RETIREMENT AGREEMENT
THIS
RETIREMENT AGREEMENT (this “Agreement”), is made and entered into as of the 6th
day of June, 2005, by and between XXXX’X COMPANIES, INC. a North Carolina
corporation (the “Company”), and XXXX X. XXXX (the “Executive”).
W I T N E
S S E T H:
WHEREAS,
the Executive is employed as the Senior Executive Vice
President—Merchandising/Marketing of the Company; and
WHEREAS,
the Company and the Executive have negotiated and agreed on the terms of this
Agreement providing for his retirement as an executive employee of the Company
and for the ongoing obligations of the parties following the Executive’s
retirement.
NOW,
THEREFORE, the parties hereby agree as follows:
1. Continued
Service; Retirement. The
Executive shall continue to serve as the Senior Executive Vice
President—Merchandising/Marketing of the Company through June 30, 2005 (the
“Retirement Date”), at which time his resignation from such position shall be
effective, and he shall retire and relinquish all positions and responsibilities
with the Company and its subsidiaries and affiliates.
2. Obligations
of the Company.
(a) Salary
and Benefits. For his
service to the Company through the Retirement Date, the Executive shall continue
to receive his current regular base salary and participate in all of the
Company’s incentive compensation and benefit plans and programs available to
senior executives and shall receive any and all payments and benefits earned up
to and through the Retirement Date.
(b) Outstanding
Equity Compensation Awards. The
award agreement for the one hundred thousand (100,000) deferred stock units
granted to the Executive on March 1, 2003 is hereby amended to provide that the
Executive shall become fully vested in such deferred stock units on the
Retirement Date. The Executive’s retirement in accordance with the terms and
provisions of this Agreement shall constitute a “Board Approved Retirement” for
purposes of the stock options, restricted stock and performance accelerated
restricted stock granted to the Executive on March 1, 2004 and March 1, 2005,
and accordingly, the Executive shall become fully vested in all such awards on
the Retirement Date. Exhibit
A attached
hereto summarizes all of the options granted to the Executive outstanding as of
the date of this Agreement, the vested status of such options as of the
Retirement Date and the last date for the Executive to exercise such options.
The Company acknowledges that the Executive has relied upon the information set
forth in Exhibit
A in
entering into this Agreement.
(c) Other
Benefits. The
Executive is a participant in the benefit plans listed on Exhibit
B attached
hereto. This Agreement shall not change the terms of such plans or the benefits
earned by or due to the Executive thereunder for services rendered to the
Company through the Retirement Date. The benefits earned by or due to the
Executive in accordance with the terms of such plans shall be paid or provided
by the Company or such plans (as the case may be) when due, and the full payment
and provision of such benefits shall discharge fully all obligations of the
Company and such plans with respect to the Executive’s benefits under such
plans.
(d) Release
of the Executive. In
consideration of the Executive’s entering into this Agreement, the Company, for
itself, its officers and directors, its subsidiaries and their respective
predecessors, successors and assigns, hereby releases and forever discharges the
Executive and his heirs, personal representatives, successors and assigns from
and against any and all claims, demands, damages, actions, causes of action,
costs and expenses, of whatever kind or nature, in law, equity or otherwise,
which the Company or any of said entities now has, may ever have had or may have
hereafter upon or by reason of any matter, cause or thing occurring, done or
omitted to be done prior to the date of this Agreement, including without
limitation all rights and claims the Company or any of said entities or any
third parties (including officers, directors and employees of the Company or its
subsidiaries) have or might have as a result of Executive’s status as an
officer, director or employee of the Company or any of said entities or the
termination of that status; provided,
however, that
this release shall not apply to any claims the Company may have, now or
hereafter, which arise out of or relate to any act by the Executive that
constituted gross negligence or willful misconduct in carrying out his duties or
obligations as an employee of the Company.
(e) Continuation
of Indemnification. The
Company agrees that if the Executive is made a party, or is threatened to be
made a party, to any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a “Proceeding”), by reason of the fact that the
Executive was an officer or employee of the Company or was serving at the
request of the Company as director, officer, member, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, the Executive shall be
indemnified and held harmless by the Company to the fullest extent permitted or
authorized by the Company’s articles of incorporation and bylaws and such
indemnification shall continue to the Executive even though the Executive has
ceased to be a director, member, employee or agent of the Company or other
entity and shall inure to the benefit of the Executive’s heirs, executors and
administrators. The Company shall advance to the Executive all reasonable costs
and expenses incurred by the Executive in connection with a Proceeding within
twenty (20) days after receipt by the Company of a written request for such
advance. Such request, however, must include an undertaking by the Executive to
repay the amount of such advance if it shall ultimately be determined that the
Executive is not entitled to be indemnified against such costs and expenses. The
Company further agrees to continue and maintain a directors’ and officers’
liability insurance policy covering the Executive to the same extent as the
Company’s directors and officers are covered until such time as suits against
the Executive are no longer permitted by law.
3. Obligations
of the Executive.
(a) Non-Competition. For the
two (2) year period beginning on the Retirement Date, the Executive shall not
directly or indirectly engage in Competition (as defined below) with the
Company; provided, that it shall not be a violation of this Paragraph 3(a) for
the Executive to become the registered or beneficial owner of up to 5% of any
class of the capital stock of a competing corporation registered under the
Securities Exchange Act of 1934, as amended, provided that the Executive does
not actively participate in the business of such corporation until such time as
this covenant expires. For purposes of this Agreement, “Competition” by the
Executive shall mean the Executive’s engaging in, or otherwise directly or
indirectly being employed by or acting as a consultant or lender to, or being a
director, officer, employee, principal, agent, stockholder (other than as
specifically provided for herein), member, owner or partner of, or permitting
his name to be used in connection with the activities of any other business or
organization that owns, operates, controls or maintains retail or warehouse
hardware or home improvement stores in the United States, Puerto Rico, Canada or
Mexico with total annual sales of at least $500 million. Such businesses or
organizations include, but are not limited to, the following entities and each
of their subsidiaries, affiliates, assigns, or successors in interest, in whole
or in part: The Home Depot, Inc., Sears Holdings Corporation, Wal-Mart Stores,
Inc. and Xxxxxx, Inc.
(b) Non-Interference. For the
two (2) year period beginning on the Retirement Date, the Executive shall not
directly or indirectly (i) solicit
or induce any officer, director, regional vice president, district manager,
co-manager, store manager, regional human resource manager or regional loss
prevention manager of the Company to terminate his or her employment with the
Company or (ii)
solicit, contact or attempt to influence any vendor or supplier of the Company
to limit, curtail, cancel or terminate any business it transacts with the
Company.
(c) Confidential
Information. The
Executive shall hold in a fiduciary capacity for the benefit of the Company all
trade secrets, confidential information, and knowledge or data relating to the
Company and its businesses, which were obtained by the Executive during the
Executive’s employment by the Company. The Executive shall not, without the
prior written consent of the Company or as may otherwise be required by law or
legal process, communicate or divulge any such trade secrets, information,
knowledge or data to anyone other than the Company and those designated by the
Company.
(d) Release
of the Company. The
Executive covenants and agrees that the Executive hereby irrevocably and
unconditionally releases, acquits and forever discharges the Company, as well as
each of the Company’s officers, directors, employees, subsidiaries, and agents
(the Company and the Company’s officers, directors, employees, subsidiaries and
agents being collectively referred to herein as the “Releasees”), or any of
them, from any and all charges, complaints, claims, liabilities, obligations,
promises, demands, costs, losses, debts, and expenses (including attorneys’ fees
and costs actually incurred), of any nature whatsoever, in law or equity,
arising out of the Executive’s employment with the Company or the termination of
the Executive’s employment with the Company (other than any claim arising out of
the breach by the Company of the terms of this Agreement), including, without
limitation, all claims asserted or that could be asserted by the Executive
against the Company in any litigation arising from summonses and complaints
filed in federal, state or municipal court asserting any claim arising from any
alleged violation by the Releasees of any federal, state, or local statutes,
ordinances, or common law, including, but not limited to, the Age Discrimination
in Employment Act, Title VII of the Civil Rights Act of 1964, as amended, the
Equal Pay Act, the Americans with Disabilities Act, the Fair Labor Standards
Act, the Employee Retirement Income Security Act of 1974, the Rehabilitation Act
of 1973, the Civil Rights Act of 1991, the Family and Medical Leave Act, the
Civil Rights Act of 1866, Section 1514A or and 1513(e) of
Chapter 73 of Title 18 of the United States Code; and any other employment
discrimination laws, as well as any other claims based on constitutional,
statutory, common law, or regulatory grounds, as well as any claims based on
theories of retaliation, wrongful or constructive discharge, breach of contract
or implied covenant, fraud, misrepresentation, intentional and/or negligent
infliction of emotional distress, or defamation, which the Executive now has,
owns, or holds, or claims to have, own, or hold, or which the Executive had,
owned, or held, or claimed to have, own or hold at any time before execution of
this Agreement, against any or all of the Releasees; provided,
however, that
the foregoing release shall not apply to any claims which the Executive may have
for the payments or provision of the benefits under this Agreement.
4. Tax
Withholding and Reporting. The
Company shall be entitled to withhold from the benefits and payments described
herein all income and employment taxes required to be withheld by applicable
law.
5. Governing
Law. This
Agreement shall be governed by and construed in accordance with the laws of the
State of North Carolina.
6. Notices. Any
notice or other communications to be given hereunder shall be deemed to have
been given or delivered when delivered by hand to the individuals named below or
when deposited in the United States mail, registered or certified, with proper
postage and registration or certification fees prepaid, addressed to the parties
as follows (or to such other address as one party shall give the other in the
manner provided herein):
If to the
Company, to:
Xxxx’x
Companies, Inc.
1000
Xxxx’x Boulevard
Mooresville,
North Carolina 28117
Attention:
Secretary and General Counsel
If to the
Executive, to the most recent address on the Company’s employment records for
the Executive.
7. Entire
Agreement. This
Agreement constitutes the entire agreement between the parties pertaining to the
subject matter contained herein and supersedes any and all prior and
contemporaneous agreements, representations, promises, inducements and
understandings of the parties. This written Agreement cannot be varied,
contradicted or supplemented by evidence of any prior or contemporaneous oral or
written agreements. Moreover, this written Agreement may not be later modified
except by a further writing signed by a duly authorized officer of the Company
and the Executive.
8. Right
to Revoke Agreement.
Following the Executive’s execution and delivery of this Agreement to the
Company, the Executive shall have a seven-day period in which to revoke this
Agreement as provided in the Age Discrimination in Employment Act (“ADEA”)
(referred to as “Revocation Period”). During the Revocation Period, the
Executive may exercise this right by delivering written notice of revocation to
the Company at the address shown in paragraph 6 above. The Company shall not
have the right to revoke this Agreement during the Revocation
Period.
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the day and year
first above written.
| /s/ Xxxx X. Xxxx | ||
| Xxxx X. Xxxx | ||
| XXXX'X COMPANIES, INC. | ||
|
By: |
/s/ Xxxxxx X. Xxxxxxx | |
|
Name: |
Xxxxxx
X. Xxxxxxx | |
|
Title: |
Chairman of the Board, President and Chief Executive Officer |
Exhibit A
Summary
of Outstanding Stock Options
|
Option
Grant Date |
No.
of Shares |
Exercise
Price |
Vested
Status |
Last
Date to Exercise |
|
03/01/05 |
40,500 |
$58.35 |
Fully
vested |
03/01/12 |
|
03/01/04 |
40,000 |
$56.75 |
Fully
vested |
03/01/11 |
|
03/01/03 |
126,000 |
$39.30 |
Fully
vested with respect to 84,000 shares; vested with respect to remaining
42,000 shares on 03/01/06 |
03/01/10 |
|
03/01/02 |
78,000 |
$43.99 |
Fully
vested |
09/28/05 |
|
02/01/02 |
85,000 |
$45.70 |
Fully
vested |
09/28/05 |
|
03/01/01 |
88,366 |
$27.505 |
Fully
vested |
09/28/05 |
Exhibit
B
BENEFIT
PLANS
1. Lowe’s
401(k) Plan
2. Lowe’s
Welfare Plan
3. Xxxx’x
Companies employee Stock Purchase Plan—Stock Options for Everyone
4. Xxxx’x
Companies Benefit Restoration Plan
5. Xxxx’x
Companies, Inc. Deferred Compensation Program
6. Xxxx’x
Companies Cash Deferral Plan
