Exhibit 10.1
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") between Xxxxxxx Enterprises, Inc.,
a Louisiana corporation (the "Company"), and Xxxxxx X. Kitchen (the "Employee")
was originally effective as of December 2, 2004 (the "Agreement Date") and is
amended and restated effective as of November 8, 2006 (the "Amendment Date").
WITNESSETH:
WHEREAS, Employee currently is employed by the Company;
WHEREAS, the Company desires to retain the services of Employee pursuant to
the terms of this Agreement, subject to Employee's acceptance of the conditions
stated herein;
WHEREAS, Employee wishes to be employed by the Company in consideration of
the compensation and benefits set forth herein and pursuant to the terms hereof;
WHEREAS, during the course of his employment with the Company, Employee has
or will have received extensive and unique knowledge, training and education in,
and access to resources involving, the Death Care Business (as defined below) at
a substantial cost to the Company, which Employee acknowledges has enhanced or
substantially will enhance Employee's skills and knowledge in such business;
WHEREAS, during the course of his employment with the Company, Employee has
or will have received access to and information about the Company's customers,
suppliers, joint venture partners and others having important commercial
relationships with the Company, the preservation of which the Employee
acknowledges are vital to the continuing commercial success of the Company;
WHEREAS, during the course of his employment with the Company, Employee has
had and will continue to have access to valuable oral and written information,
knowledge and data relating to the business and operations of the Company and
its subsidiaries that is non-public, confidential or proprietary in nature and
is particularly useful in the Death Care Business; and
WHEREAS, in view of the training provided by the Company to Employee, its
cost to the Company, the importance of maintaining continuing favorable
relationships with customers, suppliers, partners and others, and the need for
the Company to be protected against disclosures by Employee of the Company's and
its subsidiaries' trade secrets and other non-public, confidential or
proprietary information, the Company and Employee desire, among other things, to
prohibit Employee from disclosing or utilizing, outside the scope and term of
his employment with the Company, any non-public, confidential or proprietary
information, knowledge and data relating to the business and operations of the
Company or its subsidiaries received by Employee during the course of his
employment, and to restrict the ability of Employee to compete with the Company
or its subsidiaries for a limited period of time;
NOW, THEREFORE, for and in consideration of the continued employment of
Employee by the Company and the payment of salary, benefits and other
compensation to Employee by the Company, the parties hereto agree as follows:
ARTICLE I
EMPLOYMENT CAPACITY AND TERM
1.1 CAPACITY AND DUTIES OF EMPLOYEE. The Employee is employed by the
Company to render services on behalf of the Company in the capacity set forth in
Appendix A hereto, as such Appendix may be amended or supplemented from time to
time (as so amended or supplemented, "Appendix A"). The Employee shall perform
such duties, consistent with the Employee's job title, as are assigned to the
title or titles held by the Employee as set forth from time to time in the
Company's Bylaws and such other duties as may be prescribed from time to time by
the Company's Board of Directors (the "Board") or the executive of the Company
to whom the Employee directly reports.
1.2 EMPLOYMENT TERM. The term of this Agreement (the "Employment Term")
shall commence on the Agreement Date and shall continue through October 31,
2007, subject to any earlier termination of Employee's status as an employee
pursuant to this Agreement.
1.3 DEVOTION TO RESPONSIBILITIES. During the Employment Term, the Employee
shall devote all of his business time to the business of the Company, shall use
his best efforts to perform faithfully and efficiently his duties under this
Agreement, and shall not engage in or be employed by any other business;
provided, however, that nothing herein shall prohibit the Employee from (a)
serving as a member of the board of directors, board of trustees or the like of
any for-profit or non-profit entity that does not compete with the Company, or
performing services of any type for any civic or community entity, whether or
not the Employee receives compensation therefor, (b) investing his assets in
such form or manner as shall require no more than nominal services on the part
of the Employee in the operation of the business of the entity in which such
investment is made, or (c) serving in various capacities with, and attending
meetings of, industry or trade groups and associations, as long as the
Employee's activities permitted by clauses (a), (b) and (c) above do not
materially and unreasonably interfere with the ability of the Employee to
perform the services and discharge the responsibilities required of him under
this Agreement. Notwithstanding clause (b) above, during the Employment Term,
the Employee may not beneficially own more than 2% of the equity interests of a
business organization required to file periodic reports with the Securities and
Exchange Commission under the Securities Exchange Act of 1934 (the "Exchange
Act") and may not beneficially own more than 2% of the equity interests of a
business organization that competes with the Company. For purposes of this
paragraph, "beneficially own" has the meaning ascribed to that term in Rule
13d-3 under the Securities Exchange Act of 1934, as amended from time to time
(the "Exchange Act").
ARTICLE II
COMPENSATION AND BENEFITS
During the Employment Term, the Company shall provide the Employee with the
compensation and benefits described below:
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2.1 SALARY AND BONUS. (a) The Company shall pay the Employee a salary
("Base Salary") at an annual rate per fiscal year of the Company ("Fiscal Year")
as set forth in Appendix A, which shall be payable to the Employee at such
intervals as other salaried employees of the Company are paid.
(b) The Employee shall be eligible to receive an annual incentive
bonus (the "Bonus"), up to the maximum amount set forth in Appendix A. The
Bonus will be awarded based upon factors to be established or approved
annually by the Compensation Committee in its discretion and set forth in
Appendix A or a supplement thereto. Any Bonus for the fiscal year ended
October 31, 2005 shall be paid in calendar year 2006. Any Bonus awarded for
any subsequent fiscal year shall be paid no later than March 15 of the
following calendar year. The Bonus may be paid in cash or the Class A
common stock of the Company (the "Common Stock") in the discretion of the
Compensation Committee of the Board of Directors of the Company.
(c) Any change in the Employee's title, Base Salary or Bonus
eligibility during the Employment Term shall be set forth in one or more
supplements to Appendix A to this Agreement, each of which shall be signed
by the Employee and a member of the Compensation Committee of the Board of
Directors of the Company.
2.2 BENEFITS. The Employee shall be eligible to participate in all benefit
programs provided to other employees of the Company, including without
limitation a fully-paid insurance benefit package similar to that provided other
employees of the Company.
2.3 EXPENSES. The Employee shall be reimbursed for reasonable out-of-pocket
expenses incurred from time to time on behalf of the Company or any subsidiary
in the performance of his duties under this Agreement, upon the presentation of
such supporting invoices, documents and forms as the Company reasonably
requests.
2.4 SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT. In lieu of participating
in the Company's Supplemental Executive Retirement Plan (the "SERP"), the
executive shall be entitled to earn a supplemental retirement benefit on the
terms and subject to the conditions set forth in the Amended and Restated
Supplemental Executive Retirement Agreement included as Appendix C hereto (the
"SERP Agreement"). At such time as the Company has amended and restated the SERP
to incorporate all benefits of the Employee described in Appendix C, the SERP
Agreement shall automatically terminate and the Employee shall simultaneously
become a participant in the SERP.
ARTICLE III
TERMINATION OF EMPLOYMENT
3.1 DEATH. The Employee's status as an employee shall terminate immediately
and automatically upon the Employee's death during the Employment Term.
3.2 DISABILITY. The Employee's status as an employee may be terminated for
"Disability" as follows:
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(a) The Employee's status as an employee shall terminate if the
Employee has a disability that would entitle him to receive benefits under
the Company's long-term disability insurance policy in effect at the time
either because he is Totally Disabled or Partially Disabled, as such terms
are defined in such policy. Any such termination shall become effective on
the first day on which the Employee is eligible to receive payments under
such policy (or on the first day that he would be so eligible, if he had
applied timely for such payments).
(b) If the Company has no long-term disability plan in effect, if (i)
the Employee is rendered incapable because of physical or mental illness of
satisfactorily discharging his duties and responsibilities under this
Agreement for a period of 90 consecutive days and (ii) a duly qualified
physician chosen by the Company and reasonably acceptable to the Employee
or his legal representatives so certifies in writing, the Board shall have
the power to determine that the Employee has become disabled. If the Board
makes such a determination, the Company shall have the continuing right and
option, during the period that such disability continues, and by notice
given in the manner provided in this Agreement, to terminate the status of
Employee as an employee. Any such termination shall become effective 30
days after such notice of termination is given, unless within such 30-day
period, the Employee becomes capable of rendering services of the character
contemplated hereby (and a physician chosen by the Company and reasonably
acceptable to the Employee or his legal representatives so certifies in
writing) and the Employee in fact resumes such services.
(c) The "Disability Effective Date" shall mean the date on which
termination of employment becomes effective due to Disability.
3.3 CAUSE. The Company may terminate the Employee's status as an employee
for Cause. As used herein, "Cause" shall mean the Employee's: (a) breach of this
Agreement; (b) intentional failure to perform his prescribed duties; (c)
unauthorized acts or omissions that could reasonably be expected to cause
material financial harm to the Company or materially disrupt Company operations;
(d) commission of a felony; (e) commission of an act of dishonesty (even if not
a crime) resulting in the enrichment of the Employee at the expense of the
Company; (f) knowing falsification or knowing attempted falsification of
financial records of the Company in violation of SEC Rule 13b2-1; or (g) willful
failure to follow established Company policies or procedures; provided, however,
that no such termination may take place in the case of (a) through (c) or (g)
above unless the Company has provided written notice to the Employee of such
conduct and the Employee has failed to remedy such conduct within 10 days
following receipt of such notice.
3.4 GOOD REASON. The Employee may terminate his status as an employee for
Good Reason. As used herein, the term "Good Reason" shall mean:
(a) The occurrence of any of the following during the Employment Term:
(i) the assignment to the Employee of any duties or
responsibilities that are inconsistent with the Employee's status,
title and position as set forth in Appendix A;
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(ii) any removal of the Employee from, or any failure to
reappoint or reelect the Employee to, the position set forth in
Appendix A, except in connection with a termination of Employee's
status as an employee as permitted by this Agreement;
(iii) the Company's requiring the Employee to be based anywhere
other than in the metropolitan area set forth in Appendix A, except
for required travel in the ordinary course of the Company's business;
(b) any breach of this Agreement by the Company that continues for a
period of 10 days after written notice thereof is given by the Employee to
the Company;
(c) the failure by the Company to obtain the assumption of its
obligations under this Agreement by any successor or assign as contemplated
in this Agreement; or
(d) any purported termination by the Company of the Employee's status
as an employee for Cause that is not effected pursuant to a Notice of
Termination satisfying the requirements of this Agreement.
3.5 VOLUNTARY TERMINATION BY THE COMPANY. The Company may terminate the
Employee's status as employee for other than death, Disability or Cause.
3.6 VOLUNTARY TERMINATION BY THE EMPLOYEE. The Employee may voluntarily
terminate the Employee's status as employee for other than Good Reason.
3.7 NOTICE OF TERMINATION. Any termination by the Company or by the
Employee, shall be communicated by Notice of Termination to the other party
hereto given in accordance with Article VII Section 7.2 of this Agreement. For
purposes of this Agreement, a "Notice of Termination" means a written notice
that (a) indicates the specific termination provision in this Agreement relied
upon (b) to the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Employee's
employment under the provisions so indicated and (c) if the Date of Termination
(as defined below) is other than the date of receipt of such notice, specifies
the termination date (which date shall be not more than 30 days after the giving
of such notice). The failure by the Employee or the Company to set forth in the
Notice of Termination any fact or circumstance that contributes to a showing of
Good Reason, Disability or Cause shall not negate the effect of the notice nor
waive any right of the Employee or the Company, respectively, hereunder or
preclude the Employee or the Company, respectively, from asserting such fact or
circumstance in enforcing the Employee's or the Company's rights hereunder.
3.8 DATE OF TERMINATION. "Date of Termination" means (a) if Employee's
employment is terminated by reason of his death or Disability, the Date of
Termination shall be the date of death of Employee or the Disability Effective
Date, as the case may be, (b) if Employee's employment is terminated by the
Company for Cause, or by the Employee for Good Reason, the date of delivery of
the Notice of Termination or any later date specified therein (which date shall
not be more than 30 days after the giving of such notice) as the case may be,
(c) if the Employee's employment is terminated by the Company for reasons other
than death, Disability or Cause, the Date of Termination shall be the date on
which the Company notifies the
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Employee of such termination or any later date specified therein, and (d) if the
Employee's employment is terminated voluntarily by the Employee for reasons
other than Good Reason, the Date of Termination shall be the date on which the
Employee notifies the Company of such termination or any later date specified
therein (which date shall not be later than 30 days after the giving of such
notice) as the case may be.
ARTICLE IV
OBLIGATIONS UPON TERMINATION
4.1 DEATH. If the Employee's status as an employee is terminated by reason
of the Employee's death, this Agreement shall terminate without further
obligation to the Employee's legal representatives under this Agreement, other
than the obligation to pay accrued salary through the Date of Termination and to
make any payments due pursuant to employee benefit plans maintained by the
Company or its subsidiaries.
4.2 DISABILITY. If Employee's status as an employee is terminated by reason
of Employee's Disability, this Agreement shall terminate without further
obligation to the Employee, other than the obligation to pay accrued salary
through the Date of Termination and to make any payments due pursuant to
employee benefit plans maintained by the Company or its subsidiaries.
4.3 TERMINATION BY THE COMPANY FOR REASONS OTHER THAN DEATH, DISABILITY OR
CAUSE; TERMINATION BY THE EMPLOYEE FOR GOOD REASON. If the Company terminates
the Employee's status as an employee for reasons other than death, Disability or
Cause, or the Employee terminates his employment for Good Reason, then the
Company shall pay to the Employee an amount equal to a single year's Base Salary
in effect at the Date of Termination, payable over a two-year period as follows:
beginning on the first regular payroll date that is at least six months after
the Date of Termination, the Employee shall be paid one-fourth of a single
year's Base Salary, and the remaining three-fourths shall be paid in equal
installments on the Company's regular bi-weekly payroll dates over the following
18 months.
4.4 CAUSE. If the Employee's status as an employee is terminated by the
Company for Cause, this Agreement shall terminate without further obligation to
the Employee other than for accrued salary through the Date of Termination,
obligations imposed by law and obligations imposed pursuant to any employee
benefit plan maintained by the Company or its subsidiaries.
4.5 RESIGNATION FROM BOARD OF DIRECTORS. If Employee is a director of the
Company and his employment is terminated for any reason other than death, the
Employee shall, if requested by the Company, immediately resign as a director of
the Company. If such resignation is not received when so requested, the Employee
shall forfeit any right to receive any payments pursuant to this Agreement.
4.6 NO ACCELERATION OF PAYMENTS. No acceleration of payments and benefits
provided for herein shall be permitted, except that the Company may accelerate
payment, if permitted under the regulations under Section 409A of the Code, as
necessary to allow the Employee to pay FICA taxes on amounts payable hereunder
and additional taxes resulting from the payment of such FICA amount, or as
necessary to pay taxes and penalties arising as a result
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of the payments provided for in this Agreement failing to meet the requirements
of Section 409A of the Code.
ARTICLE V
NONDISCLOSURE, NONCOMPETITION AND PROPRIETARY RIGHTS
5.1 CERTAIN DEFINITIONS. For purposes of this Agreement, the following
terms shall have the following meanings:
(a) "Confidential Information" means any information, knowledge or
data of any nature and in any form (including information that is
electronically transmitted or stored on any form of magnetic or electronic
storage media) relating to the past, current or prospective business or
operations of the Company and its subsidiaries, that at the time or times
concerned is not generally known to persons engaged in businesses similar
to those conducted or contemplated by the Company and its subsidiaries
(other than information known by such persons through a violation of an
obligation of confidentiality to the Company), whether produced by the
Company and its subsidiaries or any of their consultants, agents or
independent contractors or by Employee, and whether or not marked
confidential, including without limitation information relating to the
Company's or its subsidiaries' products and services, business plans,
business acquisitions, joint ventures, processes, product or service
research and development ideas, methods or techniques, training methods and
materials, and other operational methods or techniques, quality assurance
procedures or standards, operating procedures, files, plans,
specifications, proposals, drawings, charts, graphs, support data, trade
secrets, supplier lists, supplier information, purchasing methods or
practices, distribution and selling activities, consultants' reports,
marketing and engineering or other technical studies, maintenance records,
employment or personnel data, marketing data, strategies or techniques,
financial reports, budgets, projections, cost analyses, price lists,
formulae and analyses, employee lists, customer records, customer lists,
customer source lists, proprietary computer software, and internal notes
and memoranda relating to any of the foregoing.
(b) "Death Care Business" means (i) the owning and operating of
funeral homes and cemeteries, including combined funeral home and cemetery
facilities, (ii) the offering of services and products to meet families'
funeral needs, including prearrangement, family consultation, the sale of
caskets and related funeral and cemetery products and merchandise (whether
at physical locations or by means of the Internet), the removal,
preparation and transportation of remains, cremation, the use of funeral
home facilities for visitation and worship, and related transportation
services, (iii) the marketing and sale of funeral services and cemetery
property or merchandise on an at-need or prearranged basis, (iv) providing,
managing and administering financing arrangements (including trust funds,
escrow accounts, insurance and installment sales contracts) for prearranged
funeral plans and cemetery property and merchandise, (v) providing
interment services, the sale (on an at-need or prearranged basis) of
cemetery property including lots, lawn crypts, family and community
mausoleums and related cemetery merchandise such as monuments, memorials
and burial vaults, (vi) the maintenance of
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cemetery grounds pursuant to perpetual care contracts and laws or on a
voluntary basis, and (vii) offering mausoleum design, construction and
sales services.
5.2 NONDISCLOSURE OF CONFIDENTIAL INFORMATION. During the Employment Term,
Employee shall hold in a fiduciary capacity for the benefit of the Company all
Confidential Information which shall have been obtained by Employee during
Employee's employment (whether prior to or after the Agreement Date) and shall
use such Confidential Information solely within the scope of his employment with
and for the exclusive benefit of the Company. For a period of five years after
the Employment Term, commencing with the Date of Termination, Employee agrees
(a) not to communicate, divulge or make available to any person or entity (other
than the Company) any such Confidential Information, except upon the prior
written authorization of the Company or as may be required by law or legal
process, and (b) to deliver promptly to the Company any Confidential Information
in his possession, including any duplicates thereof and any notes or other
records Employee has prepared with respect thereto. In the event that the
provisions of any applicable law or the order of any court would require
Employee to disclose or otherwise make available any Confidential Information,
Employee shall give the Company prompt prior written notice of such required
disclosure and an opportunity to contest the requirement of such disclosure or
apply for a protective order with respect to such Confidential Information by
appropriate proceedings.
5.3 LIMITED COVENANT NOT TO COMPETE. During the Employment Term and for a
period of two years thereafter, commencing with the Date of Termination,
Employee agrees that, with respect to each State of the United States or other
jurisdiction, or specified portions thereof, in which the Employee regularly (a)
makes contact with customers of the Company or any of its subsidiaries, (b)
conducts the business of the Company or any of its subsidiaries or (c)
supervises the activities of other employees of the Company or any of its
subsidiaries, as identified in Appendix B attached hereto and forming a part of
this Agreement, and in which the Company or any of its subsidiaries engages in
the Death Care Business on the Date of Termination (collectively, the "Subject
Areas"), Employee will restrict his activities within the Subject Areas as
follows:
(a) Employee will not, directly or indirectly, for himself or others,
own, manage, operate, control, be employed in an executive, managerial or
supervisory capacity by, consult with, or otherwise engage or participate
in or allow his skill, knowledge, experience or reputation to be used in
connection with, the ownership, management, operation or control of, any
company or other business enterprise engaged in the Death Care Business
within any of the Subject Areas; provided, however, that nothing contained
herein shall prohibit Employee from making passive investments as long as
Employee does not beneficially own more than 2% of the equity interests of
a business enterprise engaged in the Death Care Business within any of the
Subject Areas. For purposes of this paragraph, "beneficially own" shall
have the same meaning ascribed to that term in Rule 13d-3 under the
Exchange Act.
(b) Employee will not call upon any customer of the Company or its
subsidiaries for the purpose of soliciting, diverting or enticing away the
business of such person or entity, or otherwise disrupting any previously
established relationship existing between such person or entity and the
Company or its subsidiaries;
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(c) Employee will not solicit, induce, influence or attempt to
influence any supplier, lessor, lessee, licensor, partner, joint venturer,
potential acquiree or any other person who has a business relationship with
the Company or its subsidiaries, or who on the Date of Termination is
engaged in discussions or negotiations to enter into a business
relationship with the Company or its subsidiaries, to discontinue or reduce
or limit the extent of such relationship with the Company or its
subsidiaries; and
(d) Employee will not make contact with any of the employees of the
Company or its subsidiaries with whom he had contact during the course of
his employment with the Company for the purpose of soliciting such employee
for hire, whether as an employee or independent contractor, or otherwise
disrupting such employee's relationship with the Company or its
subsidiaries.
(e) Employee further agrees that, for a period of one year from and
after the Date of Termination, Employee will not hire, on behalf of himself
or any person or entity engaged in the Death Care Business with which
Employee is associated, any employee of the Company or its subsidiaries as
an employee or independent contractor, whether or not such engagement is
solicited by Employee; provided, however, that the restriction contained in
this subsection (e) shall not apply to Company employees who reside in, or
are hired by Employee to perform work in, any of the Subject Areas located
within the States of Virginia, Arkansas or Georgia.
Employee agrees that he will from time to time upon the Company's request
promptly execute any supplement, amendment, restatement or other modification of
Appendix B as may be necessary or appropriate to correctly reflect the
jurisdictions which, at the time of such modification, should be covered by
Appendix B and this Article V Section 3. Furthermore, Employee agrees that all
references to Appendix B in this Agreement shall be deemed to refer to Appendix
B as so supplemented, amended, restated or otherwise modified from time to time.
5.4 INJUNCTIVE RELIEF; OTHER REMEDIES. Employee acknowledges that a breach
by Employee of Section 5.2 or 5.3 of this Article V would cause immediate and
irreparable harm to the Company for which an adequate monetary remedy does not
exist; hence, Employee agrees that, in the event of a breach or threatened
breach by Employee of the provisions of Section 5.2 or 5.3 of this Article V
during or after the Employment Term, the Company shall be entitled to injunctive
relief restraining Employee from such violation without the necessity of proof
of actual damage or the posting of any bond, except as required by non-waivable,
applicable law. Nothing herein, however, shall be construed as prohibiting the
Company from pursuing any other remedy at law or in equity to which the Company
may be entitled under applicable law in the event of a breach or threatened
breach of this Agreement by Employee, including without limitation the recovery
of damages and/or costs and expenses, such as reasonable attorneys' fees,
incurred by the Company as a result of any such breach or threatened breach. In
addition to the exercise of the foregoing remedies, the Company shall have the
right upon the occurrence of any such breach or threatened breach to cancel any
unpaid salary, bonus, commissions or reimbursements otherwise outstanding at the
Date of Termination. In particular, Employee acknowledges that the payments
provided under Article IV Section 4.3 are conditioned upon Employee fulfilling
any noncompetition and nondisclosure agreements contained in this Article V. In
the event Employee shall at any time materially breach or threaten to breach any
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noncompetition or nondisclosure agreements contained in this Article V, the
Company may suspend or eliminate payments under Article IV during the period of
such breach or threatened breach. Employee acknowledges that any such suspension
or elimination of payments would be an exercise of the Company's right to
suspend or terminate its performance hereunder upon Employee's breach of this
Agreement; such suspension or elimination of payments would not constitute, and
should not be characterized as, the imposition of liquidated damages.
5.5 REQUESTS FOR WAIVER IN CASES OF UNDUE HARDSHIP. In the event that
Employee should find any of the limitations of Article V Section 5.3 (including
without limitation the geographic restrictions of Appendix B) to impose a severe
hardship on Employee's ability to secure other employment, Employee may make a
request to the Company for a waiver of the designated limitations before
accepting employment that otherwise would be a breach of Employee's promises and
obligations under this Agreement. Such request must be in writing and clearly
set forth the name and address of the organization with which employment is
sought and the location, position and duties that Employee will be performing.
The Company will consider the request and, in its sole discretion, decide
whether and on what conditions to grant such waiver.
5.6 GOVERNING LAW OF THIS ARTICLE V; CONSENT TO JURISDICTION. Any dispute
regarding the reasonableness of the covenants and agreements set forth in this
Article V (including Appendix B hereto), or the territorial scope or duration
thereof, or the remedies available to the Company upon any breach of such
covenants and agreements, shall be governed by and interpreted in accordance
with the laws of the State of the United States or other jurisdiction in which
the alleged prohibited competing activity or disclosure occurs, and, with
respect to each such dispute, the Company and Employee each hereby irrevocably
consent to the exclusive jurisdiction of the state and federal courts sitting in
the relevant State (or, in the case of any jurisdiction outside the United
States, the relevant courts of such jurisdiction) for resolution of such
dispute, and agree to be irrevocably bound by any judgment rendered thereby in
connection with such dispute, and further agree that service of process may be
made upon him or it in any legal proceeding relating to this Article V and/or
Appendix B by any means allowed under the laws of such jurisdiction. Each party
irrevocably waives any objection he or it may have as to the venue of any such
suit, action or proceeding brought in such a court or that such a court is an
inconvenient forum.
5.7 EMPLOYEE'S UNDERSTANDING OF THIS ARTICLE. Employee hereby represents to
the Company that he has read and understands, and agrees to be bound by, the
terms of this Article V (including Appendix B hereto). Employee acknowledges
that the geographic scope and duration of the covenants contained in Article V
Section 5.3 are the result of arm's-length bargaining and are fair and
reasonable in light of (i) the importance of the functions performed by Employee
and the length of time it would take the Company to find and train a suitable
replacement, (ii) the nature and wide geographic scope of the operations of the
Company and its subsidiaries, (iii) Employee's level of control over and contact
with the business and operations of the Company and its subsidiaries in a
significant number of jurisdictions where same are conducted and (iv) the fact
that all facets of the Death Care Business are conducted by the Company and its
subsidiaries throughout the geographic area where competition is restricted by
this Agreement. It is the desire and intent of the parties that the provisions
of this Agreement be enforced to the fullest extent permitted under applicable
law, whether now or hereafter in effect
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and, therefore, to the extent permitted by applicable law, the parties hereto
waive any provision of applicable law that would render any provision of this
Article V (including Appendix B hereto) invalid or unenforceable.
ARTICLE VI
ARBITRATION
6.1 BINDING AGREEMENT TO ARBITRATE. Any claim or controversy arising out of
any provision of this Agreement (other than Article V hereof), or the breach or
alleged breach of any such provision, shall be settled by arbitration
administered by the American Arbitration Association (the "AAA") under its
National Rules for the Resolution of Employment Disputes (the "Rules"), and
judgment on the award rendered by the arbitrator(s) may be entered in any court
having jurisdiction thereof.
6.2 SELECTION AND QUALIFICATIONS OF ARBITRATORS. If no party to the
arbitration makes a claim in excess of $1.0 million, exclusive of interest and
attorneys' fees, the proceedings shall be conducted before a single neutral
arbitrator selected in accordance with the Rules. If any party makes a claim
that exceeds $1.0 million, the proceedings shall be conducted before a panel of
three neutral arbitrators, one of whom shall be selected by each party within 15
days after commencement of the proceeding and the third of whom shall be
selected by the first two arbitrators within 10 days after their appointment. If
the two arbitrators selected by the parties are unable or fail to agree on the
third arbitrator, the third arbitrator shall be selected by the AAA. Each
arbitrator shall be a member of the bar of the State of Louisiana and actively
engaged in the practice of employment law for at least 15 years.
6.3 LOCATION OF PROCEEDINGS. The place of arbitration shall be New Orleans,
Louisiana.
6.4 REMEDIES. Any award in an arbitration initiated under this Article VI
shall be limited to actual monetary damages, including if determined appropriate
by the arbitrator(s) an award of costs and fees to the prevailing party. "Costs
and fees" mean all reasonable pre-award expenses of the arbitration, including
arbitrator's fees, administrative fees, travel expenses, out-of-pocket expenses
such as copying, telephone, witness fees and attorneys' fees. The arbitrator(s)
will have no authority to award consequential, punitive or other damages not
measured by the prevailing party's actual damages, except as may be required by
statute.
6.5 OPINION. The award of the arbitrators shall be in writing, shall be
signed by a majority of the arbitrators, and shall include findings of fact and
a statement of the reasons for the disposition of any claim.
ARTICLE VII
MISCELLANEOUS
7.1 BINDING EFFECT.
(a) This Agreement shall be binding upon and inure to the benefit of
the Company and any of its successors or assigns.
-11-
(b) This Agreement is personal to the Employee and shall not be
assignable by the Employee without the consent of the Company (there being
no obligation to give such consent) other than such rights or benefits as
are transferred by will or the laws of descent and distribution.
(c) The Company shall require any successor to or assignee of (whether
direct or indirect, by purchase, merger, consolidation or otherwise) all or
substantially all of the assets or businesses of the Company (i) to assume
unconditionally and expressly this Agreement and (ii) to agree to perform
all of the obligations under this Agreement in the same manner and to the
same extent as would have been required of the Company had no assignment or
succession occurred, such assumption to be set forth in a writing
reasonably satisfactory to the Employee. In the event of any such
assignment or succession, the term "Company" as used in this Agreement
shall refer also to such successor or assign.
7.2 NOTICES. All notices hereunder must be in writing and shall be deemed
to have been given upon receipt of delivery by: (a) hand (against a receipt
therefor), (b) certified or registered mail, postage prepaid, return receipt
requested, (c) a nationally recognized overnight courier service (against a
receipt therefor) or (d) telecopy transmission with confirmation of receipt. All
such notices must be addressed as follows:
If to the Company, to:
Xxxxxxx Enterprises, Inc.
0000 Xxxxx Xxxxxxxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Attn: Chief Executive Officer
If to the Employee, to:
Xxxxxx X. Kitchen
000 Xxxx Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000
or such other address as to which any party hereto may have notified the other
in writing.
7.3 GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with and governed by the internal laws of the State of Louisiana
without regard to principles of conflict of laws, except as expressly provided
in Article V Section 5.6 above with respect to the resolution of disputes
arising under, or the Company's enforcement of, Article V of this Agreement.
7.4 WITHHOLDING. The Employee agrees that the Company has the right to
withhold, from the amounts payable pursuant to this Agreement, all amounts
required to be withheld under applicable income and/or employment tax laws, or
as otherwise stated in documents granting rights that are affected by this
Agreement.
-12-
7.5 SEVERABILITY. If any term or provision of this Agreement (including
without limitation those contained in Appendix B), or the application thereof to
any person or circumstance, shall at any time or to any extent be invalid,
illegal or unenforceable in any respect as written, Employee and the Company
intend for any court construing this Agreement to modify or limit such provision
temporally, spatially or otherwise so as to render it valid and enforceable to
the fullest extent allowed by law. Any such provision that is not susceptible of
such reformation shall be ignored so as to not affect any other term or
provision hereof, and the remainder of this Agreement, or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid, illegal or unenforceable, shall not be affected thereby and
each term and provision of this Agreement shall be valid and enforced to the
fullest extent permitted by law.
7.6 WAIVER OF BREACH. The waiver by either party of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach thereof.
7.7 REMEDIES NOT EXCLUSIVE. Except as provided in Article VI hereof, no
remedy specified herein shall be deemed to be such party's exclusive remedy, and
accordingly, in addition to all of the rights and remedies provided for in this
Agreement, the parties shall have all other rights and remedies provided to them
by applicable law, rule or regulation.
7.8 COMPANY'S RESERVATION OF RIGHTS. Employee acknowledges and understands
that the Employee serves at the pleasure of the Board and that the Company has
the right at any time to terminate Employee's status as an employee of the
Company, or to change or diminish his status during the Employment Term, subject
to the rights of the Employee to claim the benefits conferred by this Agreement.
7.9 JURY TRIAL WAIVER. THE PARTIES HEREBY WAIVE TRIAL BY JURY IN ANY
JUDICIAL PROCEEDING TO WHICH THEY ARE PARTIES INVOLVING, DIRECTLY OR INDIRECTLY,
ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS
AGREEMENT.
7.10 SURVIVAL. The rights and obligations of the Company and Employee
contained in Article V of this Agreement shall survive the termination of the
Agreement. Following the Date of Termination, each party shall have the right to
enforce all rights, and shall be bound by all obligations, of such party that
are continuing rights and obligations under this Agreement.
7.11 PRIOR EMPLOYMENT AGREEMENT. Effective as of the Agreement Date, this
Agreement supersedes any prior employment agreement between the Employee and the
Company.
7.12 COUNTERPARTS. This Agreement may be executed in one 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.
7.13 SECTION 409A OF THE INTERNAL REVENUE CODE. In the event that any of
the compensation or benefits payable to the Employee hereunder are considered to
be non-qualified deferred compensation under Section 409A of the Code ("Section
409A") and any regulations issued or to be issued by the Department of the
Treasury thereunder, the Company and the
-13-
Employee shall negotiate in good faith and agree to such amendments to this
Agreement as they and their respective tax counsel deem necessary to avoid the
imposition of additional taxes and penalties under Section 409A or such
regulations, while preserving the economic benefits intended to be conferred on
the Employee by this Agreement.
IN WITNESS WHEREOF, the Company and the Employee have caused this Amended
and Restated Agreement to be executed on the dates set forth below and effective
as of the Amendment Date.
XXXXXXX ENTERPRISES, INC.
Dated: November 8, 2006 By: /s/ XXXXX X. XXXXXXXXX
------------------------------------
Xxxxx X. XxXxxxxxx
Compensation Committee Chairman
EMPLOYEE:
Dated: November 8, 2006 /s/ XXXXXX X. KITCHEN
----------------------------------------
Xxxxxx X. Kitchen
-14-
APPENDIX A TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT
BETWEEN XXXXXXX ENTERPRISES, INC.
AND
XXXXXX X. KITCHEN
BASE SALARY, BONUS COMPENSATION AND BENEFITS
1. Effective June 9, 2006, Employee's title(s) shall be Acting Chief Executive
Officer, Executive Vice President and Chief Financial Officer, and
Employee's principal work location shall be the New Orleans, Louisiana
metropolitan area. While serving as Acting Chief Executive Officer or Chief
Executive Officer, Employee's Base Salary shall be $550,000. At such time
as Employee ceases to serve as Acting Chief Executive Officer but continues
to serve as Chief Financial Officer, his Base Salary shall be decreased to
$325,000. Employee's replacement as Chief Executive Officer shall not
constitute Good Reason for a termination of employment under this
Employment Agreement.
2. For Fiscal Year 2006 ("FY 2006"), Employee shall be eligible to receive a
maximum Bonus of up to 130% of the Base Salary paid for the period that he
served only as Executive Vice President and Chief Financial Officer and
160% of Base Salary for the period that he served as Acting Chief Executive
Officer or Chief Executive Officer. The Bonus for Fiscal Year 2006 shall be
determined as provided in Attachment 1 to this Appendix A.
Agreed to and accepted:
XXXXXXX ENTERPRISES, INC.
Date: November 8, 2006 By: /S/ XXXXX X. XXXXXXXXX
------------------------------------
Xxxxx X. XxXxxxxxx
Compensation Committee Chairman
EMPLOYEE
Date: November 8, 2006 /S/ XXXXXX X. KITCHEN
----------------------------------------
Xxxxxx X. Kitchen
A-1
ATTACHMENT 1 TO APPENDIX A
CEO AND CFO
2006 BONUS CALCULATION
The bonus determination for the CEO and CFO will be based on EPS, FCF and a
Qualitative component.
The EPS and FCF components will be triggered by the achievement of specified EPS
and FCF amounts and any bonus available will be disbursed as described below.
The EPS allotment is equal to 50% of Total Bonus Potential and the FCF allotment
is equal to 35% of Total Bonus Potential. No bonus is available for the EPS and
FCF components unless the EPS and FCF achieved by the Company are $.33 / per
share and $44 million respectively.
The qualitative component allotment is equal to 15% of Total Bonus Potential.
TOTAL BONUS POTENTIAL FOR CEO IS $880,000 (160% OF $550,000 BASE SALARY) AND CFO
IS $422,500 (130% OF $325,000 BASE SALARY).
CEO CFO
-------- --------
CORPORATE OBJECTIVES
MAXIMUM AVAILABLE @ 85% $748,000 $360,000
======== ========
EPS COMPONENT
MAXIMUM AVAILABLE @ 50% $440,000 A $211,250 A
======== ========
.33 / per share $ 88,000 $ 42,250
.35 / per share $220,000 $105,625
.38 / per share $440,000 $211,250
FCF COMPONENT
MAXIMUM AVAILABLE @ 35% $308,000 B $ 148,750 B
======== ========
$44 MILLION $ 61,600 $ 29,750
$46 MILLION $154,000 $ 74,375
$48 MILLION $308,000 $148,750
TOTAL CORPORATE OBJECTIVES = A + B $748,000 $360,000
======== ========
QUALITATIVE COMPONENT
MAXIMUM AVAILABLE @ 15% $132,000 $ 62,500
======== ========
Qualitative bonuses criteria would include such criteria as leadership,
strategic planning and execution, business development and growth, financial
management, succession planning, customer satisfaction, employee satisfaction
and employee development.
MAXIMUM BONUS $880,000 $422,500
======== ========
A-2
APPENDIX B TO EMPLOYMENT AGREEMENT
BETWEEN XXXXXXX ENTERPRISES, INC.
AND
XXXXXX X. KITCHEN
Jurisdiction In Which Competition
Is Restricted As Provided
In Article V Section 5.3
A. States and Territories of the United States:
1. Louisiana-- The following parishes in the State of Louisiana:
Orleans, St. Xxxxxxx, St. Tammany, Plaquemines, Jefferson, Lafourche, St.
Xxxxxxx, St. Xxxx the Baptist, Tangipahoa
as well as any other parishes in the State of Louisiana in which the
Employee regularly (a) makes contact with customers of the Company or any
of its subsidiaries, (b) conducts the business of the Company or any of its
subsidiaries or (c) supervises the activities of other employees of the
Company or any of its subsidiaries as of the Date of Termination.
2. Florida-- The following counties in the State of Florida:
Seminole, Dade, Hillsborough, Xxxxx, Orange, Pinellas, Indian River, Palm
Beach, Volusia, Lake, Brevard, Broward, Monroe, Collier, Pasco, Manatee,
Polk, Hardee, Nassau, Baker, Clay, St. Xxxxx, St. Lucie, Osceola,
Ockeechobee, Xxxxxx, Xxxxxx, Xxxxxx, Alachua, Putnam, Levy, Hernando,
Citrus, Sumter, Sarasota, DeSoto, Highlands, Charlotte, Glades
as well as any other counties in the State of Florida in which the Employee
regularly (a) makes contact with customers of the Company or any of its
subsidiaries, (b) conducts the business of the Company or any of its
subsidiaries or (c) supervises the activities of other employees of the
Company or any of its subsidiaries as of the Date of Termination.
AGREED TO AND ACCEPTED:
XXXXXXX ENTERPRISES, INC. EMPLOYEE
BY:
--------------------------------- ----------------------------------------
XXXXX X. XXXXXXXXX EFFECTIVE DATE: , 2006
COMPENSATION COMMITTEE CHAIRMAN ------------ ---
EFFECTIVE DATE: , 2006
------------
B-1
3. Texas-- The following counties in the State of Texas:
Xxxxxxx, Xxxxxx, Collin, Tarrant, Lamar, Harris, Denton, Johnson, Rockwall,
Brazoria, Xxxxxxxxx, Van Zandt, Hunt, Ellis, Fannin, Wise, Parker, Red
River, Delta, Galveston, Ft. Bend, Waller, Montgomery, Liberty, Chambers,
Hood, Bosque, Hill, Matagorda, Franklin, Wharton, Somervell
as well as any other counties in the State of Texas in which the Employee
regularly (a) makes contact with customers of the Company or any of its
subsidiaries, (b) conducts the business of the Company or any of its
subsidiaries or (c) supervises the activities of other employees of the
Company or any of its subsidiaries as of the Date of Termination.
4. Maryland-- The following counties in the State of Maryland:
Baltimore, Baltimore City, Xxxxxx, Prince Xxxxxx'x, Xxxx Arundel,
Montgomery, Xxxxxxx, Xxxxxxxxx, Harford, Calvert, Charles, Kent, Queen
Anne's, Talbot, Wicomico, Worcester, Somerset, Dorchester
as well as any other counties in the State of Maryland in which the
Employee regularly (a) makes contact with customers of the Company or any
of its subsidiaries, (b) conducts the business of the Company or any of its
subsidiaries or (c) supervises the activities of other employees of the
Company or any of its subsidiaries as of the Date of Termination.
5. Virginia-- The following counties in the State of Virginia:
Chesterfield, Roanoke, Rockingham, Fairfax, Tazewell, Goochland, Pulaski,
Albemarle, Hanover, Henrico, Xxxxxxxxx, Xxxxxx, Powhatan, Xxxxxxx City,
Prince George, Bedford, Montgomery, Franklin, Botetourt, Craig, Floyd,
Augusta, Shenandoah, Page, Xxxxxx, Prince Xxxxxxx, Xxxxx, Xxxxxxx,
Fluvanna, Louisa, Wythe, Giles, Carroll, Orange, Buckingham, Nelson, King
Xxxxxxx, New Xxxx, Spotsylvania, Xxxxxxxx, Xxxxxxxx, Loudoun, Arlington,
Xxxxx
as well as any other counties in the State of Virginia in which the
Employee regularly (a) makes contact with customers of the Company or any
of its subsidiaries, (b) conducts the business of the Company or any of its
subsidiaries or (c) supervises the activities of other employees of the
Company or any of its subsidiaries as of the Date of Termination.
6. West Virginia-- The following counties in the State of West Virginia:
Raleigh, Kanawha, Fayette, Berkeley, Boone, Summers, Wyoming, Clay,
Lincoln, Jackson, Putnam, Roane, Greenbrier, Nicholas, Logan, Xxxxx,
McDowell, Morgan, Jefferson, Mercer, Mingo, Cabell, Xxxxx
EMPLOYEE
----------------------------------------
EFFECTIVE DATE: , 2006
----------- ---
B-2
as well as any other counties in the State of West Virginia in which the
Employee regularly (a) makes contact with customers of the Company or any
of its subsidiaries, (b) conducts the business of the Company or any of its
subsidiaries or (c) supervises the activities of other employees of the
Company or any of its subsidiaries as of the Date of Termination.
7. Puerto Rico-- The following towns in the Commonwealth of Puerto Rico:
Bayamon, San Xxxx, Cayey, Canovanas, Ponce, Caguas, Carolina, Humacao, Toa
Baja, Toa Alta, Naranjito, Aguas Buenas, Guaynabo, Comereo, Catano, Xxxx
Xxxx, Xxxxxxx, San Xxxxxxx, Guayama, Xxxxxxx, Aibonito, Loita, Rio Grande,
Las Marias, Xxxxxx, Xxxxx Xxxx, Jajuja, Utuado, Adjuntas, Puenulas,
Xxxxxxxx, Alto, Gurabo, Cidra, Yagucoa, Naguabo, Mayaguez, Anasco, Maricao,
Hormiguero, San German, Cabo Rojo, Loiza, Las Piedras, Ceiba, Naguabo,
Luquillo, San Xxxx
as well as any other towns in the Commonwealth of Puerto Rico in which the
Employee regularly (a) makes contact with customers of the Company or any
of its subsidiaries, (b) conducts the business of the Company or any of its
subsidiaries or (c) supervises the activities of other employees of the
Company or any of its subsidiaries as of the Date of Termination.
8. North Carolina-- The following counties in the State of North Carolina:
Catawba, Wilson, Guilford, Haywood, Johnston, Wake, Wilkes, Craven, Nash,
Iredell, Burke, Caldwell, Lincoln, Alexander, Cleveland, Xxxxxx, Xxxxx,
Edgecombe, Pitt, Davidson, Randolph, Forsyth, Stokes, Rockingham, Xxxxxxx,
Alamance, Xxxxxxx, Buncombe, Xxxxxxxxx, Transylvania, Swain, Madison,
Sampson, Franklin, Durham, Harnett, Granville, Chatham, Alleghany, Surry,
Ashe, Watauga, Yadkin, Pamilco, Halifax, Warren, Carteret, Jones, Lenoir,
Beaufort, Vance, Lee, Moore, Cumberland, Davie
as well as any other counties in the State of North Carolina in which the
Employee regularly (a) makes contact with customers of the Company or any
of its subsidiaries, (b) conducts the business of the Company or any of its
subsidiaries or (c) supervises the activities of other employees of the
Company or any of its subsidiaries as of the Date of Termination.
9. South Carolina-- The following counties in the State of South Carolina:
EMPLOYEE
----------------------------------------
EFFECTIVE DATE: , 2006
----------- ---
B-3
Greenville, Charleston, Aiken, Pickens, Laurens, Spartanburg, Xxxxxxxx,
Abbeville, Berkeley, Dorchester, Colleton, Edgefield, Saluda, Lexington,
Orangeburg, Barnwell, Richland, Fairfield, Kershaw, Sumter, Calhoun,
Newberry, Oconee, Georgetown
as well as any other counties in the State of South Carolina in which the
Employee regularly (a) makes contact with customers of the Company or any
of its subsidiaries, (b) conducts the business of the Company or any of its
subsidiaries or (c) supervises the activities of other employees of the
Company or any of its subsidiaries as of the Date of Termination.
10. Tennessee-- The following counties in the State of Tennessee:
Davidson, Sumner, Robertson, Knox, Sullivan, Sevier, Wilson, Rutherford,
Williamson, Cheatham, Trousdale, Macon, Montgomery, Jefferson, Grainger,
Union, Anderson, Loudon, Blount, Roane, Greene, Washington, Carter,
Johnson, Hawkins, Cocke, Xxxxxx, Dekalb, Smith, Hamblen, Unicoi
as well as any other counties in the State of Tennessee in which the
Employee regularly (a) makes contact with customers of the Company or any
of its subsidiaries, (b) conducts the business of the Company or any of its
subsidiaries or (c) supervises the activities of other employees of the
Company or any of its subsidiaries as of the Date of Termination.
11. Arkansas-- The following counties in the State of Arkansas:
Saline, Pulaski, Hot Spring, Garland, Perry, Grant, Lonoke, White,
Jefferson, Faulkner, Dallas, Clark, Montgomery, Van Buren, Cleburne, Conway
as well as any other counties in the State of Arkansas in which the
Employee regularly (a) makes contact with customers of the Company or any
of its subsidiaries, (b) conducts the business of the Company or any of its
subsidiaries or (c) supervises the activities of other employees of the
Company or any of its subsidiaries as of the Date of Termination.
12. Georgia-- The following counties in the State of Georgia:
Xxxx, Cherokee, Xxxxx, Dekalb, Xxxxxx, Xxxxxxx, Paulding, Bartow, Pickens,
Forsyth, Dawson, Xxxxxx, Xxxxxxx, Rockdale, Newton, Butts, Spalding,
Gwinnett, Fayette, Coweta, Xxxxxxx
as well as any other counties in the State of Georgia in which the Employee
regularly (a) makes contact with customers of the Company or any of its
subsidiaries, (b) conducts the business of the Company or any of its
subsidiaries or (c) supervises the activities of other employees of the
Company or any of its subsidiaries as of the Date of Termination.
EMPLOYEE
----------------------------------------
EFFECTIVE DATE: , 2006
----------- ---
B-4
13. Alabama-- The following counties in the State of Alabama:
Mobile, Madison, Baldwin, Monroe, Washington, Jackson, Marshall, Xxxxxx,
Limestone, Clarke, Elmore, Montgomery, Macon, Coosa, Tallapoosa, Autauga,
Chilton, Walker, Jefferson, Blount, Cullman, Winston, Tuscaloosa, Xxxxxxx,
Xxxxxx, Wilcox, Marengo, Choctaw, Xxxx, Talladega, St. Clair, Shelby,
Perry, Xxxx
as well as any other counties in the State of Alabama in which the Employee
regularly (a) makes contact with customers of the Company or any of its
subsidiaries, (b) conducts the business of the Company or any of its
subsidiaries or (c) supervises the activities of other employees of the
Company or any of its subsidiaries as of the Date of Termination.
14. Mississippi-- The following counties in the State of Mississippi:
Hinds, Madison, Rankin, Simpson, Copiah, Xxxxxxxxx, Xxxxxx, Yazoo
as well as any other counties in the State of Mississippi in which the
Employee regularly (a) makes contact with customers of the Company or any
of its subsidiaries, (b) conducts the business of the Company or any of its
subsidiaries or (c) supervises the activities of other employees of the
Company or any of its subsidiaries as of the Date of Termination.
15. Pennsylvania-- The following counties in the State of Pennsylvania:
Montgomery, Philadelphia, Bucks, Delaware, Xxxxxxx, Berks, Lehigh,
Northampton
as well as any other counties in the State of Pennsylvania in which the
Employee regularly (a) makes contact with customers of the Company or any
of its subsidiaries, (b) conducts the business of the Company or any of its
subsidiaries or (c) supervises the activities of other employees of the
Company or any of its subsidiaries as of the Date of Termination.
16. Kentucky-- The following counties in the State of Kentucky:
Pike, Martin, Floyd, Knott, Letcher
as well as any other counties in the State of Kentucky in which the
Employee regularly (a) makes contact with customers of the Company or any
of its subsidiaries, (b) conducts the business of the Company or any of its
subsidiaries or (c) supervises the activities of other employees of the
Company or any of its subsidiaries as of the Date of Termination.
17. The District of Columbia
EMPLOYEE
----------------------------------------
EFFECTIVE DATE: , 2006
----------- ---
B-5
18. Kansas-- The following counties in the State of Kansas:
Xxxxxxx, Leavenworth, Johnson, Miami, Franklin, Wyandotte, Sedgwick,
Cowley, Sumner, Butler, Harvey, Reno, Kingman
as well as any other counties in the State of Kansas in which the Employee
regularly (a) makes contact with customers of the Company or any of its
subsidiaries, (b) conducts the business of the Company or any of its
subsidiaries or (c) supervises the activities of other employees of the
Company or any of its subsidiaries as of the Date of Termination.
19. Missouri-- The following counties in the State of Missouri:
Boone, Audrain, Callaway, Cole, Cooper, Howard, Moniteau, Randolph,
Jackson, Lafayette, Johnson, Cass, Xxxx, Xxx, Platte, Clinton, Morgan,
Pettis, Saline
as well as any other counties in the State of Missouri in which the
Employee regularly (a) makes contact with customers of the Company or any
of its subsidiaries, (b) conducts the business of the Company or any of its
subsidiaries or (c) supervises the activities of other employees of the
Company or any of its subsidiaries as of the Date of Termination.
20. Nebraska-- The following counties in the State of Nebraska:
Lancaster, Otoe, Sarpy, Gage, Saline, Seward, Saunders, Cass, Xxxxxx,
Xxxxxxx, Washington, Dodge, Xxxxxxx
as well as any other counties in the State of Nebraska in which the
Employee regularly (a) makes contact with customers of the Company or any
of its subsidiaries, (b) conducts the business of the Company or any of its
subsidiaries or (c) supervises the activities of other employees of the
Company or any of its subsidiaries as of the Date of Termination.
Employee and the Company agree that, throughout the Employment Term,
Employee shall comply with all of the requirements and restrictions set
forth in Article V of the Agreement of which this Appendix A forms a part;
however, Employee and the Company agree that, notwithstanding anything to
the contrary contained in Article V, Section 3 of the Agreement, Employee
shall be required to restrict his post-employment activities in the State
of Nebraska only to: (i) complying with the restrictions set forth in
Article V, Section 2 of the Agreement and (ii) refraining from calling upon
any customer of the Company or its subsidiaries with whom Employee has done
business and/or had personal contact for the purpose of soliciting,
diverting or enticing away the business of such person or entity, or
otherwise disrupting any previously established relationship existing
between such person or entity and the Company or its subsidiaries. The
parties hereby acknowledge and agree that this modification to the
restrictions of Article V, Section 5.3
EMPLOYEE
----------------------------------------
EFFECTIVE DATE: , 2006
----------- ---
B-6
as they relate to post-employment competition in the State of Nebraska is
being entered into solely to comply with the limitations provided in
Nebraska law on the extent to which noncompetition agreements may be
enforced. This modification does not reflect the parties' agreement as to
the extent of the limitations upon competition necessary to protect the
legitimate interests of the Company; rather, the provisions of Article V of
the Agreement reflect such agreement.
21. Iowa-- The following county in the State of Iowa:
Xxxx, Xxxxxx, Marion, Warren, Madison, Dallas, Story, Xxxxx
as well as any other counties in the State of Iowa in which the Employee
regularly (a) makes contact with customers of the Company or any of its
subsidiaries, (b) conducts the business of the Company or any of its
subsidiaries or (c) supervises the activities of other employees of the
Company or any of its subsidiaries as of the Date of Termination.
22. Nevada-- The following counties in the State of Nevada:
Clark, Lincoln, Xxx
as well as any other counties in the State of Nevada in which the Employee
regularly (a) makes contact with customers of the Company or any of its
subsidiaries, (b) conducts the business of the Company or any of its
subsidiaries or (c) supervises the activities of other employees of the
Company or any of its subsidiaries as of the Date of Termination.
23. New Mexico-- The following counties in the State of New Mexico:
Bernalillo, Xxxxxxxx, Xxxxx Fe, Torrance, Los Alamos, Rio Arriba, Xxxx, San
Xxxxxx
as well as any other counties in the State of New Mexico in which the
Employee regularly (a) makes contact with customers of the Company or any
of its subsidiaries, (b) conducts the business of the Company or any of its
subsidiaries or (c) supervises the activities of other employees of the
Company or any of its subsidiaries as of the Date of Termination.
24. Oregon-- The following counties in the State of Oregon:
Xxxxxxxxx, Xxxxxxxxxx, Xxxxxxx, Curry, Jackson, Klamath, Clatsop, Columbia,
Multnomah, Clackamas, Yamhill, Tillamook
as well as any other counties in the State of Oregon in which the Employee
regularly (a) makes contact with customers of the Company or any of its
subsidiaries, (b) conducts the
EMPLOYEE
----------------------------------------
EFFECTIVE DATE: , 2006
----------- ---
B-7
business of the Company or any of its subsidiaries or (c) supervises the
activities of other employees of the Company or any of its subsidiaries as
of the Date of Termination.
25. California-- The following counties in the State of California:
Xxxxx, Plumas, Xxxxxx, Yuba, Colusa, Tehama, Fresno, San Mateo, Contra
Costa, San Joaquin, Stanislaus, Santa Xxxxx, Mariposa, Orange, San
Bernardino, Kern, Ventura, Inyo, Riverside, Los Angeles, Monterey, Kings,
Santa Xxxxxxx, Madera, Tulare, San Benito, Merced, San Xxxx Obispo, Nevada,
Alameda, Sacramento, El Dorado, Amador, Yolo, Xxxxxx, San Diego, Imperial,
Sonoma, Napa, Lake, Marin, Santa Xxxx, Calaveras, Placer, Butte, Mendocino,
San Francisco
as well as any other counties in the State of California in which the
Employee regularly (a) makes contact with customers of the Company or any
of its subsidiaries, (b) conducts the business of the Company or any of its
subsidiaries or (c) supervises the activities of other employees of the
Company or any of its subsidiaries as of the Date of Termination.
Employee and the Company agree that, throughout the Employment Term,
Employee shall comply with all of the requirements and restrictions set
forth in Article V of the Agreement of which this Appendix A forms a part;
however, Employee and the Company agree that, notwithstanding anything to
the contrary contained in Article V, Section 5.2 or 5.3 of the Agreement,
Employee shall be required to restrict his post-employment activities in
the State of California only to: (i) complying with the restrictions set
forth in Article V, Section 5.2 of the Agreement to the extent that
Confidential Information constitutes a trade secret under California law
and (ii) complying with the restrictions set forth in Article V, Sections
5.3(c) and 5.3(d) of the Agreement. The parties hereby acknowledge and
agree that these modifications to the restrictions of Article V, Sections
5.2 and 5.3 as they relate to post-employment disclosure and competition in
the State of California are being entered into solely to comply with the
limitations provided in California law on the extent to which nondisclosure
and noncompetition agreements may be enforced. These modifications do not
reflect the parties' agreement as to the extent of the limitations upon
disclosure and competition necessary to protect the legitimate interests of
the Company; rather, the provisions of Article V of the Agreement reflect
such agreement.
27. Illinois-- The following counties in the State of Illinois:
Cook, Lake, McHenry, Kane, DuPage, Will
as well as any other counties in the State of Illinois in which the
Employee regularly (a) makes contact with customers of the Company or any
of its subsidiaries, (b) conducts the
EMPLOYEE
----------------------------------------
EFFECTIVE DATE: , 2006
----------- ---
B-8
business of the Company or any of its subsidiaries or (c) supervises the
activities of other employees of the Company or any of its subsidiaries as
of the Date of Termination.
28. Washington-- The following counties in the State of Washington:
King, Snohomish, Kittitas, Xxxxxx, Kitsap, Skagit, Chelan, Island
as well as any other counties in the State of Washington in which the
Employee regularly (a) makes contact with customers of the Company or any
of its subsidiaries, (b) conducts the business of the Company or any of its
subsidiaries or (c) supervises the activities of other employees of the
Company or any of its subsidiaries as of the Date of Termination.
29. Wisconsin-- The following counties in the State of Wisconsin:
Waukesha, Dodge, Ozaukee, Jefferson, Washington, Racine, Walworth,
Milwaukee, Winnebago, Fond du Lac, Green Lake, Calumet, Waushara,
Outagamie, Waupaca, Kenosha
as well as any other counties in the State of Wisconsin in which the
Employee regularly (a) makes contact with customers of the Company or any
of its subsidiaries, (b) conducts the business of the Company or any of its
subsidiaries or (c) supervises the activities of other employees of the
Company or any of its subsidiaries as of the Date of Termination.
B. Acknowledgment
The Company and Employee acknowledge that Employee's voluntary compliance
with Article V, Sections 5.2 and 5.3 constitutes a significant part of the
consideration for the Company's agreement to make the payments specified in
Article IV. Therefore, the Company and Employee acknowledge that it is the
intent of this Agreement that if Employee engages in conduct described as
prohibited conduct in Article V Section 5.2 or 5.3, the Company may suspend
or eliminate payments under Article IV, including Section 4.3 of Article
IV, during the period of such conduct, even if the parties' contractual
prohibitions on such conduct are determined to be invalid, illegal or
unenforceable under applicable law.
Furthermore, the parties acknowledge that any provision in this Appendix B
that permits Employee to engage, after the Date of Termination, in a
particular jurisdiction, in conduct otherwise prohibited by Article V
Section 5.2 or 5.3 (for example, as in California and Nebraska) has been
agreed to solely in order to comply with the limitations provided in the
law of that jurisdiction on the extent to which nondisclosure and
noncompetition agreements may be enforced. Therefore, the parties
acknowledge that, although Employee may be permitted pursuant to this
Appendix B to engage, after the Date of
EMPLOYEE
----------------------------------------
EFFECTIVE DATE: , 2006
----------- ---
B-9
Termination, in certain jurisdictions (such as California and Nebraska), in
conduct otherwise prohibited by Article V Section 5.2 or 5.3, if Employee
does engage in conduct prohibited by the provisions of Article V Section
5.2 or 5.3 (as such provisions appear in the Agreement without giving
effect to any modifications to such provisions made by this Appendix B),
Employee will forfeit his or her right to payments under Article IV,
including Section 4.3 of Article IV, during the period of such conduct.
EMPLOYEE
----------------------------------------
EFFECTIVE DATE: , 2006
----------- ---
B-10
APPENDIX C TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT
BETWEEN XXXXXXX ENTERPRISES, INC.
AND
XXXXXX X. KITCHEN
AMENDED AND RESTATED SUPPLEMENTAL EXECUTIVE
RETIREMENT AGREEMENT AS PROVIDED IN ARTICLE II, SECTION 2.4
AMENDED AND RESTATED SUPPLEMENTAL
EXECUTIVE RETIREMENT AGREEMENT
THIS AMENDED AND RESTATED AGREEMENT (the "Agreement") is effective as of
October __, 2006 by and between Xxxxxxx Enterprises, Inc., a Louisiana
corporation (the "Employer" or the "Company"), and Xxxxxx X. Kitchen
("Employee").
WHEREAS, in connection with Employer's entering into an Amended and
Restated Employment Agreement with the Employee pursuant to which Employee will
serve as Acting Chief Executive Officer and Chief Financial Officer of the
Employer, Employer wishes to provide Employee with certain unfunded retirement
benefits;
NOW, THEREFORE, in consideration of the premises, it is agreed by and
between the parties as follows:
ARTICLE I
DEFINITIONS
1.1 An ACTUARIALLY EQUIVALENT benefit means a benefit having the same value
as the benefit to which it is compared. Actuarial equivalence shall be
determined using a mortality table and an interest rate that are selected from
time to time by the Compensation Committee and that meet the requirements for
valuing a lump sum distribution under Internal Revenue Code Section 417(e), as
elaborated by IRS regulations and other applicable rules. Pursuant to current
Treasury Regulation Section 1.417(e)-1(d), the interest rate shall be the annual
interest rate on 30-year Treasury securities (or a replacement basket of
securities identified by the IRS for use under Code Section 417(e)) for the
month prior to the calendar year for which the determination is to be made.
1.2 ANNUITY STARTING DATE means the first regular bi-weekly payroll date of
the Employer that occurs after the date that is at least six months following
the Employee's Termination of Employment, except that if the Employee's
Termination of Employment is because of death, the Annuity Starting Date shall
be the first payroll date of the second month following the month in which the
Employee dies.
1.3 BENEFICIARY means any of the following;
(a) In the case of a 10-Years-Certain-and-Life Annuity (including a
pre-retirement death benefit under Paragraph 4.1(b) of Article IV), the
person or persons designated by the Employee (on his Benefit Election Form)
to receive the remainder of
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the guaranteed bi-weekly payments if the Employee dies before the end of
the payout period. If no person is effectively named by the Employee as the
Beneficiary, the Beneficiary shall be the Employee's surviving spouse, if
any, and otherwise the Employee's heirs or legatees. If a Beneficiary dies
after the Employee but before full payment has been made, the share of the
remaining payments that would have been paid to the Beneficiary if he or
she had survived shall be paid to the person or persons who would have
received that share of the benefit if the Beneficiary had predeceased the
Employee.
(b) In the case of a Joint-and-Survivor Annuity, the person named by
the Employee (on his Benefit Election Form) as his joint annuitant, if that
person survives the Employee.
1.4 BENEFIT ELECTION FORM means the form set forth as Exhibit A, or any
successor form provided by the Compensation Committee, on which the Employee
elects the manner in which his benefit under this Agreement will be paid.
1.5 FINAL AVERAGE PAY means the Employee's average monthly base salary for
the 36 full months immediately preceding Employee's Termination of Employment.
If Employee's employment has been for less than 36 months, then the Final
Average Pay means the average monthly base salary from inception of employment
on December 2, 2004, until and through the Employee's Termination Date. Monthly
base salary is determined by dividing annual base salary plus annual auto
allowance by 12. Base salary does not include accrued vacation pay.
1.6 NORMAL FORM of benefit means a bi-weekly pension commencing on the
Employee's Annuity Starting Date, and paid on each regular payroll date of the
Employee thereafter, terminating with the payment made on the last regular
payroll date in the month of the Employee's death. The first payment made on the
Annuity Starting Date should be equal to the total of the bi-weekly pension
payments that the Employee would have received if a payment had been made
starting with the first payroll date of the second month following the month in
which the Employee's Termination of Employment occurred, through the Annuity
Starting Date, or, in effect, a catch up payment. No death benefit is payable
under the Normal Form.
1.7 OPTIONAL FORM of benefit means either the 10-Years-Certain-and-Life
Annuity or the Joint-and-Survivor Annuity, described in Paragraph 2.3 of Article
II, below.
1.8 SECTION 409A means Section 409A of the Internal Revenue Code of 1986,
as amended, and all regulations and guidance issued thereunder.
1.9 TERMINATION OF EMPLOYMENT means the termination of the employment of
the Employee with the Employer that constitutes a "separation from service"
under Section 409A.
ARTICLE II
RETIREMENT BENEFIT
2.1 Upon the Termination of Employment of the Employee, the Employee shall
be entitled to the vested portion of his retirement benefit commencing on his
Annuity Starting Date.
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2.2 The Employee's fully vested retirement benefit paid in the Normal Form
shall be 40% of Final Average Pay.
2.3 Instead of payment in the Normal Form, the Employee may elect to
receive the benefit in either of the following two Optional Forms:
(a) As a Joint-and-Survivor Annuity, as follows: a pension is paid to
the Employee, with the first payment on his Annuity Starting Date being
determined as set forth in the definition of "Normal Form," continuing with
regular bi-weekly payment amounts on each regular payroll date of the
Employer, and terminating with the payment on the last regular payroll date
of the Employer in the month of the Employee's death; and if the joint
annuitant named by the Employee as of the Annuity Starting Date survives
the Employee, the amount that would have been paid on each bi-weekly
payroll date to the Employee will be continued and paid to the joint
annuitant on each regular payroll date, terminating with the payment on the
last regular payroll date in the month of the joint annuitant's death.
(b) As a 10-Years-Certain-and-Life Annuity, as follows: a benefit is
paid to the Employee, with the first payment on his Annuity Starting Date
being determined as set forth in the definition of "Normal Form,"
continuing with regular bi-weekly payment amounts on each regular payroll
date of the Employer and terminating with the later of the payment on the
last regular payroll date in the month of the Employee's death or in the
month in which the ten-year payment period terminates. If the Employee dies
prior to the end of the ten-year payment period, the remainder of the
scheduled bi-weekly payments are made to the Employee's Beneficiary.
2.4 The form of pension payment must be elected by the Employee prior to
December 31, 2006. An election to change the form of payment may only be made
if: (a) such change does not take effect for 12 months; (b) the election is made
at least 18 months prior to the Annuity Starting Date under the original payment
form; and (c) payment of the benefit is deferred at least five years from the
date on which payout would otherwise commence, if required under Section 409A.
If the Employee makes no election within the time periods described herein, the
benefit shall be paid in the Normal Form. Notwithstanding the above, the
Employee may change from the Normal Form to the Joint-and-Survivor Annuity form
of payment (and vice-versa) at any time prior to Termination of Employment.
2.5 The Employee's pension paid in an Optional Form shall be Actuarially
Equivalent to the pension paid in the Normal Form.
ARTICLE III
VESTING OF RETIREMENT BENEFIT
3.1 The Employee's retirement benefit, commencing at the Annuity Starting
Date, shall be a percentage of his Final Average Pay, which shall be calculated
according to the following schedule, with pro rata additions for each full
two-week pay period in a partial year of service:
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Years of Service % of Final Average Pay
---------------- ----------------------
1 4%
2 8%
3 12%
4 16%
5 20%
6 24%
7 28%
8 32%
9 36%
10 or more 40%
3.2 If the Employee terminates employment and is subsequently re-employed
by the Employer or one of its subsidiaries, the Employee will accrue additional
benefits hereunder with respect to his period of reemployment only if so
determined by the Compensation Committee. Furthermore, the Employee's
re-employment by the Employer or one of its subsidiaries after the Employee's
Annuity Starting Date will not affect the Employee's pension benefit under this
Agreement.
ARTICLE IV
DEATH
4.1 Upon the death of the Employee prior to his Termination of Employment
for any other reason, if the Employee had a vested retirement benefit on such
date of death, the Employee's Beneficiary shall receive a death benefit that
shall commence as of the first regular payroll date of the Employer in the month
following the month of death, and shall be determined as follows:
(a) If the Employee is survived by his spouse, and the surviving
spouse is the only Beneficiary, the surviving spouse shall be entitled to a
bi-weekly benefit for her life, equal to the pension the surviving spouse
would have received if the Employee had retired on the date of his death
and had elected a Joint-and-Survivor Annuity with the surviving spouse as
the Beneficiary, and had died before his Annuity Starting Date.
(b) If Paragraph 4.1(a) of this Article IV does not apply, the death
benefit shall be paid to the Employee's Beneficiary for ten years,
determined as if the Employee had retired on the date of his death and had
elected to receive his benefit in the form of a 10-Years-Certain-and-Life
Annuity but died before his Annuity Starting Date.
4.2 Upon the death of the Employee after his Termination of Employment, a
benefit will be paid only if the Employee elected an Optional Form of benefit
under which a benefit is due to a Beneficiary.
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ARTICLE V
AMENDMENT AND DISCONTINUANCE
5.1 The Employer expects to continue this Agreement indefinitely but
reserves the right, acting through the Compensation Committee, to amend or
discontinue it, except as provided in Section 9.3 hereof and provided, however,
that a vested benefit can be affected without the Employee's consent only as set
forth below, and subject to Article VIII hereof.
5.2 If the Compensation Committee should discontinue this Agreement, the
Employer shall be obligated to continue to pay on the same schedule all benefits
that have already commenced.
5.3 The Compensation Committee can terminate this Agreement at any time in
its discretion without the Employee's consent, if the Employee has not had a
Termination of Employment. In that event a benefit shall be paid, as set forth
in Paragraph 5.4 below, to the Employee only if he is vested with respect to all
or a portion of his benefits hereunder as of the date such action is taken.
5.4 In the event of the termination of this Agreement, the benefit under
Paragraph 5.3 of this Article V shall be based on the Employee's Final Average
Pay determined as of the date of termination of this Agreement. Nevertheless,
the Annuity Starting Date, the retirement benefit, the discount (if any), and
the form of the benefit, shall be determined in the normal way upon the
Employee's Termination of Employment.
5.5 An amendment or discontinuance of this Agreement shall not result in
the acceleration of the payment of a benefit hereunder, unless permitted by
Section 409A. The Employer may terminate this Agreement and accelerate the
payment of benefits under the conditions of Section 1.409A-3(h)(2)(viii) of the
currently proposed regulations under Section 409A (or a successor provision) in
the event of an arrangement termination in connection with a corporate
dissolution or bankruptcy, in connection with a change of control event or in
connection with a termination of all arrangements that would be aggregated with
this Agreement under Section 409A.
ARTICLE VI
RESTRICTIONS ON ASSIGNMENT
The interest of the Employee or a Beneficiary hereunder may not be sold,
transferred, assigned, or encumbered in any manner, either voluntarily or
involuntarily. Neither shall the benefits hereunder be liable for or subject to
the claims of the creditors of any person to whom such benefits or funds are
payable, except that (i) no amount shall be payable hereunder until and unless
any and all amounts representing debts or other obligations owed to the Employer
or any affiliate of the Employer by the Employee with respect to whom such
amounts would otherwise be payable shall have been fully paid and satisfied, and
(ii) no amounts shall be payable hereunder to any Employee (or the Employee's
Beneficiary) if the Employee engages in any of the activities described in
Article VII hereof.
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ARTICLE VII
CONDITION OF NON-COMPETITION
7.1 The Employee (and the Employee's Beneficiary) will lose the right to
any unpaid benefits under the Agreement if the Employee engages in any
Restricted Activities following his Termination of Employment.
7.2 The term "Restricted Activities" means any one or more of the following
activities:
(a) Employee, directly or indirectly, for himself or others, owns,
manages, operates, controls, is employed in an executive, managerial or
supervisory capacity by, consults with, or otherwise engages or
participates in or allows his skill, knowledge, experience or reputation to
be used in connection with, the ownership, management, operation or control
of, any company or other business enterprise engaged in the Death Care
Business within any of the Subject Areas; provided, however, a passive
investment by the Employee is not a Restricted Activity as long as Employee
does not beneficially own more than 2% of the equity interests of a
business enterprise engaged in the Death Care Business within any of the
Subject Areas. For purposes of this paragraph, "beneficially own" shall
have the same meaning ascribed to that term in Rule 13d-3 under the
Securities Exchange Act of 1934.
(b) Employee calls upon any customer of the Company or its
subsidiaries for the purpose of soliciting, diverting or enticing away the
business of such person or entity, or otherwise disrupting any previously
established relationship existing between such person or entity and the
Company or its subsidiaries.
(c) Employee solicits, induces, influences or attempts to influence
any supplier, lessor, lessee, licensor, partner, joint venturer, potential
acquiree or any other person who has a business relationship with the
Company or its subsidiaries, or who on the date of Termination of
Employment is engaged in discussions or negotiations to enter into a
business relationship with the Company or its subsidiaries, to discontinue
or reduce or limit the extent of such relationship with the Company or its
subsidiaries.
(d) Employee makes contact with any of the employees of the Company or
its subsidiaries with whom he had contact during the course of his
employment with the Company for the purpose of soliciting such employee for
hire, whether as an employee or independent contractor, or otherwise
disrupting such employee's relationship with the Company or its
subsidiaries.
7.3 The following terms used in this Article VII are defined as follows:
(a) "Subject Areas" means each State of the United States or other
jurisdiction in which Employee regularly (a) makes contact with customers
of the Company or any of its subsidiaries, (b) conducts the business of the
Company or any of its subsidiaries or (c) supervises the activities of
other employees of the Company or any of its subsidiaries, and in which the
Company or any of its subsidiaries engages in the Death Care Business (as
hereinafter defined) on the date of Termination of Employment.
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(b) "Death Care Business" means (i) the owning and operating of
funeral homes and cemeteries, including combined funeral home and cemetery
facilities, (ii) the offering of services and products to meet families'
funeral needs, including prearrangement, family consultation, the sale of
caskets and related funeral and cemetery products and merchandise (whether
at physical locations or by means of the Internet), the removal,
preparation and transportation of remains, cremation, the use of funeral
home facilities for visitation and worship, and related transportation
services, (iii) the marketing and sale of funeral services and cemetery
property or merchandise on an at-need or prearranged basis, (iv) providing,
managing and administering financing arrangements (including trust funds,
escrow accounts, insurance and installment sales contracts) for prearranged
funeral plans and cemetery property and merchandise, (v) providing
interment services, the sale (on an at-need or prearranged basis) of
cemetery property including lots, lawn crypts, family and community
mausoleums and related cemetery merchandise such as monuments, memorials
and burial vaults, (vi) the maintenance of cemetery grounds pursuant to
perpetual care contracts and laws or on a voluntary basis, and (vii)
offering mausoleum design, construction and sales services.
ARTICLE VIII
NATURE OF AGREEMENT
The Employee and Beneficiaries under this Agreement have only an unsecured
right to receive benefits from the Employer as general creditors of the
Employer. The Agreement constitutes a mere promise to make payments in the
future. The Employer may set aside funds, in a trust or otherwise, for the
purpose of satisfying its obligations under this Agreement. The setting aside of
amounts by the Employer with which to discharge its obligations hereunder shall
not create any security for the payment of benefits, however. Any and all funds
so set aside shall remain subject to the claims of the general creditors of the
Employer, present and future. This provision shall not require the Employer to
set aside any funds, but the Employer may set aside such funds if it chooses to
do so.
ARTICLE IX
CHANGE OF CONTROL
9.1 Notwithstanding the provisions of Article V, Article VIII or any other
provisions of this Agreement to the contrary, if the Employee has a Termination
of Employment before December 2, 2009 and following a Change of Control (as such
term is defined in the Change of Control Agreement between the Employee and the
Employer), the Employee shall receive the same benefits hereunder that the
Employee would have received if the Employee had completed five years of service
to the Employer hereunder.
9.2 If the Employee's Termination of Employment occurs during the two-year
period beginning with the Change of Control and the Change of Control
constitutes a change in the ownership or effective control of the Company or a
change in the ownership of a substantial portion of the assets of the Company,
as such terms are defined in Section 409A, the Employee shall receive as his
only benefit under the Plan a lump sum that is Actuarially Equivalent to the
Normal Form of benefit that the Employee otherwise would have been entitled to
under the Plan (including, if applicable, Paragraph 9.1 of this Article IX) that
shall be paid on the first regular
C-7
payroll date that is at least six months following Termination of Employment. In
computing the Normal Form for the purpose of this benefit, however, Final
Average Pay shall be determined immediately before the Change of Control or
immediately before the Termination of Employment, whichever produces the larger
amount.
9.3 During the two-year period following a Change of Control, the Employer
shall have no right to terminate this Agreement.
ARTICLE X
ADMINISTRATION
The Compensation Committee of the Board of Directors of the Employer shall
have full power and authority to interpret, construe and administer this
Agreement, and its interpretations and constructions hereof and actions
hereunder, including the timing, form, amount or receipt of any payment to be
made hereunder, within the scope of its authority, shall be binding and
conclusive for all purposes. The Compensation Committee may delegate its
responsibilities hereunder to one or more employees of the Employer.
ARTICLE XI
MISCELLANEOUS
11.1 If the Employee anticipates a Termination of Employment, the Employee
should apply for a benefit using the Benefit Election Form provided by the
Compensation Committee. Upon the death of the Employee when a benefit is payable
to a Beneficiary, the Beneficiary should notify the Compensation Committee of
the death. All claims for benefit shall be addressed to the Chairman of the
Compensation Committee, Xxxxxxx Enterprises, Inc., 0000 Xxxxx Xxxxxxxxx Xxxxxxx,
Xxxxxxxxx, Xxxxxxxxx 00000. The procedures of making a claim, and for appealing
from a partial or complete denial, are attached hereto as Exhibit B. The remedy
of an employee who is unsatisfied after completing the appeal process is to
enter binding arbitration with the Employer.
11.2 If the Employer, through a mistake of law or fact, pays to the
Employee or other person a benefit hereunder that the recipient is not entitled
to, the recipient shall repay the mistaken amount to the Employer. The Employer
may offset the future benefits of any recipient who refuses to return an
erroneous payment, in addition to pursuing other remedies provided by law.
11.3 Nothing contained herein shall be construed as conferring upon the
Employee the right to continue in the employ of the Employer in any capacity.
11.4 This Agreement shall be binding upon and inure to the benefit of the
Employer, its successors and assigns and the Employee and his or her heirs,
executors, administrators and legal representatives.
11.5 The Employee is being offered the benefits of this Agreement in
consideration of agreeing to become an employee of the Employer and the
non-competition covenant contained in Article VII hereto, to which such Employee
explicitly agrees by executing this Agreement.
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11.6 This Agreement shall be construed in accordance with and governed by
the laws of the State of Louisiana, except to the extent that the Agreement is
governed by the Employee Retirement Income Security Act of 1974 ("ERISA"). It is
the Employer's intent that the Agreement shall be exempt from ERISA's provisions
to the maximum extent permitted by law. The Agreement is intended to be unfunded
for federal income tax purposes and for the purposes of Title I of ERISA, and is
intended to provide a pension benefit only for a select group of management or
highly compensated employees, so as to be exempt from Parts 2, 3 and 4 of Title
I of ERISA, pursuant to Sections 201(2), 301(a)(3), and 401(a)(1) of ERISA.
11.7 This Agreement, and any amendment hereto, shall also serve as the
Agreement's Summary Plan Description. A copy of this Agreement and each
amendment hereto shall be provided to the Employee.
11.8 It is the intent of the Employer that this Plan comply with the
requirements of Section 409A and it shall be construed accordingly. No
acceleration of payments hereunder shall occur unless permitted under Section
409A. As allowed under Section 409A, an acceleration may occur in order (a) to
fulfill a domestic relations order, (b) to allow for the payment of FICA taxes
on benefits hereunder and the resulting tax withholding amount thereon, and (c)
to pay amounts required to be included in income as a result of any failure of
this Agreement to comply with Section 409A.
11.9 Notwithstanding any other provision of this Agreement, the Employer
shall withhold from payments made hereunder any amounts required to be so
withheld by any applicable law or regulation.
Executed in duplicate originals in _________________, Louisiana, this _____
day of _____________, 200__.
WITNESSES: XXXXXXX ENTERPRISES, INC.
By: The Compensation Committee
------------------------------------- of the Board of Directors
By: /s/ XXXXX X. XXXXXXXXX
------------------------------------- ------------------------------------
Xxxxx X. XxXxxxxxx,
Chairman
WITNESSES:
/S/ XXXXXX X. KITCHEN
------------------------------------- ----------------------------------------
Xxxxxx X. Kitchen
-------------------------------------
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XXXXXXX ENTERPRISES, INC.
EXECUTIVE RETIREMENT AGREEMENT
EXHIBIT A - BENEFIT ELECTION FORM
Name: ________________________________________________ SSN: ____________________
Address: _______________________________________________________________________
Date of Termination of Employment: ___________________
Form of Benefit (Elect One):
[ ] For my life only
[ ] For my life, but no less than a ten-year period ___________________________
In the event of my death before ten years of payments have been made, the
beneficiary or beneficiaries of the remaining payments shall be:
________________________________________________________________________________
[ ] For my life, and at my death to the following individual for his or her
life, if he or she survives me:
________________________________________________________________________________
----------------------------------------
Xxxxxx X. Kitchen
----------------------------------------
Date
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XXXXXXX ENTERPRISES, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
EXHIBIT B - CLAIMS PROCEDURES
(a) Filing of a Claim for Benefits
Claims for benefits under the Agreement are to be presented in writing
by the claimant or an authorized representative to the Chairman of the
Compensation Committee of the Board of Directors of Xxxxxxx Enterprises,
Inc.
(b) Notification to Claimant of Decision
If a claim is wholly or partially denied, a notice of the decision
rendered in accordance with the rules set forth below will be furnished to
the claimant not later than 90 days after receipt of the claim by the
Chairman of the Compensation Committee.
If special circumstances require an extension of time for processing
the claim, the Chairman of the Compensation Committee will give the
claimant a written notice of the extension prior to the end of the initial
90 day period. In no event will the extension exceed an additional 90 days.
The extension notice will indicate the special circumstances requiring an
extension of time and the date by which the Chairman of the Compensation
Committee expects to render its final decision.
If the notice of the denial of claim is not furnished in accordance
with the procedure set out herein, the claim will be deemed denied and the
claimant will be permitted to proceed to the review stage.
(c) Content of Notice
The Chairman of the Compensation Committee will provide to a claimant
who is denied a claim for benefits written or electronic notice setting
forth in a clear and simple manner:
(1) The specific reason or reasons for denial;
(2) Specific reference to pertinent plan provisions on which denial is
based;
(3) A description of any additional material or information necessary
for the claimant to perfect the claim and an explanation of why such
materials or information are necessary; and
(4) Appropriate information as to the steps to be taken if the
claimant wishes to submit his or her claim for review, including the
right to bring a civil action under ERISA Section 502(a) following an
adverse determination on review.
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(d) Review Procedure
After the claimant has received written notification of the denial of
the claim, the claimant or a duly authorized representative will have 60
days within which to appeal, in writing, a denied claim to the full
Compensation Committee. The Compensation Committee will afford the claimant
a full and fair review of the denial of the claim. The claimant should
include in his written appeal the following information to support his
claim for benefits:
(1) A list of the issues in the claim denial that he chooses to
contest, if any, and that he wishes the Compensation Committee to
review on appeal;
(2) His position on each issue;
(3) Any additional facts that he believes support his position on each
issue; and
(4) Any legal or other arguments he believes support his position on
each issue.
The claimant or a duly authorized representative will be permitted to
submit issues and comments relevant to the claim. Upon request, the
claimant will be given reasonable access to, and copies of, all
documents and information relevant to the claim for benefits, at no
charge.
The review will consider all items submitted by the claimant,
regardless of whether such information was submitted or considered in
the initial benefit determination.
(e) Decision on Review
The decision on review by the Compensation Committee will be rendered
as promptly as is feasible, but not later than 60 days after the receipt of
a request for review unless the Compensation Committee in its sole
discretion, determines that special circumstances require an extension of
time for processing, in which case a decision will be rendered as promptly
as is feasible, but not later than 120 days after receipt of a request for
review.
If an extension of time for review is required because of special
circumstances, written notice of the extension will be furnished to the
claimant before termination of the initial 60-day review period.
The decision on review will be in written or electronic form. In the
event of a claim denial, the decision shall contain: (1) specific reasons
for the decision, written in a clear and simple manner; (2) specific
references to the pertinent plan provisions on which the decision is based;
(3) a statement that the claimant may request, at no charge,
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reasonable access to and copies of all documents, records and other
information relevant to the claim for benefits; and (4) a description of
the Agreement's appeal and arbitration procedures (if any), and the
claimant's right to bring an action under ERISA Section 502(a).
If the decision on review is not furnished within the time period(s)
set out in this section, the claim will be deemed denied on review.
If the claimant wishes to contest the Compensation Committee's decision on
review, the claimant's claim shall be submitted to binding arbitration in
accordance with the following procedures:
(f) Arbitration
(1) Binding Agreement to Arbitrate. Any claim or controversy arising
out of any provision of this Agreement that cannot be resolved through
the claims procedures provided above, shall be settled by arbitration
administered by the American Arbitration Association (the "AAA") under
its National Rules for the Resolution of Employment Disputes (the
"Rules"), and judgment on the award rendered by the arbitrator(s) may
be entered in any court having jurisdiction thereof.
(2) Selection and Qualifications of Arbitrators. If no party to the
arbitration makes a claim in excess of $1.0 million, exclusive of
interest and attorneys' fees, the proceedings shall be conducted
before a single neutral arbitrator selected in accordance with the
Rules. If any party makes a claim that exceeds $1.0 million, the
proceedings shall be conducted before a panel of three neutral
arbitrators, one of whom shall be selected by each party within 15
days after commencement of the proceeding and the third of whom shall
be selected by the first two arbitrators within 10 days after their
appointment. If the two arbitrators selected by the parties are unable
or fail to agree on the third arbitrator, the third arbitrator shall
be selected by the AAA. Each arbitrator shall be a member of the bar
of the State of Louisiana and actively engaged in the practice of
employment law for at least 15 years.
(3) Location of Proceedings. The place of arbitration shall be New
Orleans, Louisiana.
(4) Remedies. Any award in an arbitration initiated here shall be
limited to actual monetary damages, including if determined
appropriate by the arbitrator(s) an award of costs and fees to the
prevailing party. "Costs and fees" mean all reasonable pre-award
expenses of the arbitration, including arbitrator's fees,
administrative fees, travel expenses, out-of-pocket expenses such as
copying, telephone, witness fees and attorneys' fees. The
arbitrator(s) will have no authority to award consequential, punitive
or other damages not measured by the prevailing party's actual
damages, except as may be required by statute.
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(5) Opinion. The award of the arbitrators shall be in writing, shall
be signed by a majority of the arbitrators, and shall include findings
of fact and a statement of the reasons for the disposition of any
claim.
Agreed to and Accepted:
Xxxxxxx Enterprises, Inc. Employee
By:
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Date: , 200
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