Exhibit 10.81
AMENDMENT NO. 1
TO
EMPLOYMENT AGREEMENT
THIS AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT (the "Amendment") is made and
entered into as of the 15th day of March, 2002 by and between CHROMCRAFT
REVINGTON, INC. (the "Company"), a Delaware corporation with its principal
office in Delphi, Indiana, and XXXXXXX X. XXXXXX (the "Executive"), a resident
of the State of Indiana,
W I T N E S S E T H:
WHEREAS, the Executive is currently employed by the Company in accordance
with an Employment Agreement dated March 31, 1992 between the Company and the
Executive (the "Agreement"), a copy of which is attached hereto as Exhibit 1;
WHEREAS, the Company and the Executive desire to amend the Agreement in
accordance with the provisions of this Amendment; and
WHEREAS, the Agreement shall remain in full force and effect in accordance
with its provisions, except as expressly set forth in this Amendment.
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
covenants, agreements and obligations contained herein, the continued employment
of the Executive by the Company pursuant to the Agreement, as amended hereby,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company and the Executive, each intending to
be legally bound, hereby agree as follows:
Section 1. Amendment to Section 2 of the Agreement. Section 2 of the
Agreement is hereby amended and superseded in its entirety and is hereby
replaced with the following:
2. Positions and Duties
During the Employment Period, the Executive shall serve as the
Company's Chairman of the Board, President and Chief Executive Officer and
shall have such additional titles, duties, authority and responsibilities
with respect to the Company as the Board of Directors of the Company may
from time to time reasonably prescribe or request. The Executive shall
report to the Board of Directors of the Company. The Executive shall
diligently and competently perform all duties and responsibilities of his
offices. The Executive shall perform all the duties and responsibilities
called for hereunder to the best of his ability and shall devote all his
working time, energies and skills to such duties and responsibilities
during the Employment Period.
Section 2. Amendment to Section 3 of the Agreement. Section 3 of the
Agreement is hereby amended and superseded in its entirety and is hereby
replaced with the following:
3. Compensation
(a) Base Salary
During the Employment Period, for all services rendered to or on
behalf of the Company by the Executive in all capacities pursuant to this
Agreement or otherwise, the Company shall pay to the Executive an annual
base salary equal to Four Hundred Thousand Dollars ($400,000) per year (the
"Base Salary"), as may be adjusted in accordance with this Section. At
approximately annual intervals after the end of each fiscal year of the
Company during the Employment Period, the Board of Directors of the Company
(or the Compensation Committee of the Board of Directors) shall review, or
shall cause to be reviewed, the Base Salary payable to the Executive,
giving attention to all pertinent factors, including, without limitation,
the performance of the Company, the performance of the Executive and the
compensation practices inside and outside of the Company. The Board of
Directors (or the Compensation Committee of the Board of Directors) shall,
after such annual review, determine the Base Salary to be paid until the
completion of the next annual review, but such new Base Salary shall not be
less than the Base Salary specified above. The Base Salary shall be paid to
the Executive in accordance with the Company's usual and customary payroll
practices applicable to its employees generally.
(b) Incentive Compensation
During the Employment Period, the Executive shall be entitled to
participate in all incentive compensation plans and programs of the Company
in effect from time to time and generally available to executive officers
of the Company, subject to the terms and conditions of such plans and
programs; provided, however, that the goals, targets, thresholds and
objectives used in the computation of incentive compensation paid to the
Executive shall be no less favorable than those which are used in the
computation of similar incentive compensation paid to other executive
officers of the Company.
(c) Stock Options
During the Employment Period, the Executive shall be entitled to
participate in the Chromcraft Revington, Inc. 1992 Stock Option Plan, as
amended and restated through March 15, 2002 (the "Stock Option Plan"),
subject to the terms and conditions of the Stock Option Plan. On March 15,
2002, the Executive shall receive a grant under the Stock Option Plan of an
option to purchase One Hundred Seventy-Five Thousand (175,000) shares of
common stock of the Company. Such grant shall be made pursuant to the terms
and conditions of the Stock Option Plan and a stock option agreement
between the Company and the Executive. The Executive shall be eligible for
additional grants of stock options under the Stock Option Plan in the
discretion of and as authorized by the Board of Directors of the Company or
the Compensation Committee of the Board of Directors.
Section 3. Amendment to Section 4 of the Agreement. Section 4 of the
Agreement is hereby amended and superseded in its entirety and is hereby
replaced with the following:
4. Employee Benefits
The Executive and, as applicable, the Executive's family, shall be
entitled to participate during the Employment Period in all of the
Company's then existing employee benefit plans and
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programs which are generally available to the Company's executive
management, including any group hospitalization, medical, dental,
accidental death and disability and long term disability income replacement
insurance plans and any retirement income and capital accumulation plans,
except that the Executive will be excluded from participating in the
Company's group life insurance plan and shall instead be provided with term
life insurance in the amount of $1,500,000 until his attainment of age 65.
The Company will also establish pursuant to an insured money purchase
arrangement a Supplemental Executive Retirement Plan (the "SERP") to
provide supplemental retirement benefits designed to provide the Executive
with a supplemental payment to him upon retirement. The amount to be
contributed each year by the Company under the SERP will reflect
calculations designed to provide the Executive with retirement income of
approximately 60% of projected average salary, bonus and pre-tax deferrals
of the final three years prior to retirement at age 65, reduced by the
amount of benefits payable under the Mohasco Retirement Plan for Salaried
and Sales Employees, the Executive Retirement Plan and the annuity value of
estimated benefits payable under the Company's profit sharing plan. The
Executive shall become vested in 30% of the cash surrender value of the
insurance policy account after completion of three years of the Employment
Period and an additional 10% for each subsequent full year that the
Employment Period is extended, subject to acceleration if the Executive's
employment is terminated by the Company without cause or because of his
death, Disability, or in accordance with Section 8 hereof. In addition, the
Executive shall be entitled to the use of a Company-owned automobile,
reimbursement for an annual physical examination and reimbursement of up to
$10,000 per year for personal financial and tax counseling.
Section 4. Amendment to Section 8 of the Agreement. Section 8 of the
Agreement is hereby amended and superseded in its entirety and is hereby
replaced with the following:
8. Termination Upon Change in Control
Following a Change in Control (as hereinafter defined), the Executive,
upon written notice to the Company, may terminate his employment with the
Company for Good Reason. For purposes of this Agreement, the term "Good
Reason" shall mean the occurrence of any of the following events after a
Change in Control:
(a) the assignment to the Executive of any duties or responsibilities
that are inconsistent with the Executive's position as Chairman of the
Board, President and Chief Executive Officer of the Company, or a
substantial reduction in the nature or status of the Executive's duties and
responsibilities from those in effect immediately prior to a Change in
Control;
(b) a reduction by the Company in the Executive's Base Salary in
effect on the date of the Change in Control;
(c) the Company requires the Executive to be based anywhere other than
the Company's office at which he was based immediately prior to a Change in
Control; or
(d) the failure by the Company to continue to provide the Executive
with employee benefits substantially similar to those specified in Sections
4 hereof which are provided to the Executive immediately prior to a Change
in Control.
For purposes of this Agreement, a "Change in Control" shall mean a
transaction or series of related transactions pursuant to which (i) a
majority of the outstanding shares of common stock of the Company, on a
fully diluted basis, shall be owned by any Person (as hereinafter defined)
or group of Persons who, as of the date of this Agreement, own (together
with their affiliates) an aggregate of less
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than fifty percent (50%) of the outstanding shares of common stock of the
Company on a fully diluted basis; (ii) the Company consolidates with,
merges into or with or effects any plan of share exchange with any
unaffiliated or unrelated entity and, after giving effect to such
consolidation, merger or share exchange, a majority of the outstanding
shares of common stock of the Company, on a fully diluted basis, shall be
owned by any Person or group of Persons who, as of the date of this
Agreement, own (together with their affiliates) an aggregate of less than
fifty percent (50%) of the outstanding shares of common stock of the
Company on a fully diluted basis; (iii) the Company disposes of all or
substantially all of its assets; or (iv) the Company is liquidated or
dissolved or adopts a plan of liquidation or dissolution.
For purposes of the definition of "Change in Control," (i) a Person or
group of Persons shall not include the Chromcraft Revington, Inc. Employee
Stock Ownership Plan Trust which forms a part of the Chromcraft Revington,
Inc. Employee Stock Ownership Plan (the "ESOP"), or any other employee
benefit plan, subsidiary or affiliate of the Company, and (ii) the
outstanding shares of common stock of the Company, on a fully diluted
basis, shall include all shares owned by the ESOP, whether allocated or
unallocated to the accounts of participants.
For purposes of this Agreement, the term "Person" shall mean any
natural person, proprietorship, partnership, corporation, limited liability
company, organization, firm, business, joint venture, association, trust or
other entity and any government agency, body or authority.
If the Executive shall terminate his employment with the Company for
Good Reason following a Change in Control, then the Company shall pay him
as severance pay in a lump sum an amount equal to two (2) times the sum of
(i) his Base Salary, and (ii) the higher of the amounts of incentive
compensation paid to the Executive in the two (2) bonus years prior to the
Change in Control.
Section 5. No Changes; Limited Waiver of Breaches.
(a) No Changes Except as Provided Herein. The Agreement (i) is not amended
or changed in any respect except as provided in this Amendment, and (ii) shall
continue in full force and effect in accordance with its terms and provisions
except as amended pursuant to this Amendment.
(b) Limited Waiver of Breaches. Each of the Company and the Executive
hereby waives any and all breaches by the other of this Agreement that may occur
or that have occurred, and any and all rights to terminate the Agreement that
may arise or that have arisen, on or prior to the date of this Amendment.
Notwithstanding the foregoing, the parties hereto do not waive any breaches or
rights to terminate the Agreement that may occur or arise subsequent to the date
of this Amendment.
Section 6. Miscellaneous.
(a) Binding Effect. This Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, executors,
representatives, successors and assigns.
(b) Headings. The headings in this Amendment have been inserted solely for
ease of reference and shall not be considered in the interpretation or
construction of this Amendment.
(c) Severability. In case any one or more of the provisions (or any portion
thereof) contained herein shall, for any reason, be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Amendment, but this Amendment shall
be construed as if
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such invalid, illegal or unenforceable provision or provisions (or portion
thereof) had never been contained herein. If any provision of this Amendment
shall be determined by a court of competent jurisdiction to be unenforceable
because of the provision's scope, duration or other factor, then such provision
shall be considered divisible and the court making such determination shall have
the power to reduce or limit (but not increase or make greater) such scope,
duration or other factor or to reform (but not increase or make greater) such
provision to make it enforceable to the maximum extent permitted by law, and
such provision shall then be enforceable against the appropriate party hereto in
its reformed, reduced or limited form; provided, however, that a provision shall
be enforceable in its reformed, reduced or limited form only in the particular
jurisdiction in which a court of competent jurisdiction makes such
determination.
(d) Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute one and the same agreement.
(e) Construction. This Amendment shall be deemed to have been drafted by
both parties hereto. This Amendment shall be construed in accordance with the
fair meaning of its provisions and its language shall not be strictly construed
against, nor shall ambiguities be resolved against, either party.
(f) Review and Consultation. The Executive hereby acknowledges and agrees
that he (i) has read this Amendment in its entirety prior to executing it, (ii)
understands the provisions, effects and restrictions of this Amendment, (iii)
has consulted with such of his own attorneys, accountants and financial and
other advisors as he has deemed appropriate in connection with his execution of
this Amendment, and (iv) has executed this Amendment voluntarily. THE EXECUTIVE
HEREBY UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT HE HAS NOT RECEIVED ANY ADVICE,
COUNSEL OR RECOMMENDATION WITH RESPECT TO THIS AMENDMENT FROM ANY DIRECTOR OR
EMPLOYEE OF, OR ANY ATTORNEY, ACCOUNTANT OR ADVISOR FOR, THE COMPANY.
(g) Entire Agreement. This Amendment, the Agreement and the incentive
compensation, stock option and employee benefit plans referenced herein and in
the Agreement supersede all other prior understandings, commitments,
representations, negotiations, contracts and agreements, whether oral or
written, between the parties hereto relating to the matters contemplated hereby
and constitute the entire agreement and understanding between the parties hereto
relating to the subject matter hereof.
(h) Certain References. Whenever in this Amendment a singular word is used,
it also shall include the plural wherever required by the context and
vice-versa. All references to the masculine, feminine or neuter genders herein
shall include any other gender, as the context requires. Unless expressly
provided otherwise, all references in this Amendment to days shall mean
calendar, not business, days.
(i) Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of Indiana, without reference to any
choice of law provisions, principles or rules thereof (whether of the State of
Indiana or any other jurisdiction) that would cause the application of any laws
of any jurisdiction other than the State of Indiana.
(j) Recitals. The recitals, premises and "Whereas" clauses contained on
page 1 of this Amendment are expressly incorporated into and made a part of this
Amendment.
(k) Restatement of Agreement. The Agreement may be restated such that it
shall contain in a single document all of the provisions of the Agreement, as
amended pursuant to this Amendment; provided that any such amended and restated
Agreement shall be signed by the Company and the Executive.
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IN WITNESS WHEREOF, the parties hereto have made, entered into, executed
and delivered this Amendment as of the day and year first above written.
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
CHROMCRAFT REVINGTON, INC.
By: /s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx
Vice President-Finance
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