RETIREMENT AGREEMENT
Exhibit 10.1
This Retirement Agreement (the “Agreement”) is made and entered into this 26th day of October,
2006, by and between Xxxxxxx Enterprises, Inc., a Louisiana corporation (the “Company”) and Xxxxxxx
X. Xxxxxxxx (“Employee”).
WHEREAS, the Company entered into an Employment Agreement with Employee effective as of
November 1, 2004, as amended by Amendment No. 1 to Appendix A effective July 14, 2005 and as
supplemented by Attachment 1 to Appendix A regarding the 2006 Bonus Calculation (as amended and
supplemented, the “Employment Agreement”);
WHEREAS, the Company entered into a Change of Control Agreement with Employee effective as of
November 1, 2004 (the “Change of Control Agreement”);
WHEREAS, the Employee and the Company have agreed that Employee will retire from his
employment with the Company and that Employee will assist the Company with an orderly transition,
as provided herein; and
WHEREAS, Employee and the Company wish to confirm their mutual understanding regarding the
benefits payable to Employee as a result of his retirement and have agreed in certain cases on
benefits that vary from those that might otherwise be provided under the Employment Agreement or
under other existing agreements or plans relating to Employee’s employment.
NOW THEREFORE, in consideration of the mutual promises herein contained and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending
to be legally bound hereby, the parties hereto agree as follows:
1. Employment. Employee shall continue to be employed by the Company on a full-time
basis, and shall continue to hold the title of Chief Operating Officer, Executive Vice President
and President – Sales and Marketing Division through midnight on December 31, 2006 (the “Retirement
Date”). Thereafter, commencing at 12:01 a.m. on January 1, 2007, Employee shall be fully retired.
More specifically, effective at midnight on the Retirement Date, Employee hereby resigns and
retires from all positions with the Company and its subsidiaries, and from the board of directors
of any and all of the Company’s subsidiaries. Up to and including the Retirement Date, Employee’s
duties shall be to assist the Company in effecting an orderly transition and to perform such other
duties as may be reasonably requested by the Company’s Board of Directors.
2. Pre-Retirement Compensation and Benefits. (a) Employee’s compensation and benefits
shall remain unchanged through the Retirement Date, except that Employee shall not be eligible to
receive any bonus for the fiscal year ending October 31, 2007. In particular, Employee shall
continue to receive the base salary provided for in the Employment Agreement through the Retirement
Date and shall be paid for his accrued and unused vacation time, up to a
maximum of 240 hours (or six weeks), pursuant to the Company’s vacation policy.
(b) As Employee’s bonus with respect to the fiscal year ending October 31, 2006, the Company
shall pay Employee $244,500 in a lump sum in cash on or before January 5, 2007. Employee shall not
be entitled to any other bonus pursuant to his Employment Agreement.
3. Post-Retirement Payments. In accordance with the terms of the Employment Agreement
applicable to a termination of employment by Employee for “Good Reason,” the Company shall pay to
Employee an amount equal to a single year’s Base Salary (as defined in the Employment Agreement) in
effect on the Retirement Date, which amount is agreed to be $350,000. Such amount shall be payable
in equal installments over a two-year period beginning on the first regular payroll date of the
Company that is more than six months after the Retirement Date, and continuing thereafter at such
intervals as other salaried employees of the Company are paid. Employee’s spouse, Xxxxxx X.
Xxxxxxx, is to receive any remaining payments due under this paragraph 3(a) if Employee should die
prior to the completion of the payment term.
4. Post-Retirement Health Insurance. Subject to the conditions described in this
paragraph 4, Employee shall be entitled to continue to participate through December 31, 2006 in the
Company’s group health insurance program on the same terms as are applicable to the Company’s
executive officers. Employee shall be offered COBRA continuation coverage with the COBRA
continuation coverage period beginning on January 1, 2007, and if Employee elects continued
coverage under COBRA, the Company shall pay, or reimburse Employee for the payment of, the premiums
payable for the first 12 months or until Employee obtains other employment offering similar group
health insurance coverage, whichever occurs first. Employee shall pay the premiums for any
coverage that he elects to continue thereafter. Employee understands that in order to avoid the
application of Section 409A of the Internal Revenue Code to medical benefits provided through
December 31, 2007, all medical expenses incurred through December 31, 2007 must be reimbursed by
December 31, 2008. Employee agrees to submit (or cause providers to submit) for payment or
reimbursement all medical expenses incurred as of December 31, 2007 no later than July 1, 2008, and
Company agrees to pay or reimburse such expenses by December 31, 2008. Employee acknowledges that
if medical expenses incurred between January 1, 2007 and December 31, 2007 are not submitted for
payment or reimbursement by July 1, 2008, Employee may be assessed taxes and penalties under
Internal Revenue Code Section 409A.
5. Options and Restricted Stock. Employee’s stock options and restricted stock shall
remain in effect in accordance with their terms, it being acknowledged that those options and
restricted stock not vested on or before the Retirement Date shall be forfeited.
6. Post-Employment Benefits. Upon his retirement on the Retirement Date, Employee
shall be entitled to the benefits under other Company benefit plans in which he is a participant
that are applicable to a voluntary termination of his employment on such date in accordance with
the terms and conditions of such plans, including such benefits as he may be entitled to receive
under the Company’s Supplemental Executive Retirement Plan (the “SERP”), Supplemental Retirement
and Deferred Compensation Plan (the “Deferred Compensation Plan”) and 401(k) plan, except that in
order that Employee may avoid the imposition of interest and additional tax under Section 409A of
the Internal Revenue Code of 1986, as amended, no payments shall be made to Employee under the SERP
or the Deferred Compensation Plan (with
the exception of the portion of the Deferred Compensation Plan that is not subject to Code
Section 409A) until the Company’s first regular payroll date that is more than six months after the
Retirement Date, but the first payment made to the Employee under the SERP shall be equal to the
total payments that Employee would have been entitled to receive under the terms of such plan and
the Employee’s election as to form of payment, if any, from the Retirement Date through the first
regular payroll date that is more than six months after the Retirement Date. With respect to the
Deferred Compensation Plan, for avoidance of doubt and assuming Employee remains employed through
the Retirement Date as provided herein, (a) Employee shall receive the Company matching
contribution and the discretionary contribution (if any) for calendar year 2006, and (b) interest
shall continue to accrue for so long as Employee has a balance in the plan through the date
immediately preceding the date of the final distribution of his account.
7. Other Benefits. All compensation, fringe benefits, perquisites and participation
in any bonus or incentive plan shall cease as of the close of business on the Retirement Date,
unless otherwise specifically provided herein.
8. Nondisclosure, Noncompetition and Proprietary Rights. The provisions of Article V
(Nondisclosure, Noncompetition and Proprietary Rights) of the Employment Agreement and the related
Appendix B thereto shall remain in full force and effect, and Employee hereby agrees to such
provisions as of the date hereof, as if they were set forth in this Agreement in their entirety,
except that Employment Term shall mean the term of Employee’s employment hereunder and Date of
Termination shall mean the Retirement Date hereunder. The remedies provided for in such Article V
shall apply to the payments provided for in paragraph 3 hereof to the same extent as such remedies
would apply to a payment under Article IV, Section 3 of the Employment Agreement.
9. Nondisparagement. During and after his employment by the Company hereunder, the
Employee agrees to refrain from making any statements and from taking any actions that disparage or
could reasonably be expected to harm the reputation of the Company and its subsidiaries or any of
their directors, officers or employees, and agrees that he will not voluntarily assist or otherwise
participate in any action or proceeding undertaken by any other person that disparages or could
reasonably be expected to materially harm the reputation of the Company and its subsidiaries or any
of their directors, officers or employees. Similarly, the Company agrees that its directors and
officers shall refrain from making any statements and from taking any actions that disparage or
could reasonably be expected to harm the reputation of the Employee and agrees that its directors
and officers will not voluntarily assist or otherwise participate in any action or proceeding
undertaken by any other person that disparages or could reasonably be expected to materially harm
the reputation of the Employee. Should the Employee materially breach this paragraph 9 during or
after his employment, he shall, among other remedies available to the Company, forfeit the right to
any further payments pursuant to paragraph 3.
10. Press Release. The Company shall afford the Employee the opportunity to review,
comment on and suggest changes to any press release to be issued by the Company regarding the
matters addressed in this Agreement.
11. Release. The Employee hereby and forever, irrevocably and unconditionally, waives
and releases any and all rights, claims and causes of action against the Company and its
subsidiaries of whatever kind or nature, known or unknown, asserted or unasserted, that may have
arisen prior to or that may exist as of the date of the Employee’s execution and delivery of this
Agreement. It is understood and agreed that the parties covered by the Employee’s release include
the Company’s and its subsidiaries’ present and former shareholders, officers, directors,
employees, agents, insurers, assigns, predecessors and successors, and that any reference to the
Company and its subsidiaries in this paragraph is understood to include all of the foregoing
persons or entities. It is expressly understood and agreed that the claims covered by Employee’s
release include, but are not limited to, any and all claims or rights arising or that could be
asserted under the Employee Retirement Income Security Act, 29 U.S.C. §§ 1001 et seq., Title VII of
the Civil Rights Act of 1964, as amended, 42 U.S.C. §§ 2000e et seq., the Older Workers’ Benefits
Protection Act and the Age Discrimination in Employment Act, 29 U.S.C. §§ 621 et seq., the
Americans with Disabilities Act, 42 U.S.C. §§ 12101 et seq., claims for wrongful discharge, breach
of any express or implied employment contract or agreement, breach of any covenant of good faith
and fair dealing, fraud, defamation, intentional infliction of emotional distress, any personal or
emotional injury, any and all damages, including attorney’s fees, and any other federal, state, or
local statute, law, rule, or regulation concerning the terms, conditions, or benefits of employment
or the separation thereof.
12. Indemnity Agreement. The Indemnity Agreement dated as of December 23, 2004 by and
between the Company and Employee shall survive this Agreement and remain in full force and effect
in accordance with its terms.
13. Effect on Employment Agreement and Change of Control Agreement. Except as
modified hereby, the Employment Agreement, including without limitation, the nondisclosure,
noncompetition and proprietary rights covenants contained therein, shall remain in full force and
effect. The Change of Control Agreement shall terminate effective as of the execution and delivery
of this Agreement.
14. Withholding. Employee agrees that the Company has the right to withhold from the
amounts payable pursuant to this Agreement all amounts required to be withheld under applicable
income and/or employment tax laws.
15. Advice of Counsel. Employee acknowledges that he has read and fully understands
each paragraph of this Agreement, that he has been advised by the Company to consult with an
attorney and told that he could take up to twenty-one (21) days within which to consider this
Agreement, and that he has considered this Agreement and consulted with legal or other counsel to
the full extent desired.
16. Revocation. Employee has seven (7) days following the execution and delivery of
this Agreement within which to exercise a right of revocation, and this Agreement will not be
enforceable or effective until the expiration of this seven (7) day period. Any such revocation of
this Agreement must be communicated in writing and delivered in person or by facsimile to Xxxxxx X.
Kitchen fax number (000) 000-0000 before the close of business on the seventh day following the
execution and delivery of this Agreement. After that time, any attempt by Employee to revoke this
Agreement will have no force or effect.
17. Miscellaneous. This Agreement and the benefits provided in this Agreement are in
no way an admission by the Company of any fault or liability owed to Employee arising out of or in
any way connected with Employee’s employment or the termination of such employment. This Agreement
sets forth the entire agreement between Employee and the Company concerning Employee’s separation
from Employer, and there are no other agreements or understandings concerning such separation.
[Signatures are on following page.]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in
duplicate original as of the day and year first above written.
| XXXXXXX ENTERPRISES, INC. | ||||||
| By: | /s/ Xxxxxx X. Kitchen
|
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| Acting Chief Executive Officer | ||||||
| Chief Financial Officer and Director | ||||||
| EMPLOYEE: | ||||||
| /s/ Xxxxxxx X. Xxxxxxxx |
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| Xxxxxxx X. Xxxxxxxx |
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