EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as
of the 22nd day of June, 2005 by and between CHROMCRAFT REVINGTON, INC. (the
"Company"), a Delaware corporation headquartered in Delphi, Indiana, and
XXXXXXXX X. XXXXXXXX-XXX (the "Executive"), currently a resident of the State of
Georgia,
W I T N E S S E T H:
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WHEREAS, the Company desires to employ the Executive as its Chairman
and Chief Executive Officer, and the Executive desires to be employed by the
Company as its Chairman and Chief Executive Officer, in accordance with the
provisions of this Agreement; and
WHEREAS, in addition to the employment provisions contained herein, the
Company and the Executive have agreed to certain restrictions, covenants,
agreements and severance payments, as set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises, the
respective covenants, agreements and obligations contained herein, the
employment of the Executive by the Company and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and the Executive hereby agree as follows:
Section 1. Employment; Term. (a) Employment. Unless the Executive's
employment with the Company is terminated earlier as provided in this Agreement,
the Company hereby agrees to employ the Executive, and the Executive hereby
agrees to be employed by the Company, during the Term (as hereinafter defined),
on a full-time basis in accordance with the provisions of this Agreement.
(b) Term. Unless terminated earlier as provided in this Agreement, the
initial term of the Executive's employment with the Company shall begin on June
20, 2005 and shall end on June 20, 2010 (the "Initial Term"). Upon the
expiration of the Initial Term, this Agreement, and the Executive's employment
hereunder, shall thereafter be automatically extended upon the same terms and
conditions as set forth herein for successive one-year terms (each, a "Renewal
Term"), unless (i) the Executive's employment with the Company has been
terminated during the Initial Term or during any Renewal Term, as the case may
be, in accordance with Section 4 hereof or (ii) either the Company or the
Executive provides to the other a written notice not less than one hundred
eighty (180) days prior to the end of the Initial Term or any Renewal Term, as
the case may be, that a Renewal Term shall not occur (the "Non-Renewal Notice").
The Initial Term and the Renewal Term may be referred to in this Agreement
individually or collectively as the "Term."
If either party provides the Non-Renewal Notice to the other party,
then the Executive's employment with the Company shall terminate on the last day
of the Initial Term or the applicable Renewal Term, as the case may be, and such
termination shall not constitute a
termination (whether with or without Cause or with or without Good Reason) of
employment by the Company or by the Executive pursuant to Section 4 hereof, but
shall be deemed to be, and shall have the effect of, a mutual termination of the
Executive's employment with the Company.
Section 2. Position; Duties; Responsibilities.
(a) During the Term, the Executive:
(i) shall serve as the Chairman of the Board (subject to
the Executive's appointment to this position within
the 45-day period specified in Section 2(b) hereof)
and Chief Executive Officer of the Company;
(ii) shall have such authority, duties and
responsibilities as the Board of Directors of the
Company (the "Board of Directors") may from time to
time prescribe that are consistent with the
Executive's position as the Chief Executive Officer
of the Company;
(iii) shall perform diligently and faithfully, and shall
use his best efforts in the performance of, his
duties and responsibilities under this Agreement; and
(iv) shall devote all of his working time, attention,
energies and skills to his duties and
responsibilities under this Agreement and to the
furtherance of the business and interests of the
Company and its subsidiaries or affiliates; provided,
however, that the Executive shall be permitted to
manage his own personal investments so long as such
investment activities do not affect the Executive's
performance of his duties and responsibilities for
the Company and do not adversely affect the
reputation of the Company; and provided further,
however, that the Executive shall be permitted to
engage in civic and charitable activities and to
serve on boards of directors of other for-profit and
non-profit entities so long as such civic and
charitable activities and board positions do not
affect the Executive's performance of his duties and
responsibilities for the Company, do not adversely
affect the reputation of the Company and have been
approved in advance by resolution of the Board of
Directors or a committee thereof.
(b) Within forty-five (45) days following the Executive's first day of
employment with the Company, the Board of Directors shall appoint the Executive
as a director of the Company and shall elect the Executive as Chairman of the
Board. The Board of Directors shall nominate the Executive as one of its
director nominees to be considered for election at each annual meeting of
stockholders of the Company during such period of time that the Executive is
serving as the Company's Chief Executive Officer. If the Executive's employment
with the Company is terminated, the Executive shall immediately resign as a
director, as Chairman of the Board, as Chief Executive Officer and from all
other offices and positions with the Company and any of its subsidiaries or
affiliates.
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(c) The Executive represents to the Company that he is not a party to
or bound by any non-competition or other agreement that would prevent or limit
him from serving as a director or officer of the Company or from performing any
of his duties and responsibilities under this Agreement.
Section 3. Compensation and Employee Benefits.
(a) Base Salary. During the Term, for all services rendered to or on
behalf of the Company and its subsidiaries or affiliates by the Executive in all
capacities, the Company shall pay to the Executive an annual base salary equal
to Three Hundred Seventy-Five Thousand Dollars ($375,000) per fiscal year (the
"Base Salary"), as may be increased in accordance with this Section. During the
Term and at approximately annual intervals after the end of each fiscal year of
the Company in accordance with the Company's historical practices, the Board of
Directors or a committee thereof shall review the Executive's Base Salary and
shall, after such annual review, determine whether an increase to the Base
Salary shall be made. If such an increase is approved, the increased salary
shall become the applicable Base Salary under this Agreement. The Base Salary
shall be paid to the Executive in accordance with the Company's usual and
customary payroll practices applicable to its employees generally and shall be
pro-rated for any partial year of employment (including, but not limited to, the
fiscal year ending December 31, 2005) based upon the length of time that the
Executive is employed by the Company during any such partial fiscal year.
The Executive shall not receive any additional fees or compensation,
other than his Base Salary, for his service on the Board of Directors or any
committee of the Board of Directors, or for his service as a director or officer
of any subsidiary or affiliate of the Company, nor shall the Executive
participate in the Directors' Stock Option Plan of the Company or any other plan
available only to directors who are not also employees of the Company.
(b) Sign-on Bonus. The Company shall pay to the Executive a one-time
cash sign-on bonus of One Hundred Fifty Thousand Dollars ($150,000), one-half of
which shall be payable within one (1) week of the first day of the Term with the
remaining balance payable on the one-year anniversary of the date of this
Agreement; provided, however, that the Executive shall immediately repay to the
Company that portion of the sign-on bonus paid to him on the first day of the
Term and, in addition, the Company shall have no obligation to pay the remaining
balance of the sign-on bonus if, prior to such one-year anniversary, (i) the
Company terminates the Executive's employment for Cause (as hereinafter
defined), or (ii) the Executive terminates his employment with the Company
without Good Reason (as hereinafter defined). In the event of a Disability (as
hereinafter defined) or the death of the Executive prior to such one-year
anniversary, the Company shall pay the remaining $75,000 balance of the sign-on
bonus to the Executive or to his estate, as the case may be, on the one-year
anniversary of the date of this Agreement. The sign-on bonus is a special bonus
and is not granted or earned under the STIP (as hereinafter defined).
(c) Incentive Compensation. During the Term, the Executive shall be
entitled to participate in all incentive compensation plans and programs
generally available to executive officers of the Company and its subsidiaries as
are currently in effect and as may hereafter be
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amended from time to time, or as may hereafter be established, subject to the
terms and conditions of such plans and programs. As of the date of this
Agreement, the incentive compensation plans available to the Executive are the
Company's Short Term Executive Incentive Plan, as currently in effect and as may
hereafter be amended from time to time (the "STIP"), and the Company's Long Term
Executive Incentive Plan and the Company's 1992 Stock Option Plan, both as
currently in effect and as may hereafter be amended from time to time
(collectively, the "LTIP"). For purposes of this Agreement, (i) the STIP shall
also include any additional or replacement short-term incentive compensation
plan that the Company may adopt subsequent to the date of this Agreement in
which the Executive is eligible to participate, and (ii) the LTIP shall also
include any restricted stock and any additional or replacement long-term
incentive compensation plan that the Company may adopt subsequent to the date of
this Agreement in which the Executive is eligible to participate.
The Executive's award under the STIP for 2005 shall be a cash bonus of
One Hundred Seventy-Five Thousand Dollars ($175,000), which shall be earned if
the performance factor established by the Board of Directors is achieved by the
Executive by December 31, 2005 and which shall be paid in accordance with the
historical practices of the Company and, in any event, not later than March 15,
2006. For the fiscal year ending December 31, 2006 and each subsequent fiscal
year during the Term, the "target" award rate for the Executive under the STIP
shall be 100% of his Base Salary. For the 2006 and subsequent fiscal years, the
performance factors under the STIP shall be mutually agreed upon between the
Board of Directors and the Executive.
The Executive understands and acknowledges that the Compensation
Committee of the Board of Directors is currently reviewing the LTIP (including
the performance factors and the type of compensation payable under the LTIP for
the 2005-2007 and subsequent performance periods consistent with the Company's
strategic plan), that the Compensation Committee may replace the cash component
of awards under the LTIP with equity-based awards and that the Compensation
Committee may use only restricted stock or other equity-based compensation as
awards under the LTIP. Notwithstanding the foregoing, for the 2005-2007
performance period under the LTIP, the Compensation Committee shall grant to the
Executive an award of Forty Two Thousand (42,000) shares of restricted common
stock of the Company under the LTIP, and the award shall vest and be payable to
the Executive upon achievement of all performance factors for the 2005-07
performance period in accordance with the LTIP. Prior to the restricted common
stock becoming fully vested, the Executive shall not have the right to vote, to
receive dividends or distributions on or to enjoy any other rights of ownership
of such stock.
(d) Employee Benefit Plans. During the Term, the Executive shall be
entitled to participate in all employee benefit plans and programs generally
available to executive officers of the Company and its subsidiaries as are
currently in effect and as may hereafter be amended from time to time, or as may
hereafter be established, subject to the terms and conditions of such plans and
programs. During the Term, the Company shall reimburse the Executive for the
employee-paid portion of the premiums relating to the Executive and his spouse
under the Company's group health insurance plan, subject to their eligibility to
participate in such plan.
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(e) Other Policies. All other matters relating to the employment of the
Executive by the Company not specifically addressed in this Agreement or in the
plans and programs referenced in this Section (including, but not limited to,
vacation, sick and other paid time off), shall be subject to the employee
handbooks, rules, policies, procedures, corporate governance guidelines and
codes of conduct and ethics of the Company as are currently in effect or as may
hereafter be in effect from time to time. Notwithstanding the foregoing, the
Executive shall be entitled to receive paid vacation of not less than
twenty-five (25) days per fiscal year during the Term, which shall be pro-rated
for any partial year of employment based upon the length of time that the
Executive is employed by the Company during any such partial fiscal year.
(f) Automobile Allowance. During the Term, the Company shall provide to
the Executive an automobile allowance of One Thousand Five Hundred Dollars
($1,500) per month. The Executive shall pay for his own insurance, maintenance,
fuel, license plates and other costs relating to this automobile.
(g) Relocation Expenses. In connection with the relocation of the
Executive and his spouse, the Company shall pay:
(i) Reasonable temporary housing expenses of the
Executive at or near the Company's headquarters
location until the earlier of the Executive's
purchase of a home at or near such location or
December 31, 2006;
(ii) Reasonable travel expenses of the Executive between
his home in Atlanta, Georgia and the Company's
headquarters location until the earlier of the
Executive's purchase of a home at or near the
Company's headquarters location or December 31, 2006,
provided, however, that until the earlier of such
events occurs, the Company shall pay such reasonable
travel expenses of the Executive only for up to (A)
four (4) roundtrips per month in the event his spouse
is living primarily in Atlanta, Georgia, or (B) two
(2) roundtrips per month in the event his spouse is
living at or near the Company's headquarters location
and the closing on the sale of the Executive's home
in Atlanta, Georgia has not occurred;
(iii) Reasonable moving expenses of the Executive in
connection with the relocation of the Executive and
his spouse to or near the Company's headquarters
location;
(iv) Reasonable real estate brokerage commission and
reasonable attorneys' fees incurred by the Executive
relating to the sale of his existing home in Atlanta,
Georgia; and
(v) Reasonable closing costs (but not any points) and
reasonable attorneys' fees incurred by the Executive
relating to the purchase of his home at or near the
Company's headquarters location.
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The Executive shall be entitled to receive an additional payment from
the Company attributable to any income and employment taxes payable by the
Executive as a result of receiving any of the payments specified in the forgoing
provisions of this Section 3(g) (the "Gross-Up Payment") in an amount such that,
after payment by the Executive of any income and employment taxes imposed upon
the Gross-Up Payment, the Executive shall retain an amount of the Gross-Up
Payment equal to such taxes.
(h) Taxes and Other Amounts. Except as provided otherwise in Section
3(g) hereof, all taxes (other than the Company's portion of FICA taxes) on the
Executive's Base Salary and on all other amounts payable to the Executive
pursuant to this Agreement or any plan or program of the Company shall be paid
by the Executive and, if applicable, withheld by the Company. The Company shall
be entitled to withhold from the Base Salary and all other amounts payable to
the Executive pursuant to this Agreement or any plan or program (i) applicable
income, employment, FICA, Medicare and other taxes required by law, and (ii)
such amounts authorized by the Executive.
(i) Expense Reimbursements. The Company shall reimburse the Executive
for all reasonable out-of-pocket expenses incurred by the Executive related to
the performance of his duties and responsibilities for the Company. Without
limiting the foregoing, the Company shall pay or reimburse the Executive for all
reasonable expenses incurred by or for the Executive for his membership in
relevant trade and professional associations, executive education and
subscriptions; provided, however, that the Board of Directors reserves the right
to approve such expenses. The Executive shall comply with the Company's standard
expense reimbursement policies and procedures in effect from time to time.
(j) Insurance and Indemnification. At all times during the Term, the
Company shall provide to the Executive the same coverage that it provides to its
other directors and officers under the Company's directors and officers
liability insurance policy as is currently in effect or as may hereafter be in
effect from time to time. At all times during the Term, the Company shall
indemnify the Executive with respect to claims brought by Persons other than the
Company against the Executive arising from the Executive's service as an
employee, officer or director of the Company in accordance with the Certificate
of Incorporation of the Company as is currently in effect or as may hereafter be
amended from time to time.
(k) Acknowledgment by the Executive. Notwithstanding anything in this
Agreement to the contrary, the Executive understands, acknowledges and agrees
that the Company may, in its sole discretion, amend, modify, replace, freeze,
suspend or terminate any or all of the Company's incentive compensation,
employee benefit, retirement and other plans and programs from time to time in
the future, other than (i) the STIP award for 2005 and the LTIP award for the
2005-2007 performance period, as both are described in Section 3(c) hereof, and
(ii) reimbursement for the Executive's premiums under the Company's group health
insurance plan at the regular employee contribution rate and as expressly
provided in this Agreement.
Section 4. Termination of Employment.
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Subject to the respective continuing obligations of the Company and the
Executive set forth in this Agreement, the Executive's employment with the
Company may be terminated during the Term in any of the following ways:
(a) Termination by the Company for Cause. The Company, upon written
notice to the Executive, may terminate the Executive's employment with the
Company immediately for Cause (except as otherwise expressly provided herein
with respect to the Executive's limited right to cure). For purposes of this
Agreement, "Cause" is defined as any of the following:
(i) any refusal by the Executive to follow the directions
of the Board of Directors so long as such directions
are consistent with the Executive's position as the
Chief Executive Officer of the Company; or
(ii) any gross negligence by the Executive (or by any
executive officer of the Company or any of its
subsidiaries or affiliates with the knowledge of the
Executive and where the Executive allows or fails to
prevent such gross negligence by such officer) in
managing the business or affairs of the Company and
its subsidiaries or affiliates; or
(iii) any dishonesty, fraud, theft or embezzlement by the
Executive (or by any executive officer of the Company
or any of its subsidiaries or affiliates with the
knowledge of the Executive and where the Executive
allows or fails to prevent such dishonesty, fraud,
theft or embezzlement by such officer) upon or
against the Company or any of its subsidiaries or
affiliates or any customer of the Company or any of
its subsidiaries or affiliates; or
(iv) any conviction of, or the entering of any plea of
guilty or nolo contendere by, the Executive for any
felony; or
(v) any intentional or negligent violation by the
Executive (or by any executive officer of the Company
or any of its subsidiaries or affiliates with the
knowledge of the Executive and where the Executive
allows or fails to prevent such violation by such
officer) of any law, statute, rule, regulation or
governmental requirement that has or will have a
significant adverse effect on the Company or any of
its subsidiaries or affiliates; or
(vi) any material noncompliance by the Executive (or by
any executive officer of the Company or any of its
subsidiaries or affiliates with the knowledge of the
Executive and where the Executive allows or fails to
prevent such noncompliance by such officer) with any
provision of any employee handbook, code of business
conduct and ethics or corporate governance guidelines
of the Company as are currently in effect or as may
hereafter be in effect from time to time; or
(vii) any breach by the Executive of any provision of this
Agreement.
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(b) Termination by the Company Without Cause. The Company, upon not
less than thirty (30) days' prior written notice to the Executive, may terminate
the Executive's employment with the Company without Cause.
(c) Termination by the Executive for Good Reason. The Executive, upon
written notice to the Company, may terminate his employment with the Company
immediately (except as otherwise expressly provided herein with respect to the
Company's limited right to cure) for Good Reason. For purposes of this
Agreement, "Good Reason" is defined as any of the following:
(i) any assignment to the Executive of any duties or
responsibilities that are inconsistent with the
Executive's position as Chief Executive Officer of
the Company; or
(ii) any breach by the Company of any provision of this
Agreement; or
(iii) any relocation of the Company's headquarters to a
location more than one hundred (100) miles from its
location on the date of this Agreement so long as (A)
the Executive shall have previously relocated his
principal residence to Indiana, and (B) the Board of
Directors shall have approved a relocation of the
Company's headquarters without the concurrence of the
Executive.
(d) Termination by the Executive Without Good Reason. The Executive,
upon not less than thirty (30) days' prior written notice to the Company, may
terminate his employment with the Company without Good Reason.
(e) Termination in the Event of Death or Disability. The Executive's
employment with the Company shall terminate immediately upon the death of the
Executive. The Executive's employment with the Company may be terminated
immediately by the Company in the event of the occurrence of a Disability of the
Executive. For purposes of this Agreement, a "Disability" shall be defined as an
illness or a physical or mental disability or incapacity of the Executive such
that the Executive has not been able to perform his duties and responsibilities
under this Agreement (as reasonably determined by the Company) for a period of
at least ninety (90) consecutive days, including, but not limited to, any
diagnosis of the Executive relating to alcoholism or unlawful drug, chemical or
substance abuse or addiction. A Disability shall be evidenced by signed, written
opinions of at least two (2) independent, qualified medical doctors selected by
the Board of Directors and paid for by the Company. The Executive hereby agrees
to make himself promptly available for examination by such medical doctors upon
request by the Board of Directors and consents to provide the results of such
examination and any diagnosis to the Company promptly.
(f) Termination by the Executive in the Event of a Change in Control.
Following a Change in Control (as hereinafter defined), the Executive, upon not
less than thirty (30) days' prior written notice to the Company, may terminate
his employment with the Company during the twelve (12) month period immediately
following a Change in Control.
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For purposes of this Agreement, a "Change in Control" shall mean a
transaction or series of related transactions pursuant to which (i) at least
fifty-one percent (51%) of the outstanding shares of common stock of the
Company, on a fully diluted basis, shall subsequent to the date of this
Agreement be owned by any Person (as hereinafter defined) unrelated to or
unaffiliated with the Company, (ii) the Company merges into or with,
consolidates with or effects any plan of share exchange or other combination
with any Person unrelated to or unaffiliated with the Company, or (iii) the
Company disposes of all or substantially all of its assets other than in the
ordinary course of business.
For purposes of the definition of "Change in Control," (y) a Person
shall not include the Chromcraft Revington, Inc. Employee Stock Ownership Plan
Trust which forms a part of the Chromcraft Revington, Inc. Employee Stock
Ownership Plan (collectively, the "ESOP"), or any other employee benefit plan
sponsored by the Company, or any subsidiary or affiliate of the Company, and (z)
the outstanding shares of common stock of the Company, on a fully diluted basis,
shall include all shares owned by the ESOP, whether allocated or unallocated to
the accounts of participants.
(g) Notice of Termination; Last Day of Employment. Other than in the
event of death, any termination of the Executive's employment with the Company
as contemplated by this Section 4, shall be communicated by a written "Notice of
Termination" by the terminating party to the other party hereto. Any Notice of
Termination shall indicate the specific provisions of this Agreement relied upon
and, if applicable, shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for such termination. For purposes of
this Agreement, the "Date of the Termination Notice" shall be the first to occur
of the following: (i) the date of the Non-Renewal Notice, (ii) the date of the
Notice of Termination, or (iii) the date of the written notice under Section
4(h) hereof with respect to those items for which either party has a right to
cure but only if the party entitled to cure has not fully corrected and cured in
accordance with Section 4(h).
The last day of the Executive's employment with the Company (whether
upon termination of the Executive's employment during or following the Term,
upon the death of the Executive, upon the occurrence of a Disability of the
Executive or upon the expiration of the Initial Term or any Renewal Term) shall
be referred to in this Agreement as the "Last Day of Employment."
(h) Limited Right to Cure by the Company and the Executive.
(i) In the event that the Company desires to terminate
the Executive's employment for Cause pursuant to
Sections 4(a)(i), 4(a)(vi) or 4(a)(vii) hereof, the
Company shall first deliver to the Executive a
written notice which shall (A) indicate the specific
provisions of this Agreement relied upon for such
termination, (B) set forth in reasonable detail the
facts and circumstances claimed to provide the
grounds for such termination, and (C) describe the
steps, actions, events or other items that must be
taken, completed or followed by the Executive to
correct or cure the grounds for
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such termination. The Executive shall then have
thirty (30) days following the effective date of such
notice to fully correct and cure the grounds for the
termination of his employment to the reasonable
satisfaction of the Board of Directors. If the
Executive does not fully correct and cure such
grounds within such thirty (30) day period, then the
Company shall have the right to terminate the
Executive's employment with the Company immediately
for Cause upon delivering to the Executive a Notice
of Termination, and the Executive shall have no
further cure period with respect thereto.
Notwithstanding the foregoing and regardless of the
grounds for the termination, the Executive shall be
entitled to so correct and cure only one (1) time
during the Term.
(ii) In the event that the Executive desires to terminate
his employment with the Company for Good Reason
pursuant to Section 4(c) hereof, the Executive shall
first deliver to the Company a written notice which
shall (A) indicate the specific provisions of this
Agreement relied upon for such termination, (B) set
forth in reasonable detail the facts and
circumstances claimed to provide the grounds for such
termination, and (C) describe the steps, actions,
events or other items that must be taken, completed
or followed by the Company to correct or cure the
grounds for such termination. The Company shall then
have thirty (30) days following the effective date of
such notice to fully correct and cure the grounds for
the termination by the Executive of his employment.
If the Company does not fully correct and cure such
grounds within such thirty (30) day period, then the
Executive shall have the right to terminate his
employment with the Company immediately upon
delivering to the Company a Notice of Termination,
and the Company shall have no further cure period
with respect thereto. Notwithstanding the foregoing
and regardless of the grounds for the termination,
the Company shall be entitled to so correct and cure
only one (1) time during the Term.
Section 5. Payment Upon Termination of Employment. Upon the termination
of the Executive's employment with the Company by virtue of either the Company
or the Executive providing to the other the Non-Renewal Notice contemplated by
Section 1(b) hereof or upon the termination of the Executive's employment with
the Company pursuant to Section 4 hereof, the Executive shall receive, subject
to Section 5(g), the following in accordance with the appropriate subsection
below:
(a) Termination by the Company for Cause or by the Executive Without
Good Reason. Upon the termination of the Executive's employment by the Company
for Cause pursuant to Section 4(a) hereof or by the Executive without Good
Reason pursuant to Section 4(d) hereof, the Company shall pay to the Executive
(i) that portion of his Base Salary earned through the Last Day of Employment,
(ii) an amount, payable in a lump sum, equal to the Executive's monthly Base
Salary for three (3) months, which the Executive agrees shall constitute
adequate consideration for his covenants and agreements set forth in Section 6
(Non-Disclosure, etc.), Section 7 (Non-Competition), Section 8
(Non-Solicitation) and Section 9
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(Intellectual Property) of this Agreement, (iii) all amounts that have become
fully vested and properly payable on or before the Last Day of Employment under
all retirement plans sponsored by the Company in accordance with the provisions
of such plans, and (iv) all other amounts that are properly payable to the
Executive by the Company that have not been paid to him on or before the Last
Day of Employment.
In addition, unless expressly provided otherwise in the STIP or the
LTIP or in a written agreement between the Company and the Executive relating to
awards under the STIP or the LTIP (an "Award Agreement"), all awards granted to
the Executive under the STIP and the LTIP that have become fully vested,
exercisable or earned on or before the Date of the Termination Notice, (y) in
the event of a termination of the Executive's employment by the Company for
Cause, shall be forfeited or shall not be exercisable or paid, as the case may
be, as of and following the Date of the Termination Notice, and (z) in the event
of a termination of the Executive's employment by the Executive without Good
Reason, shall be distributed or paid to the Executive within, or shall be
exercisable by the Executive for, as the case may be, sixty (60) days following
the Last Day of Employment, unless expressly provided otherwise in the STIP or
the LTIP or in the applicable Award Agreement(s). All awards granted to the
Executive under the STIP and the LTIP that have not become fully vested,
exercisable or earned on or before the Date of the Termination Notice shall be
forfeited or shall not be exercisable, distributed or paid, as the case may be,
as of and following the Date of the Termination Notice, unless expressly
provided otherwise in the STIP or the LTIP or in the applicable Award
Agreement(s).
(b) Termination by the Company Without Cause or by the Executive For
Good Reason. Upon the termination of the Executive's employment by the Company
without Cause pursuant to Section 4(b) hereof or by the Executive for Good
Reason pursuant to Section 4(c) hereof, the Company shall pay to the Executive
(i) that portion of his Base Salary earned through the Last Day of Employment,
(ii) if the Last Day of Employment is on or prior to December 31 2006, an amount
(payable in twelve (12) equal monthly installments) equal to Five Hundred Fifty
Thousand Dollars ($550,000), or if the Last Day of Employment is subsequent to
December 31, 2006, an amount (payable in twenty-four (24) equal monthly
installments) equal to the sum of (A) two (2) times the Executive's Base Salary
and (B) two (2) times the average of the awards paid to the Executive under the
STIP in the two (2) fiscal years of the Company ended immediately preceding the
Last Day of Employment (but in no event greater than two (2) times the average
of the "target" award amounts under the STIP for such two (2) year period),
(iii) all amounts that have become fully vested and properly payable on or
before the Last Day of Employment under all retirement plans sponsored by the
Company in accordance with the provisions of such plans, and (iv) all other
amounts that are properly payable to the Executive by the Company that have not
been paid to him on or before the Last Day of Employment.
In addition, all awards granted to the Executive under the STIP and the
LTIP that have become fully vested, exercisable or earned on or before the Last
Day of Employment shall be distributed or paid to the Executive within, or shall
be exercisable by the Executive for, as the case may be, sixty (60) days
following the Last Day of Employment, unless expressly provided otherwise in the
STIP or the LTIP or in the applicable Award Agreement(s). With respect to the
awards granted to the Executive under the STIP and the LTIP that have not become
fully vested, exercisable or earned on or before the Last Day of Employment,
one-half (1/2) of such awards
11
(but in no event greater than one-half (1/2) of the "target" award amounts
under the STIP and the LTIP for the applicable years) shall become vested,
exercisable or earned on the day immediately following the Last Day of
Employment and shall be distributed or paid to the Executive within, or shall be
exercisable by the Executive for, as the case may be, sixty (60) days following
the Last Day of Employment, unless expressly provided otherwise in the STIP or
the LTIP or in the applicable Award Agreement(s). The remaining one-half (1/2)
of such awards shall be forfeited or shall not be exercisable, distributed or
paid, as the case may be, as of and following the Last Day of Employment.
If the Executive elects to continue coverage under the Company's group
health insurance plan for himself and/or his spouse under the Consolidated
Omnibus Budget Reconciliation Act of 1986, as amended ("COBRA"), the Company
shall reimburse the Executive for the premiums paid by the Executive associated
with such continued coverage until the earlier of (I) the end of the Executive's
entitlement to continued coverage under the Company's group health insurance
plan under COBRA, or (II) the date on which the Executive becomes covered by a
health plan sponsored by another employer.
(c) Termination Upon Death of the Executive. Upon the death of the
Executive, the Company shall pay to the Executive's estate (i) that portion of
the Executive's Base Salary earned through the date of his death, (ii) all
amounts that have become fully vested on or before the Last Day of Employment
under all retirement plans of the Company in accordance with the provisions of
such plans, and (iii) all other amounts that are properly payable to the
Executive by the Company that have not been paid to him on or before the Last
Day of Employment.
In addition, all awards granted to the Executive under the STIP and the
LTIP that have become fully vested, exercisable or earned on or before the Last
Day of Employment shall be distributed or paid to the Executive's estate within,
or shall be exercisable by the Executive's estate for, as the case may be, one
(1) year following the date of the Executive's death, unless expressly provided
otherwise in the STIP or the LTIP or in the applicable Award Agreement(s). All
awards granted to the Executive under the STIP and the LTIP that have not become
fully vested, exercisable or earned on or before the Last Day of Employment
shall continue to vest, or to become exercisable or payable, as the case may be,
in accordance with the appropriate schedule regarding vesting, exercisability or
payment established at the time of the grant of the award (but in no event
greater than the "target" award amounts under the STIP and the LTIP for the
applicable years) and shall be distributed or paid to the Executive's estate
within, or shall be exercisable by the Executive's estate for, as the case may
be, thirty (30) days following the date that such award becomes fully vested,
exercisable or earned, unless expressly provided otherwise in the STIP or the
LTIP or in the applicable Award Agreement(s).
(d) Termination Upon a Disability. Upon the termination of the
Executive's employment by the Company upon the occurrence of a Disability
pursuant to Section 4(e) hereof, the Company shall pay to the Executive (i) that
portion of the Executive's Base Salary earned through the Last Day of
Employment, (ii) all amounts that have fully vested as of the Last Day of
Employment under all retirement plans of the Company in accordance with the
provisions of such plans, and (iii) all other amounts that are properly payable
to the Executive by the Company that have not been paid to him on or before the
Last Day of Employment.
12
In addition, all awards granted to the Executive under the STIP and the
LTIP that have become fully vested, exercisable or earned on or before the Last
Day of Employment shall be distributed or paid to the Executive within, or shall
be exercisable by the Executive for, as the case may be, one (1) year following
the Last Day of Employment, unless expressly provided otherwise in the STIP or
the LTIP or in the applicable Award Agreement(s). All awards granted to the
Executive under the STIP and the LTIP that have not become fully vested,
exercisable or earned on or before the Last Day of Employment shall continue to
vest, or to become exercisable or paid, as the case may be, in accordance with
the appropriate schedule regarding vesting, exercisability or payment
established at the time of the grant of the award (but in no event greater than
the "target" award amounts under the STIP and the LTIP for the applicable years)
and shall be distributed or paid to the Executive within, or shall be
exercisable by the Executive for, as the case may be, thirty (30) days following
the date that such award becomes fully vested, exercisable or earned, as the
case may be, unless expressly provided otherwise in the STIP or the LTIP or in
the applicable Award Agreement(s).
(e) Termination by the Executive Upon a Change in Control. Upon the
termination of the Executive's employment by the Executive following the
occurrence of a Change in Control pursuant to Section 4(f) hereof, the Company
shall pay to the Executive (i) that portion of his Base Salary earned through
the Last Day of Employment, (ii) an amount (payable in twenty-four (24) equal
monthly installments) equal to the sum of (A) two (2) times the Executive's Base
Salary and (B) two (2) times the average of the awards paid to the Executive
under the STIP in the two (2) fiscal years of the Company ended immediately
preceding the Last Day of Employment (but in no event greater than two (2) times
the average of the "target" award amounts under the STIP for such two (2) year
period), (iii) all amounts that have become fully vested on or before the Last
Day of Employment under all retirement plans of the Company in accordance with
the provisions of such plans, and (iv) all other amounts that are properly
payable to the Executive by the Company that have not been paid to him on or
before the Last Day of Employment.
In addition, all awards granted to the Executive under the STIP and the
LTIP that have become fully vested, exercisable or earned on or before the Last
Day of Employment shall be distributed or paid to the Executive within, or shall
be exercisable by the Executive for, as the case may be, sixty (60) days
following the Last Day of Employment, unless expressly provided otherwise in the
STIP or the LTIP or in the applicable Award Agreement(s). With respect to the
awards granted to the Executive under the STIP and the LTIP that have not become
fully vested, exercisable or earned on or before the Last Day of Employment, all
of such awards (but in no event greater than the "target" award amounts under
the STIP and the LTIP for the applicable years) shall become fully vested,
exercisable or earned on the day immediately following the Last Day of
Employment and shall be distributed or paid to the Executive within, or shall be
exercisable by the Executive for, as the case may be, sixty (60) days following
the Last Day of Employment, unless expressly provided otherwise in the STIP or
the LTIP or in the applicable Award Agreement(s).
If the Executive elects to continue coverage under the Company's group
health insurance plan for himself and/or his spouse under COBRA, the Company
shall reimburse the Executive
13
for the premiums paid by the Executive associated with such continued coverage
until the earlier of (I) the end of the Executive's entitlement to continued
coverage under the Company's group health insurance plan under COBRA, or (II)
the date on which the Executive becomes covered by a health plan sponsored by
another employer.
(f) Non-Renewal Pursuant to Section 1(b) of this Agreement. If the
Company provides the Non-Renewal Notice to the Executive, the Company shall pay
to the Executive (i) that portion of his Base Salary earned through the Last Day
of Employment, (ii) an amount (payable in twenty-four (24) equal monthly
installments) equal to the sum of (A) two (2) times the Executive's Base Salary
and (B) two (2) times the average of the awards paid to the Executive under the
STIP in the two (2) fiscal years of the Company ended immediately preceding the
Last Day of Employment (but in no event greater than two (2) times the average
of the "target" award amounts under the STIP for such two (2) year period),
(iii) all amounts that have become fully vested and properly payable on or
before the Last Day of Employment under all retirement plans sponsored by the
Company in accordance with the provisions of such plans, and (iv) all other
amounts that are properly payable to the Executive by the Company that have not
been paid to him on or before the Last Day of Employment. If the Executive
provides the Non-Renewal Notice to the Company, the Company shall pay to the
Executive (w) that portion of his Base Salary earned through the Last Day of
Employment, (x) an amount (payable in twelve (12) equal monthly installments)
equal to the sum of (A) the Executive's Base Salary and (B) the average of the
awards paid to the Executive under the STIP in the two (2) fiscal years of the
Company ended immediately preceding the Last Day of Employment (but in no event
greater than the average of the "target" award amounts under the STIP for such
two (2) year period), (y) all amounts that have become fully vested and properly
payable on or before the Last Day of Employment under all retirement plans
sponsored by the Company in accordance with the provisions of such plans, and
(z) all other amounts that are properly payable to the Executive by the Company
that have not been paid to him on or before the Last Day of Employment.
In addition, all awards granted to the Executive under the STIP and the
LTIP that have become fully vested, exercisable or earned on or before the Last
Day of Employment shall be distributed or paid to the Executive within, or shall
be exercisable by the Executive for, as the case may be, sixty (60) days
following the Last Day of Employment, unless expressly provided otherwise in the
STIP or the LTIP or in the applicable Award Agreement(s). Unless expressly
provided otherwise in the STIP or the LTIP or in the applicable Award
Agreement(s), all awards granted to the Executive under the STIP and the LTIP
that have not become fully vested, exercisable or earned on or before the Last
Day of Employment, (I) in the event the Company provides the Non-Renewal Notice
to the Executive, shall continue to vest, or to become exercisable or paid, as
the case may be, in accordance with the appropriate schedule regarding vesting,
exercisability or payment established at the time of the grant of the award (but
in no event greater than the "target" award amounts under the STIP and the LTIP
for the applicable years) and shall be distributed or paid to the Executive
within, or shall be exercisable by the Executive for, as the case may be, thirty
(30) days following the date that such award becomes fully vested, exercisable
or earned, as the case may be, and (II) in the event the Executive provides the
Non-Renewal Notice to the Company, shall be forfeited or shall not be
exercisable, distributed or paid, as the case may be, as of and following the
Last Day of Employment.
14
If the Company provides the Non-Renewal Notice to the Executive and if
the Executive elects to continue coverage under the Company's group health
insurance plan for himself and/or his spouse under COBRA, the Company shall
reimburse the Executive for the premiums paid by the Executive associated with
such continued coverage until the earlier of (i) the end of the Executive's
entitlement to continued coverage under the Company's group health insurance
plan under COBRA, or (ii) the date on which the Executive becomes covered by a
health plan sponsored by another employer.
(g) Certain Limitations. The Company's obligation to pay any amount to
the Executive under this Section 5 shall terminate immediately without
reinstatement of any obligation of the Company to resume paying the Executive
hereunder if the Executive breaches any of the provisions of this Agreement. In
addition, the Executive waives any right to, and agrees not to file any claim
for, unemployment compensation in the event of any termination of his employment
with the Company.
Notwithstanding any other provision of this Section 5, if the Company
becomes obligated to make monthly payments to the Executive pursuant to this
Section 5 (the "Monthly Severance Payments") over a period of time which is
twelve (12) months or longer (the "Severance Period") and the Executive obtains
an employee or similar position with another Person during or prior to the
Severance Period, then the Monthly Severance Payments shall terminate or be
reduced as set forth in this paragraph. For purposes of this paragraph, the "New
Monthly Compensation" shall mean the monthly base salary or monthly consulting
fee associated with the Executive's new position with another Person. In the
event that the New Monthly Compensation is equal to or greater than the
Executive's monthly Base Salary on the Last Day of Employment, then the
Company's obligation to pay additional Monthly Severance Payments shall
immediately terminate. In the event that the New Monthly Compensation is less
than the Executive's monthly Base Salary on the Last Day of Employment, then the
Monthly Severance Payments shall, for the remainder of the Severance Period, be
reduced such that they shall equal solely the amount by which the Executive's
monthly Base Salary on the Last Day of Employment exceeds the New Monthly
Compensation.
If the Monthly Severance Payments have been terminated or reduced in
accordance with the foregoing paragraph, then the portion of the Monthly
Severance Payments that are based upon any average of awards under the STIP
shall terminate at the same time. Once the Company's obligation to pay Monthly
Severance Payments has been terminated or reduced as provided in the foregoing
paragraph, such obligation shall not thereafter be reinstated or increased, in
whole or in part. The Executive shall promptly provide written notice to the
Company of his new position with another Person, which shall include an adequate
confirmation of his New Monthly Compensation. The Executive shall not have any
duty to mitigate the amount of the Monthly Severance Payments and shall not do
any act or thing relating to his compensation from his new position with another
Person to circumvent, diminish or prevent the operation of the foregoing
paragraph.
The Executive hereby agrees that the Monthly Severance Payments
constitute adequate consideration for his covenants and agreements set forth in
Section 6 (Non-Disclosure, etc.), Section 7 (Non-Competition), Section 8
(Non-Solicitation) and Section 9 (Intellectual Property)
15
of this Agreement. The Executive further agrees that any termination or
reduction of the Monthly Severance Payments in accordance with this Section 5(g)
shall not affect in any manner the Executive's covenants and agreements in
Section 6 (Non-Disclosure, etc.), Section 7 (Non-Competition), Section 8
(Non-Solicitation) and Section 9 (Intellectual Property) of this Agreement.
Section 6. Non-Disclosure; Return of Confidential Information and Other
Property.
(a) Confidential Information; Non-Disclosure. At all times while the
Executive is employed by the Company and at all times thereafter, the Executive
shall not (i) directly or indirectly disclose, provide or discuss any
Confidential Information with or to any Person other than those directors,
officers, employees, representatives and agents of the Company and any of its
subsidiaries or affiliates who need to know such Confidential Information for a
proper corporate purpose, and (ii) directly or indirectly use any Confidential
Information (A) to compete against the Company or any of its subsidiaries or
affiliates, or (B) for the Executive's own benefit or for the benefit of any
Person other than the Company or any of its subsidiaries or affiliates. The
Executive agrees that all Confidential Information is and at all times shall
remain the property of the Company or any of its subsidiaries or affiliates, as
applicable.
For purposes of this Agreement, the term "Confidential Information"
means
(i) any and all materials, records, data, documents,
lists, writings and information (whether in writing,
printed, verbal, electronic, computerized, on disk or
otherwise) (A) relating or referring in any manner to
the business, operations, affairs, financial
condition, results of operation, assets, liabilities,
sales, revenues, income, estimates, projections,
budgets, policies, strategies, techniques, methods,
products, developments, suppliers, vendors,
relationships and/or customers of the Company or any
of its subsidiaries or affiliates that are
confidential, proprietary or not otherwise publicly
available, in any event not through a breach of this
Agreement, or (B) that the Company or any of its
subsidiaries or affiliates has deemed confidential,
proprietary or nonpublic;
(ii) any and all trade secrets of the Company or any of
its subsidiaries or affiliates; and
(iii) any and all copies, summaries, analyses and extracts
which relate or refer to or reflect any of the items
set forth in (i) or (ii) above.
(b) Return of Confidential Information and Other Property. The
Executive covenants and agrees (i) to return promptly to the Company all
Confidential Information that is still in the Executive's possession or control
on the Last Day of Employment (including, but not limited to, any Confidential
Information contained on the Executive's personal or home computer), and (ii) to
return promptly to the Company, at the Company's headquarters, all vehicles,
equipment, computers, credit cards and other property of the Company that are
still in the Executive's
16
possession or control on the Last Day of Employment, and to cease using any of
the foregoing as of the Last Day of Employment.
Section 7. Non-Competition.
(a) The Executive hereby understands, acknowledges and agrees that he
has not been employed in the furniture manufacturing industry prior to the date
of this Agreement and that, by virtue of his position as Chief Executive Officer
of the Company, the Executive will have advantageous familiarity and personal
contacts with the suppliers, vendors and customers, wherever located, of the
Company and its subsidiaries or affiliates and will have advantageous
familiarity with the Confidential Information and the business, operations,
affairs and strategy of the Company and its subsidiaries or affiliates.
Accordingly, at all times while the Executive is employed by the Company and for
a period of two (2) years following his Last Day of Employment, the Executive
shall not, in any location within the United States of America, directly or
indirectly, or individually or together with any other Person, as owner,
shareholder, investor, member, partner, proprietor, principal, director,
officer, employee, manager, agent, representative, independent contractor,
consultant or otherwise:
(i) engage in or assist another Person in engaging in, or
use or permit his name to be used in connection with,
any business, operation or activity which competes
with any business, operation or activity conducted or
proposed to be conducted by the Company or any of its
subsidiaries or affiliates (or which is in the same
or a similar line of business as the Company or any
of its subsidiaries or affiliates) at any time during
the Executive's employment with the Company; or
(ii) engage in or assist another Person in engaging in, or
use or permit his name to be used in connection with,
any business, operation or activity which competes
with any business, operation or activity conducted by
the Company or any of its subsidiaries or affiliates
(or which is in the same or a similar line of
business as the Company or any of its subsidiaries or
affiliates) at any time during such two (2) year
period following his Last Day of Employment; or
(iii) finance, join, operate or control any business,
operation or activity which competes with any
business, operation or activity conducted or proposed
to be conducted by the Company or any of its
subsidiaries or affiliates (or which is in the same
or a similar line of business as the Company or any
of its subsidiaries or affiliates) at any time during
the Executive's employment with the Company; or
(iv) finance, join, operate or control any business,
operation or activity which competes with any
business, operation or activity conducted by the
Company or any of its subsidiaries or affiliates (or
which is in the same or a similar line of business as
the Company or any of its subsidiaries or
17
affiliates) at any time during such two (2) year
period following his Last Day of Employment; or
(v) offer or provide employment, hire or engage (whether
on a full-time, part-time or consulting basis or
otherwise) any individual who has been an employee of
the Company or any of its subsidiaries or
affiliates within one (1) year prior to such offer,
hiring or engagement.
Provided, however, that this Section 7(a) shall not prohibit the
Executive from owning up to one percent (1%) of the outstanding shares of
capital stock of any company or other entity which files reports or other
information with the U.S. Securities and Exchange Commission.
(b) The Executive acknowledges the nationwide scope of the business of
the Company and its subsidiaries or affiliates. Nevertheless, if the foregoing
provisions of Section 7(a) are found to be unenforceable by a court of competent
jurisdiction because such provisions are not sufficiently limited to specific
geographic areas, then the restrictions contained in Section 7(a) upon the
Executive may be limited to the geographic areas consisting of one hundred (100)
miles from each city, town, village, municipality or other location in the
United States of America in which the Company or any of its subsidiaries or
affiliates maintains an office, manufacturing facility, warehouse or showroom on
his Last Day of Employment.
Notwithstanding the foregoing, in the event that any provision of this
Section 7 is found by a court of competent jurisdiction to exceed the time,
geographic or other restrictions permitted by applicable law in any
jurisdiction, then such court shall have the power to reduce, limit or reform
(but not to increase or make greater) such provision to make it enforceable to
the maximum extent permitted by law, and such provision shall then be
enforceable against the Executive in its reduced, limited or reformed manner;
provided, however, that a provision shall be enforceable in its reduced, limited
or reformed manner only in the particular jurisdiction in which a court of
competent jurisdiction makes such determination. In addition, the Company and
the Executive agree that the provisions of this Section 7 shall be severable in
accordance with Section 13(e) hereof.
Section 8. Non-Solicitation.
The Executive hereby understands, acknowledges and agrees that he has
not been employed in the furniture manufacturing industry prior to the date of
this Agreement and that, by virtue of his position as the Chief Executive
Officer of the Company, the Executive will have advantageous familiarity and
personal contacts with the suppliers, vendors and customers, wherever located,
of the Company and its subsidiaries or affiliates and will have advantageous
familiarity with the Confidential Information and the business, operations,
affairs and strategy of the Company and its subsidiaries or affiliates.
Accordingly, at all times while the Executive is employed by the Company and for
a period of two (2) years following his Last Day of Employment, the Executive
shall not, directly or indirectly, or individually or together with any other
Person, as owner, shareholder, investor, member, partner, proprietor, principal,
director, officer, employee, manager, agent, representative, independent
contractor, consultant or otherwise:
18
(a) solicit in any manner, seek to obtain or service any business of
any Person who is or was a customer or an active prospective customer of the
Company or any of its subsidiaries or affiliates at any time during the
Executive's employment with the Company, where the solicitation is for the
purpose of offering products or services competitive with those sold or offered
by the Company at any time during the Executive's employment with the Company;
or
(b) request or advise any customers, suppliers, vendors or others doing
business with the Company or any of its subsidiaries or affiliates at any time
during the Executive's employment with the Company to terminate, reduce, limit
or change their business or relationship with the Company or any of its
subsidiaries or affiliates; or
(c) request or advise any customers, suppliers, vendors or others doing
business with the Company or any of its subsidiaries or affiliates at any time
during such two (2) year period following his Last Day of Employment to
terminate, reduce, limit or change their business or relationship with the
Company or any of its subsidiaries or affiliates; or
(d) induce, request or attempt to influence any employee of the Company
or any of its subsidiaries or affiliates at any time during the Executive's
employment with the Company or during such two (2) year period following the
Last Day of Employment to terminate his or her employment with the Company or
any of its subsidiaries or affiliates.
Notwithstanding the foregoing, in the event that any provision of this
Section 8 is found by a court of competent jurisdiction to exceed the time or
other restrictions permitted by applicable law in any jurisdiction, then such
court shall have the power to reduce, limit or reform (but not to increase or
make greater) such provision to make it enforceable to the maximum extent
permitted by law, and such provision shall then be enforceable against the
Executive in its reduced, limited or reformed manner; provided, however, that a
provision shall be enforceable in its reduced, limited or reformed manner only
in the particular jurisdiction in which a court of competent jurisdiction makes
such determination. In addition, the Company and the Executive agree that the
provisions of this Section 8 shall be severable in accordance with Section 13(e)
hereof.
Section 9. Intellectual Property. The Executive understands,
acknowledges and agrees that each and every invention, discovery, improvement,
device, design, apparatus, practice, process, method, technique or product
(whether patentable or copyrightable or not) made, developed, perfected,
devised, conceived, worked on or first reduced to practice by the Executive,
either solely or in collaboration with others, during the period of the
Executive's employment with the Company (whether or not during regular working
hours) relating, directly or indirectly, to the business, operations, affairs,
products, practices, techniques or methods of the Company or any of its
subsidiaries or affiliates (the "Developments") is and shall be the property of
the Company or its subsidiaries or affiliates, as applicable. The Executive
hereby assigns and agrees to assign to the Company or its subsidiaries or
affiliates, as applicable, any and all of the Executive's right, title and
interest in and to any and all Developments and hereby forever and
unconditionally releases and relinquishes any and all rights that he may have
with respect to any and all of the Developments.
19
Section 10. Periods of Noncompliance and Reasonableness of Periods. The
restrictions and covenants contained in Sections 7 and 8 of this Agreement shall
be deemed not to run during all periods of noncompliance, the intention of the
parties hereto being to have such restrictions and covenants apply during the
full periods specified in Sections 7 and 8 of this Agreement. The Company and
the Executive understand, acknowledge and agree that the restrictions and
covenants contained in Section 7 and Section 8 of this Agreement are reasonable
in view of the Executive's positions as the Chief Executive Officer of the
Company and the nature of the business in which the Company and its subsidiaries
and affiliates are engaged.
The Company's obligation to pay the amounts payable to the Executive
pursuant to this Agreement shall immediately terminate without reinstatement of
any obligation to resume paying the Executive under this Agreement in the event
that the Executive breaches any of the provisions of Sections 6, 7, 8 or 9
hereof. Notwithstanding any such termination of the Company's obligation to pay,
(a) the covenants of the Executive set forth in Sections 6, 7, 8 and 9 hereof
shall continue in full force and effect and be binding upon the Executive, (b)
the Company shall be entitled to the remedies specified in Section 12 hereof,
and (c) the Company shall be entitled to its damages, costs and expenses
(including, without limitation, reasonable attorneys fees and expenses)
resulting from or relating to the Executive's breach of any of the provisions of
Sections 6, 7, 8 or 9 hereof.
Section 11. Survival of Certain Provisions. Upon any termination of the
Executive's employment with the Company at or prior to the expiration of the
Term, both the Company and the Executive hereby agree that Sections 1, 2, 3 and
4 of this Agreement shall terminate and be of no force or effect (except for the
definitions of terms specified in such sections) and that Sections 5, 6, 7, 8,
9, 10, 11, 12 and 13 hereof shall continue to be in full force and effect and
binding upon the Company or the Executive, as the case may be, in accordance
with the respective provisions of such Sections. Upon any termination of the
Executive's employment with the Company following the expiration of the Term,
both the Company and the Executive hereby agree that Sections 1, 2, 3, 4 and 5
of this Agreement shall terminate and be of no further force or effect (except
for the definitions of terms specified in such sections) and that Sections 6, 7,
8, 9, 10, 11, 12 and 13 hereof shall continue to be in full force and effect and
binding upon the Company or the Executive, as the case may be, in accordance
with the respective provisions of such Sections.
Section 12. Remedies. The Executive agrees that the Company will suffer
irreparable damage and injury and will not have an adequate remedy at law in the
event of any actual, threatened or attempted breach by the Executive of any
provision of Sections 6, 7, 8 or 9. Accordingly, in the event of a breach or a
threatened or attempted breach by the Executive of any provision of Sections 6,
7, 8 or 9, in addition to all other remedies to which the Company is entitled at
law, in equity or otherwise, the Company shall be entitled to a temporary
restraining order and a permanent injunction or a decree of specific performance
of any provision of Sections 6, 7, 8 or 9. The parties agree that a bond posted
by the Company in the amount of One Thousand Dollars ($1,000) shall be adequate
and appropriate in connection with such restraining order or injunction and that
actual damages need not be proved by the Company prior to it being entitled to
obtain such restraining order, injunction or specific performance. The foregoing
20
remedies shall not be deemed to be the exclusive rights or remedies of the
Company for any breach of or noncompliance with this Agreement by the Executive
but shall be in addition to all other rights and remedies available to the
Company at law, in equity or otherwise.
Section 13. Miscellaneous.
(a) Binding Effect; Assignment. This Agreement shall be binding upon
and inure to the benefit of the Company and the Executive and their respective
heirs, executors, representatives, successors and assigns; provided, however
that neither party may assign this Agreement without the prior written consent
of the other party hereto except that the Company may, without the consent of
the Executive, assign this Agreement in connection with any merger,
consolidation, share exchange, combination, sale of stock or assets or similar
transaction involving the Company or any transaction or series of transaction
constituting a Change in Control.
(b) Waiver. Either party hereto may, by a writing signed by the waiving
party, waive the performance by the other party of any of the covenants or
agreements to be performed by such other party under this Agreement. The waiver
by either party hereto of a breach of or noncompliance with any provision of
this Agreement shall not operate or be construed as a continuing waiver or a
waiver of any other or subsequent breach or noncompliance hereunder. The failure
or delay of either party at any time to insist upon the strict performance of
any provision of this Agreement or to enforce its rights or remedies under this
Agreement shall not be construed as a waiver or relinquishment of the right to
insist upon strict performance of such provision, or to pursue any of its rights
or remedies for any breach hereof, at a future time.
(c) Amendment. This Agreement may be amended, modified or supplemented
only by a written agreement executed by all of the parties hereto.
(d) Headings. The headings in this Agreement have been inserted solely
for ease of reference and shall not be considered in the interpretation or
construction of this Agreement.
(e) Severability. In case any one or more of the provisions (or any
portion thereof) contained herein shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement, but
this Agreement shall be construed as if such invalid, illegal or unenforceable
provision or provisions (or portion thereof) had never been contained herein;
provided, however, if any provision of Section 7 or 8 of this Agreement shall be
determined by a court of competent jurisdiction to be unenforceable because of
the provision's scope, duration, geographic restriction or other factor, then
such provision shall be considered divisible and the court making such
determination shall have the power to reduce or limit (but not increase or make
greater) such scope, duration, geographic restriction or other factor or to
reform (but not increase or make greater) such provision to make it enforceable
to the maximum extent permitted by law, and such provision shall then be
enforceable against the appropriate party hereto in its reformed, reduced or
limited form; provided further, however, that a provision shall be enforceable
in its reformed, reduced or limited form only in the particular jurisdiction in
which a court of competent jurisdiction makes such determination.
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(f) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute one and the same agreement.
(g) Construction. This Agreement shall be deemed to have been drafted
by both parties hereto. This Agreement shall be construed in accordance with the
fair meaning of its provisions and its language shall not be strictly construed
against, nor shall ambiguities be resolved against, any party.
(h) Review and Consultation. The Executive hereby acknowledges and
agrees that he (i) has read this Agreement in its entirety prior to executing
it, (ii) understands the provisions, effects and restrictions of this Agreement,
and (iii) has consulted with such of his own attorneys, accountants and
financial and other advisors as he has deemed appropriate in connection with his
execution of this Agreement. THE EXECUTIVE HEREBY UNDERSTANDS, ACKNOWLEDGES AND
AGREES THAT HE HAS NOT RECEIVED ANY ADVICE, COUNSEL OR RECOMMENDATION WITH
RESPECT TO THIS AGREEMENT FROM ANY DIRECTOR OR EMPLOYEE OF, OR ANY ATTORNEY,
ACCOUNTANT OR ADVISOR FOR, THE COMPANY.
(i) Entire Agreement. This Agreement, and the plans, programs,
policies, procedures, rules and agreements referenced herein, constitute the
entire understanding and agreement between the parties hereto relating to the
subject matter hereof and supersede all other prior understandings, commitments,
representations, negotiations, contracts and agreements, whether oral or
written, between the parties hereto relating to the matters contemplated hereby.
(j) Certain References. Whenever in this Agreement a singular word is
used, it also shall include the plural wherever required by the context and
vice-versa. All references to the masculine, feminine or neuter genders herein
shall include any other gender, as the context requires. Unless expressly
provided otherwise, all references in this Agreement to days shall mean
calendar, not business, days.
(k) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Indiana, without reference to any
choice of law provisions, principles or rules thereof (whether of the State of
Indiana or any other jurisdiction) that would cause the application of any laws
of any jurisdiction other than the State of Indiana.
(l) Notices. All notices, requests and other communications hereunder
shall be in writing (which shall include facsimile communication) and shall be
deemed to have been duly given if (i) delivered by hand; (ii) sent by certified
United States Mail, return receipt requested, first class postage pre-paid;
(iii) sent by overnight delivery service; or (iv) sent by facsimile transmission
if such fax is confirmed immediately thereafter by also mailing a copy of such
notice, request or other communication by regular (not certified or registered)
United States Mail, first class postage pre-paid, as follows:
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If to the Company: Chromcraft Revington, Inc.
Attention: Board of Directors
0000 Xxxxx Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to (which Xxxxx XxXxxxx LLP
shall not constitute notice): Attention: Xxxxxxxx X. Xxxxxx, Esq.
Xxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Executive: Xxxxxxxx X. Xxxxxxxx-Xxx
000 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to (which XxXxxxx Long & Xxxxxxxx LLP
shall not constitute notice): Attention: R. Xxxxxx Xxxxx, Esq.
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or to such other address or facsimile number as either party hereto may have
furnished to the other in writing in accordance herewith. The Executive shall
promptly provide any changes to his address, telephone number and facsimile
number to the Company.
All such notices, requests and other communications shall be effective
(i) if delivered by hand, when delivered; (ii) if sent by mail in the manner
provided herein, two (2) business days after deposit with the United States
Postal Service; (iii) if sent by overnight delivery service, on the next
business day after deposit with such service; or (iv) if sent by facsimile
transmission, on the date indicated on the fax confirmation page of the sender
if such fax also is confirmed by mail in the manner provided herein.
(m) Jurisdiction and Venue. The parties hereto hereby agree that all
demands, claims, actions, causes of action, suits, proceedings and litigation
between or among the parties relating to this Agreement, shall be filed, tried
and litigated only in a federal or state court located in the State of Indiana.
In connection with the foregoing, the parties hereto irrevocably consent to the
jurisdiction and venue of such court and expressly waive any claims or defenses
of lack of jurisdiction of or proper venue by such court.
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(n) Recitals. The recitals, premises and "Whereas" clauses contained on
page 1 of this Agreement are expressly incorporated into and made a part of this
Agreement.
(o) Definition of Person. For purposes of this Agreement, the term
"Person" shall mean any natural person, proprietorship, partnership,
corporation, limited liability company, organization, firm, business, joint
venture, association, trust or other entity and any government agency, body or
authority.
(p) Reimbursement of Certain Attorney's Fees. Upon the execution of
this Agreement by both parties and the presentation by the Executive of a
request for reimbursement, the Company shall promptly reimburse the Executive
for his attorney's fees incurred in reviewing and negotiating this Agreement, up
to a maximum of Ten Thousand Dollars ($10,000).
* * *
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IN WITNESS WHEREOF, the Company and the Executive have made, entered
into, executed and delivered this Agreement as of the day and year first above
written.
/s/ Xxxxxxxx X. Xxxxxxxx-Xxx
--------------------------------------------
Xxxxxxxx X. Xxxxxxxx-Xxx
CHROMCRAFT REVINGTON, INC.
By: /s/ Xxxxx X. Xxxx
----------------------------------------
Xxxxx X. Xxxx
Vice President-Finance
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