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EMPLOYMENT, CONSULTING AND NON-COMPETITION AGREEMENT
THIS EMPLOYMENT, CONSULTING AND NON-COMPETITION AGREEMENT ("Agreement") is
made and entered into as of the 11th day of March, 1997, by and between Xxxxxx
Fiber Properties, Inc. ("BFP"), a Delaware corporation, and Xxxxxx X. Xxxxxx
("Executive").
WITNESSETH THAT:
WHEREAS, Executive is the founder of BFP and has been elected by the Board
of Directors of BFP to the position of, and has served since inception of BFP
as, Chairman of the Board of Directors;
WHEREAS, Executive possesses executive skills and experience which BFP
believes are of substantial value and importance to the success of BFP's
business operations;
WHEREAS, BFP wishes to assure continuation of the services of Executive in
connection with the conduct of its business; and
WHEREAS, Executive is willing to continue to render service as an employee,
and thereafter as a consultant and Chairman Emeritus, on the terms hereinafter
set forth;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, it is covenanted and agreed as
follows:
1. BFP-Executive Relationship and Executive Duties.
(a) BFP hereby continues the employment of Executive, and Executive
agrees to continue in the employ of BFP for and during the Employment Period.
During the Employment Period, Executive shall serve BFP in the position of
Chairman of the Board of Directors. Subject to general policies established by
the Board of Directors of BFP, Employee shall have all of the rights,
prerogatives, responsibilities, obligations and duties normally attendant to
such executive position. Executive agrees to perform the duties consistent with
such executive position and shall devote his business time, attention and
efforts to the business and affairs of BFP and its subsidiaries on an as needed
basis.
(b) During the Consulting Period, Executive shall serve BFP as a
consultant with a title of Chairman Emeritus. During the Consulting Period,
Executive shall serve on BFP's Board of Directors and provide such consulting
and advisory services to BFP at such time and at such locations or by way of
telephone conference calling as is convenient to Executive (taking into account
other business, charitable, humanitarian and personal activities). Generally,
Executive's consulting and advisory services shall not exceed an average of 20
hours per month.
(c) For both the Employment and Consulting Period, BFP shall provide
Executive with an office and secretarial and administrative assistance
comparable to that provided to BFP's chief executive officer.
2. Compensation for Employment and Consulting Services.
(a) In full consideration for services provided by Executive during
the Employment Period, BFP will, during the Employment Period,
(i) pay or cause to be paid to Executive, and Executive agrees to
accept, compensation consisting of a base salary (payable in regular
installments not less frequently than monthly) of not less than $400,000
per year and a bonus of not less than $400,000 per year.
(ii) provide to Executive medical or health coverage as provided
from time to time to the most senior executive officers of BFP, but in no
event less than currently provided to Executive; and
(iii) provide to Executive customary "fringe" benefits (other
than medical and health benefits) provided by BFP to its most senior
executive officers.
Executive shall also be eligible to participate in all incentive compensation,
bonus plans, deferred compensation, savings, stock option, stock appreciation
and similar type plans generally available, from time to time, to the most
senior executive officers of BFP.
(b) In full consideration for services provided by Executive during
the Consulting Period, BFP will, during the Consulting Period: (i) provide
Executive with the medical and/or health coverage provided for in Section
2(a)(ii); and (ii) pay or cause to be paid to Executive (not less frequently
than monthly), and Executive agrees to accept, a fee per annum equal to the
amounts for the years set forth in the table below:
YEAR OF CONSULTING PERIOD Applicable Annual Fee
-------------------------- ---------------------
1998 $250,000
1999 $250,000
2000 $200,000
2001 $200,000
2002 $150,000
Executive shall not be entitled to additional compensation or benefits for
serving as a Director of BFP except to the extent employees of BFP receive
separate compensation or benefits for such service.
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3. Term. The Employment Period shall be for a period beginning on the date
hereof and ending on the earlier of (a) December 31, 1997 or(b) the date of any
Permitted BFP Termination, any Permitted Executive Resignation or any other date
mutually agreed to by BFP and Executive. The Consulting Period shall be for a
period beginning on the termination of the Employment Period and ending on the
earlier of (a) December 31, 2002 or (b) the date of any Permitted BFP
Termination or Permitted Executive Resignation occurring after the term of the
Employment Period. In the event of a Permitted BFP Termination or a Permitted
Executive Resignation during the term of the Employment Period, there shall be
no Consulting Period. The Consulting Period may be extended by mutual consent of
the parties with consideration for services as agreed upon.
4. Permitted BFP Termination. The Employment Period, or the Consulting
Period, and all obligations of BFP pursuant hereto, except those provided for in
Section 7 hereof, shall be terminated upon the death of Executive or the
Permanent Disability of Executive. The Employment Period and the Consulting
Period, and all obligations of BFP pursuant hereto, may be terminated by BFP in
the event of the occurrence of a Good Cause Event.
5. Termination Payment.
(a) In the event of a Permitted Executive Resignation (subject to the
provisions of Exhibit A hereto which are incorporated herein by reference), BFP
will:
(i) continue the medical and/or health coverage provided
Executive pursuant to Section 2(a)(ii) of this Agreement through December
31, 2002 at the level then in effect, or provide Executive with a cash
payment in the amount necessary for Executive to purchase equivalent
coverage; and
(ii) pay Executive a lump sum payment equal to the present value
of the compensation and benefits provided for, but not yet paid to
Executive, pursuant to Sections 2(a)(i), 2(a)(iii) and 2(b).
(b) In the event that BFP shall terminate the engagement of Executive
as an employee or consultant for any reason other than in a Permitted BFP
Termination prior to the end of the Consulting Period or materially breach this
Agreement in any other way, BFP will pay or provide to Executive: (i) the
benefits as provided for in Section 5(a) in the event of a Permitted Executive
Resignation; and (ii) a cash payment equal to the present value of the benefits
available to Executive pursuant to Section 9 (based on average use in the
preceding twelve months) for the time remaining in the Employment Period and the
Consulting Period; provided such payment shall not exceed $75,000 per year
remaining in the Employment Period and the Consulting Period. All amounts
payable under this Section 5(b) shall be increased as provided in Exhibit B
hereto which is incorporated herein by reference.
(c) The payments provided for in this Section 5 are in addition to all
benefits or amounts payable under all other agreements between Executive and BFP
and all plans or programs in effect at termination to which Executive is then
entitled. Nothing in this Section 5, or elsewhere in this Agreement is intended,
or shall be construed, to limit or impair Executive's rights to receive benefits
under any and all such other agreements between the parties, or under any and
all such plans or programs.
(d) For purposes of this section, present value shall be determined in
accordance with Section 280G(d)(4) of the Internal Revenue Code.
6. Non-Competition Covenant and Compensation.
(a) Non-Competition. From the date hereof until December 31, 2002,
Executive covenants and agrees with BFP that Executive will not, directly or
indirectly (including consulting and advising), engage in, enter the employ of,
or have any interest in, any other person, firm, corporation or other entity
engaged in any activity competitive with the business of BFP or its subsidiaries
as carried on within the United States of America; provided, however, that
nothing contained herein shall restrict Executive from individually owning 5% or
less of corporate securities of any competitor of BFP or its subsidiaries which
securities are listed on any national securities exchange or traded actively in
the national over-the-counter market, if Executive has no other connection or
relationship with the issuer of such securities. This restriction shall be
applicable only with respect to the United States of America. Notwithstanding
the foregoing, this non-competition covenant shall terminate in the event BFP
shall breach this Agreement or if BFP terminates this Agreement by reason of a
Good Cause Event. In the event BFP breaches this Agreement, Executive shall
continue to receive the payments provided for in Section 6(d) hereof.
(b) Invalidity of Provisions. Executive recognizes the broad scope of
the foregoing covenants, but expressly agrees that they are reasonable in light
of the scope of the business heretofore conducted by BFP. If any court or
tribunal of competent jurisdiction shall refuse to enforce any or all of the
foregoing covenants because they are more extensive (whether as to geographic
area, scope of business or otherwise) than is deemed reasonable, it is expressly
understood and agreed between the parties hereto that such covenant shall not be
void, but that for the purpose of such proceedings and in such jurisdiction, the
restrictions contained herein (whether as to geographic area, scope of business
or otherwise) shall be deemed reduced to the extent necessary to permit
enforcement of the covenants.
(c) Enforcement and Remedy. Executive further acknowledges and agrees
that the damages resulting from any breach of the foregoing covenants may be
intangible in whole or in part and that the injured party is entitled to seek
specific enforcement, injunctive relief and other equitable remedies in addition
to monetary damages and legal remedies.
(d) Compensation. In full consideration for agreeing to the
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restrictions contained in this Section 6, BFP will pay Executive, and Executive
agrees to accept, a fee per annum in each of the years as set forth in the table
below:
