EMPLOYMENT AGREEMENT
This Employment Agreement is made and entered into on August 1,
1996 (the "Effective Date") by and between Furniture Brands
International, Inc., a Delaware corporation ("Furniture Brands") and
Xxxxx X. Xxxxxx ("Executive").
WHEREAS, Executive is now and has been employed by Furniture
Brands in senior management executive positions and is broadly
experienced in all facets of Furniture Brands' operations; and
WHEREAS, it is in the best interests of Furniture Brands to
assure that it will have the continued dedication of Executive;
NOW THEREFORE, for good and valuable consideration and in order
to induce Executive to remain in the employ of Furniture Brands, the
parties covenant and agree as follows:
1. Definitions. The following terms shall have the following
meanings for purposes of this Agreement.
a. "Cause" means (i) an act or acts of personal dishonesty
taken by Executive and intended to result in substantial personal
enrichment of Executive at the expense of Furniture Brands, (ii)
violations by Executive of this Agreement or Executive's
employment obligations to Furniture Brands which are demonstrably
willful on Executive's part and which are not remedied within a
reasonable period of time after receipt of written notice from
Furniture Brands, or (iii) the conviction of Executive of a felony
involving moral turpitude.
b. "Disability" means the incapacity to attend to and perform
effectively one's duties and responsibilities which continues for
at least 26 weeks after its commencement, as determined by a
physician selected by Furniture Brands.
c. "Employment Period" that period beginning on the Effective
Date and ending upon Executive's retirement or earlier
termination of employment.
2. Employment. Furniture Brands agrees to employ Executive,
and Executive agrees to serve Furniture Brands in an executive,
managerial and supervisory capacity, subject to the direction and
control of the Board of Directors of Furniture Brands, all upon the
terms and conditions hereinafter set forth. During the Employment
Period:
a. Executive's position (including, without limitation,
status, offices, titles and reporting requirements), authority,
duties and responsibilities shall be at least commensurate in all
material respects with the most significant of those held, exercised
and assigned at any time during the 90-day period immediately
preceding the Effective Date,
b. Executive's services shall be performed at the location
where the Executive is employed on the Effective Date, or at any
office or location not more than thirty-five (35) miles from such
location,
c. Executive shall continue to receive an annual base salary
at least equal to the annual base salary payable to the Executive
by Furniture Brands on the Effective Date ("Base Salary"),
d. Executive shall continue to have an annual cash bonus
potential, either pursuant to the Furniture Brands Executive
Incentive Plan in effect on the Effective Date or pursuant to a
similar incentive compensation plan of Furniture Brands, at least
equal to the level in existence on the Effective Date ("Annual
Bonus"), and
e. Executive shall be entitled to participate in all
incentive, savings and retirement plans, practices, policies and
programs applicable to other key executive employees of
Furniture Brands ("Benefit Plans").
The failure of Furniture Brands, without Executive's consent, to
comply with the terms and conditions of employment as set forth in
this Section 2 shall constitute "Good Reason" for Executive's
termination of his employment with Furniture Brands.
3. Best Efforts. Executive agrees during the Employment
Period to devote his best efforts and substantially all of his
business time and attention to the business of Furniture Brands, it
being agreed that the Executive will have complied with this
obligation if he devotes to the business of Furniture Brands his same
best efforts and the same time and attention to the business of
Furniture Brands that he has devoted to the business of Furniture
Brands during the twelve months next preceding the Effective Date.
Executive agrees that he will perform such other executive duties for
Furniture Brands and for Furniture Brands' subsidiaries relating to
its business as the Board of Directors of Furniture Brands may
reasonably direct.
4. Term. Subject to the provisions of Sections 4 and 5 of
this Agreement, either party shall have the right to terminate the
Employment Period at any time. If Executive's employment with
Furniture Brands is terminated by Furniture Brands, other than for
Cause or as a result of his death or Disability, or if Executive
terminates his employment with Furniture Brands for Good Reason, then
Furniture Brands will, for the greater of (a) the period ending three
years after the Effective Date or (b) a period of one year after the
termination date (or, if shorter, until Executive reaches "Normal
Retirement Age" (as such concept is used in the primary retirement
plan in which Executive is a participant on the Effective Date)), (i)
pay to Executive as and when normally payable his Base Salary as in
effect on the date of termination and an amount equal to the average
Annual Bonus received by such Executive for the past three years prior
to termination (or a pro-rated portion of such average Annual Bonus)
and (ii) subject to program eligibility requirements and continuation
of programs by Furniture Brands, continue his participation in the
Benefit Plans in which he was participating on the date of termination
of employment.
5. Split Dollar Insurance Policy. If Executive's employment
with Furniture Brands is terminated by Furniture Brands other than for
Cause or as a result of his death or Disability, or if during such
period Executive terminates his employment with Furniture Brands for
Good Reason, then Furniture Brands will continue to make premium
payments for so long as Furniture Brands is making payments to
Executive under Section 4 hereof under any and all split dollar life
insurance programs in effect on the life of the Executive as of the
Effective Date, after which the Executive will be entitled to
ownership of the policy and Furniture Brands will be entitled to
premium retrieval, all in accordance with the terms of the program,
but only to the extent of the cash value of the policy, and without
recourse to the Executive for the balance of any such premium
retrieval.
6. Non-Competition. During the three-year period commencing
on the Effective Date and, if longer, while employed by Furniture
Brands, and for a period of one year after termination of employment,
Executive shall not, without the prior written consent of Furniture
Brands, directly or indirectly, own, control, finance, manage,
operate, join or participate in the ownership, control, financing,
management or operation of, or be connected as an employee, consultant
or in any other capacity with, any business engaged in the manufacture
or distribution of residential furniture in the United States.
Nothing in this Section 6 shall, however, restrict Executive from
making investments in other ventures which are not competitive with
Furniture Brands, or restrict Executive from owning less than one
percent (1%) of the outstanding securities of companies listed on a
national stock exchange or actively traded in the "over-the-counter"
market. In addition, if the Employment Period is terminated by
Furniture Brands (other than for Cause) and the Executive elects to
forego the payments called for in Sections 4 and 5 hereof, the
provisions of this Section 6 shall not apply. Should any of the terms
of this Section 6 be found to be unenforceable because they are over-
broad in any respects then they shall be deemed amended to the extent,
and only to the extent, necessary to render them enforceable. Both
parties stipulate that money damages would be inadequate to compensate
for any breaches of the terms of this Section 6, and that such terms
shall be enforceable through appropriate equitable relief, without the
necessity of proving actual damages and to an equitable accounting of
all earnings, profits, and other benefits arising from such violation,
which rights shall be cumulative and in addition to any other rights
and remedies to which Furniture Brands may be entitled.
7. Confidentiality. During the Employment Period and at all
times thereafter, Executive shall maintain the confidentiality of, and
shall not disclose to any person (except as his duties as an employee
of Furniture Brands may require) any non-public information concerning
Furniture Brands or its business.
8 Miscellaneous. This Employment Agreement shall be binding
upon and shall inure to the benefit of Executive's heirs, executors,
administrators and legal representatives, and shall be binding upon
and inure to the benefit of Furniture Brands and its successors and
assigns. This Agreement shall supersede and stand in place of any and
all other agreements between Executive and Furniture Brands regarding
severance pay and/or any and all severance pay benefits pursuant to
any plan or practice of Furniture Brands. This Employment Agreement
shall take effect as of the day and year first above set forth, and
its validity, interpretation, construction and performance shall be
governed by the laws of the State of Missouri.
9. Indemnification. In the event that either party hereto is
required to pursue litigation against the other party to enforce his
or its rights hereunder, the prevailing party in any such litigation
shall be entitled to reimbursement of the costs and expenses of such
litigation, including attorney's fees.
10. Waivers. In consideration of the undertakings of
Furniture Brands set forth in this Agreement, Executive hereby
irrevocably waives and forever releases any and all claims and causes
of action of any nature whatsoever that Executive has or may have
against Furniture Brands or any of its officers, directors, employees
or agents arising out of the negotiation, execution, delivery or terms
of this Agreement, including, without limitation, any claims arising
under the Age Discrimination in Employment Act, 29 U.S.C. Section 21
et seq., and any state or local law relating to age discrimination.
11. Entire Agreement. This Agreement contains the entire
agreement of the parties with respect to its subject matter, and no
waiver, modification or change of any of its provisions shall be valid
unless in writing and signed by the party against whom such claimed
waiver, modification or change is sought to be enforced.
IN WITNESS WHEREOF, the parties hereto have each executed this
Agreement the date set forth below.
FURNITURE BRANDS INTERNATIONAL, INC.
By: X. X. Xxxxx
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Chairman of the Board
XXXXX X. XXXXXX
By: Xxxxx X. Xxxxxx
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