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EXHIBIT 10.13
AGREEMENT
BETWEEN
XXXXXXX FURNITURE COMPANIES, INC.
A GEORGIA CORPORATION,
AND
AS OF
__________, 1996
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TABLE OF CONTENTS
1. Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2. Term of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3. Company's Covenants Summarized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
4. The Executive's Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
5. Compensation Other Than Severance Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
6. Severance Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
7. Termination Procedures and Compensation During Dispute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
8. No Mitigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
9. Successors; Binding Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
10. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
11. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
12. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
13. Settlement of Disputes; Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
14. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
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AGREEMENT
THIS AGREEMENT dated as of ______________, 1996 is made by and between
Xxxxxxx Furniture Companies, Inc., a Georgia corporation (the "Company"), and
__________________________________________ (the "Executive").
WHEREAS the Company considers it essential to the best interests of
its shareholders to xxxxxx the continuous employment of key management
personnel; and
WHEREAS the Board of Directors of the Company (the "Board") recognizes
that, as is the case with many publicly-held corporations, the possibility of
a Change in Control (as defined in the last Section hereof) exists and that
such possibility, and the uncertainty and questions which it may raise among
management, may result in the departure or distraction of management personnel
to the detriment of the Company and its shareholders; and
WHEREAS the Board has determined that appropriate steps should be
taken to reinforce and encourage the continued attention and dedication of
members of the Company's management, including the Executive, to their assigned
duties without distraction in the face of potentially disturbing circumstances
arising from the possibility of a Change in Control;
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Company and the Executive hereby agree as
follows:
1. Defined Terms. The definitions of capitalized terms used in
this Agreement are provided in the last Section hereof.
2. Term of Agreement. This Agreement shall commence on the date
hereof and shall continue in effect through December 31, 1997; provided,
however, that commencing on
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January 1, 1998 and each January 1 thereafter, the term of this Agreement shall
automatically be extended for one additional year unless, not later than
September 30 of the preceding year, the Company or the Executive shall have
given notice not to extend this Agreement or a Change in Control shall have
occurred prior to such January 1; provided, however, if a Change in Control
shall have occurred during the term of this Agreement, this Agreement shall
continue in effect for a period of not less than thirty-six (36) months beyond
the month in which such Change in Control occurred.
3. Company's Covenants Summarized. In order to induce the
Executive to remain in the employ of the Company and in consideration of the
Executive's covenants set forth in Section 4 hereof, the Company agrees, under
the conditions described herein, to pay the Executive the "Severance Payments"
described in Section 6.01 hereof and the other payments and benefits described
herein in the event the Executive's employment with the Company is terminated
following a Change in Control and during the term of this Agreement. Except as
provided by the second sentence of Section 6.01 hereof or the last sentence of
Section 9.01 hereof, no amount or benefit shall be payable under this Agreement
unless there shall have been a termination of the Executive's employment with
the Company following a Change in Control. This Agreement shall not be
construed as creating an express or implied contract of employment and, except
as otherwise agreed in writing between the Executive and the Company, the
Executive shall not have any right to be retained in the employ of the Company.
4. The Executive's Covenants. The Executive agrees that, subject
to the terms and conditions of this Agreement, in the event of a Potential
Change in Control during the term of this Agreement, the Executive will remain
in the employ of the Company until the earliest of (i) a date which is six (6)
months after the date of such Potential Change of Control, (ii) the date of a
Change
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in Control, (iii) the date of termination by the Executive of the Executive's
employment for Good Reason, by reason of death, Disability or Retirement, or
(iv) the termination by the Company of the Executive's employment for any other
reason.
5. Compensation Other Than Severance Payments.
5.01 Following a Change in Control and during the term of
this Agreement, during any period that the Executive fails to perform the
Executive's full-time duties with the Company as a result of incapacity due to
physical or mental illness, the Company shall pay the Executive's full salary
to the Executive at the rate in effect at the commencement of any such period,
together with all compensation and benefits payable to the Executive under the
terms of any compensation or benefit plan, program or arrangement maintained by
the Company during such period, until the Executive's employment is terminated
by the Company for Disability.
5.02 If the Executive's employment shall be terminated for
any reason following a Change in Control and during the term of this Agreement,
the Company shall pay the Executive's full salary to the Executive through the
Date of Termination at the rate in effect at the time the Notice of Termination
is given, together with all compensation and benefits payable to the Executive
through the Date of Termination under the terms of any compensation or benefit
plan, program or arrangement maintained by the Company during such period.
5.03 If the Executive's employment shall be terminated for
any reason following a Change in Control and during the term of this Agreement,
the Company shall pay the Executive's normal post-termination compensation and
benefits to the Executive as such payments become due. Such post-termination
compensation and benefits shall be determined under, and paid in accordance
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with, the Company's retirement, insurance and other compensation or benefit
plans, programs and arrangements.
6. Severance Payments.
6.01 Subject to Section 6.02 hereof, the Company shall pay
the Executive the payments described in this Section 6.01 (the "Severance
Payments") upon the termination of the Executive's employment following a
Change in Control and during the term of this Agreement, in addition to the
payments and benefits described in Section 5 hereof, unless such termination is
(i) by the Company for Cause, (ii) by reason of death, Disability or
Retirement, or (iii) by the Executive without Good Reason. For purposes of the
immediately preceding sentence, if a termination of the Executive's employment
occurs prior to a Change in Control, but following a Potential Change in
Control in which a Person has entered into an agreement with the Company the
consummation of which will constitute a Change in Control, such termination
shall be deemed to have followed a Change in Control and to have been (i) by
the Company without Cause, if the Executive's employment is terminated without
Cause at the direction of such Person, or (ii) by the Executive with Good
Reason, if the Executive terminates his employment with Good Reason and the act
(or failure to act) which constitutes Good Reason occurs following such
Potential Change in Control and at the direction of such Person.
(A) In lieu of any further salary payments to the
Executive for periods subsequent to the Date of Termination and in lieu
of any severance benefit otherwise payable to the Executive, the Company
shall pay to the Executive a lump sum severance payment, in cash, equal
to the sum of (i) the higher of (x) the Executive's annual base salary
in effect immediately prior to the occurrence of the event or
circumstance upon which the Notice of
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Termination is based or (y) the average of Executive's annual base
salary for the three (3) years immediately prior to the occurrence of
the event or circumstance upon which the Notice of Termination is based,
and (ii) the higher of (x) the amount paid to the Executive as an annual
discretionary bonus in the year preceding the year in which the Date of
Termination occurs or (y) the average amount so paid in the three (3)
years preceding that in which the Date of Termination occurs.
(B) The Company shall pay to the Executive a lump
Sum amount, in cash, equal to the sum of (i) any annual discretionary
bonus which has been allocated or awarded to the Executive for a
completed fiscal year preceding the Date of Termination but has not yet
been paid (pursuant to Section 5.02 hereof or otherwise), and (ii) a pro
rata portion of an annual discretionary bonus for the fiscal year in
which the Date of Termination occurs, determined by multiplying the
Executive's annual discretionary bonus awarded or paid for the most
recently completed fiscal year by a fraction, the numerator of which
shall be the number of full days the Executive was employed by the
Company during the fiscal year in which the Executive's Date of
Termination occurred and the denominator of which shall be three hundred
and sixty-five (365) days;
(C) At the option of Executive exercised by
written notice to the Board of Directors within thirty (30) days of
termination, the Company shall repurchase all Options held by Executive
(which Options shall be cancelled upon the making of the payment
referred to below) by the payment of a lump sum amount, in cash, equal
to the product of
(i) the excess of the higher of (x) the Current
Market Value of the Company Shares (as hereinafter
defined) or (y) the highest per share price for
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Company Shares actually paid within six (6) months
preceding or after any Change in Control (whether by
the person or group obtaining such control or by the
Company), over the per share exercise price of each
such Option held by the Executive, times
(ii) the number of Company Shares covered by each
such Option.
As used in this subparagraph, the term "Current Market Value" shall mean the
Closing Price of such shares on the date of the Executive's termination, or if
no shares were traded or bid or ask quotations were published on such date,
then on the next preceding date on which such sales transactions or quotations
were actually made. The term "Closing Price" shall mean:
(1) if the Company Shares are listed on a national
securities exchange, the NASDAQ National Market, or authorized
for trading in any other market or quotation system in which
last sale transactions are reported on a contemporary basis,
the last reported sales price, regular way, of such security
on such exchange or in such quotation system for such day; or
(2) if the Company Shares are not listed, or authorized
for trading in the markets described in (1) above, the last bid
quotation in the over-the-counter market on such trading day as
reported by the National Association of Securities Dealers,
Inc. through NASDAQ, its automated system for reporting
quotations, or its successor or such other generally accepted
source of publicly reported bid quotations as the Company's
Board of Directors may reasonably designate; or
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(3) if the Company Shares are not traded in the organized
securities markets, the fair market value of the Company Shares
as determined by the Board of Directors of the Company in good
faith.
(D) For a twelve (12) month period after the Date of
Termination, the Company shall arrange to provide the Executive with
life, disability, accident and health insurance benefits substantially
similar to those which the Executive is receiving immediately prior to
the Notice of Termination (without giving effect to any reduction in
such benefits subsequent to a Change in Control which reduction
constitutes Good Reason). Benefits otherwise receivable by the
Executive pursuant to this Section 6.01(D) shall be reduced to the
extent comparable benefits are actually received by or made available to
the Executive without cost during the twelve (12) month period following
the Executive's termination of employment (any such benefits actually
received by the Executive shall be reported to the Company by the
Executive). If the benefits provided to the Executive under this
Section 6.01(D) shall result in a decrease, pursuant to Section 6.02, in
the Severance Payments and these Section 6.01(D) benefits are thereafter
reduced pursuant to the immediately preceding sentence because of the
receipt of comparable benefits, the Company shall, at the time of such
reduction, pay to the Executive the lesser of (a) the amount of the
decrease made in the Severance Payments pursuant to Section 6.02, or (b)
the maximum amount which can be paid to the Executive without being, or
causing any other payment to be, nondeductible by reason of section 280G
of the Code.
6.02 Notwithstanding any other provisions of this
Agreement, in the event that any payment or benefit received or to be received
by the Executive in connection with and contingent
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on a Change in Control or the termination of the Executive's employment
(whether pursuant to the terms of this Agreement or any other plan, arrangement
or agreement with the Company, any Person whose actions result in a Change in
Control or any Person affiliated with the Company or such Person) (all such
payments and benefits, including the Severance Payments, being hereinafter
called "Total Payments") would not be deductible (in whole or part), by the
Company, an affiliate or Person making such payment or providing such benefit,
as a result of section 280G of the Code, then, to the extent necessary to make
the remaining portion of the Total Payments deductible (and after taking into
account any reduction in the Total Payments provided by reason of Section 280G
of the Code in such other plan, arrangement or agreement), (A) the cash
Severance Payments and/or other cash payments provided for hereunder, in each
case, to the extent still unpaid, shall first be reduced (if necessary, to
zero), and (B) all other noncash Severance Payments and/or other non-cash
benefits provided for hereunder, in each case, to the extent still unfurnished,
shall next be reduced (if necessary, to zero), and (C) the Executive shall have
no right to receive hereunder, and neither the Company, any Person whose
actions result in a Change in Control or any Person affiliated with the Company
or such Person shall be obligated to make, pay or furnish to the Executive
hereunder any payment or benefit in excess of those payments or benefits
provided hereunder as reduced, if applicable, pursuant to clause (A) or clause
(B) above. For purposes of this limitation (i) no portion of the Total
Payments the receipt or enjoyment of which the Executive shall have effectively
waived in writing prior to the Date of Termination shall be taken into account,
(ii) no portion of the Total Payments shall be taken into account which in the
opinion of tax counsel selected by the Company's independent auditors and
reasonably acceptable to the Executive does not constitute a "parachute
payment" within the meaning of section 280G(b)(2) of the Code, including by
reason of section
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280G(b)(4)(A) of the Code, (iii) the Severance Payments shall be reduced only
to the extent necessary so that the Total Payments (other than those referred
to in clauses (i) or (ii)) in their entirety constitute reasonable compensation
for services actually rendered within the meaning of section 280G(b)(4)(B) of
the Code or are otherwise not subject to disallowance as deductions, in the
opinion of the tax counsel referred to in clause (ii); and (iv) the value of
any non-cash benefit or any deferred payment or benefit included in the Total
Payments shall be determined by the Company's independent auditors in
accordance with the principles of sections 280G(d)(3) and (4) of the Code.
If it is established pursuant to a final determination of a
court or an Internal Revenue Service proceeding that, notwithstanding the good
faith of the Executive and the Company in applying the terms of this Section
6.02, the aggregate "parachute payments" paid to or for the Executive's benefit
are in an amount that would result in any portion of such "parachute payments"
not being deductible by reason of section 280G of the Code, then the Executive
shall have an obligation to pay the Company upon demand an amount equal to the
sum of (i) the excess of the aggregate "parachute payments" paid to or for the
Executive's benefit over the aggregate "parachute payments" that could have
been paid to or for the Executive's benefit without any portion of such
"parachute payments" not being deductible by reason of section 280G of the
Code; and (ii) interest on the amount set forth in clause (i) of this sentence
at the rate provided in section 1274(b)(2)(B) of the Code from the date of the
Executive's receipt of such excess until the date of such payment.
6.03 The payments and other items provided for in Section
6.01 (other than Section 6.01(D)) hereof shall be made not later than the
fifteenth (15th) day following the Date of Termination or the date of exercise
by Executive of any of Executive's rights hereunder, provided, however, that if
the amounts of such payments, and the limitation on such payments set forth in
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Section 6.02 hereof, cannot be finally determined on or before such day, the
Company shall pay to the Executive on such day an estimate, as determined in
good faith by the Company, of the minimum amount of such payments to which the
Executive is clearly entitled and shall pay the remainder of such payments
(together with interest at the rate provided in section 1274(b)(2)(B) of the
Code) as soon as the amount thereof can be determined but in no event later
than the thirtieth (30th) day after the Date of Termination. In the event that
the amount of the estimated payments exceeds the amount subsequently determined
to have been due, such excess shall constitute a loan by the Company to the
Executive, payable on the fifth (5th) business day after demand by the Company
(together with interest at the rate provided in section 1274(b)(2)(B) of the
Code). At the time that payments are made under this Section, the Company
shall provide the Executive with a written statement setting forth the manner
in which such payments were calculated and the basis for such calculations
including, without limitation, any opinions or other advice the Company has
received from outside counsel, auditors or consultants (and any such opinions
or advice which are in writing shall be attached to the statement).
6.04 The Company also shall pay to the Executive all legal
and accounting fees and expenses incurred by the Executive as a result of a
termination which entitles the Executive to the Severance Payments (including
all such fees and expenses, if any, incurred in disputing any such termination
or in seeking in good faith to obtain or enforce any benefit or right provided
by this Agreement or in connection with any tax audit or proceeding to the
extent attributable to the application of section 4999 of the Code to any
payment or benefit provided hereunder). Such payments shall be made within
fifteen (15) business days after delivery of the Executive's written
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requests for payment accompanied with such evidence of fees and expenses
incurred as the Company reasonably may require.
7. Termination Procedures and Compensation During Dispute.
7.01 Notice of Termination. After a Change in Control and
during the term of this Agreement, any purported termination of the Executive's
employment (other than by reason of death) shall be communicated by written
Notice of Termination from one party hereto to the other party hereto in
accordance with Section 10 hereof. For purposes of this Agreement, a "Notice
of Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated.
Further, a Notice of Termination for Cause is required to include a copy of a
resolution duly adopted by the affirmative vote of not less than three-quarters
(3/4) of the entire membership of the Board at a meeting of the Board which was
called and held for the purpose of considering such termination (after
reasonable notice to the Executive and an opportunity for the Executive,
together with the Executive's counsel, to be heard before the Board) finding
that, in the good faith opinion of the Board, the Executive was guilty of
conduct set forth in clause (i) or (ii) of the definition of Cause herein, and
specifying the particulars thereof in detail.
7.02 Date of Termination. "Date of Termination", with
respect to any purported termination of the Executive's employment after a
Change in Control or prior to a Change in Control, but following a Potential
Change in Control in which a Person has entered into an agreement with the
Company the consummation of which will constitute a Change in Control and
during the term of this Agreement, shall mean (i) if the Executive's employment
is terminated for
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Disability, thirty (30) days after Notice of Termination is given (provided
that the Executive shall not have returned to the full-time performance of the
Executive's duties during such thirty (30) day period), and (ii) if the
Executive's employment is terminated for any other reason, the date specified
in the Notice of Termination (which, in the case of a termination by the
Company, shall not be less than thirty (30) days (except in the case of a
termination for Cause) and, in the case of a termination by the Executive,
shall not be less than fifteen (15) days nor more than sixty (60) days,
respectively, from the date such Notice of Termination is given).
7.03 Dispute Concerning Termination. If within fifteen
(15) days after any Notice of Termination is given, or, if later, prior to the
Date of Termination (as determined without regard to this Section 7.03), the
party receiving such Notice of Termination notifies the other party that a
dispute exists concerning the termination, the Date of Termination shall be the
date on which the dispute is finally resolved, either by mutual written
agreement of the parties or by a final judgment, order or decree of a court of
competent jurisdiction (which is not appealable or with respect to which the
time for appeal therefrom has expired and no appeal has been perfected);
provided further that the Date of Termination shall be extended by a notice of
dispute only if such notice is given in good faith and the party giving such
notice pursues the resolution in such dispute with reasonable diligence.
7.04 Compensation During Dispute. If a purported
termination occurs following a Change in Control and during the term of this
Agreement, and such termination is disputed in accordance with Section 7.03
hereof, the Company shall continue to pay the Executive the full compensation
in effect when the notice giving rise to the dispute was given (including, but
not limited to, salary) and continue the Executive as a participant in all
compensation, benefit and
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insurance plans in which the Executive was participating when the notice giving
rise to the dispute was given, until the dispute is finally resolved in
accordance with Section 7.03 hereof. Amounts paid under this Section 7.04 are
in addition to all other amounts due under this Agreement (other than those due
under Section 5.02 hereof) and shall not be offset against or reduce any other
amounts due under this Agreement.
8. No Mitigation. The Company agrees that, if the Executive's
employment by the Company is terminated during the term of this Agreement, the
Executive is not required to seek other employment or to attempt in any way to
reduce any amounts payable to the Executive by the Company pursuant to Section
6 or Section 7.04. Further, the amount of any payment or benefit provided for
in Section 6 (other than Section 6.01(D)) or Section 7.04 shall not be reduced
by any compensation earned by the Executive as the result of employment by
another employer, by retirement benefits, by offset against any amount claimed
to be owed by the Executive to the Company, or otherwise.
9. Successors; Binding Agreement.
9.01 In addition to any obligations imposed by law upon
any successor to the Company, the Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. Failure of the Company to obtain such assumption and
agreement prior to the effectiveness of any such succession shall be a breach
of this Agreement and shall entitle the Executive to compensation from the
Company in the same amount and on the same terms as the Executive would be
entitled to
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hereunder if the Executive were to terminate the Executive's employment for
Good Reason after a Change in Control, except that, for purposes of
implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination.
9.02 This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive shall die while any amount would still be payable to the Executive
hereunder (other than amounts which, by their terms, terminate upon the death
of the Executive) if the Executive had continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to the executors, personal representatives or administrators of
the Executive's estate.
10. Notices. For the purpose of this Agreement, notices
and all other communications provided for in the Agreement shall be in writing
and shall be deemed to have been duly given when delivered or mailed by United
States registered mail, return receipt requested, postage prepaid, addressed to
the respective addresses set forth below, or to such other address as either
party may have furnished to the other in writing in accordance herewith, except
that notice of change of address shall be effective only upon actual receipt:
To the Company: Xxxxxxx Furniture Companies, Inc.
000 Xxxx Xxxxxxxxx Xx., XX
Xxxxxxx, Xxxxxxx 00000
Attention: President
To the Executive: ____________________________
____________________________
____________________________
11. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the
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Executive and such officer as may be specifically designated by the Board. No
waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time. No agreements or representations, oral or otherwise, express or implied,
with respect to the subject matter hereof have been made by either party which
are not expressly set forth in this Agreement. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the State of Georgia. All references to sections of the Exchange Act or the
Code shall be deemed also to refer to any successor provisions to such
sections. Any payments provided for hereunder shall be paid net of any
applicable withholding required under federal, state or local law and any
additional withholding to which the Executive has agreed. The obligations of
the Company and the Executive under Sections 6 and 7 shall survive the
expiration of the term of this Agreement. The invalidity or unenforceability
of any provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall remain in
full force and effect.
12. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
13. Settlement of Disputes; Arbitration. All claims by the
Executive for benefits under this Agreement shall be directed to and determined
by the Board and shall be in writing. Any denial by the Board of a claim for
benefits under this Agreement sha11 be delivered to the Executive in writing
and shall set forth the specific reasons for the denial and the specific
provisions of this
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Agreement relied upon. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration in
Atlanta, Georgia in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered on the arbitrator's award
in any court having jurisdiction; provided, however, that the Executive shall
be entitled to seek specific performance of the Executive's right to be paid
until the Date of Termination during the pendency of any dispute or controversy
arising under or in connection with this Agreement.
14. Definitions. For purposes of this Agreement, the following
terms shall have the meanings indicated below:
(A) "Beneficial Owner" shall have the meaning defined in Rule
13d-3 under the Exchange Act.
(B) "Board" shall mean the Board of Directors of the Company.
(C) "Cause" for termination by the Company of the Executive's
employment, after any Change in Control (or after any Potential Change in
Control under the circumstances described in the second sentence of Section
6.01 hereof), shall mean (i) the willful and continued failure by the Executive
for a period of ninety (90) days to substantially perform the Executive's
duties with the Company (other than any such failure resulting from the
Executive's incapacity due to physical or mental illness or any such actual or
anticipated failure after the issuance of a Notice of Termination for Good
Reason by the Executive pursuant to Section 7.01) after a written demand for
substantial performance is delivered to the Executive by the Board, which
demand specifically identifies the manner in which the Board believes that the
Executive has not substantially performed the Executive's duties, or (ii) the
willful engaging by the Executive in conduct which is demonstrably
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and materially injurious to the Company or its subsidiaries, monetarily or
otherwise. For purposes of clauses (i) and (ii) of this definition, no act, or
failure to act, on the Executive's part shall be deemed "willful" unless done,
or omitted to be done, by the Executive not in good faith and without
reasonable belief that the Executive's act, or failure to act, was in the best
interest of the Company.
(D) A "Change in Control" shall be deemed to have occurred if
the conditions set forth in any one of the following paragraphs shall have been
satisfied:
(I) any Persons other than Xxxxxx Xxxxxxx, Xxx.
Xxxxx Xxxxxxx Xxxxx, Xxxxxxxx X. Xxxxxx, Xxxx Xxxxxx Xxxxxxx,
M.D. and Xxxxx X. XxXxxxxxx, Xx., their spouses, lineal
descendants, heirs, administrators or representatives is or
becomes the Beneficial Owner, directly or indirectly, of
securities of the Company (not including in the securities
beneficially owned by such Person any securities acquired
directly from the Company or its affiliates, as such term is
defined in the rules and regulations of the Securities and
Exchange Commission) representing 20% or more of the combined
voting power of the Company's then outstanding securities; or
(II) during any period of two consecutive years
(not including any period prior to the execution of this
Agreement), individuals who at the beginning of such period
constitute the Board and any new director (other than a director
designated by a Person who has entered into an agreement with
the Company to effect a transaction described in clause (I),
(III) or (IV) of this paragraph) whose election by the Board or
nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors at
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the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to
constitute a majority thereof; or
(III) the shareholders of the Company approve a
merger or statutory share exchange of the Company with any other
corporation, other than (i) a merger or statutory share exchange
which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into
voting securities of the surviving entity), in combination with
the ownership of any trustee or other fiduciary holding
securities under an employee benefit plan of the Company, at
least 75% of the combined voting power of the voting securities
of the Company or such surviving entity outstanding immediately
after such merger or statutory share exchange, or (ii) a merger
or statutory share exchange effected to implement a
recapitalization of the Company (or similar transaction) in
which no Person acquires more than 50% of the combined voting
power of the Company's then outstanding securities; or
(IV) the shareholders of the Company approve a
plan of complete liquidation of the Company or an agreement for
the sale or disposition by the Company of all or substantially
all the Company's assets.
(E) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
(F) "Company" shall mean the Xxxxxxx Furniture Companies, Inc.
and any successor to its business and/or assets which assumes and agrees to
perform this Agreement by operation of
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law, or otherwise (except in determining, under Section 15(E) hereof, whether
or not any Change in Control of the Company has occurred in connection with
such succession).
(G) "Company Shares" shall mean shares of common stock of the
Company or any equity securities into which such shares have been converted.
(H) "Date of Termination" shall have the meaning stated in
Section 7.02 hereof.
(I) "Disability" shall be deemed the reason for the termination
by the Company of the Executive's employment, if, as a result of the
Executive's incapacity due to physical or mental illness, the Executive shall
have been absent from the full-time performance of the Executive's duties with
the Company for a period of six (6) consecutive months, the Company shall have
given the Executive a Notice of Termination for Disability, and, within thirty
(30) days after such Notice of Termination is given, the Executive shall not
have returned to the full-time performance of the Executive's duties.
(J) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended from time to time.
(K) "Executive" shall mean the individual named in the first
paragraph of this Agreement.
(L) "Good Reason" for termination by the Executive of the
Executive's employment shall mean the occurrence (without the Executive's
express written consent) after any Change in Control, or after any Potential
Change in Control under the circumstances described in the second sentence of
Section 6.01 hereof (treating all references in paragraphs (I) through (VII)
below to a "Change in Control" as references to a "Potential Change in
Control"), of any one of the following acts by the Company, or failures by the
Company to act:
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(I) the assignment to the Executive of any duties
inconsistent with the Executive's status as an executive officer
of the Company or a substantial adverse alteration in the nature
or status of the Executive's responsibilities from those in
effect immediately prior to the Change in Control;
(II) a reduction by the Company in the Executive's
annual base salary as in effect on the date hereof or as the
same may be increased from time to time;
(III) the relocation of the Company's principal
executive offices to a location outside a ten (10) mile radius
from the city limits of Atlanta, Georgia (or, if different, a
ten (10) mile radius from the city limits in which such offices
are located immediately prior to the Change in Control) or the
Company's requiring the Executive to be based anywhere other
than the metropolitan area in which the Executive is based
immediately prior to the Change in Control except for required
travel on the Company's business to an extent substantially
consistent with the Executive's present business travel
obligations;
(IV) the failure by the Company, without the
Executive's consent, to pay to the Executive any portion of the
Executive's current compensation or to pay to the Executive any
portion of an installment of deferred compensation under any
deferred compensation program of the Company, within seven (7)
days of the date such compensation is due;
(V) the failure by the Company to continue in effect
any compensation plan in which the Executive participates
immediately prior to the Change in Control which is material to
the Executive's total compensation, including but not limited to
the
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Company's stock option, incentive compensation, bonus and other
plans or any substitute plans adopted prior to the Change in
Control, unless an equitable arrangement (embodied in an ongoing
substitute or alternative plan) has been made with respect to
such plan, or the failure by the Company to continue the
Executive's participation therein (or in such substitute or
alternative plan) on a basis not materially less favorable, both
in terms of the amount of benefits provided and the level of the
Executive's participation relative to other participants, as
existed at the time of the Change in Control;
(VI) the failure by the Company to continue to provide
the Executive with benefits substantially similar to those
enjoyed by the Executive under any of the Company's pension,
life insurance, medical, dental, health and accident, or
disability plans in which the Executive was participating at the
time of the Change in Control, the taking of any action by the
Company which would directly or indirectly materially reduce any
of such benefits or deprive the Executive of any material fringe
benefit enjoyed by the Executive at the time of the Change in
Control, or the failure by the Company to provide the Executive
with the number of paid vacation days to which the Executive is
entitled on the basis of years of service with the Company in
accordance with the Company's normal vacation policy in effect
at the time of the Change in Control; or
(VII) any purported termination of the Executive's
employment which is not effected pursuant to a Notice of
Termination satisfying the requirements of
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Section 9.01; for purposes of this Agreement, no such purported
termination shall be effective.
The Executive's right to terminate the Executive's employment
for Good Reason shall not be affected by the Executive's incapacity due to
physical or mental illness. The Executive's continued employment shall not
constitute consent to, or a waiver of rights with respect to, any act or
failure to act constituting Good Reason hereunder.
(M) "Notice of Termination" shall have the meaning stated in
Section 7.01 hereof.
(N) "Options" shall mean options for Company Shares granted to
the Executive under the Company's stock option plans.
(O) "Person" shall have the meaning given in Section 3(a)(9) of
the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof;
however, a Person shall not include (i) the Company or any of its subsidiaries,
(ii) a trustee or other fiduciary holding securities under an employee benefit
plan of the Company or any of its subsidiaries, (iii) an underwriter
temporarily holding securities pursuant to an offering of such securities, or
(iv) a corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of stock of
the Company.
(P) "Potential Change in Control" shall be deemed to have
occurred if the conditions set forth in any one of the following paragraphs
shall have been satisfied;
(I) the Company enters into an agreement, the
consummation of which would result in the occurrence of a Change
in Control;
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(II) the Company or any Person publicly announces
an intention to take or to consider taking actions which, if
consummated, would constitute a Change in Control;
(III) any Persons other than Xxxxxx Xxxxxxx, Xxx.
Xxxxx Xxxxxxx Xxxxx, Xxxxxxxx X. Xxxxxx, Xxxx Xxxxxx Xxxxxxx,
M.D. and Xxxxx XxXxxxxxx, Xx., their spouses, lineal
descendants, heirs, administrators or representatives who is or
becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing 10% or more of the
combined voting power of the Company's then outstanding
securities, increases such Person's beneficial ownership of such
securities by 5% or more over the percentage so owned by such
Person on the date hereof; or
(IV) the Board adopts a resolution to the effect
that, for purposes of this Agreement, a Potential Change in
Control has occurred.
(Q) "Retirement" shall be deemed the reason for the
termination by the Company or the Executive of the Executive's employment if
such employment is terminated in accordance with the Company's retirement
policy, not including early retirement, generally applicable to its salaried
employees, as in effect immediately prior to the Change in Control, or in
accordance with any retirement arrangement established with the Executive's
consent with respect to the Executive.
(R) "Severance Payments" shall mean those payments
described in Section 6.01 hereof.
(S) "Shares" shall mean shares of the common stock of the
Company.
(T) "Total Payments" shall mean those payments described
in Section 6.02 hereof.
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IN WITNESS WHEREOF, the parties hereto have set their hands and seals
all as of the day and year first above written.
XXXXXXX FURNITURE COMPANIES, INC.
By:
--------------------------------
Name:
Title:
EXECUTIVE
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