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EXHIBIT 10.24
AGREEMENT
AGREEMENT, dated as of December 10, 1996, between XXXXXXX FABRICS,
INC. ("the Company"), a Delaware corporation, and Xxxxx X. Xxxxx ("the
Employee").
A. The Employee has been employed by the Company (or one of its
subsidiaries) since November 4, 1996. During the period of such employment the
judgment, skill and efforts of the Employee have contributed greatly to the
growth and success of the Company, and the Company desires to provide for the
continued availability of the services of the Employee. The Company further
recognizes that it would not be to the best interest of the Company were the
Employee to engage in activities competitive with the business of the Company
or any of its subsidiaries.
B. The Employee is willing and able to render the services herein
provided for, and is willing to refrain from activities competitive with the
business of the Company and its subsidiaries, on the terms herein set forth.
IT IS AGREED AS FOLLOWS:
1. The payment obligation of the Company under this Agreement is
conditioned upon the occurrence of one of the following: (a) the Employee
remains in the employment of the Company or any of its subsidiaries on a
full-time basis until December 8, 2018 ("said date"); or, (b) the Employee dies
prior to said date while so employed by the Company or any of its subsidiaries.
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2. If such employment ceases (other than by reason of death) on
or after said date, the Company shall pay to the Employee, if living, Two
Thousand Eighty-Three and Thirty-Three One-Hundredths Dollars ($2,083.33) (the
"monthly amount") on the first day of the calendar month following such
cessation, and on the first day of each and every month thereafter until a
total of one hundred eighty (180) monthly payments shall have been paid.
3. (a) If the Employee dies while still so employed by the
Company or any of its subsidiaries, the Company shall pay, as the Employee by
appointment shall have provided pursuant to paragraph 10 hereof, the monthly
amount on the first day of the month following his death, and on the first day
of each and every month thereafter until a total of one hundred eighty (180)
monthly payments shall have been paid.
(b) If the Employee dies after said date, and prior to
the time that the payments made to him pursuant to paragraph 2 hereof shall
have totaled Three Hundred Seventy-Five Thousand Dollars ($375,000.00) ("the
total amount"), the Company shall pay, as the Employee by appointment shall
have so provided, the monthly amount on the first day of the month following
his death, and on the first day of each and every month thereafter until the
sum of all payments made under paragraph 2 hereof and under this paragraph
shall equal the total amount.
4. So long as the Employee is receiving monthly payments
hereunder, he shall not, without the prior approval of the Board of Directors
of the Company, engage in or be or become interested (as an individual,
officer, principal, agent, employee, trustee, investor, stockholder or
creditor, or in any other relation whatsoever) in any
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business substantially competitive with the business of the Company, its
successor or subsidiary; provided, that the Employee shall not be precluded
from holding securities of a corporation, which securities are publicly held,
so long as the Employee shall not hold in excess of one percent (1%) of any
class of said securities. The determination of the Board of Directors of the
Company shall be conclusive of the question whether any such business is
substantially competitive with the business of the Company.
5. So long as the Employee is receiving monthly payments
hereunder, he shall, at the reasonable request of the Company, and to the
extent consistent with his then age and state of health, make available to the
Company at all reasonable times the benefit of his experience and advice. The
Company shall reimburse the Employee for his reasonable travel and other
expenses incurred in the performance of his obligations under this paragraph.
6. All obligations of the Company under this Agreement are
conditioned upon the performance by the Employee of his obligations under
paragraphs 4 and 5 hereof. Upon failure of any said condition, this Agreement
shall be of no further effect, and no person shall have any further right to
payments hereunder.
7. Nothing in this Agreement shall be construed to affect the
rights and obligations of the Employee, his heirs, successors or personal
representatives, under the Company's Retirement Plan, Extra Compensation Plan,
or employees' stock option plans, as from time to time amended, or under any
other agreement or plan. Payments pursuant to this Agreement are in the nature
of a fee, and do not constitute "compensation" as defined in the Company's
Retirement Plan.
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8. This Agreement is not a contract of employment, and shall not
be deemed to affect the right of either the Employee or the Company to
terminate the employment of the Employee by the Company at any time, with or
without cause.
9. The right to payments pursuant to this Agreement shall not be
sold, transferred, anticipated, assigned, hypothecated, or otherwise disposed
of, shall not at any time be subject to the claims of creditors, and shall not
be liable to attachment, execution, or other legal process. The Company shall
have no obligation to make any payment hereunder to any person other than the
Employee or his appointee designated pursuant to paragraph 10 hereof.
10. Subject to the provisions of paragraph 9 of this Agreement,
the Employee may appoint, by written instrument (other than a will) delivered
to the Secretary of the Company, the permitted appointee or appointees to whom,
the proportions in which, and any contingencies upon which the Company shall
make payments payable under paragraphs 2 and 3 of this Agreement, but not paid
prior to the death of the Employee. "Permitted appointee" includes only the
following persons: spouse, descendant (or spouse thereof), parent, brother or
sister of the Employee (or descendant of such brother or sister); parent,
descendant, brother or sister of the spouse of the Employee (or descendant of
such brother or sister); the trustee or trustees of a trust or trusts (created
by the Employee either during his lifetime or by his will) the purpose of which
is primarily to provide for any of the foregoing persons; or any other natural
person. The determination of the Board of Directors of the Company shall be
conclusive of the question whether such purpose of any such trust is primarily
to provide for such person
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or persons. To any extent that amounts payable under paragraphs 2 and 3 of
this Agreement are not paid to the Employee prior to his death and are not the
subject of an effective appointment pursuant to this paragraph, no person shall
be entitled to payment thereof, and said amounts shall remain the property of
the Company.
11. For purposes of this Agreement, the Employee shall be deemed
to be in the employment of the Company on a full-time basis during any period
for which he is on Company-approved sick leave or disability leave.
12. Notwithstanding any of the provisions of this Agreement, no
payments shall be made hereunder following the death of the Employee in the
event that such death is the result of suicide occurring within three years of
the date of this Agreement.
13. This Agreement shall be binding upon the parties hereto, their
heirs, personal representatives and successors. Upon the sale of all or
substantially all of the assets, business and goodwill of the Company, or upon
the merger or consolidation of the Company with another corporation or
corporations, this Agreement shall inure to the benefit of and be binding
upon both the Employee and such purchaser or surviving corporation.
14. The purpose of this paragraph is solely to provide for greater
flexibility and convenience in the precise timing of the monthly payments
provided for above, and it shall not be deemed to affect the amount that shall
be payable or the conditions upon which it shall become payable. The Company
may make the payment for any given month upon such day or days and in such
manner as shall be applicable from time to time to executive payroll then being
administered by the disbursing office of the
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Company that then shall have the responsibility for the making of payments
under this Agreement.
15. Neither Employee nor any other person shall have any rights
under this paragraph 15 until both:
(i) A "Change of Control" (as defined in
subparagraph (b) of this paragraph 15) has occurred; and
(ii) Either (A) Employee has satisfied
the conditions of paragraph 1 of this Agreement or (B) pursuant to the terms of
that certain Severance Agreement, dated as of this date, between the Company
and Employee, as hereafter amended, extended or renewed, Employee is deemed to
have satisfied those conditions. For the purposes of this paragraph 15, the
"Effective Date" shall be the earliest date upon which both of the conditions
described in subparagraph (a) of this paragraph 15 shall have been satisfied.
(b) For purposes of this paragraph 15, a "Change of
Control" shall mean a change of control of the Company of a nature that would
be required to be reported in response to Item 1(a) of the Current Report on
Form 8-K (or its successor Item or Form, as the case may be), as in effect on
the date hereof (or from time to time thereafter), pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 ("Exchange Act"); provided that,
without limitation, a "Change of Control" shall be deemed to have occurred
if: (i) a third person, including a "group" as defined in Section 13(d) (3) of
the Exchange Act, becomes the beneficial owner, directly or indirectly, of 20%
or more of the combined voting power of the Company's
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outstanding voting securities ordinarily having the right to vote for the
election of directors of the Company; or (ii) individuals who constitute the
Board of Directors of the Company as of the date hereof ("Incumbent Board")
cease for any reason to constitute at least two-thirds thereof, provided that
any person becoming a director subsequent to the date hereof whose election, or
nomination for election by the Company's stockholders, was approved by a vote
of at least three-quarters of (or if less, all but one of) the directors
constituting the Incumbent Board (other than an election or nomination in
connection with an actual or threatened election contest relating to the
election of directors of the Com- pany, as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Exchange Act) shall be, for purposes of
this paragraph 15, considered as though such person were a member of the
Incumbent Board.
(c) (i) Promptly, and in no event more than
seven (7) days, after the Effective Date, the Company shall establish an
irrevocable letter of credit (the "Letter of Credit"), as provided in
subparagraph (c)(iv) of this paragraph 15, in an amount equal to the largest sum
(calculated as of the Effective Date) of all payments provided to be paid in
the future under paragraphs 2 and 3 of this Agreement, as security for such
payments as may become due under this Agreement.
(ii) Until such time as all amounts
provided to be paid to or with respect to Employee under this Agreement have
been paid in full, the Company shall, no later than thirty (30) days before the
Letter of Credit would otherwise lapse or expire, renew the Letter of Credit or
establish a replacement letter of credit in an
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amount equal to the largest sum (calculated as of the date of the renewal or
replacement) of all payments provided to be paid in the future under paragraphs
2 and 3 of this Agreement. Hereinafter, the term "Letter of Credit" shall mean
the original letter of credit referred to in subparagraph (c)(i) of this
paragraph 15 and the renewal and replacement letters of credit referred to in
this subparagraph (c)(ii).
(iii) If the Company fails, within the
times provided in subparagraph (c)(i) and (c)(ii) of this paragraph 15, to
establish, renew or replace the Letter of Credit before all amounts payable to
or with respect to Employee under this Agreement have been paid in full, --
(A) if any payments to or with respect
to Employee have been made under this Agreement, then the Company shall pay in
a cash lump sum, without discount, to Employee or to such appointee as may have
been designated pursuant to paragraph 10 of this Agreement (hereinafter
Employee and such other person being collectively referred to as "Entitled
Payee") the balance of all payments under this Agreement remaining unpaid,
regardless of the fact that under this Agreement such payments would not
otherwise be payable until some future date or future performance by Employee;
or
(B) if no payments to or with respect
to Employee have been made under this Agreement, then the Company shall pay in
a cash lump sum, without discount, to Entitled Payee the sum of all payments
that would have been paid to Entitled Payee had Employee ceased employment (x)
on the date by
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which the Company was required to renew or replace the last Letter of Credit
issued hereunder, or (y) if no Letter of Credit shall have been issued, on the
Effective Date, regardless of the fact that under this Agreement such payments
would not otherwise have been payable until some future date or future
performance by Employee. The cash lump sums required to be paid by clauses (A)
and (B) of this subparagraph (c)(iii) shall be paid within fifteen (15) days
after the date by which the Company was required to establish, renew or replace
the Letter of Credit.
(iv) The Letter of Credit is to be issued
by a commercial bank (the "Bank") that is a state or national banking
association and that has a stockholders' equity in excess of one (1) billion
dollars. The term of the Letter of Credit shall be the maximum term then
available for commercial letters of credit. The Letter of Credit shall provide
that the Bank shall pay to Entitled Payee the amount of Entitled Payee's draft,
at sight, on presentation to the Bank of a statement, signed by Entitled Payee
or Entitled Payee's authorized representative, setting forth that Entitled
Payee is entitled to payments of not less than the amount of such draft
pursuant to the Agreement and that such payments are, under the Agreement, due
and unpaid. The Letter of Credit shall otherwise be in form and substance
reasonably satisfactory to Entitled Payee and the Company. The Letter of
Credit shall further provide that twenty-five (25) days prior to the expiration
of the Letter of Credit the Bank shall mail by registered mail a written notice
to the Entitled Payee (but only if the Entitled Payee has provided the Bank
with written notice of the Entitled Payee's mailing address), such notice to
state whether or not the Letter of Credit has been renewed or replaced.
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(v) The payment by the Bank of the
amount of Entitled Payee's draft in accordance with the terms hereof and of the
Letter of Credit shall not constitute a waiver by the Company of, or in any way
preclude the Company from asserting, any claim the Company may have against
Entitled Payee that Entitled Payee is not entitled to some or all of such
payment. Drawing upon the Letter of Credit shall not constitute a waiver by
Entitled Payee of, or in any way preclude Entitled Payee from asserting, any
claim the Entitled Payee may have against the Company that Entitled Payee is
entitled to amounts under this Agreement that were not paid by amounts received
under the Letter of Credit.
(d) The Company's obligation to make the payments
provided for in this paragraph 15 and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any setoff, counterclaim, recoupment, defense or other right that
the Company may have against the Entitled Payee provided, however, that the
Company's failure to make any such setoff shall not constitute a waiver of any
claim of the Company against the Entitled Payee.
16. (a) If (1) an Employee has made an election pursuant to
the provisions of this paragraph 16 to have his benefits under this Agreement
paid in a cash lump sum pursuant to this paragraph 16 and (2) each of the
conditions described in clauses 15(a)(i) and 15(a)(ii) of this Agreement is
satisfied with respect to the Employee, the Company shall pay to the Entitled
Payee (as defined in paragraph 15 of this Agreement) the present value of --
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(i) if any payments to or with respect
to Employee have been made under this Agreement, the balance of all payments
under this Agreement remaining unpaid, or
(ii) if no payments to or with respect to
Employee have been made under this Agreement, the sum of all payments that
would have been paid to Entitled Payee had Employee ceased employment on the
Effective Date (as defined in paragraph 15 of this Agreement).
Payment shall be made in a single cash lump sum within 20 days after
the Effective Date. If such payment shall not be made in full as provided
herein any unpaid balance shall draw interest at the lesser of: (1) the highest
rate of interest that may legally be chargeable on such amount; and (2) two
percent (2%) over the prime commercial lending rate announced by the Xxxxxx
Guaranty Trust Company of New York in effect from time to time during the
period of such non-payment, compounded monthly.
(b) For purposes of this paragraph 16, present value
shall be determined in accordance with the following:
(i) Present value shall be determined as
of the Effective Date.
(ii) The stream of monthly payments for
which the present value is being calculated shall be assumed to run for the
following period:
(A) if any payments have been made under
this Agreement, a period beginning one month after the date the most recent
payment made
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was required to have been made and continuing until the date on which the last
of the monthly payments to be made under this Agreement is required to be made,
and
(B) if no such payments have been made,
a period beginning on the later of the Effective Date or the date of the,
Employee's 60th birthday and continuing for 180 months.
(iii) The interest rate used to determine
present value shall be two percent (2%) below the average of the daily yield
(to maturity) quotations published in the Wall Street Journal on the 30
business days preceding the Effective Date regarding the obligations (bonds or
notes) of the U.S. Treasury maturing on the date closest to the 15th
anniversary of the Effective Date. No discount factor other than this interest
rate shall be used to determine present value.
(iv) In making such determination, the
provisions of paragraphs 4, 5, and 6 of this Agreement shall be disregarded.
(c) In order to elect to have his benefits under this
Agreement paid in a cash lump sum pursuant to this paragraph 16 the Employee
must give written notice to the Company as provided in this paragraph (c).
(i) The notice must be in writing and be
substantially in the form set forth in Exhibit A to this Agreement.
The notice, to be valid, must be given before either of the two
conditions described in clauses 15(a)(i) and 15(a)(ii) of this Agreement has
occurred.
(ii) Service of such notice shall be
deemed complete when given by hand delivery to an officer of the Company, or,
if given by mail, on
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the day of deposit in the United States mail by certified or registered mail,
first-class postage prepaid, addressed as follows:
Xxxxxxx Fabrics, Inc.
0000 X. Xxxx Xxxxxx
X.X. Xxx 0000
Xxxxxx, Xxxxxxxxxxx 00000-0000
Attn: Corporate Secretary
or to such other address as the Company shall have furnished to the Employee in
writing in accordance herewith.
(d) If Employee elects to receive his benefits pursuant
to the provisions of this paragraph 16, Employee shall have, as of the
Effective Date, no further obligation to the Company under this Agreement, and
the Company shall have no further obligation to the Entitled Payee under this
Agreement as of the date that all payments required to be made to Entitled
Payee under this paragraph 16 have been made.
(e) If Entitled Payee incurs any legal fees or expenses
as a result of seeking to obtain or enforce any benefit under this paragraph
16, Company shall pay or reimburse Entitled Payee for all such reasonable fees
and expenses.
(f) The Company's obligation to make the payments
provided for in this paragraph 16 shall not be affected by any circumstances,
including, without limitation, any setoff, counterclaim, recoupment, defense or
other right that the Company may have against the Entitled Payee provided,
however, that the Company's failure to make any such setoff shall not
constitute a waiver of any claim of the Company against the Entitled Payee.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
personally or by officers thereunto duly authorized.
XXXXXXX FABRICS, INC.
By
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Its
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Xxxxx X. Xxxxx, Employee
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NOTICE OF ELECTION
To: Xxxxxxx Fabrics, Inc.
0000 X. Xxxx Xxxxxx
X.X. Xxx 0000
Xxxxxx, XX 00000-0000
Attention: Corporate Secretary
I, Xxxxx X. Xxxxx ("Employee"), pursuant to paragraph 16 of that
Agreement dated _________________ to which Xxxxxxx Fabrics, Inc. and I are
parties (the Agreement"), hereby elect to have my benefits under the Agreement
paid in a cash lump sum pursuant to the provisions of said paragraph 16.
Dated:
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Xxxxx X. Xxxxx, Employee
EXHIBIT A
