EXHIBIT 10.10
X'XXXXXXXX INDUSTRIES HOLDINGS, INC.
0000 Xxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000-0000
Xxxxxxx X. Xxxxxxxx
President and Chief Operating Officer
August 23, 1999
Xx. Xxxxx X. Xxxxx
0000 Xxxxxxxxxxx
Xxxxxx Xxxxx, Xxxxx 00000
Dear Xxxxx:
You have expressed your desire to leave the full time employment of
X'Xxxxxxxx Industries Holdings, Inc. ("X'Xxxxxxxx") to return to the workforce
in Texas. This letter agreement will document our discussion concerning the
terms of your separation from X'Xxxxxxxx. Both you and X'Xxxxxxxx agree that
your last day of full time employment with X'Xxxxxxxx will be August 31, 1999.
In recognition of your service and commitment, and in consideration of the
agreements made by you in this letter agreement, X'Xxxxxxxx will make the
following arrangements for your benefit.
EMPLOYEE DUTIES.
You will remain an employee of X'Xxxxxxxx until the earlier of August 31,
2000 or until the closing of the Merger Agreement (as hereinafter defined). Your
duties will be to consult (via telephone) as requested with the officers and
employees of X'Xxxxxxxx on such matters as they may reasonably request. The
amount of time you are required to consult with X'Xxxxxxxx will not unreasonably
interfere with your search for a new position or with your duties at any
position you may secure.
BENEFITS IN THE EVENT OF A CHANGE IN CONTROL OF X'XXXXXXXX.
X'Xxxxxxxx and you entered into a Termination Protection Agreement dated as
of February 1, 1996 (the "Termination Protection Agreement"). If a Change in
Control of X'Xxxxxxxx (as defined in the Termination Protection Agreement)
occurs on or before November 30, 1999 or pursuant to the Agreement and Plan of
Merger dated as of May 17, 1999
Xx. Xxxxx X. Xxxxx -2- August 23, 1999
between X'Xxxxxxxx and OSI Acquisition, Inc., as the agreement may be amended
(the "Merger Agreement"), X'Xxxxxxxx will pay you
1. the benefits described in Sections 3.1(b)(i) through 3.1(b)(vii),
Section 3.1(b)(xii) and Section 5 of the Termination Protection
Agreement (X'Xxxxxxxx confirms that your Profit Sharing Account in
X'Xxxxxxxx'x Savings and Profit Sharing Plan is vested); and
2. an amount in cash equal to the sum of (a) the balance in your Deferred
Compensation Plan account as of August 31, 1999 plus (b) an amount
equal to the amount contributed to your Deferred Compensation Plan
account for fiscal 1999 (including without limitation Profit Sharing
Contributions).
In addition, if a Change in Control occurs on or before November 30, 1999 or
pursuant to the Merger Agreement, any unvested employee stock options you hold
will vest immediately for the remainder of their respective terms, subject to
the next sentence. If the Change of Control involves an affiliate of Bruckmann,
Xxxxxx, Xxxxxxxx & Co., L.P. ("BRS"), you agree to surrender all of your
employee stock options in exchange for the consideration described in Section
3.2(d) of the Merger Agreement.
The amounts described in the preceding paragraphs shall be in lieu of any
payment under the Termination Protection Agreement. The amounts described in the
preceding paragraphs will be paid at approximately the times specified in the
Termination Protection Agreement.
BENEFITS IN THE EVENT OF NO CHANGE IN CONTROL OF X'XXXXXXXX BEFORE NOVEMBER 30,
1999 OR PURSUANT TO THE MERGER AGREEMENT.
In the event no Change in Control of X'Xxxxxxxx occurs on or before
November 30, 1999 or pursuant to the Merger Agreement:
1. X'Xxxxxxxx will pay you Accrued Compensation (as defined in the
Termination Protection Agreement) through August 31, 1999.
2. X'Xxxxxxxx will pay you (a) $3,000 per month from September 1999
through August 2000; and (b) a lump sum payment of $124,000 on January
5, 2000.
3. Your accounts in X'Xxxxxxxx'x Stock Purchase Program, Savings and
Profit Sharing Plan and Deferred Compensation Plan will be distributed
to you in accordance with the terms of the respective plans.
X'Xxxxxxxx confirms that it will contribute to your accounts in the
Savings and Profit Sharing Plan and Deferred Compensation Plan your
profit sharing contribution for the year ended June 30, 1999. 1.
Xx. Xxxxx X. Xxxxx -3- August 23, 1999
4. All of your employee stock options not vested at August 31, 1999 will
terminate. The Compensation Committee of the Board of Directors has
agreed to delay the termination date of your vested stock options to
August 31, 2000. If a Change in Control involving an affiliate of BRS
occurs, you agree to surrender all of your employee stock options in
exchange for the consideration described in Section 3.2(d) of the
Merger Agreement.
5. X'Xxxxxxxx will agree to continue medical and life insurance coverage
for you and your dependents (as defined in X'Xxxxxxxx'x Health
Protection Plan) for twelve months from August 31, 1999 at the active
employee rate. Thereafter, you will be entitled to continue your
medical and life insurance coverage under COBRA at the applicable
COBRA premium rate established by X'Xxxxxxxx'x Human Resources
Department. You should contact Xxx Xxxxxxx to arrange for payment of
the premiums for these coverages if you desire them. Your medical and
life insurance coverage will terminate if you become covered under
another medical or life insurance plan prior to the end of the
prescribed period.
6. X'Xxxxxxxx will make available to you up to $8,500 in fees and
expenses used towards outplacement services with Right Associates or
another outplacement firm of your choice. X'Xxxxxxxx will also pay for
your telephone costs in your Texas office until the earlier of August
31, 2000 or you accept employment with another firm.
7. X'Xxxxxxxx will maintain for your benefit the director and officer
liability insurance equivalent to that it is required to maintain for
its outside directors pursuant to Section 6.8 of the Merger Agreement.
TIMING OF PAYMENTS.
Your participation in all other benefits will end effective August 31,
1999. If you sign this letter agreement and the periods specified in the last
two paragraphs of this letter have elapsed, X'Xxxxxxxx will make the applicable
payments at the times specified above. Accrued Compensation will be paid to you
reasonably promptly after September 1, 1999. Further, you will be entitled to
the outplacement services specified in numbered paragraph 6 above. Your accounts
in the X'Xxxxxxxx Stock Purchase Program, Savings and Profit Sharing Plan and
Deferred Compensation Plan will be distributed to you at the times specified in
the respective plans. The remainder of the payments due hereunder, if any, will
be processed for payment as soon as practicable after the Change in Control or
cancellation of the Merger Agreement, whichever first occurs.
TAXES.
Xx. Xxxxx X. Xxxxx -4- August 23, 1999
Regardless of whether a Change in Control occurs on or before November 30,
1999, X'Xxxxxxxx will withhold any taxes required by federal or state
governments from the payments described above.
In return for the payments outlined above, you agree to the following.
(A) You agree that you are not eligible for any severance benefits, or any
other amounts from X'Xxxxxxxx or its affiliates, other than those described
herein, including specifically any payments under the Termination Protection
Agreement.
(B) You will resign from all positions you hold with X'Xxxxxxxx and any of
its affiliates and will execute appropriate letters of resignation.
(C) In consideration of the above arrangements, you agree to release fully
and unconditionally X'Xxxxxxxx, its parent, subsidiaries and affiliates, their
successors and assigns, and each of their respective officers, directors and
employees (collectively, "X'Xxxxxxxx"), from any and all claims, demands, debts,
obligations, damages, costs, expenses, actions, causes of action or judgments of
any kind or character whatsoever, which you may have or claim to have against
them or any of them as of the date of this letter agreement, or which may be
hereafter claimed to arise out of any action, inaction, event or matter
occurring prior to the execution of this letter agreement, whether known or
unknown, and whether arising out of your employment with X'Xxxxxxxx or your
separation therefrom. You waive all claims against X'Xxxxxxxx and all damages,
if any, that might be recoverable arising out of any such claims, demands,
debts, obligations, damages, costs, expenses, actions, causes of action or
judgments. This release and waiver of all claims and damages includes, but is
not limited to, any tort or breach of express or implied contract or claim of
contractual restriction relating to your employment or discontinuation thereof,
any claim of wrongful discharge, slander, libel, intentional or negligent
infliction of emotional distress, and all rights under federal, state or local
law including but not limited to laws prohibiting race, sex, age, religion,
national origin, handicap, disability or other forms of discrimination,
including, but not limited to, Title VII of the Civil Rights Act of 1964, as
amended, the Age Discrimination in Employment Act, as amended ("ADEA"), any
state or local human rights laws, the Employee Retirement Income Security Act,
workers' compensation laws, the Consolidated Omnibus budget Reconciliation Act
and the National Labor Relations Act, as amended. You waive and release any
rights you may have under these and other laws, but do not waive any rights or
claims that may arise under the ADEA or otherwise after the date of execution of
this Agreement.
(D) By signing this letter agreement, you are waiving and giving up your
right, if any, to bring suit and collect damages or otherwise recover from
X'Xxxxxxxx for any alleged violation by any of them of any federal, state or
local statutes, ordinances or common laws, including but not limited to claims
under the ADEA and claims under other statutes and ordinances which bar
discrimination based on age, sex, race, color, national origin, religion,
handicap or veteran status. This letter agreement covers all claims in
connection with your employment and the termination
Xx. Xxxxx X. Xxxxx -5- August 23, 1999
of your employment. This release and discharge does not apply to rights or
claims that arise after the date this letter agreement is executed.
(E) You agree to return any files, records, documents, plans, drawings,
equipment, software, pictures, spreadsheets and any other property belonging to
X'Xxxxxxxx which may be in your possession, other than the office furniture,
personal computer, monitor, printer and facsimile machine located in your Flower
Mound, Texas home office and the Sharp calculator located in your Lamar,
Missouri office. X'Xxxxxxxx will pay your out-of-pocket expenses involved in
returning such materials.
(F) You will not, for a period of two years after August 31, 1999, act as
an officer, director, employee, consultant or agent of any corporation
manufacturing or distributing (or planning to manufacture or distribute)
ready-to-assemble furniture, including without limitation Xxxxxx Woodworking,
Xxxx Industries, Inc., Dorel Industries, Inc. or Xxxxx Pride L.P., or any
successor to any of such companies. Notwithstanding the preceding sentence, you
may invest in the securities of any corporation whose securities are traded on a
national securities exchange or on NASDAQ if your ownership of such corporation
would be less than one percent of the outstanding voting stock of such
corporation.
(G) You will not, for a period of two years after August 31, 1999, directly
or indirectly, whether as an individual or on behalf of any other person, firm,
corporation, partnership, joint venture or other entity, solicit or endeavor to
entice away from X'Xxxxxxxx any employee employed by X'Xxxxxxxx. This paragraph
shall not be construed as prohibiting you from hiring an employee of X'Xxxxxxxx
who first contacts you with respect to employment.
(H) You agree not to disclose or communicate to any person or to use for
your benefit or the benefit of another person any confidential or proprietary
information concerning X'Xxxxxxxx or any of its affiliates, suppliers or
customers, including but not limited to specific processes, procedures, customer
lists, financial information, etc. which may be regarded as confidential.
(I) You acknowledge that you have freely entered into this Agreement and
that no representations or promises other than those stated herein have been
made to you. You are advised to consult with an attorney before signing this
letter agreement. By signing this letter agreement, you acknowledge that you
have had the opportunity to consult with your attorney, accountant or financial
advisor at your expense and that you have had at least 21 days in which to
consider this letter agreement.
Xx. Xxxxx X. Xxxxx -6- August 23, 1999
(J) In the event of a material breach or threatened material breach by you,
X'Xxxxxxxx may cancel any remaining payments to you and cease any further
benefits. This will not be construed, however, to limit the remedies available
to X'Xxxxxxxx in the event of such breach and your release and waiver of claims
against X'Xxxxxxxx shall continue to be valid and in effect.
You and X'Xxxxxxxx agree not to make any disparaging or critical remarks
concerning each other or any of X'Xxxxxxxx'x affiliates and will assist each
other in preserving and promoting their respective goodwill and other business
interests.
X'Xxxxxxxx and you agree that if a dispute arises regarding this letter
agreement, other than one involving a breach of paragraphs (F), (G) or (H), such
dispute shall be submitted to binding arbitration in Tulsa, Oklahoma. The
arbitration is to be conducted before an arbitrator mutually agreed upon by
X'Xxxxxxxx and you and pursuant to procedures to be mutually agreed upon by us.
However, if X'Xxxxxxxx and you cannot agree upon an arbitrator or the procedures
for the arbitration, the choice of an arbitrator and the procedures to be
followed in the arbitration shall be determined in accordance with the
Commercial Arbitration Rules of the American Arbitration Association, except to
the extent the parties agree otherwise in writing. Missouri law, without
reference to its conflicts of law rules, shall govern the interpretation of this
agreement, whether in any such arbitration or otherwise. X'Xxxxxxxx and you
further agree that judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. The reasonable attorneys' fees
and expenses of appearing at the arbitration and preparing for the arbitration
proceeding, and the fees and expenses of the arbitrator shall be determined by
the arbitrator, who will be authorized to require the loser to pay the winner's
reasonable fees and expenses or to fairly apportion the attorneys' and
arbitrator's fees and expenses between the parties if both parties prevail on
some aspects of the dispute.
A breach of paragraphs (F), (G) or (H) above could result in irreparable
and continuing damage to X'Xxxxxxxx for which there will be no adequate remedy
at law, and in the event of such breach, X'Xxxxxxxx shall be entitled to
injunctive and other and further relief, including damages, attorneys' fees and
litigation costs, as may be proper. X'Xxxxxxxx may apply to any court of
competent jurisdiction for such relief and damages.
We encourage you to take this letter agreement home with you and to
consider it carefully for at least 21 days. If you have questions regarding this
letter agreement, please contact either Xxx Xxxxxxx or Xxxxxxx Xxxxxx. We
encourage you to discuss this letter agreement and the release language
contained in it with your attorney. In any event, you should thoroughly review
and understand the effect of this letter agreement and the release language
before signing it. You have 21 days in which to consider this letter agreement
and indicate whether you will sign this letter agreement.
Xx. Xxxxx X. Xxxxx -7- August 23, 1999
Pursuant to the Older Workers Benefit Protection Act, this letter agreement
cannot become effective and enforceable until seven days following its
execution. Hence, the monies payable under this letter agreement may not be paid
until seven days have elapsed after you sign this letter agreement. For seven
days following your execution of this letter agreement, you may revoke it. If
you revoke this letter agreement, X'Xxxxxxxx will not owe you any money under
this agreement. If you do not revoke this letter agreement within seven days
after signing it, X'Xxxxxxxx will commence the payments hereunder.
Very truly yours,
X'XXXXXXXX INDUSTRIES, INC.
By: /S/ XXXXXXX X. XXXXXXXX
-------------------------------------
Xxxxxxx X. Xxxxxxxx
President and Chief Operating Officer
THIS AGREEMENT CONTAINS A BINDING
ARBITRATION PROVISION WHICH MAY
BE ENFORCED BY THE PARTIES.
Accepted and Agreed to this
23rd day of August, 1999
/S/ XXXXX X. XXXXX
-----------------------------
Xxxxx X. Xxxxx
