees and/or their families
if Executive's employment had not been terminated, including health insurance
and dental insurance, if and as in effect at any time during the 90-day period
immediately preceding the Change of Control Date or, if more favorable to
Executive, as in effect at any time thereafter with respect to other key
executives and their families, or after the Company may no longer cover
Executive and/or Executive's family under its group health plan, through a
comparable health plan generally available to individual subscribers; provided,
however, that such benefit continuation shall cease when and to the extent
Executive becomes eligible for coverage through a new employer.
6. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall guarantee,
entitle, prevent or limit Executive's continuing or future participation in any
benefit, bonus, incentive or other plan or program provided by the Company or
any of its affiliated companies and for which Executive may qualify, nor shall
anything herein limit or otherwise affect such rights that Executive may have
under any stock option or other agreements with the Company.
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Amounts which are vested benefits or which Executive is otherwise entitled to
receive under any plan or program of the Company at or subsequent to the Date of
Termination shall be payable in accordance with such plan or program.
7. COOPERATION. Notwithstanding anything to the contrary contained herein,
payment of salary continuation and other severance benefits pursuant to Section
5 hereof is conditional upon Executive cooperating fully with the Company in
connection with any Change of Control or proposed Change of Control and all
matters relating to Executive's employment with the Company and assisting the
Company as requested in transitioning Executive's responsibilities to
Executive's replacement as well as upon Executive refraining from doing or
saying anything derogatory about the Company or its businesses or personnel.
8. CONFIDENTIAL INFORMATION. Executive shall hold in a fiduciary capacity
for the benefit of the Company all secret or confidential information, knowledge
or data relating to the Company and its businesses, which shall have been
obtained by Executive during Executive's employment by the Company and which
shall not be public knowledge (other than by acts by Executive in violation of
this Agreement). Whether before or after termination of the Executive's
employment with the Company, Executive shall not, without the prior written
consent of the Company, communicate or divulge any such secret or confidential
information, knowledge or data to anyone other than the Company and those
designated by it. In no event shall an asserted violation of the provisions of
this Section 8 constitute a basis for deferring or withholding any amounts
otherwise payable to Executive under this Agreement.
9. COVENANT NOT TO COMPETE.
(a) Non-Competition. Executive agrees that, from the date hereof to the
sooner to occur of (i) the end of the eighteenth month following the Date of
Termination or (ii) the end of the Protection Period (including any portion
thereof remaining after termination of Executive's employment or this
Agreement), Executive will not directly or indirectly be employed by, own,
manage, operate, join, control or participate in the ownership, management,
operation or control of, or act as a consultant to, engage in, or be connected
in any manner with, any firm which is or may reasonably be found to be in
competition with the competitive access business of the Company and its
subsidiaries as such business may exist at any time from the date of this
Agreement through the Date of Termination, except that Executive may own not
more than five percent (5%) of any class of publicly traded securities of a
competitor.
(b) Non-Solicitation. Executive agrees that, during the Agreement Period
and the Protection Period (including any portion thereof remaining after
termination of Executive's employment or this Agreement), Executive will not:
(i) Solicit, raid, entice or induce any present or prospective
employee of the Company to be employed by any competitor of the Company;
(ii) Solicit business for any competitor from, or transact business
for any competitor with, any person, firm or corporation which was, at any time
during Executive's employment hereunder, a customer of the Company; or
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(iii) Assist a competitor in taking such action.
(c) Remedies. Executive agrees that any breach or threatened breach or
alleged breach or alleged threatened breach by Executive of any provision of
this Section 9 will entitle the Company, in addition to any other legal remedies
available to it, to apply to any court of competent jurisdiction to enjoin the
breach or threatened breach or alleged breach or alleged threatened breach, it
being acknowledged and agreed that any such material breach will cause
irreparable injury to the Company and that any damages will not provide adequate
remedies to the Company. The parties understand and intend that each restriction
agreed to by Executive will be construed as separable and divisible from every
other restriction, and that the unenforceability, in whole or in part, of any
restriction will not affect the enforceability of the remaining restrictions and
that one or more or all of such restrictions may be enforced in whole or in part
as the circumstances warrant and each restriction may be construed or altered by
a judicial authority in order to make such restriction enforceable. No waiver of
any one breach of the restrictions contained herein will be deemed a waiver of
any future breach. In no event shall an asserted violation of the provisions of
this Section 9 constitute a basis for deferring or withholding any amounts
otherwise payable to Executive under this Agreement.
(d) If Executive's employment is terminated in accordance with paragraph
5(c), Executive shall have no obligation under paragraphs 9(a) and 9(b).
10. EXCLUSIVE REMEDY. Executive's rights to salary continuation and other
severance benefits pursuant to Section 5 hereof shall be Executive's sole and
exclusive remedy for any termination of Executive's employment by the Company
other than for Death, Disability or Cause or by Executive for Good Reason. The
payments, severance benefits and severance protections provided to Executive
pursuant to this Agreement are provided in lieu of any severance payments,
severance benefits and severance protections provided in any other plan or
policy of the Company, except as may be expressly provided in writing under the
terms of any plan or policy of the Company, or in a written agreement between
the Company and Executive entered into after the date of this Agreement. In no
event shall Executive be obligated to seek other employment or take any other
action by way of mitigation of the amounts payable to Executive under any of the
provisions of this Agreement. The Company agrees to pay, to the full extent
permitted by law, all legal fees and expenses which Executive may reasonably
incur as a result of any contest by the Company or others of the validity or
enforceability of, or liability under, any provision of this Agreement which is
ultimately decided in favor of Executive.
11. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.
(a) Gross-up Payment. Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment or
distribution by the Company to or for the benefit of Executive, whether paid or
payable or distributed or distributable pursuant to the terms of this Agreement
or otherwise would be subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended, or any interest or penalties with
respect to such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "Excise Tax"), then
Executive shall be
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entitled to receive an additional payment (a "Gross-Up Payment") in an amount
such that after payment by Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including any Excise Tax, imposed
upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon such payment or distribution.
(b) Determination of Gross-Up. Subject to the provisions of paragraph (c)
of this Section 11, all determinations required to be made under this Section
11, including whether a Gross-Up Payment is required and the amount of such
Gross-Up Payment, shall be made by an accounting firm satisfactory to the
Company and Executive ("Accounting Firm"). The Accounting Firm shall make such
determination and provide detailed supporting calculations to both the Company
and Executive within fifteen (15) business days after it is requested to do so.
The initial Gross-Up Payment, if any, as determined pursuant to this paragraph
(b) of this Section 11, shall be paid to Executive within five (5) business days
after the Company's receipt of the Accounting Firm's determination. If the
Accounting Firm determines that no Excise Tax is payable by the Executive, it
shall furnish the Executive with a written opinion that he has legal authority
satisfying the criteria set forth in Treasury Regulation Section 1.6661-3 or
similar successor provisions not to report any Excise Tax on his federal income
tax return. Any determination by the Accounting Firm shall be binding upon the
Company and Executive.
(c) Dispute of Tax Claim. Executive shall notify the Company in writing of
any proposed assessment or proposed adjustment by the Internal Revenue Service
("IRS") pursuant to an audit of Executive's federal income tax return or
otherwise, that, if successful, would require the payment by the Company of a
Gross-Up Payment (hereinafter referred to as a "Claim"). Such notice shall be
given as soon as practicable but no later than ten (10) business days after the
earlier of (i) the receipt by Executive of a written notice of proposed
adjustment from the IRS or (ii) the receipt by Executive of a statutory notice
of deficiency. Such notice by Executive to the Company shall include (i) notice
of the amount of the proposed assessment or proposed adjustment which relates to
the Claim and the taxable year or years in which the Claim arises, (ii) the
general nature of the Claim and (iii) all relevant written reports of the
examining agent relating to the Claim. Within thirty (30) days of (i) the
receipt by Executive of a final assessment or (ii) the execution by Executive
and the IRS of a closing agreement, with respect to any tax year of Executive in
which a Claim has been raised, pursuant to which Executive is required to pay
any amount with respect to the Claim, Executive shall provide the Company and
the Accounting Firm with a copy of such assessment or agreement, together with
supporting documents sufficient to determine the amount of such tax liability
that was attributable to the Claim. The Accounting Firm shall determine the
amount Gross-Up Payment under this Agreement due to such tax liability and the
Company will make such Gross-Up Payment to Executive within five (5) business
days after its receipt of such determination.
12. STATEMENT OF INTENTION. It is the intention of the parties hereto that,
prior to the Change of Control Date, this Agreement shall not create any rights
or obligations in Executive or the Company, or require any payments by the
Company to Executive, except as expressly provided herein.
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13. SUCCESSORS.
(a) Executive. This Agreement is personal to Executive and without the
prior written consent of the Company shall not be assignable by Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Executive's legal
representatives.
(b) The Company. This Agreement shall inure to the benefit of and be
binding upon the Company and its successors. The Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place. As used in this Agreement, "Company"
shall include any successor to its business and/or assets as aforesaid which
assumes and agrees to perform this Agreement by operation of law, or otherwise.
14. MISCELLANEOUS.
(a) Interpretation. This Agreement shall be governed by and construed in
accordance with the laws of the State of Missouri, without reference to
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect.
(b) Notices. All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed to
Executive at Executive's address on the payroll records of the Company and to
the Company as follows:
Xxxxxx Fiber Properties, Inc.
000 Xxxxx Xxxx Xxxx Xxxxx
Xxxxx 000
Xxxx & Xxxxxxx, Xxxxxxxx 00000
Attention: Chairman
with a copy to:
Chairman of the Compensation Committee
Xxxxxx Fiber Properties, Inc.
000 Xxxxx Xxxx Xxxx Xxxxx
Xxxxx 000
Xxxx & Xxxxxxx, Xxxxxxxx 00000
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Any party may change the address to which notices are to be addressed by giving
the other party notice in the manner herein set forth. Notice and communications
shall be effective when actually received by the addressee.
(c) Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(d) Withholding Taxes. The Company may withhold from any amounts payable
under this Agreement such Federal, state or local taxes as shall be required to
be withheld pursuant to any applicable law or regulation.
(e) No Waiver. The failure of Executive or the Company to insist upon
strict compliance with any provision hereof shall not be deemed to be a waiver
of such provision or any other provision thereof.
(f) Entire Agreement; Amendments. This Agreement embodies the entire
agreement and understanding of the parties hereto with respect to the subject
matter hereof, and supercedes all prior and contemporaneous agreements and
understandings relative to such subject matter. This Agreement may be amended or
superceded only by a written instrument executed by both Executive and the
Company. Any such written instrument must be approved by either the Company's
Board of Directors (the "Board") or the Compensation Committee of the Board (or
in the event of a Change of Control, such instrument may also be approved by the
Board of Directors or Compensation Committee of either (i) any successor to the
Company or (ii) any parent of the Company or its successor) prior to the time
that it is executed by the Company.
(g) At Will Employment. Executive and the Company acknowledge that the
employment of Executive by the Company is "at will" and may be terminated by
either Executive or the Company at any time.
(h) Dispute Resolution Procedures. If any question shall arise in regard to
the interpretation of any provision of this Agreement or as to the rights and
obligations of either of the parties hereunder, Executive and a designated
representative of the Company shall meet with each other to negotiate and
attempt to resolve such question in good faith. Executive and such
representative may, if they so desire, consult outside experts for assistance in
arriving at a resolution. In the event that a resolution is not achieved within
fifteen (15) days after their first meeting, then either party may submit the
question for final resolution by binding arbitration in accordance with the
rules and procedures of the American Arbitration Association applicable to
commercial transactions, and judgment upon any award thereon may be entered in
any court having jurisdiction thereof. The arbitration shall be held in St.
Louis, Missouri. In the event of any arbitration, Executive shall select one
arbitrator, the Company shall select one arbitrator and the two arbitrators so
selected shall select a third arbitrator, any two of which arbitrators together
shall make the necessary determinations. All out-of-pocket costs and expenses of
the parties in connection with such arbitration, including, without limitation,
the fees of the arbitrators and any administration fees and reasonable
attorney's fees and expenses, shall be borne by the parties in
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such proportions as the arbitrators shall decide that such expenses should, in
equity, be apportioned. This Section 14(h) shall not be applicable to matters
arising out of Executive's obligations pursuant to Section 9 hereof.
IN WITNESS WHEREOF, Executive and the Company have executed this Agreement
as of the day and year first above written.
Executive:
Xxxxx X. Xxxxx
-------------------------------------------
Xxxxx X. Xxxxx
Company:
Xxxxxx Fiber Properties, Inc.
By: X. Xxxxxxx Xxxxxxxxxx, Jr.
--------------------------------------
X. Xxxxxxx Xxxxxxxxxx, Jr.
Chairman of the Compensation Committee
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