EXHIBIT 10.7
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into as
of December 21, 1995, by and between GMH ACQUISITION CORP., a
Delaware corporation with an office at X.X. Xxx 0000, Xxxxxxxx,
Xxxxxxx 00000-0000 (the "Company") and XXXXXX X. XXXXX, currently
residing at 0000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxxxxx Xxxxx, Xxxxxxx
32034(the "Executive").
The parties hereto, intending to be legally bound hereby,
and in consideration of the mutual covenants herein contained,
agree as follows:
1. Employment.
1.1 The Company employs the Executive, and the
Executive accepts such employment (the "Employment"), as Chief
Executive Officer of the Company. The Executive agrees to accept
the employment and agrees to remain in the employ of the Company
during the Employment Term (as defined in Section 2 hereof) and
any extensions thereof and to perform such lawful duties as are
from time to time assigned to him by the Board of Directors of
the Company (the "Board") and which are normally associated with
the position of Chief Executive Officer in the manufactured
housing industry and generally consistent with past practices of
the Company.
1.2 During the Employment Term and any extensions
thereof, the Executive will devote his best efforts and full
business time, skill and attention to the performance of his
duties on behalf of the Company.
2. Term of Employment. Subject to the provisions of
Section 6 hereof, the term of the Executive's employment
hereunder shall be from the date hereof until December 31, 2000
(the "Employment Term").
3. Compensation.
3.1 The Company agrees to pay, and the Executive
agrees to accept, as base compensation for all services to be
rendered by the Executive in any capacity to the Company or its
affiliates during the Employment Term, a salary of $300,000 per
annum, subject to such deductions and withholdings as may be
required by law or by further agreement with the Executive (the
"Base Salary"), payable in arrears in equal bi-weekly
installments. The Base Salary may be increased from time to time
in the discretion of the Board. Any such increases shall be
added to the Base Salary then being paid to the Executive, and
the sum thereof shall then become the Base Salary for each
successive year, until further adjusted in accordance with the
provisions of this Section 3.1.
3.2 In addition to the Base Salary, the Executive
shall participate in the Company's Executive Bonus Plan, a copy
of which is attached hereto as Exhibit 1, (the "Plan") subject to
the terms and conditions of the Plan. The Executive's
"Participant Percentage" under the Plan will never be less than
20% of the "Bonus Pool" (as such terms are defined in the Plan).
The Company will award not less than a $100,000 incentive award
to the Executive for the 1996 Plan Year regardless of the size of
the Bonus Pool.
3.3 The Company shall reimburse the Executive for all
reasonable and necessary expenses incurred by the Executive in
connection with the Employment, including without limitation,
travel and lodging expenses and charges incurred on a Company
credit card for business entertainment. Such expenses shall be
reimbursed to the Executive by the Company after the Executive's
submittal of an invoice to the Company with respect to the
reimbursable expenses incurred by him. All invoices for
reimbursable expenses shall include adequate supporting
documentation of the expenses incurred by the Executive,
including receipts.
4. Additional Benefits. During the Employment Term,
the Company shall provide the following additional benefits to
the Executive:
4.1 The Executive shall be entitled to paid vacation
during each calendar year in such amounts and at such times as
the Executive in his sole discretion, shall determine consistent
with past practice and in accordance with the Executive's
obligations under this Agreement.
4.2 The Company shall provide the Executive with
health, medical and hospitalization insurance benefits equal to
those provided by the Company to other executive officers of the
Company. In addition, the Executive shall be permitted, if and
to the extent eligible, to participate in any pension plan or
other "fringe benefits" of the Company, which may be available
generally to other executive officers of the Company.
4.3 So long as the Company shall own or lease on
an exclusive basis an airplane, the Executive or his family
members shall be entitled to personal use thereof, subject to the
business requirements of the Company, at the rate of ten (10)
hours of flying time per month on a cumulative basis. The
Executive shall be deemed to have received additional
compensation in the amount of $175.00 for each such hour of
actual personal use of such Company airplane.
4.4 To defray the expenses of operating his
personal automobile in connection with the performance of his
duties hereunder, the Executive shall be entitled to an
automobile allowance in the amount of $500.00 per month.
4.5 The Company shall maintain during the term of
this Agreement and pay all premiums on that certain key-man,
split-dollar life insurance presently in force (or a substitute
policy of comparable quality) insuring the life of the Executive
and carrying a death benefit of not less than $600,000. The
beneficiary(ies) of such life insurance shall be designated by
the Executive.
4.6 The Company shall obtain, maintain throughout
the term of this Agreement and pay all premiums on a policy or
policies of disability insurance covering the Executive for the
lesser of (a) the maximum amount permitted by law and (b)
$300,000 per annum, payable to not less than age 70, reasonably
obtainable under the circumstances. Such policy or policies of
disability insurance shall provide for commencement of benefits
payable thereunder immediately following any termination of the
Executive's employment pursuant to Section 6.5 hereof.
4.7 During the term of this Agreement, the
Executive or his designee(s) shall be entitled to the exclusive
use and enjoyment of the six (6) season tickets to the
Jacksonville Jaguars NFL football games. Additionally, upon
termination of this Agreement, the Company shall sell and assign
to Executive all remaining tickets for the balance of the then
current season and all rights and/or licenses to purchase such
season tickets in the future, all at the face value thereof.
4.8 The Executive shall have the right, in his
sole discretion, to designate the recipients of any and all
incentive travel and other benefits awarded by suppliers of the
Company for the year 1995.
5. Insurance. In addition to any insurance coverage
provided for in Section 4 hereof, the Company may, in its
discretion, purchase or renew insurance on the life of the
Executive, with the Company or a lender of the Company as
beneficiary in an amount determined by the Company or such lender
from time to time. The Executive agrees to submit to medical
examinations and otherwise to cooperate with the Company and any
such lender in connection with obtaining such insurance.
6. Termination.
6.1 In the event the Executive's employment is
terminated for "Cause", the Executive shall have no further
rights under this Agreement, except the right to receive the Base
Salary up to the date of termination by the Company of the
Executive's employment hereunder. The decision to terminate the
Executive under this Section 6.1 shall be made by the Board. The
term "Cause" shall mean any of the following: (a) any deliberate
or intentional act or omission by the Executive with the intent
of causing damage to the Company's relationships with its
lenders, suppliers or customers; (b) any fraud, misappropriation
or embezzlement by the Executive involving properties, assets or
funds of the Company; (c) a conviction of the Executive, or plea
of nolo contendere by the Executive, to any crime or offense
involving monies or other property of the Company or any other
felony or criminal act involving moral turpitude; (d) any
usurpation by the Executive of a corporate opportunity of the
Company or the Executive's willful and continual neglect of or
willful and continual failure to perform any of his material
duties, responsibilities or obligations as an employee of the
Company, but only after notice of such usurpation, neglect or
failure is delivered to the Executive and the Executive fails or
refuses to remedy such usurpation, neglect or failure to the
reasonable satisfaction of the Board within thirty (30) days
after the receipt of such notice; provided, that any action or
omission taken by the Executive in good faith and in the
reasonable belief that such action or omission was in the best
interests of the Company shall not constitute "Cause"; or (e) the
violation by the Executive of Section 7 of this Agreement or of
any other non-competition agreement or covenant binding upon the
Executive.
6.2 In the event the Executive's employment is
terminated without "Cause", the Executive shall have no further
rights under this Agreement except the right to receive (a) the
Base Salary for the balance of the term of this Agreement,
payable in arrears, in bi-weekly installments, (b) any amounts
due in accordance with the terms of the Plan, (c) all benefits
under Section 4.1 hereof which have accrued as of the date of
termination and (d) uninterrupted continuation of all rights and
benefits accorded the Executive under Sections 4.2, 4.5 and 4.6
hereof for the duration of this Agreement. Additionally, upon
termination by the Company of the Executive's employment without
"Cause", the Executive and the other participants in the
Incentive Compensation Plan shall be entitled to immediate
payment of their respective shares of an amount equal to the
difference between $4,000,000 and the aggregate amount of
payments theretofore made to the Executive and the other
participants pursuant to such Plan or set off pursuant to Section
15(i) of the Stock Purchase Agreement dated as of October 10,
1995 by and among the Company, the Executive and certain other
parties thereto, as amended from time to time.
6.3 In the event of the Executive's death during the
Employment Term, the Employment Term shall terminate
automatically as of the date of the Executive's death, and the
Executive's executor, administrator or other legal representative
shall have no further rights hereunder, except the right to
receive (a) the Base Salary up to the date of the Executive's
death and (b) any amounts due under the Plan.
6.4 If for any reason (other than pursuant to Section
6.3 or 6.5), the Executive resigns from his employment hereunder,
this Agreement shall terminate automatically, and the Executive
shall have no further rights hereunder, except the right to
receive the Base Salary up to the date of the Executive's
resignation.
6.5 If, by reason of any illness, disability or
incapacity, the Executive is unable to perform his duties under
this Agreement for a period of six (6) consecutive months (or
shorter periods aggregating to nine (9) months in any twelve (12)
month period) ("Disability"), the Company may terminate the
Employment Term as of the last day of such six (6) or nine (9)
month period, as the case may be, or as of such other day
thereafter, provided the Executive remains unable to perform his
duties hereunder. The Executive or his legal representative, if
one is appointed, shall be entitled to receive, within sixty (60)
days after the date of such termination, any amounts payable to
the Executive pursuant to this Agreement up to the date of
termination of this Agreement. Notwithstanding the foregoing, if
the Executive suffers a Disability and his employment hereunder
is not terminated, the Executive shall be entitled to receive any
amounts owing to him hereunder, less any disability insurance
payments which Executive receives pursuant to disability
insurance provided by the Company hereunder.
6.6 Upon the termination of the Executive's
employment pursuant to this Section 6, the Executive shall have
no further rights under this Agreement except as expressly
provided in this Section 6.
7. Non-Competition, Non-Interference and Non-Disclosure.
7.1 The Executive acknowledges that: (a) the
business of producing and distributing at wholesale, manufactured
housing, currently conducted and as conducted from time to time
throughout the term of this Agreement (collectively, the
"Business") is conducted by and is proposed to be conducted by
the Company throughout the states of Florida, Georgia, South
Carolina, North Carolina, Virginia, West Virginia, Alabama,
Mississippi, Louisiana, Kentucky and Tennessee (the "Company's
Market"); (b) the Business involves the identification and
development of new products and markets relating to the
production and distribution at wholesale of manufactured housing;
(c) the Company has developed trade secrets and confidential
information concerning the Business; and (d) the agreements and
covenants contained in this Section 7 are essential to protect
the Business of the Company. In order to induce the Company to
enter into this Employment Agreement, the Executive covenants and
agrees that:
7.2 For a period commencing on the date of this
Agreement and ending (a) on the date that the Executive's
employment is terminated without Cause, or (b) in the case of the
expiration of this Agreement or the Executive's voluntary
resignation or termination with Cause, on the date which is two
years following such expiration, resignation or termination of
this Agreement, neither the Executive nor any entity of which 5%
or more of the beneficial ownership is held by the Executive or a
related family member ("Controlled Entity") will, anywhere in the
Company's Market, directly or indirectly own, manage, operate,
control, invest or acquire an interest in, or otherwise engage or
participate in, whether as a proprietor, partner, stockholder,
director, officer, "Key Employee" (defined herein to include any
person who is employed in a management, executive, supervisory,
marketing or sales capacity for another person), joint venturer,
investor or other participant, any business which competes with
the Business ("Competitive Business") without regard to
(i) whether the Competitive Business has its office,
manufacturing or other business facilities within or without the
Company's Market, (ii) whether any of the activities of the
Executive referred to above occur or are performed within or
without the Company's Market or (iii) whether the Executive
resides, or reports to an office, within or without the Company's
Market.
7.3 During the period commencing on the date of
this Agreement and ending on the date which is two years
following the expiration or termination of this Agreement,
whether by resignation, termination with or without Cause, or
otherwise (the "Restricted Period"), neither the Executive nor
any Controlled Entity will directly or indirectly solicit, induce
or influence any customer, supplier, lender, lessor or any other
person which has a business relationship with the Company, or
which had on the date of this Agreement, a business relationship
with the Company, to discontinue or reduce the extent of such
relationship with the Company.
7.4 During the Restricted Period, neither the
Executive nor any Controlled Entity will directly or indirectly
recruit, solicit or otherwise induce or influence any employee or
sales agent of the Company or any of its affiliates to
discontinue such employment or agency relationship with the
Company. During the Restricted Period, neither the Executive nor
any Controlled Entity will employ or seek to employ, or cause or
induce any Competitive Business to employ or seek to employ for
any Competitive Business, any person who is then (or was at any
time within six months prior to the date the Executive or the
Competitive Business employs or seeks to employ such person)
employed by the Company. Nothing herein shall prevent the
Executive from providing a letter of recommendation to an
Employee with respect to a future employment opportunity.
7.5 During the Restricted Period and thereafter,
neither the Executive nor any Controlled Entity will directly or
indirectly disclose to anyone, or use or otherwise exploit for
the Executive's or any Controlled Entity's own benefit or for the
benefit of anyone other than the Company, any confidential
information, including, without limitation, any confidential
"know-how", trade secrets, customer lists, details of client or
consultant contracts, pricing policies, operational methods,
marketing plans or strategies, product development techniques or
plans, computer software, business acquisition plans and new
personnel acquisition plans of the Company related to the
Business or any portion or phase of any scientific or technical
information, design, process, procedure, formula or improvement
of the Company that is valuable and not generally known to the
competitors of the Company whether or not in written or tangible
form (hereinafter referred to as "Confidential Information").
The term "Confidential Information" does not include, and there
shall be no obligation hereunder with respect to, (a) information
that becomes generally available to the public other than as a
result of a disclosure by the Executive or a Controlled Entity or
any agent or other representative thereof and (b) general
business methods applicable to a sales business including, but
not limited to, pricing policies, operational methods and
marketing concepts. Neither the Executive nor any Controlled
Entity shall have any obligation hereunder to keep confidential
any Confidential Information to the extent disclosure of any
thereof is required by law, or determined in good faith by the
Executive to be necessary or appropriate to comply with any legal
or regulatory order, regulation or requirement; provided,
however, that in the event disclosure is required by law, the
Executive or the Controlled Entity concerned shall provide the
Company with prompt notice of such requirement so that the
Company may seek an appropriate protective order.
7.6 In the event the termination or expiration of
this Agreement, the covenants and agreements contained in this
Section 7 shall survive, shall continue thereafter, and shall not
expire unless and except as expressly set forth in such Sections.
7.7 The parties to this Agreement agree that
(a) if either the Executive or any Controlled Entity breaches any
provision of this Section 7, the damage to the Company will be
substantial, although difficult to ascertain, and money damages
will not afford the Company an adequate remedy, and (b) if either
the Executive or any Controlled Entity is in breach of this
Agreement, or threatens a breach of this Agreement, the Company
shall be entitled, in addition to all other rights and remedies
as may be available to the Company at law or in equity, to
(i) specific performance, (ii) injunctive and other equitable
relief to prevent or restrain a breach of this Agreement and
(iii) require the breaching party to account for and pay over to
the Company all compensation, profits, monies, accruals or other
benefits derived or received by such party as the result of any
transactions constituting a breach hereof.
7.8 If any court determines that any provision of
this Section 7 is unenforceable because of the duration or
geographic scope of such provision, such court shall have the
power to reduce the scope or duration of such provision, as the
case may be, and, in its reduced form, such provision shall then
be enforceable.
7.9 Notwithstanding anything to the contrary
contained herein, a continuation of the Executive's present
twenty percent (20%) equity interest in Sweetwater Homes, Inc.
("Sweetwater"), a current competitor of the Company, shall not be
deemed a violation or breach of any of the provisions of this
Section 7, so long as the Executive does not, from and after the
date of this Agreement, directly or indirectly: (i) increase his
equity interest in Sweetwater; (ii) serve as an officer, director
or employee of, or consultant to Sweetwater; or (iii) otherwise
assist Sweetwater in any aspect of its operations.
8. Additional Covenants of Company.
(a) If at any time during the term of this
Agreement, the Company shall decide to sell the airplane hangar
owned by it on the date hereof, to the extent permitted to do so,
the Company shall first offer such property for sale to the
Executive and provide for the Executive's assumption of the
Company's obligations under the ground lease relating thereto at
such purchase price and on such terms as the Company shall deem
reasonable under the circumstances. The Executive shall have
fifteen (15) business days in which to exercise his purchase
option and an additional thirty (30) days in which to consummate
the purchase transaction should he elect to purchase such
property. If the Executive fails or refuses to exercise his
purchase option within the prescribed 15-day period, the Company
may offer such property for sale to any third party at a price
and on terms no more favorable to the prospective purchaser than
those offered to the Executive.
(b) If at any time during the term of this Agreement, the
Company shall decide not to exercise one or both of the purchase options
that are included in the leases in existence on the date hereof covering
the Company's Plants No. 4 (and the vacant land adjacent thereto) and 5,
respectively (the "Purchase Options"), prior to the expiration of the Purchase
Options, the Company shall permit the Executive to purchase such
properties, subject to the leasehold interest in favor of the
Company, pursuant to the terms and conditions of the Purchase
Options as if the Company were exercising such Purchase Options.
9. Headings. The section headings of this Agreement
are for convenience of reference only and are not to be
considered in the interpretation of the terms and conditions of
this Agreement.
10. Notices. All notices and other communications
required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given (a) when
delivered personally, (b) if sent by telecopy, when receipt
thereof is acknowledged at the telecopy number below, (c) the day
following the day on which the same has been delivered prepaid
for overnight delivery to a national air courier service or (d)
three business days following deposit in the United States Mail,
registered or certified, postage prepaid, in each case,
addressed as follows:
If to the Company: GMH Acquisition Corp.
X.X. Xxx 0000
Xxxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxx X. Xxxxx
Telecopy: 000-000-0000
with copies to: Strategic Investments &
Holdings, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxx
Telecopy: 000-000-0000
Nixon, Hargrave, Devans & Xxxxx LLP
0000 Xxxx Xxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
Telecopy: 716-853-8109
If to the
Executive: Xxxxxx X. Xxxxx
0000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxx Xxxxx, Xxxxxxx 00000
with a copy to: Holland & Knight
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: X. Xxxxxx Xxxxxx, III, Esq.
Telecopy: 000-000-0000
Any party may change the persons and address to which
notices or other communications are to be sent by given written
notice of such change to the other party in the manner provided
herein for giving notice.
11. Waiver of Breach. No waiver by either party of
any condition or of the breach by the other of any term or
covenant contained in this Agreement, whether by conduct or
otherwise, in any one or more instances shall be deemed or
construed as a further or continuing waiver of any such condition
or breach or a waiver of any other condition, or of the breach of
any other term or covenant set forth in this Agreement. The
failure of either party to exercise any right hereunder shall not
bar the later exercise thereof.
12. Binding Nature; Assignment. This Agreement shall
inure to the benefit of and be binding on the parties and their
respective successors in interest, and shall not be assignable by
either party without the written consent of the other; provided
that nothing in this Section shall preclude the Executive from
designating a beneficiary to receive any benefit payable
hereunder upon his death, or the executors, administrators or
other legal representatives of the Executive or his estate from
assigning any rights hereunder to which they become entitled to
the person or persons entitled thereto. It is specifically
understood and acknowledged that this Agreement will be assumed
by General Manufactured Housing, Inc., a Georgia corporation
("GMH") by virtue of a merger of the Company with and into GMH
which is occurring contemporaneously with the execution hereof.
13. Governing Law. This Agreement is entered into and
shall be construed in accordance with the laws of the State of
Georgia, without giving effect to conflict of laws principles
thereof requiring application of the substantive laws of another
jurisdiction.
14. Invalidity or Unenforceability. If any term or
provision of this Agreement is held to be invalid or
unenforceable for any reason, such invalidity or unenforceability
shall not affect any other term or provision hereof and this
Agreement shall continue in full force and effect as if such
invalid or unenforceable term or provision (to the extent of the
invalidity or unenforceability) had not been contained herein.
15. Entire Agreement. This Agreement constitutes the
full and complete understanding and agreement of the Executive
and the Company respecting the subject matter hereof, and
supersedes all prior understandings and agreements concerning the
subject matter hereof, oral or written, express or implied. This
Agreement may not be modified or amended orally, but only by an
agreement in writing, signed by the party against whom
enforcement of any modification or amendment is sought.
16. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an
original and all of which together shall be deemed one and the
same instrument.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first written.
EXECUTIVE
/s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
COMPANY
GMH ACQUISITION CORP.
By: /s/ Xxxx X. Xxxxx
Xxxx X. Xxxxx
President
EXHIBIT 1
GENERAL MANUFACTURED HOUSING, INC.
EXECUTIVE BONUS PLAN
1. PURPOSES OF THE PLAN
The purposes of this Executive Bonus Plan (the "Plan") are
to enable General Manufactured Housing, Inc. (the "Company") to
retain the services of key employees and to provide them with
increased motivation and incentive to achieve and exceed the
goals of the business consistent with both short term and long
term objectives.
2. DEFINITIONS
The following terms shall have the meanings set forth below:
(a) "Base Amount" means $8.5 million.
(b) "Board of Directors" means the Board of Directors of
the Company.
(c) "Bonus Pool" means, for each fiscal year of the
Company, so long as EBIT equals or exceeds the Base Amount for
such fiscal year, 7% of EBIT.
(d) "EBIT" means, for each fiscal year of the Company, the
net income of the Company for such year, before (i) interest
expense, (ii) taxes, (iii) amortization, (iv) amounts paid under
the Company's Incentive Compensation Plan, (v) reimbursement of
the Company's expenses under Section 19 of the Stock Purchase
Agreement, (vi) the Management Fee, (vii) costs incurred by the
Company in remediating the Company's properties pursuant to
Section 14(b) of the Stock Purchase Agreement and (viii) all
compensation and benefits payable to management personnel added
after the Effective Date other than at the direction of the Chief
Executive Officer of the Company and other than in the ordinary
course of the Company's business, all as shown on the audited
financial statements of the Company; provided, that EBIT shall be
determined in accordance with generally accepted accounting
principles consistent with those employed by the Company in 1994
and reflected in its audited financial statements for such year.
(e) "Effective Date" means January 1, 1996.
(f) "Management Agreement" means the Management Agreement
dated as of December 21, 1995 by and between Strategic
Investments & Holdings, Inc. and the Company.
(g) "Management Fee" means an amount equal to the
management fee paid pursuant to the terms of the Management
Agreement.
(h) "Participant" means each of the following management
personnel of the Company: Xxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxx
Xxxxx, Xxxxxx Xxxxxx and Xxxxx Xxxxxxx.
(i) "Participant Percentage" means, for any Plan Year, the
percentage of the Bonus Pool allocated to a Participant, which
shall be 20% for each Participant.
(j) "Plan Year" means the fiscal year of the Company.
(k) "Stock Purchase Agreement" means that certain Stock
Purchase Agreement dated as of October 10, 1995, among Xxxxxx X.
Xxxxx et al. and GMH Acquisition Corp., as amended.
3. ADMINISTRATION OF THE PLAN
(a) The Plan shall be administered by the Board of
Directors or a Compensation Committee thereof. In the event the
employment of any Participant terminates, the Board of Directors
or Compensation Committee shall have the right to designate a
substitute Participant or Participants (having an aggregate
Participant Percentage not in excess of that of the terminating
Participant) or otherwise determine the disposition of the
Participant Percentage of any such terminating Participant. Any
decision by the Board of Directors or Compensation Committee
regarding the administration, interpretation or construction of
any provisions of the Plan shall be final, binding and
conclusive.
(b) No member of the Board of Directors or Compensation
Committee shall be liable for any action taken or omitted to be
taken or for any determination made by him or her in good faith
with respect to the Plan, and the Company shall indemnify and
hold harmless each member of the Board of Directors or
Compensation Committee against any cost or expense (including
counsel fees) or liability (including any sum paid in settlement
of a claim with the approval of the Board of Directors) arising
out of any act or omission in connection with the administration
or interpretation of the Plan, unless arising out of such
person's own fraud or bad faith.
(c) The Plan shall become effective upon the Effective
Date.
4. INCENTIVE AWARDS
(a) If EBIT for any Plan Year does not at least equal the
Base Amount for such year, the Company shall not allocate any
amounts to the Bonus Pool. Notwithstanding the foregoing or
anything to the contrary contained herein, the Board of Directors
may elect to make discretionary bonus payments, not paid from any
Bonus Pool, in order to reward and retain such key employees as
it shall deem appropriate.
(b) If EBIT for any Plan Year equals or exceeds the Base
Amount for such year, the Company shall allocate 7% of EBIT to
the Bonus Pool to be allocated among the Participants.
(c) The Bonus Pool, if any, for any Plan Year shall be
calculated and paid to the Participants, in cash, within thirty
(30) days after the Company's receipt of its audited financial
statements for such year but not later than one hundred fifty
(150) days following the end of such year; provided, however,
that except as provided in paragraph (d) hereof, no portion of
the Bonus Pool shall be paid to any Participant for any Plan Year
if such Participant is not an employee of the Company at the end
of such year.
(d) In the event that a Participant is not an employee of
the Company at the end of a Plan Year because of his death,
termination for disability or retirement during such year, the
portion of the Bonus Pool, if any, payable to such Participant
for such Plan Year shall be prorated to the date of death, date
of termination for disability or date of retirement, and the
portion of the Bonus Pool attributable to the part of the Plan
Year prior to such date of death, termination or retirement shall
be determined and paid to such Participant or his legal
representative in accordance with paragraph (c) above. In the
event that a Participant is not an employee of the Company at the
end of a Plan Year because such Participant has either
voluntarily terminated his employment or because of the
termination of such Participant for any reason other than death,
disability or retirement during such year, no portion of the
Bonus Pool for such year shall be payable to such Participant.
(e) Any and all amounts payable under the Bonus Pool
hereunder shall be subject to (i) applicable federal, state and
local tax withholding requirements and (ii) the Company's
obligations to comply with the covenants set forth in the
Company's agreements with its lenders, and payment of any and all
amounts payable under the Bonus Pool may be deferred in order to
maintain the Company's compliance with such covenants. Such
deferred amounts will be accrued until such time as they are
permitted to be paid under the Company's agreements with its
lenders and shall then be promptly paid with interest as set
forth in the immediately following sentence. Any such deferred
amounts will accrue interest at the Prime Rate, as such rate is
quoted from time to time in the Wall Street Journal.
5. MISCELLANEOUS
(a) No right to receive any incentive compensation under
the Plan shall be transferable except by will or the laws of
descent and distribution. Any purported transfer contrary to
this provision will be null and void and without effect.
(b) Neither the adoption of the Plan nor its operation, nor
any document describing or referring to the Plan, or any part
hereof, nor the designation of any employee as a Participant in
the Plan shall confer upon any Participant any right to continue
in the employ of the Company or shall in any way affect the right
and power of the Company to terminate the employment of any
Participant at any time with or without assigning a reason
therefor, to the same extent as might have been done if the Plan
had not been adopted.
(c) By acceptance of any incentive compensation under the
Plan, the recipient shall be deemed to agree (a) to execute any
and all documents requested by the Company in connection with his
or her participation in the Plan, including an agreement to
report any amounts received under the Plan as compensation and
(b) that any compensation paid hereunder will not be taken into
account as "base remuneration", "wages", "salary" or
"compensation" in determining the amount of any contribution to
or payment or any other benefit under any pension, retirement,
incentive, profit-sharing or deferred compensation plan of the
Company.
(d) The place of administration of the Plan shall be in the
State of Georgia, and the validity, construction, interpretation,
administration and effect of the Plan and of its rules and
regulations, and rights relating to the Plan, shall be determined
solely in accordance with the laws of the State of Georgia.
