AGREEMENT
THIS AGREEMENT is made and entered into as of this 29th day of
October, 1997 by and between Xxxxxxx X. Xxxxxxxxx ("Bluestone"),
Xxxxxx Xxxxx Xxxxx & Co., an Illinois corporation ("CPS"), and
Xxxxxxxx'x, Inc. a Tennessee corporation (the "Company").
WITNESSETH:
WHEREAS, CPS and Bluestone are parties to that certain
Employment Agreement dated as of March 25, 1996, pursuant to which
Bluestone has agreed to perform certain duties for the benefit of
CPS; and
WHEREAS, CPS and the Company are contemplating a transaction
(the "Pr Transaction7) pursuant to which the Company would acquire
control of CPS; and
WHEREAS, in connection with the Proposed Transaction, it is
the desire of CPS and Bluestone that Bluestone continue as an
employee of CPS pursuant to the terms and conditions set forth in
the Employment Agreement attached hereto (the "Revised Employment
Agreement"); and
WHEREAS, in the event the Proposed Transaction is consummated
prior to April 15, 1998, CPS, the Company and Bluestone shall
execute and deliver the Revised Employment Agreement, and in the
event the Proposed Transaction is not consummated prior to such
date, this Agreement shall be null and void and of no effect,
except as otherwise provided herein.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements contained herein, the parties
hereto agree as follows:
1. Revised Employment Agreement. In the event the Proposed
Transaction is consummated on or before April 15, 1998, CPS, the
Company and Bluestone shall execute and deliver at the closing of
the Proposed Transaction (the "Closing") the Revised Employment
Agreement.
2. Effectiveness of Agreement. In the event the Closing
does not occur on or prior to April 15, 1998, this Agreement, and
the obligations and rights hereunder, shall be null and void and of
no effect, except as otherwise provided herein.
3. Expense Reimbursement. CPS shall promptly upon request of
Bluestone reimburse Bluestone for all reasonable expenses
(including reasonable accountants', attorneys' and advisors' fees)
incurred in connection with the preparation and negotiation of this
Agreement and the Revised Employment Agreement. Notwithstanding
the provisions of Section 2, above, this Section 3 shall survive
the termination hereof.
4. Miscellaneous.
a) Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of
Wisconsin.
b) Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be
deemed on original but all of which shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the day and year first written
above.
COMPANY:
XXXXXXXX'X, INC.
By:
___________________________________
(Title)
CPS:
XXXXXX XXXXX XXXXX & CO.
By:
___________________________________
(Title)
_________________________________
Xxxxxxx X. Xxxxxxxxx
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into this _____
day of ____________, 1998, by and between Xxxxxx Xxxxx Xxxxx & Co.,
an Illinois corporation (the "Company"), Xxxxxxx X. Xxxxxxxxx
("Executive") and Xxxxxxxx'x, Inc., a Tennessee corporation
("Xxxxxxxx'x).
WITNESSETH:
WHEREAS, Executive has been employed by the Company, pursuant
to that certain Employment Agreement dated as of March 25, 1996
between the Company and Executive (the "Previous Employment
Agreement"); and
WHEREAS, Xxxxxxxx'x has acquired a controlling interest in the
Company and desires to continue to employ Executive, and Executive
desires to continue to be employed by the Company, in accordance
with the terms and provisions herein contained; and
WHEREAS, in connection with the transaction between the
Company and Xxxxxxxx'x and in consideration for Executive agreeing
to remain as an employee of the Company, Xxxxxxxx'x has agreed to
guaranty the obligations of the Company hereunder; and
WHEREAS, the parties hereto desire that this Agreement
supersede and replace the Previous Employment Agreement in its
entirety.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements herein contained, the parties
hereto hereby agree as follows:
1. Employment.
(a) The Company hereby employs Executive, and Executive
hereby accepts employment, on the terms and subject to the
conditions contained herein.
(b) Executive shall serve as the Chairman of the Company,
Special Consultant to the Chief Executive Officer of the Company
and as a Director of the Company and of Xxxxxxxx'x, faithfully and
to the best of his ability, under the direction of the Company's
Board of Directors (the "Board of Directors") and, in such
capacities, shall perform such duties and exercise such power and
authority as may from time to time be delegated to him by the Board
of Directors consistent with his status. The Company shall be
operated as a subsidiary of Xxxxxxxx'x. Executive shall perform his
duties from his current office location or from a location no more
than twenty-five (25) miles therefrom.
(c) Excluding periods of vacation and sick leave to which
Executive is entitled, Executive shall devote his full business
time and attention and his best efforts to the performance
of his duties hereunder; provided, that Executive may take
reasonable amounts of time to serve on corporate, civic or
charitable boards or committees or other similar activities.
2. Term.
The term of the employment of Executive under this Agreement
(the "Employment Term") shall commence as of the date hereof and
shall continue, unless sooner terminated under Section 11 hereof,
until January 29, 1999, unless extended by the written agreement of
the parties.
3. Salary.
(a) During the Employment Term and subject to Section 5
hereof, Executive shall be paid a salary at the rate equal to the
sum of Eight Hundred Thousand Dollars ($800,000) per annum plus the
greater of (i) Two Hundred Forty Thousand Dollars ($240,000) or
(ii) Executive's bonus paid to him for the fiscal year of the
Company ending January 31, 1998 (the "Annual Base Salary"), payable
in equal disbursements and in accordance with the Company's
customary payroll practices in effect from time to time.
Executive's Annual Base Salary shall not be reduced at any time
during the Employment Term.
4. Bonus.
(a) In addition to Annual Base Salary, Executive shall be
eligible to receive, subject to the provisions of Section 5 hereof,
for the period ending January 29, 1999, an annual bonus (the
"Annual Bonus") in an amount not to exceed sixty percent (60%) of
Executive's Annual Base Salary in any such fiscal year.
(b) A formula for determining Executive's Annual Bonus
for each fiscal year shall be agreed upon for each fiscal year by
Executive and the Company, and shall be based upon the results of
the Company for such fiscal year as compared with the projected
results therefor or such other criteria as may be agreed upon in
writing by Executive and the Company. Such formula shall be
substantially similar to the formula most recently used by the
Company to determine Executive's Annual Bonus.
(c) The Annual Bonus, if and to the extent earned in
accordance with the formula provided for in Section 4(b) hereof,
shall be paid to Executive within ninety (90) days after the end of
such fiscal year for which such Annual Bonus is awarded; provided,
however, that in the event the audited consolidated financial
statements of the Company have not been issued by the Company
within such ninety (90) day period, such Annual Bonus shall be paid
within ten (10) days after the issuance of such consolidated
financial statements.
5. Election to Defer.
At the request of Executive, the Company shall defer, for such
period of time as Executive may request at the time of such
deferral, the payment of all or any portion of any Annual Base
Salary and Annual Bonus not yet earned by Executive under this
Agreement; provided, however that in no event shall Executive defer
the commencement of such payments beyond April 30, 1999. Each such
deferred payment shall accrue simple interest (on the basis of
360-day year), from the date it would have been paid if no election
had been made until the date of actual payment, at the rate of
interest per annum reported in the Wall Street Journal, from time
to time as the "Prime Rate" or at such other rate as may be agreed
to by the Company and Executive (the "Interest Rate"). Any amount
deferred pursuant to this Section 5, and interest thereon, shall be
prepayable in whole or in part, without penalty, at any time at the
option of the Company. The rights of Executive to the payment of
the amounts pursuant to this Section 5 shall be no greater than the
rights of an unsecured general creditor of the Company and may not
be assigned, pledged or otherwise transferred by him during his
lifetime to any person, whether by operation of law or otherwise,
and shall not be subject to execution, attachment or similar
proceeding. By written notice delivered to the Company, Executive
may designate (or change a prior designation of) one or more
beneficiaries (or his estate) to receive payment hereunder in the
event of his death.
6. Employee Benefits and Options.
(a) Executive shall be entitled to participate, at the
highest participation level available to executives, including such
participation levels as may be determined by seniority, in any and
all life insurance, medical insurance and other employee benefit
plans within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), which are made
available by the Company to executives of the Company from time to
time. The employee benefits provided to Executive hereunder shall
not be materially less than the benefits provided to him while
employed under the Previous Employment Agreement.
(b) In addition, subject to Executive's satisfactory
completion of any and all required physical examinations, during
the Employment Term the Company shall pay the premium for and
maintain in effect an unrated term life insurance policy on the
life of Executive in an amount equal to $1,000,000, reduced by the
amount of insurance coverage provided by the Company to Executive
under any other plan, policy or arrangement. At Executive's
option, Executive may elect to pay the excess of the cost of a
rated term life insurance policy over an unrated term life
insurance policy in order to obtain a rated term life insurance
policy equal to the sum of insurance provided above from time to
time. Executive shall be the owner of the life insurance policy
described in this Section 6(b) and shall have sole authority to
designate (or change a prior designation) one or more beneficiaries
(or his estate) under such policy.
(c) During the Employment Term, Executive shall be entitled
to participate in all incentive, savings and retirement plans,
practices, policies and programs of the Company. Notwithstanding
anything to the contrary contained in the Xxxxxx Xxxxx Xxxxx & Co.
1993 Stock Incentive Plan (the "Equity Plan") or any document or
agreement in connection therewith, all stock options or other
securities granted to Executive under the Equity Plan prior to the
date hereof shall vest on the date hereof.
(d) As of the date of this Agreement ("Grant Date"),
Xxxxxxxx'x grants to Executive an option to purchase 60,000 shares
of the common stock of Xxxxxxxx'x (the "Option") under Xxxxxxxx'x
1997 Stock-Based Incentive Plan. The exercise price of the Option
shall be equal to the closing price of the Company's stock on the
Grant Date or, if the Grant Date is not a business day, the price
at the end of the first business day following the Grant Date. The
Option shall be subject to all the terms and conditions of the 1997
Stock-Based Incentive Plan, except as otherwise provided herein.
The Option shall be exercisable on or after the Grant Date to the
extent of 20% of the shares covered thereby; exercisable to the
extent of an additional 20% of the shares covered thereby on and
after the first anniversary of the Grant Date; exercisable to the
extent of an additional 20% of the shares covered thereby on and
after the second anniversary of the Grant Date; exercisable to the
extent of an additional 20% of the shares covered thereby on and
after the third anniversary of the Grant Date; and exercisable to
the extent of any remaining shares on and after the fourth
anniversary of the Grant Date; provided, however, that the Option
shall be 100% exercisable in the event that Executive terminates
employment with Company.
(e) Notwithstanding anything to the contrary contained in the
Option or any options of Executive to acquire shares in the Company
converted into options of Xxxxxxxx'x, all such options shall be
exercisable until one (1) year following the termination of
Executive's employment hereunder or until one (1) year after he
ceases to be a director of Xxxxxxxx'x, whichever is later.
7. Transportation.
In recognition of the fact that Executive shall be required to
travel by automobile for the purpose of visiting the Company's
various stores, examining potential sites for new stores and
attending meetings and other activities in the performance of his
duties hereunder, the Company shall provide Executive with a
monthly allowance for a late model luxury class automobile,
consistent with the allowance provided by the Company under the
Previous Employment Agreement, which may be used at Executive's
discretion.
8. Expense Reimbursement.
The Company, upon the submission of proper written vouchers by
Executive, shall reimburse Executive promptly for all reasonable
and necessary expenses incurred by Executive incident to the
performance of his duties hereunder, in accordance with such
policies as may from time to time be established by the Board of
Directors.
9. Vacation.
During the Employment Term, Executive shall be entitled to
four (4) weeks of paid vacation in each fiscal year of the Company.
Executive may accumulate up to two (2) weeks of vacation in each
fiscal year to be used at Executive's discretion at any time and
from time to time during the Employment Term. Any vacation in
excess of two (2) weeks which is not used by Executive in a fiscal
year shall be forfeited. For purposes of determining Executive's
accrued vacation for the purpose of Section 12 hereof only,
Executive's vacation shall be deemed to accrue ratably on a monthly
basis on the first day of each month in the Company's fiscal year.
10. Total Disability of Executive.
For purposes of this Agreement, the term "Total Disability"
shall mean the inability of Executive to perform Executive's duties
with the Company on a full-time basis for one hundred eighty (180)
consecutive days or an aggregate of two hundred ten (210) days in
any consecutive twelve (12) month period, as a result of incapacity
due to mental or physical illness or injury which is determined to
be total and permanent by a physician selected by the Company or
its insurers and acceptable to Executive or Executive's legal
representative, provided if the parties are unable to agree on a
physician to make such determination, the parties shall request the
Xxxx of the Medical College of Wisconsin to choose such physician.
11. Termination.
(a) Notwithstanding anything to the contrary contained in
this Agreement, the Company, by written notice to Executive, shall
at all times have the right to terminate the employment of
Executive hereunder for "Cause." A termination for Cause is a
termination evidenced by a resolution adopted in good faith by a
majority of the Board of Directors that Executive (i) willfully
failed to substantially perform his duties under Section 1, above,
(other than a failure resulting from Executive's incapacity due to
physical or mental illness or injury), (ii) committed acts of
fraud, embezzlement, theft or dishonesty, as determined by a final
judgment or order of a court of competent jurisdiction, or (iii)
committed acts which constitute a felony or misdemeanor as
determined by a final judgment or order of a court of competent
jurisdiction and which, in the reasonable opinion of the Board of
Directors, involve moral turpitude and have caused material
embarrassment to the Company; provided, however, that no
termination of Executive's employment shall be for Cause as set
forth in (i), above, until (a) Executive shall have had at least
forty-five (45) days to cure any conduct or act alleged to provide
Cause for termination after a written notice of demand has been
delivered to Executive specifying in detail the manner in which
Executive's conduct violates this Agreement, and (b) Executive
shall have been provided an opportunity to be heard by the Board of
Directors (with the assistance of Executive's counsel if Executive
so desires). No act, or failure to act, on Executive's part, shall
be considered "willful" unless he has acted or failed to act
without reasonable belief that his action or failure to act was in
the best interest of the Company. Any termination of Executive's
employment by the Company other than pursuant to this Section 11(a)
or Sections 11(b) or 11(c), below, shall be deemed to have been
made "without Cause."
(b) Notwithstanding anything to the contrary contained in
this Agreement, the Company, by written notice to Executive, shall
have the right to terminate the employment of Executive under this
Agreement at any time in the event of Executive's Total Disability.
(c) Executive's employment under this Agreement shall
automatically terminate upon Executive's death.
(d) Executive may voluntarily terminate his employment
hereunder at any time for any reason.
(e) Notice of Termination. Any termination by the Company or
by Executive (other than by death of Executive) shall be
communicated by Notice of Termination to the other in accordance
with Section 22 hereof. For purposes of this Agreement, a "Notice
of Termination" shall mean a written notice which (i) indicates the
specific termination provision in this Agreement relied upon, and
(ii) to the extent applicable, sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination
of Executive's employment under the provision so indicated. For
purposes of this Agreement, no purported termination of employment
shall be effective without such Notice of Termination.
12. Payments Upon Termination.
(a) If the employment of Executive hereunder shall be
terminated for any reason, the Company shall make the following
payments and take the following actions:
(i) pay Executive within fifteen (15) days after the
date of the termination of employment a lump sum in cash equal
to the sum of the following:
a) the product of Executive's Annual Base Salary
multiplied by 3.0;
b) the sum of the following (1) the product of
thirty percent (30%) of the Annual Base Salary (the
"Midpoint Bonus") multiplied by a fraction the numerator
of which is the number of days Executive was employed by
the Company during the fiscal year in which Executive's
employment with the Company is terminated and the
denominator of which is 365, except that the amount set
forth in this subsection (1) shall not be paid if
Executive is employed hereunder through January 29, 1999
and is paid a bonus pursuant to Section 4, above,
provided however, that nothing contained herein shall
affect Executive's right to receive the product of the
Midpoint Bonus multiplied by 3.0 plus (2) the product of
the Midpoint Bonus multiplied by 3.0;
(ii) pay Executive within fifteen (15) days after the
date of termination of employment a lump sum in cash equal to
the sum of (A) any unvested amount in Executive's Post- 1990
Matched Contribution Account under the Xxxxxx Xxxxx Xxxxx &
Co. Savings Plan; and (B) the actuarial equivalent, determined
as of the date of termination of employment, of any unvested
accrued benefit under the Xxxxxx Xxxxx Xxxxx & Co. Pension
Plan (using actuarial assumptions no less favorable to
Executive than the actuarial assumptions used for the
determination of benefits in effect under such plan
immediately prior to the date hereof,
(iii) for 36 months after the date of termination of
employment or such longer term as may be provided by the
appropriate plan (the "Extended Benefits Period"), program,
practice, or policy, continue benefits to Executive, and if
applicable, to Executive's family, at the Company's expense,
at least equal to those benefits which would have been
provided to them in accordance with the Company's health and
welfare plans, including, without limitation, accruals under
the SERP, medical, dental, life insurance, long-term
disability plans and automobile reimbursement plan pursuant to
Section 7, above, as if Executive's employment had not been
terminated;
(iv) credit Executive with additional hours of benefit
service under the Xxxxxx Xxxxx Xxxxx & Co. Pension Plan equal
to the least of (A) the greater of (1) 501 hours or (2) the
maximum number of hours of benefit service attributable to
severance pay as such Plan in effect on the date of
termination of employment, (B) the maximum number of hours
permitted by law, or (C) 3,000 hours;
(v) notwithstanding any provision to the contrary in the
SERP, the Equity Plan or any other benefit plan in which
Executive participates, Executive's benefits under the SERP
and any stock options or other securities or awards under the
Equity Plan shall be and become fully vested as of the date of
such termination;
(vi) notwithstanding the provisions of the SERP, upon
Executive's termination of employment hereunder, Executive
shall have the option in his sole discretion to have the
amounts due to him under the SERP paid out in a lump sum
distribution or in accordance with the terms of the SERP. In
addition, in the event Executive's employment hereunder is
terminated as a result of his death, Executive's designated
beneficiary shall receive the benefits under the SERP as if
Executive had terminated his employment immediately prior to
his death and had selected the payment option under the SERP
most beneficial to his beneficiary; and
(vii) the Company shall pay to Executive, within
fifteen (15) days of his termination of employment, any
compensation previously deferred by Executive (together with
any accrued interest or earnings thereon) and any accrued
vacation pay, in each case to the extent not theretofore paid.
If the payments provided for in this Section 12(a) are made
promptly when due and without dispute by the Company (other than as
a result of a good faith dispute by the Company), such payments
shall be the sole and exclusive remedy available to Executive for
the termination of his employment.
(b) The payments set forth in Section 12(a), above, due upon
Executive's termination of employment, shall be in consideration of
two components: (i) Executive's foregoing his right to terminate
his employment immediately after the effective time of the merger
of Xxxxxxxx'x and the Company, and (ii) Executive's entering into
the non-competitive provisions in Section 14, below The payments
shall also represent Executive's severance pay. Xxxxxxxx'x
Accounting Firm (as hereinafter defined) shall determine the
valuation of each of these two components.
(c) Except as otherwise provided herein, nothing in this
Agreement shall affect the rights and obligations of Executive
under any of the Company's employee benefit plans in effect from
time to time, including but not limited to the SERP, and such
rights and obligations shall be determined solely by reference to
such employee benefit plan documents.
(d) Following the expiration of the Extended Benefits Period
(i) Executive and his spouse may elect to continue for the life of
Executive and his spouse their coverage under the Company's health
insurance plan in effect from time to time at their sole expense,
(ii) Executive shall have the right to purchase the car (if any)
provided to him by the Company or its affiliated companies
immediately preceding the termination of the Extended Benefits
Period, at the book value thereof as of such date exercisable
within thirty (30) days after the termination, and if such car is
not purchased, Executive shall return the car to the Company, and
(iii) Executive may elect to continue the life insurance policy
purchased pursuant to Section 6(b), above, and any disability
policies purchased on behalf of Executive, at Executive's expense.
(e) Notwithstanding anything else contained in this Section
12, the Company may defer payment of any amounts payable pursuant
to this Section 12 until the day fifty (50) days after the first
day of the first fiscal year that begins after the termination of
Executive's employment hereunder, if and to the extent that the
Company determines, based on a written opinion of its tax counsel,
that such deferral will prevent such amounts from being
nondeductible by the Company for federal income tax purposes. Any
such deferred payment shall be paid with simple interest at the
Interest Rate from the date it would otherwise have been payable
pursuant to this Section 12 until the date it is actually paid.
13. Fringe Benefits.
During the Employment Term, Executive shall be entitled to
reimbursement of up to Fifteen Thousand Dollars ($15,000.00) per
fiscal year, payable promptly by the Company upon submission of
proper evidence of payment by Executive to cover expenses for such
things as country club dues and assessments, social club dues,
travel expenses incurred by Executive's spouse while accompanying
Executive on Company business, where appropriate, and such other
similar expenses as may from time to time be incurred by Executive.
14. Restrictive Covenants and Confidentiality.
(a) As a condition to the performance by the Company of its
obligations hereunder, Executive shall not, without the prior
written approval of the Board of Directors, until the first
anniversary of the termination of his employment hereunder directly
or indirectly through any other person, firm, corporation, or other
entity solicit, raid, entice or induce any person who on the date
of termination of employment of Executive is, or within the last
six (6) months of Executive's employment by the Company was, an
employee of the Company or any of its subsidiaries, to become
employed by any person, firm, corporation, or other entity other
than the Company or any of its subsidiaries, and Executive shall
not approach any such employee for such purpose or authorize or
knowingly approve the taking of such actions by any other person.
(b) Recognizing that the knowledge, information and
relationship with customers, suppliers and agents, and the
knowledge of the Company's, Proffitts and their respective
subsidiaries' business methods, systems, plans and policies which
Executive shall hereafter establish, receive or obtain as an
employee of the Company, Xxxxxxxx'x or any such subsidiary, are
valuable and unique assets of the businesses of the Company,
Xxxxxxxx'x and their respective subsidiaries, Executive agrees
that, during and after the term of his employment hereunder, he
shall not (otherwise than pursuant to his duties hereunder)
disclose, without the prior written approval of the Board of
Directors of the Company, any such knowledge or information
pertaining to the Company, Xxxxxxxx'x or any of their respective
subsidiaries, their business, personnel or policies, to any person,
firm, corporation or other entity, for any reason or purpose
whatsoever. The provisions of this Section 14(b) shall not apply to
information which is or shall become generally known to the public
or the trade (except by reason of Executive's breach of his
obligations hereunder), information which is or shall become
available in trade or other publications, information known to
Executive prior to entering the employ of the Company, and
information which Executive is required to disclose by law or an
order of a court of competent jurisdiction. If Executive is
required by law or a court order to disclose such information, he
shall notify the Company of such requirement and provide the
Company an opportunity (if the Company so elects) to contest such
law or court order.
(c) As a condition to the performance by the Company of its
obligations hereunder, Executive shall not, without the prior
written approval of the Board of Directors, which approval shall
not be unreasonably withheld, in light of all competitive factors,
until the fifth (5th) anniversary of the termination of this
employment hereunder directly or indirectly through any other
person, firm, corporation, or other entity, become employed by or
render advisory or other services to or for any person, firm,
corporation, or other entity, or in connection with any business
enterprise, that is, directly or indirectly, engaged in the
operation of retail department stores within a seventy-five (75)
mile radius of any retail department store operated by the Company,
CPS or any of their respective subsidiaries.
15. Injunction.
It is recognized and hereby acknowledged by the parties hereto
that a breach or violation by Executive of any of the covenants or
agreements contained in Section 14 of this Agreement may cause
irreparable harm and damage to the Company, the monetary amount of
which may be virtually impossible to ascertain. Therefore,
Executive recognizes and hereby agrees that the Company shall be
entitled to an injunction from any court of competent jurisdiction,
upon proper showing by the Company that such grounds for injunctive
relief exists, enjoining and restraining any breach or violation of
any or all of the covenants and agreements contained in Section 14
of this Agreement by Executive and/or his employees, associates,
partners or agents, or entities controlled by one or more of them,
either directly or indirectly, and that such right to injunction
shall be cumulative and in addition to whatever other rights or
remedies the Company may possess. Nothing contained in this Section
15 shall be construed to prevent the Company from seeking and
recovering from Executive damages sustained by it as a result of
any breach or violation by Executive of any of the covenants or
agreements contained in this Agreement
16. Director.
As of the date of this Agreement, Xxxxxxxx'x shall cause
Executive to be elected to Xxxxxxxx'x Board of Directors for the
class of 1998, and to serve until the next regularly scheduled
annual meeting of Xxxxxxxx'x or until his successor has been duly
elected or appointed and qualified or until his earlier death.
Xxxxxxxx'x shall also cause its Board to renominate Executive for
the class of 2001 and shall endorse Executive for election. In the
event that executive terminates his employment prior to January 29,
1999, he shall also submit his resignation from Xxxxxxxx'x Board of
Directors. Xxxxxxxx'x shall at all times while Executive is
employed hereunder or during the period Executive serves on the
Xxxxxxxx'x Board of Directors, take all such steps as may be
necessary to permit Executive to serve on the Company's Board of
Directors.
17. Attorney's Fees.
If any cause of action is brought before any court to enforce
any provision of this Agreement, the Company shall reimburse
Executive for reasonable costs incurred (including reasonable
attorney's fees) by Executive.
18. Deductions and Withholding.
Executive acknowledges and agrees that the Company shall be
entitled to withhold from his compensation hereunder, including
Annual Base Salary, Annual Bonus and payments pursuant to any
retirement plans, and any additional compensation payable
hereunder, all federal, state, local or other taxes which the
Company determines are required to be withheld on amounts payable
to Executive pursuant to this Agreement or otherwise. Executive
further agrees to indemnify the Company and hold it harmless from
and against any and all taxes and interest with respect thereto
arising out of or based upon the Company's failure to so deduct and
withhold pursuant to any present or future law, regulation or
ordinance of the United States of America or any state, city or
municipality therein.
19. No Delegation.
Executive shall not delegate his employment obligations under
this agreement to any other person.
20. Governing Law.
This Agreement shall be governed by and construed in
accordance with the laws of Wisconsin.
21. Entire Agreement.
This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and
supersedes all prior agreements, understandings and arrangements,
both oral and written, between the parties hereto with respect to
such subject matter, including, without limitation, the Previous
Employment Agreement. This Agreement may not be modified in any
manner, except by a written instrument signed by both the Company
and Executive.
22. Notices.
Any notice required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been duly
given when delivered by hand or facsimile transmission or when
deposited in the United States mail, by registered or certified
mail, return receipt requested, postage prepaid, as follows:
If to the Company: ________________________________
________________________________
________________________________
If to Xxxxxxxx'x: Xxxxxxxx'x, Inc.
000 Xxxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Attn: General Counsel
If to Executive: Xxxxxxx X. Xxxxxxxxx
0000 Xxxxx Xxxxxxxx
Xxxxxxxxx Xxx, XX 00000
with a copy to: Xxxxxxx X. Xxxxxxx
Xxxxxxx & Xxxx, S.C.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
or to such other addresses as either party hereto may from time to
time specify to the other.
23. Benefit; Binding Effect.
This Agreement shall be for the benefit of and binding upon
the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and, where
applicable, assigns.
24. Severability.
The invalidity of any one or more of the words, phrases,
sentences, clauses or sections contained in this Agreement shall
not affect the enforceability of the remaining portions of this
Agreement or any part thereof, all of which are inserted
conditionally on their being valid in law, and, in the event that
any one or more of the words, phrases, sentences, clauses or
sections contained in this Agreement shall be declared invalid,
this Agreement shall be construed as if such invalid word or words,
phrase or phrases, sentence or sentences, clause or clauses, or
section or sections had not been inserted.
25. No Mitigation.
Following the termination of Executive's employment hereunder,
Executive shall not be obligated to seek other employment or take
any other action by way of mitigation of the amounts payable to
Executive under Section 12.
26. Excise Tax Payments.
(a) Notwithstanding anything contained in this Agreement to
the contrary, in the event that any payment or distribution to or
for the benefit of Executive, whether paid or payable or
distributed or distributable pursuant to the terms of this
Agreement or otherwise in connection with, or arising out of, his
employment with the Company (a "Payment" or "Payments"), would be
subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended (the "Code"), or any interest or
penalties are incurred by Executive with respect to such excise tax
(such excise tax, together with any interest and penalties, are
collectively referred to as the "Excise Tax"), then Executive shall
be entitled to receive an additional payment (a "Gross-Up Payment")
in an amount such that after payment by Executive of all taxes
(including any interest or penalties imposed with respect to such
taxes), including any Excise Tax, imposed upon the Gross-Up
Payment, Executive retains an amount of the Gross-Up Payment equal
to the Excise Tax imposed upon the Payments.
(b) A determination shall be made as to whether and when a
Gross-Up Payment is required pursuant to this Section 26 and the
amount of such Gross-Up Payment, such determination to be made
within fifteen (15) business days of the date of Executive's
termination of employment, or such other time as requested by the
Company or by Executive. Such determination shall be made by
Xxxxxxxx'x national independent accounting firm (the "Accounting
Xxxx"). All fees, costs and expenses (including, but not limited
to, the cost of retaining experts) of the Accounting Firm shall be
borne by the Company and the Company shall pay such fees, costs and
expenses as they become due. The Accounting Firm shall provide
detailed supporting calculations, acceptable to Executive, both to
the Company and Executive. The Gross-Up Payment, if any, as
determined pursuant to this Section 26(b) shall be paid by the
Company to Executive within five (5) business days of the receipt
of the Accounting Firm's determination. If the Accounting Firm
determines that no Excise Tax is payable by Executive with respect
to a Payment or Payments, it shall furnish Executive with an
unqualified opinion that no Excise Tax will be imposed with respect
to any such Payment or Payments. Any such initial determination by
the Accounting Firm of the Gross-Up Payment shall be binding upon
the Company and Executive subject to the application of Section
26(c).
(c) As a result of the uncertainty in the application of
Sections 4999 and 280G of the Code, it is possible that a Gross-Up
Payment (or a portion thereof) will be paid which should not have
been paid (an "Overpayment") or a Gross-Up Payment (or a portion
thereof) which should have been paid will not have been paid (an
"Underpayment"). An Underpayment shall be deemed to have occurred
upon notice (formal or informal) to Executive from any governmental
taxing authority that the tax liability of Executive (whether in
respect of the then current taxable year of Executive or in respect
of any prior taxable year of Executive) may be increased by reason
of the imposition of the Excise Tax on a payment or Payments with
respect to which the Company has failed to make a sufficient
Gross-Up Payment. An Overpayment shall be deemed to have occurred
upon a "Final Determination" (as hereinafter defined) that the
Excise Tax shall not be imposed upon a Payment or Payments with
respect to which Executive had previously received a Gross-Up
Payment. A Final Determination shall be deemed to have occurred
when Executive has received from the applicable governmental taxing
authority a refund of taxes or other reduction, in his tax
liability by reason of the Overpayment and upon either (i) the date
a determination is made by, or an agreement is entered into with,
the applicable governmental taxing authority which finally and
conclusively binds Executive and such taxing authority, or in the
event that a claim is brought before a court of competent
jurisdiction, the date upon which a final determination has been
made by such court and either all appeals have been taken and
finally resolved or the time for all appeals has expired or (ii)
the expiration of the statute of limitations with respect to
Executive's applicable tax return. If an Underpayment occurs,
Executive shall promptly notify the Company and the Company shall
pay to Executive at least five (5) business days prior to the date
on which the applicable governmental taxing authority has requested
payment, an additional Gross-Up Payment equal to the amount of the
Underpayment plus any interest and penalties imposed on the
Underpayment. If an Overpayment occurs, the amount of the
Overpayment shall be treated as a loan by the Company to Executive
and Executive shall, within ten (10) business days of the
occurrence of such Overpayment, pay to the Company the amount of
the Overpayment plus interest at the Interest Rate from the date
the Gross-Up Payment (to which the Overpayment relates) was paid to
Executive.
27. Waivers.
The waiver by either party hereto of a breach or violation of
any term or provision of this Agreement shall not operate nor be
construed as a waiver of any subsequent breach or violation.
28. Section Headings.
The section headings contained in this Agreement are for
reference purpose only and shall not affect in any way the meaning
or interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this agreement as of the day and year first above
written.
XXXXXX XXXXX XXXXX & CO.
By:
______________________________
(Title)
_________________________________
Xxxxxxx X. Xxxxxxxxx
Xxxxxxxx'x executes this Agreement for the purpose of (i)
agreeing to be bound by and perform its obligations under this
Agreement, and (ii) unconditionally guarantying to Executive, the
full and prompt payment and performance of each and every
obligation of the Company contained in this Employment Agreement in
accordance with the terms hereof. The obligations of Xxxxxxxx'x as
guarantor hereunder shall be absolute and unconditional and shall
remain in full force and effect until all payments and obligations
owed to Executive are paid and satisfied in full.
XXXXXXXX'X, INC.
By:
_______________________________
(Title)
