EMPLOYMENT AGREEMENT
BETWEEN
FAC REALTY, INC.
AND
X. XXXXXXX XXXXXX
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is entered into as of the 1st day of March, 1997
between FAC REALTY, INC., a Delaware corporation (the "Company"), and X. XXXXXXX
XXXXXX (the "Executive") for employment commencing on the Effective Date (as
hereinafter defined).
W I T N E S S E T H:
WHEREAS, the Executive has been employed by the Company as President and
Chief Operating Officer under that certain Second Amended and Restated
Employment Agreement between Factory Stores of America, Inc., now known as FAC
Realty, Inc., and dated December 15, 1995 (the "Original Employment Agreement");
and
WHEREAS, the Company desires to employ the Executive as its Chief Executive
Officer and to terminate the Original Employment Agreement, and the Executive
desires to be so employed on the terms and subject to the conditions set forth
herein.
NOW, THEREFORE, in consideration of the mutual promises herein contained,
the parties agree as follows:
1. Employment.
(a) The Company hereby employs the Executive as President and Chief
Executive Officer and the Executive hereby accepts such employment, on the terms
and subject to the conditions hereinafter set forth. The Original Employment
Agreement is hereby terminated.
(b) During the term of his employment under this Employment Agreement and
any extension hereof (all references herein to the term of this Employment
Agreement shall include any extension hereof), the Executive shall be and have
the title of President and Chief Executive Officer and shall devote his entire
business time and all reasonable efforts to his employment and perform
diligently such duties as are customarily performed by presidents and chief
executive officers of companies similar in size to the Company, together with
such other duties as may be reasonably requested from time to time by the Board
of Directors of the Company (the "Board"), which duties shall be consistent with
his title and position as set forth above and as provided in Paragraph 2;
provided, however, that business activities by the Executive with respect to
passive investments, so long as such activities do not, alone or in the
aggregate, materially interfere with the Executive's performance of his duties
as described in this Paragraph l(b), will not be deemed inconsistent with the
requirements of this Paragraph l(b).
2. Term and Positions.
(a) Subject to the provisions for extension or termination hereinafter
stated, the term of this Employment Agreement shall begin as of March 1, 1997
(the "Effective Date")
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and shall continue through February 29, 2000 (the "Expiration Date"). As of the
March 1, 1998 and each successive anniversary thereof, such term automatically
shall be extended for one (1) additional year, unless: (i) this Employment
Agreement is terminated as provided in Paragraph 5 or (ii) either the Company or
the Executive shall give written notice to the other at least thirty (30) days
before the first anniversary of the Effective Date or any subsequent annual
anniversary thereof, that this Employment Agreement shall not be so extended but
shall terminate upon the expiration of the then-existing term (for example,
unless such written notice of non-extension is given on or prior to January 28,
1998, the term of this Employment Agreement automatically will be extended,
effective March 1, 1998, until February 28, 2001). In the event of a "change of
control" (as hereinafter defined) the term of this Employment Agreement shall
automatically be extended for a term of two (2) years from the then existing
Termination Date.
(b) The Executive shall be entitled to serve as President and Chief
Executive Officer of the Company. For service as a director, officer and
employee of the Company, the Executive shall be entitled to the full protection
of the applicable indemnification provisions of the Restated Certificate of
Incorporation and Bylaws of the Company, as the same may be amended from time to
time, which indemnifications shall remain effective after termination of this
Employment Agreement with respect to Executive's actions and inactions during
the term hereof. Without limiting the generality of any of the foregoing, except
as hereafter expressly agreed in writing by the Executive, during and throughout
the term of his employment under this Employment Agreement: (i) all employees of
the Company shall report directly or indirectly to the Executive; and (ii)
unless the Board of Directors shall otherwise direct, the Executive shall have
the authority to make operating decisions regarding day-to-day operation of the
business.
(c) If:
(i) the Company materially changes the Executive's duties and
responsibilities as set forth in Paragraphs l(b) and 2(b) without his
consent;
(ii) the Executive's place of employment or the principal executive
offices of the Company are located more than fifty (50) miles from the
geographical center of Cary, North Carolina;
(iii) there occurs a material breach by the Company of any of its
obligations under this Employment Agreement, which breach has not been
cured in all material respects within ten (10) days after the Executive
gives notice thereof to the Company;
(iv) there occurs a "change in control" (as hereinafter defined) of
the Company during the term of this Employment Agreement; or
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(v) after the Effective Date, the Executive is not at all times during
his employment hereunder a member of the Board of Directors, or, if the
Board of Directors constitutes an Executive Committee, the Executive is not
at all times during his employment hereunder a member of such Executive
Committee;
then in any such event the Executive shall have the right to terminate his
employment with the Company, but such termination shall not be considered a
voluntary resignation or termination of such employment or of this Employment
Agreement by the Executive but rather a discharge of the Executive by the
Company "without cause" (as defined in Paragraph 5 (a)). The Executive may
exercise such right of termination at any time within three (3) months following
the occurrence of the applicable event described in (i) and (iii) of this
Paragraph 2(c), and within six (6) months following the occurrence of the
applicable event described in (ii), (iv) and (v) of this Paragraph 2(c).
(d) The Executive shall be deemed not to have consented to any written
proposal calling for a material change in his duties and responsibilities unless
he shall give written notice of his consent thereto to the Board of the Company
within fifteen (15) days after receipt of such written proposal. If the
Executive shall not have given such consent, the Company shall have the
opportunity to withdraw such proposed material change by written notice to the
Executive given within ten (10) days after the end of said fifteen (15) day
period.
(e) The term "change in control" means the first to occur of the following
events:
(i) any person or group of commonly controlled persons owns or
controls, directly or indirectly, fifty percent (50%) or more (directly or
indirectly, including convertible shares or convertible partnership units)
of the voting control or value of the capital stock of the Company
following the Effective Date;
(ii) any person or group of commonly controlled persons owning less
than five percent (5%) of the voting control or value of the capital stock
of the Company within 30 days following the Effective Date owns or
controls, directly or indirectly, more than twenty percent (20%) (directly
or indirectly, including convertible shares or convertible partnership
units) of the voting control or value of the capital stock of the Company;
or
(iii) following the Effective Date, the stockholders of the Company
approve an agreement to merge or consolidate with another corporation or
other entity resulting (whether separately or in connection with a series
of transactions) in a change in ownership of twenty percent (20%) or more
(directly or indirectly, including convertible shares or convertible
partnership units) of the voting control or value of the capital stock of
the Company, or an agreement to sell or otherwise dispose of all or
substantially all of the Company's assets (including without limitation, a
plan of liquidation or dissolution), or otherwise approve of a fundamental
alteration in the nature of the Company's business; provided,
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however, a pledge, hypothecation or other similar disposition for the
purpose of providing collateral security made at the time the Company
enters into a bona fide financing transaction with a party which at the
time of such transaction is not an affiliate of the Company would not
constitute a change in control.
Notwithstanding the foregoing provisions of this Paragraph 2, the ownership or
acquisition of capital stock by the Executive, J. Xxxxx Xxxxxxx, Xx., Xxxxxxx X.
Xxxxxxxx, Xxxxxxxxxxx X. Xxxxxxxx, Xxxxxxx X. Xxxxxxxx, and/or their respective
affiliates, shall not be deemed to result in a "change in control" of the
Company.
3. Compensation.
During the term of his employment under this Employment Agreement the
Company shall pay or provide, as the case may be, to the Executive the
compensation and other benefits and rights set forth in this Paragraph 3. All
restricted stock given as compensation shall be subject to the Company's 1996
Restricted Stock Plan.
(a) The Company shall pay to the Executive a base salary payable in
accordance with the Company's usual pay practices (and in any event no less
frequently than monthly) of (i) cash payments of Three Hundred Thirty
Thousand and No/100 Dollars ($330,000.00) per annum; (ii) Common Stock of
the Company equivalent to $200,000 based on the market price of the Common
Stock on March 1, 1997 and each subsequent annual anniversary, rounded down
to the nearest 1,000 shares (for example, $200,000 divided by $6.625 per
share would result in 30,000 shares issued), which shares shall
automatically vest on the subsequent annual anniversary (for example, March
1, 1998 for shares issued March 1, 1997) unless the Executive voluntarily
terminates his employment prior to such anniversary date or his employment
is terminated for "cause" (see Paragraph 5 (a) (iii)); (iii) Common Stock
of the Company equivalent to $25,000 based on the market price of the
Common Stock on March 1, 1997 and each subsequent annual anniversary
rounded up to the nearest 1,000 shares plus 50% (for example, $25,000
divided by $6.625 per share would result in 4,000 shares issued plus 50%,
or a total of 6,000 shares), which shares shall automatically vest on the
third anniversary of the date of issuance (for example, March 1, 2000 for
shares issued March 1, 1997) unless the Executive voluntarily terminates
his employment prior to such anniversary date or his employment is
terminated for "cause" (see Paragraph 5 (a) (iii)); and (iv) such increases
(but not decreases) from time to time (based upon the performance of the
Company and the Executive) as determined by the Board or the Company's
Executive Compensation Committee payable in the form of Common Stock of the
Company similar to (iii) above.
(b) The Company may pay to the Executive bonus compensation on a
calendar year basis pursuant to the terms of the incentive compensation
plan established by the Board from time to time, not later than March 1
following each calendar year. Such bonus compensation may be payable in the
form of cash or Common Stock of the Company. In the event such bonus is
paid in the form of Common Stock, the determination of shares issued may be
based on the cash equivalent divided by the market price of the Common
Stock on or about the date of determination of the bonus
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compensation by the Board. Such shares will be increased by 50% and shall
automatically vest on the third anniversary of the date of issuance (for
example, March 1, 2001 for shares issued March 1, 1998) unless the
Executive voluntarily terminates his employment prior to such anniversary
date or his employment is terminated for "cause" (see Paragraph 5 (a)
(iii)).
(c) The Company shall provide to the Executive such medical,
hospitalization and dental insurance for himself, his spouse and eligible
family members, as may be available to other officers of the Company and
term life insurance in the amount of not less than $1,000,000.
(d) The Executive shall participate in all retirement and other
benefit plans of the Company generally available from time to time to
officers of the Company and for which the Executive qualifies under the
terms thereof (and nothing in this Employment Agreement shall or shall be
deemed to in any way affect the Executive's rights and benefits thereunder
except as expressly provided herein).
(e) The Executive shall be entitled to such periods of vacation and
sick leave allowance each year as are determined by the Company's Executive
Compensation Committee for officers generally; provided that Executive
shall be entitled to not less than four weeks (twenty days) of vacation
each year.
(f) The Executive shall be entitled to participate in any equity or
other employee benefit plan that is generally available to senior executive
officers, as distinguished from general management, of the Company. The
Executive's participation in and benefits under any such plan shall be on
the terms and subject to the conditions specified in the governing document
of the particular plan.
(g) The Company shall reimburse the Executive or provide him with an
expense allowance during the term of this Employment Agreement for travel,
entertainment and other expenses reasonably and necessarily incurred by the
Executive in connection with the Company's business. The Executive shall
furnish such documentation with respect to reimbursement to be paid
hereunder as the Company shall reasonably request.
(h) The Company shall (i) pay to the Executive an annual automobile
allowance of $8,000 payable on a pro rata monthly basis; (ii) pay or
reimburse the Executive for country club initiation fees of up to $20,000
plus periodic dues; and (iii) pay or reimburse the Executive up to $2,500
annually for expenses of financial, estate or tax planning.
4. Payment in the Event of Death or Permanent Disability.
(a) In the event of the Executive's death or "permanent disability" (as
hereinafter defined) during the term of his employment under this Employment
Agreement, the Company shall pay to the Executive (or his personal
representatives,
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heirs, successors and assigns in the event of his death) an amount equal to two
(2) times the Executive's then effective annual base salary, as determined under
Paragraph 3(a), plus a pro rata portion of the bonus applicable to the calendar
year in which such death or permanent disability occurs, as such bonus is
determined under Paragraph 3(b).
(b) The pro rata portion of the bonus described in Paragraph 4(a) shall be
paid when and as provided in Paragraph 3(b). The remainder of the benefit to be
paid pursuant to Paragraph 4(a) shall be paid within ninety (90) days after the
date of death or permanent disability, as the case may be.
(c) Except as otherwise provided in Paragraphs 2(b), 3(d), 4(a) and 4(b),
in the event of the Executive's death or permanent disability, the Executive's
employment hereunder shall terminate and the Executive shall be entitled to no
further compensation or other benefits under this Employment Agreement, except
as to that portion of any unpaid salary and other benefits accrued and earned by
him hereunder up to and including the date of such death or permanent
disability, as the case may be.
(d) For purposes of this Employment Agreement, the Executive's "permanent
disability" shall be deemed to have occurred after one hundred twenty (120) days
in the aggregate during any consecutive twelve (12) month period, or after
ninety (90) consecutive days, during which one hundred twenty (120) or ninety
(90) days, as the case may be, the Executive, by reason of his physical or
mental disability or illness, shall have been unable to discharge his duties
under this Employment Agreement. The date of permanent disability shall be such
one hundred twentieth (120th) or ninetieth (90th) day, as the case may be. In
the event either the Company or the Executive, after receipt of notice of the
Executive's permanent disability from the other, dispute that the Executive's
permanent disability shall have occurred, the Executive shall promptly submit to
a physical examination by the chief of medicine of any major accredited hospital
in the Raleigh, North Carolina, area and, unless such physician shall issue his
written statement to the effect that in his opinion, based on his diagnosis, the
Executive is capable of resuming his employment and devoting his full time and
energy to discharging his duties within thirty (30) days after the date of such
statement, such permanent disability shall be deemed to have occurred.
5. Termination.
(a) The Employment of the Executive under this Employment Agreement, and
the term hereof, may be terminated by the Company:
(i) on the death or permanent disability (as defined above) of the
Executive;
(ii) for "cause" at any time by action of the Board; or
(iii) "without cause" at any time by action of the Board.
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For purposes hereof, the term "cause" shall mean:
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(A) The Executive's fraud, commission of a felony, commission of
an act or series of repeated acts of dishonesty which fraud, felony or
dishonesty is materially inimical to the best interests of the
Company, or which results in material injury to the business
reputation of the Company, or the Executive's willful and repeated
failure to perform his duties under this Employment Agreement, which
failure has not been cured within fifteen (15) days after the Company
gives notice thereof to the Executive; or
(B) The Executive's material breach of any material provision of
this Employment Agreement, which breach has not been cured in all
substantial respects within ten (10) days after the Company gives
notice thereof to the Executive.
For purposes hereof, the term "without cause" shall mean any reason other
than those set forth in subparagraphs (a)(i) and (a)(ii) of this Paragraph
5.
The exercise by the Company of its rights of termination under this Paragraph 5
shall be the Company's sole remedy in the event of the occurrence of the event
as a result of which such right to terminate arises. Upon any termination of
this Employment Agreement, the Executive shall be deemed to have resigned from
all offices and directorships held by the Executive in the Company.
(b) In the event of a termination claimed by the Company to be for "cause"
pursuant to Paragraph 5(a)(ii), the Executive shall have the right to have the
justification for said termination determined by arbitration in Raleigh, North
Carolina. In order to exercise such right, the Executive shall serve on the
Company within thirty (30) days after termination a written request for
arbitration. The Company immediately shall request the appointment of a single
arbitrator by the American Arbitration Association and thereafter the question
of "cause" shall be determined under the rules of the American Arbitration
Association, and the decision of the arbitrator shall be final and binding on
both parties. The parties shall use all reasonable efforts to facilitate and
expedite the arbitration and shall act to cause the arbitration to be completed
as promptly as possible. During the pendency of the arbitration, the Executive
shall continue to receive all compensation and benefits to which he is entitled
hereunder, and if at any time during the pendency of such arbitration the
Company fails to pay and provide all compensation and benefits to the Executive
in a timely manner the Company shall be deemed to have automatically waived
whatever rights it then may have had to terminate the Executive's employment for
cause. Expenses of the arbitration shall be borne equally by the parties.
(c) In the event of termination pursuant to subparagraph (a)(i) or (a)(ii)
of this Paragraph 5, except as otherwise provided in Paragraphs 2(b), 3(d), 4(a)
and 4(b), as applicable, the Executive shall be entitled to no further
compensation or other benefits under this Employment Agreement, except as to
that portion of any unpaid salary and other benefits accrued and earned by him
hereunder up to and including the effective date of such termination.
(d) In the event of termination pursuant to Paragraph 2(c), or subparagraph
(a)(iii) of this paragraph 5, the Executive shall be entitled to
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(i) severance pay payable within five (5) days of such termination in
a lump sum equal to the sum of (A) the greater of (x) the total amount of
unpaid base salary for the then-unexpired portion of the term of this
Employment Agreement, including any extended term as provided by Section
2(a) hereof at the then-effective annual rate of salary, as determined
under Paragraph 3(a) and (y) the amount of one year's base salary at the
then-effective annual rate of salary, and (B) the product of the number of
years (including fractions) representing the unexpired term of this
Employment Agreement (but not less than one) times an amount equal to the
average of the annual bonuses payable to the Executive under Paragraph 3(b)
for the three (3) full calendar years immediately prior to termination of
this Employment Agreement in which a bonus was payable or such lesser
number of full calendar years during which the Executive was employed
hereunder in which a bonus was payable,
(ii) during a period equal to the greater of one (1) year or the
unexpired term of this Employment Agreement, all other benefits to which
the Executive would have been entitled during the term of this Employment
Agreement had the Executive's employment not been terminated,
(iii) during a period equal to the greater of one (1) year or the
unexpired term of this Employment Agreement, the continuing use of a
secretary and office space to be provided by the Company, and
(iv) other benefits accrued and earned by him hereunder up to and
including the effective date of such termination.
(e) In the event of the termination of his employment pursuant to Paragraph
2(c) or Paragraph 5(a)(iii), the Executive shall have the option to be released
from his obligations under Paragraph 6(a)(i) for the one (1) year period
following the termination of his employment, by releasing the Company from its
obligations under Paragraph 5(d) hereof (other than those provided in Paragraph
5(d)(iv)). Such option may be exercised by the Executive giving the Company
notice thereof within five (5) days of such termination.
(f) In no event shall the Executive have or be deemed to have any duty to
seek employment or otherwise mitigate damages with respect to any amounts or
benefits due to him upon termination of this Employment Agreement as provided in
this Paragraph 5, nor shall any such amount or benefits be reduced by reason of
any other compensation or benefits which the Executive may earn following
termination of this Employment Agreement.
6. Covenants and Confidential Information.
(a) The Executive acknowledges the Company's reliance and expectation of
the Executive's continued commitment to performance of his duties and
responsibilities during the time when he is employed under this Employment
Agreement. In light of such reliance and expectation on the part of the Company
(but subject to Paragraph 5(d), 5(e) and 5(f) above),
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during the time when he is employed under this Employment Agreement and for a
period of one (1) year after the
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termination of such employment for any reason other than the expiration of the
term hereof in accordance with Paragraph 2(a)(ii) hereof (and, as to clause (ii)
of this subparagraph (a), at any time during and after the term of this
Employment Agreement), the Executive shall not, directly or indirectly, do
either of the following:
(i) Own, manage, control or participate in the ownership, management,
or control of, or be employed or engaged by or otherwise affiliated or
associated as a consultant, independent contractor or otherwise with, any
other corporation, partnership, proprietorship, firm, association or other
business entity engaged in the business of, or otherwise engage in the
business of, acquiring, owning, developing or managing factory outlet
shopping centers; provided, however, that the ownership of not more than
one percent (1%) of any class of publicly traded securities of any entity;
or
(ii) Disclose, divulge, discuss, copy or otherwise use or suffer to be
used in any manner, in competition with, or contrary to the interests of,
the Company, any confidential information relating to the Company's
operations, properties or otherwise to its particular business or other
trade secrets of the Company, it being acknowledged by the Executive that
all such information regarding the business of the Company compiled or
obtained by, or furnished to, the Executive while the Executive shall have
been employed by or associated with the Company is confidential information
and the Company's exclusive property; provided, however, that the foregoing
restrictions shall not apply to the extent that such information (A) is
obtainable in the public domain or known in the industry generally, (B)
becomes obtainable in the public domain or known in the industry generally,
except by reason of the breach by the Executive of the terms hereof, (C)
was not acquired by the Executive in connection with his employment or
affiliation with the Company, (D) was not acquired by the Executive from
the Company or its representatives, or (E) is required to be disclosed by
rule of law or by order of a court or governmental body or agency.
(b) The Executive agrees and understands that the remedy at law for any
breach by him of this Paragraph 6 may be inadequate and that the damages flowing
such breach are not readily susceptible to being measured in monetary terms.
Accordingly, it is acknowledged that, upon adequate proof of the Executive's
violation of any legally enforceable provision of this Paragraph 6, the Company
may be entitled to immediate injunctive relief and may obtain a temporary order
restraining any threatened or further breach. Nothing in this Paragraph 6 shall
be deemed to limit the Company's remedies at law or in equity for any breach by
the Executive of any of the provisions of this Paragraph 6 which may be pursued
or availed of by the Company.
(c) The Executive has carefully considered the nature and extent of the
restrictions upon him and the rights and remedies conferred upon the Company
under this Paragraph 6, and hereby acknowledges and agrees that the same are
reasonable in time and territory, are designed to eliminate competition which
otherwise would be unfair to the Company, do not stifle the inherent skill and
experience of the Executive, would not operate as a bar to the Executive's sole
means of support, are fully required to protect the legitimate interests of the
Company and do not confer a benefit upon the Company disproportionate to the
detriment to the Executive.
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7. Stock Options. The Executive shall receive stock options under the
Company's 1993 Employee Stock Incentive Plan as amended as more fully described
in that certain Nonqualified Stock Option Agreement and that certain Incentive
Stock Option Agreement dated February 14, 1996 the terms and conditions of which
are incorporated herein by reference.
8. Restricted Stock. The Executive shall receive a grant of 150,000 shares
(the "Restricted Shares") of restricted common stock of the Company ("Common
Stock") granted under the Company's 1996 Restricted Stock Plan. Prior to
vesting, the Restricted Shares will be registered under the Securities Act on
Form S-8, will be listed on the NYSE and following vesting thereof will be
freely tradable subject to applicable provisions of Rule 144 promulgated under
the Securities Act. With respect to said grant, the Company and the Executive
shall enter into a Restricted Stock Agreement in a form mutually agreed upon by
the Company and the Executive providing that (i) the Restricted Shares shall
vest in ten (10) equal installments of ten percent (10%) per year (provided as
to each installment that the Executive continues to be employed by the Company),
commencing on the Effective Date and thereafter on the first through ninth
anniversaries of the Effective Date provided (ii) all unvested Restricted Shares
shall immediately vest upon the Executive's death or permanent disability (as
defined in Paragraph 4(d)) during his employment by the Company; or termination
of the Executive's employment by the Company pursuant to Paragraph 2(c) or
Paragraph 5(a)(iii) or termination of the Executive's employment due to the
Company's election not to extend this Employment Agreement as permitted in
Paragraph 2(a); or pursuant to Paragraph 5(a)(iii) if such termination occurs
within three (3) months prior to, at the time of, or within one (1) year
following a "change of control" (as defined in Section 2(e) hereof) or provided
that such change is effected, the execution of a definitive agreement therefor
(notwithstanding the requirement of continued employment in subparagraph (i)
above, upon such termination of employment). The Executive shall be entitled to
dividends on only those Restricted Shares which have vested as of the record
date of any dividend payment.
9. Tax Adjustment Payments. If all or any portion of the amounts payable to
the Executive under this Employment Agreement (together with all other payments
of cash or property, whether pursuant to this Employment Agreement or otherwise,
including, without limitation, the issuance of common stock of the Company, or
the granting, exercise or termination of options therefor) constitutes "excess
parachute payments" within the meaning of Section 280G of the Code that are
subject to the excise tax imposed by Section 4999 of the Code (or any similar
tax or assessment), the amounts payable hereunder shall be increased (in the
same manner, to the extent applicable, without duplication, as provided in (i),
(ii) and (iii) below) to the extent necessary to place the Executive in the same
after-tax position as he would have been in had no such tax assessment been
imposed on any such payment paid or payable to the Executive under this
Employment Agreement or any other payment that the Executive may receive in
connection therewith. The determination of the amount of any such tax or
assessment and the incremental payment required hereby in connection therewith
shall be made by the accounting firm employed by the Executive within thirty
(30) calendar days after such payment and said incremental payment shall be made
within five (5) calendar days after such determination has been made. If, after
the date upon which the payment required by this Paragraph 8 has been made, it
is determined (pursuant to final regulations or published rulings of
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the Internal Revenue Service, final judgment of a court of competent
jurisdiction, Internal Revenue Service audit assessment, or otherwise) that the
amount of excise or other similar taxes or assessments payable by the Executive
is greater than the amount initially so determined, then the Company shall pay
the Executive an amount equal to the sum of: (i) such additional excise or other
taxes, plus (ii) any interest, fines and penalties resulting from such
underpayment, plus (iii) an amount necessary to reimburse the Executive for any
income, excise or other tax assessment payable by the Executive with respect to
the amounts specified in (i) and (ii) above, and the reimbursement provided by
this clause (iii), in the manner described above in this Paragraph 8. Payment
thereof shall be made within five (5) calendar days after the date upon which
such subsequent determination is made.
10. Representations and Warranties of the Company.
(a) The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all requisite
corporate power and authority to enter into, execute and deliver this Employment
Agreement, fulfill its obligations hereunder and consummate the transactions
contemplated hereby.
(b) The execution and delivery of, performance of obligations under, and
consummation of the transactions contemplated by, this Employment Agreement have
been duly authorized and approved by all requisite corporate action by or in
respect of the Company, and this Employment Agreement constitutes the legally
valid and binding obligation of the Company, enforceable by the Executive in
accordance with its terms.
(c) No provision of the Company's governing documents or any agreement to
which it is a party or by which it is bound or of any material law or regulation
of the kind usually applicable and binding upon the Company prohibits or limits
its ability to enter into, execute and deliver this Employment Agreement,
fulfill its respective obligations hereunder and consummate the transactions
contemplated hereby.
11. Miscellaneous.
(a) The Executive represents and warrants that he is not a party to any
agreement, contract or understanding, whether employment or otherwise, which
would restrict or prohibit him from undertaking or performing employment in
accordance with the terms and conditions of this Employment Agreement.
(b) The provisions of this Employment Agreement are severable and if any
one or more provisions may be determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions and any partially
unenforceable provision to the extent enforceable nevertheless shall be binding
and enforceable.
(c) The rights and obligations of the Company under this Employment
Agreement shall inure to the benefit of, and shall be binding on, the Company
and its successors and assigns, and the rights and obligations of the Executive
under this Employment Agreement shall inure to the benefit of, and shall be
binding upon, the Executive (other than obligations to perform services and to
refrain from competition and disclosure of confidential information) and
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his heirs, personal representatives and assigns.
(d) Any controversy or claim arising out of or relating to this Employment
Agreement, or the breach thereof, shall be settled by arbitration in accordance
with the Rules of the American Arbitration Association then pertaining in the
City of Raleigh, North Carolina, and judgment upon the award rendered by the
arbitrator or arbitrators may be entered in any court having jurisdiction
thereof. The arbitrator or arbitrators shall be deemed to possess the powers to
issue mandatory orders and restraining orders in connection with such
arbitration; provided, however, that nothing in this Paragraph 11(d) shall be
construed so as to deny the Company the right and power to seek and obtain
injunctive relief in a court of equity for any breach or threatened breach by
the Executive of any of his covenants contained in Paragraph 6 hereof.
(e) Any notice to be given under this Employment Agreement shall be
personally delivered in writing or shall have been deemed duly given when
received after it is posted in the United States mail, postage prepaid,
registered or certified return receipt requested, and if mailed to the Company,
shall be addressed to its principal place of business, attention: Chairman, and
if mailed to the Executive, shall be addressed to him at his home address last
known on the records of the Company, or at such other address or addresses as
either the Company or the Executive may hereafter designate in writing to the
other. All notices provided for hereunder to the parties shall be accompanied by
simultaneous copy of such notice sent to the attorneys for such parties, as
follows:
If to the Executive:
Xxxxxxx Xxxxxxxx, Esq.
Xxxxx Cummis Xxxxxxxxx Xxxxx Tischman Xxxxxxx & Xxxxx, P.A.
Xxx Xxxxxxxxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000
If to the Company:
FAC Realty, Inc.
00000 Xxxxxxx Xxxxxxx,
Xxxxx Xxxxx Xxxx Xxxxx
Xxxx, Xxxxx Xxxxxxxx 00000
Attention: General Counsel
Notices sent by Federal Express or similar overnight delivery service or by
facsimile transmissions shall also constitute due notice under this paragraph
11(e), effective upon receipt thereof.
(f) The failure of either party to enforce any provision or provisions of
this Employment Agreement shall not in any way be construed as a waiver of any
such provision or provisions as to any future violations thereof, nor prevent
that party thereafter from enforcing each and every other provision of this
Employment Agreement. The rights granted the parties herein are cumulative and
the waiver of any single remedy shall not constitute a waiver of such party's
right to assert all other legal remedies available to it under the
circumstances.
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(g) This Employment Agreement supersedes all prior agreements and
understandings between the parties made prior to the date hereof and may not be
modified or terminated orally. No modification, termination or attempted waiver
shall be valid unless in writing and signed by the party against whom the same
is sought to be enforced.
(h) This Employment Agreement shall be governed by and construed according
to the laws of the State of North Carolina.
(i) Captions and paragraph headings used herein are for convenience and are
not a part of this Employment Agreement and shall not be used in construing it.
(j) Where necessary or appropriate to the mean hereof, the singular and
plural shall be deemed to include each other, and the masculine, feminine and
neuter shall be deemed to include each other.
(k) This Employment Agreement may be executed in multiple counterparts,
each of which will be deemed an original, but all of which together will
constitute one and the same instrument. This Employment Agreement may be
executed by facsimile signature.
IN WITNESS WHEREOF, the parties have executed this Employment Agreement on
the day and year first set forth above.
FAC REALTY, INC., a Delaware corporation
By: ____________________________________(SEAL)
Xxxxxxx X. Xxxxxxxx
Executive Vice President
Chief Financial Officer
By: ____________________________________
Xxxxxxxx X. Xxxxxxx, Xx.
Chairman of Executive Compensation
Committee
________________________________________(SEAL)
X. Xxxxxxx Xxxxxx
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