1
EXHIBIT 10.10
SERVICE AGREEMENT
THIS AGREEMENT effective the 6th day of March 1996 (the "Effective
Date") by and between XXXXXX X. XXXXXXXX, ("RCL") and XXXXXX INDUSTRIES, INC.,
("Xxxxxx").
WHEREAS RCL is willing to serve as Chairman of the Board of Directors
(the "Board") of Xxxxxx and Chairman of the Executive Committee (the
"Committee") of the Board, and to provide Xxxxxx with business services as
requested by Xxxxxx; and,
WHEREAS Xxxxxx is desirous of having RCL serve as Chairman of the
Board and of the Committee and of obtaining business services from RCL.
NOW THEREFORE it is agreed as follows:
1. From the effective date of this agreement until December 31,
1996, RCL shall serve as Chairman of the Board and of the
Committee, until his successor is elected and qualified and
will provide such additional business services as requested
by Xxxxxx.
2. In consideration of RCL serving as Chairman of the Board and
the Committee, Xxxxxx hereby agrees to pay RCL deferred
compensation under the terms and conditions set forth herein.
Xxxxxx shall establish a deferred compensation ledger on its
books (the "Account") which shall reflect the amount of the
Daniel's obligation to RCL hereunder at any given time.
3. As of March 6, 1996, Xxxxxx will credit RCL's Account with
6,558 shares of Daniel's common stock. The 6,558 shares of
common stock being the equivalent of One Hundred Thousand Nine
dollars and 50/100 ($100,009.50) using the closing price of
Xxxxxx common stock on the New York Stock Exchange on March 6,
1996 which was $15.25 per share. Thereafter, RCL shall be
paid an amount equal to any cash dividend that would have been
paid on the number of shares credited to his Account
2
as if the shares listed in the deferred compensation ledger
had been issued and were outstanding at the time the dividend
is payable to the stockholders. The number of shares of stock
credited to RCL's Account will be adjusted for all stock
dividends, stock splits and all other transactions as if the
shares listed in the ledger had been issued and were
outstanding on the date of the transaction, rounding up to the
next whole share.
4. In the event the stockholders do not approve the payment of
the deferred compensation in shares of Xxxxxx common stock,
Paragraph 3 hereof shall become void and RCL shall have One
Hundred Thousand Nine dollars and 50/100 ($100,009.50)
credited to the deferred compensation ledger on Daniel's
books. The cash compensation shall accrue interest,
compounded annually, using the yearly average of the prime
rate set by Texas Commerce Bank.
5. The deferred compensation credited to the Account pursuant to
either Paragraphs 3 or 4 hereof, shall be delivered on March
5, 2001 pursuant to RCL's letter to W. A. Xxxxxxx, III dated
as of March 6, 1996, copy attached.
6. In the event RCL does not continue as Chairman or declines to
furnish business services prior to January 1, 1997, Xxxxxx
shall have no obligation to pay RCL deferred compensation
pursuant to this Agreement.
7. Notwithstanding Paragraph 6, in the event of RCL's death
before December 31, 1996, the pro rata share of the
compensation to which RCL would have been entitled if he
served until December 31, 1996 shall be delivered to his
executor(s)/ administrator(s) as soon as they are duly elected
and qualified.
8. It is specifically recognized by Xxxxxx and RCL that this
Agreement is only a general corporate obligation of Xxxxxx and
RCL and his spouse or estate must rely upon the general credit
of the company for fulfillment of its obligations under this
Agreement.
3
No specific assets of the company have been set aside or
pledged nor shall any assets be pledged or set aside in any
manner in the future in any form in which they cannot be
reached by the general creditors of the company to assure the
performance by the company of its obligations under this
Agreement. It is intended that this Agreement shall be
unfunded for tax purposes.
9. Xxxxxx will calculate the deductions from the amount of the
compensation paid under this Agreement for any taxes required
to be withheld by federal, state or local government and will
cause them to be withheld, when due and payable.
10. If any term, provision, covenant or condition of this
Agreement is held to be invalid, void or otherwise
unenforceable, the remaining portions of this Agreement will
remain in full force and effect and will in no way be
affected, impaired or invalidated.
11. This Agreement shall be construed, administered and governed
in all respect by the laws of the State of Texas.
IN WITNESS WHEREOF, this Agreement has been executed effective as of
the date first written above.
XXXXXX INDUSTRIES, INC.
By:
------------------------------------
W. A. XXXXXXX, III
------------------------------------
XXXXXX X. XXXXXXXX
