Exhibit 10.3
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EXECUTION COPY
FORM OF AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement"), dated as of April _, 2005,
by and between XXXXXXXX'X INC., a Delaware corporation (the "Company"), and
XXXX XXXXXX, an individual residing in the State of Florida (the "Executive").
W I T N E S S E T H :
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WHEREAS, the Executive is currently employed pursuant to an
Employment Agreement by and between the Company and the Executive dated July
6, 2004 (the "Prior Agreement");
WHEREAS, on January 14, 2005 the Company filed a voluntary petition
for relief under Chapter 11 of the United States Bankruptcy Code (the
"Bankruptcy") in the United States Bankruptcy Court for the Southern District
of Georgia, Savannah District (the "Bankruptcy Court");
WHEREAS, in conjunction with the Bankruptcy, the Company intends to
implement, upon approval of the Bankruptcy Court, a Key Employee Compensation
Program (the "KECP") pursuant to which the Executive will be entitled to
receive certain bonuses and severance benefits; and
WHEREAS, the Company and the Executive wish to amend the Employment
Agreement as set forth in this Amended and Restated Employment Agreement to
incorporate those payments and benefits under the KECP to which the Executive
is entitled;
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and for good and valuable consideration, the receipt of which
is hereby acknowledged, the parties hereto, each intending to be legally bound
hereby, agree as follows:
1. Employment. On the terms and subject to the conditions set forth
herein, the Company hereby agrees to employ the Executive as the Senior Vice
President - Stores Organization of the Company, and the Executive hereby
agrees to accept such employment, for the Employment Term (as defined in
Section 3). During the Employment Term, the Executive shall serve as the
Executive Vice President - Stores Organization of the Company and shall report
to the Chief Executive Officer of the Company and the Board of Directors of
the Company (the "Board"), and shall have such responsibilities, duties and
authority as are generally consistent and customary with the position of
Executive Vice President - Stores Organization including, but not limited to,
managing the retail stores network and merchandising functions of the Company,
as appropriate, subject to the oversight of the Chief Executive Officer and
the Board, and shall have such other powers and perform such other duties as
may from time to time be assigned to him by the Chief Executive Officer and
the Board. If requested, the Executive shall serve as an executive, officer
and/or director of the Company's subsidiaries without additional compensation.
2. Performance; Place of Employment. The Executive will serve the
Company faithfully and to the best of his ability and will devote his full
business time, energy, experience and talents to the business of the Company
and its subsidiaries and affiliates; provided, however, that it shall not be a
violation of this Agreement for the Executive to (a) manage his personal
investments, (b) with the prior consent of the Board (not to be unreasonably
withheld or conditioned) serve on for-profit corporate boards, other than
those of the Company and its subsidiaries, or, (c) with prior notice to the
Board, to serve on industry, civic, community, charitable, educational, or
religious boards so long, in the case of clause (b) and (c), as such service
does not interfere with the Executive's performance of his duties hereunder.
3. Employment Term/Prior Agreement. Subject to earlier termination
pursuant to Section 6, the term of employment of the Executive hereunder shall
begin on July [ ], 2004 (the "Commencement Date"), and shall continue through
the date which is two (2) years following the Commencement Date (the "Initial
Term"); provided, however, that upon the failure of the Company to give timely
notice of non-renewal, such term of employment shall be automatically extended
by an additional one (1) year beyond the end of the then-current term, unless,
at least one hundred twenty (120) days before the expiration of the Initial
Term, or one hundred twenty (120) days before any such subsequent anniversary
thereof, as the case may be, the Company gives notice to the Executive that
the Company does not desire to extend the term of this Agreement, in which
case the term of employment hereunder shall terminate as of the end of the
Initial Term or the end of the then-current one-year extension term, as
applicable (the term of employment hereunder, including any extensions, in
accordance with this Section 3, shall be referred to herein as the "Employment
Term"). From and after the date hereof, the terms of this Agreement shall
supersede in all respects the terms of any prior arrangement or agreement, if
any, dealing with the matters herein, including the Employment Agreement.
4. Compensation and Benefits.
(a) Base Salary. As compensation for his services hereunder and in
consideration of the Executive's other agreements hereunder, during the
Employment Term, the Company shall pay the Executive a base salary, payable in
equal installments in accordance with the Company's payroll procedures, at an
annual rate of Three Hundred Thousand Dollars ($300,000), subject to annual
review by the Chief Executive Officer of the Company (which amount shall not
be decreased except upon mutual consent of the Executive and the Company).
(b) Signing Bonus. In consideration of the Executive's agreements
hereunder, the Company shall pay the Executive a signing bonus of One Hundred
Thousand Dollars ($100,000), payable as follows: Twenty Thousand Dollars
($20,000) on the date of execution of this Agreement, and Twenty Thousand
Dollars ($20,000) on each of July 30, 2004, August 31, 2004, September 30,
2004 and October 29, 2004.
(c) Bonus; Stock Options.
(1) Annual Incentive Plan. During the Employment Term, the
Executive shall be entitled to participate in the Company's incentive bonus
plan, the terms and conditions of which shall be determined by the Board or a
committee thereof. Such incentive bonus (the "Incentive Bonus") will have a
target amount of forty percent (40%) of the Executive's annual Base Salary and
may be up to seventy-five percent (75%) of the Executive's annual Base Salary,
at the rate of Base Salary in effect in accordance with Section 4(a) during
the period with respect to which such bonus is payable, if all performance
targets are fully satisfied at the highest level; provided, however, that the
Incentive Bonus to which the Executive may otherwise become entitled for
calendar year 2004 shall be a minimum of the One Hundred Thousand Dollars
($100,000), separate and apart from the signing bonus in Section 4(b), and the
Incentive Bonus to which the Executive may otherwise become entitled for
calendar year 2005 shall vest on December 31, 2005 and be paid to the
Executive no later than March 15, 2006. In the event that the Executive's
employment is terminated by the Company without Cause or by the Executive for
Good Reason, then the Executive shall be entitled to receive a full Incentive
Bonus at the target amount payable at the time when annual incentive bonuses
are paid to other executives of the Company and payable only if target
performance goals are achieved. In the event that the Executive's employment
is terminated by reason of the Executive's death or Disability, then the
Executive (or his estate, as applicable) shall be entitled to receive a pro
rata portion of the Incentive Bonus at the target amount based on the number
of days the Executive was employed during the calendar year for which such
Incentive Bonus was to be earned payable at the time when annual incentive
bonuses are paid to other executives of the Company and payable only if target
performance goals are achieved.
(2) Equity Grants.
A. Initial Grant. The Executive shall also be entitled
to participate in the stock option plan established
by the Company, pursuant to which the Executive
shall receive options, granted on the date of
execution of this Agreement at the market price of
the Company's stock at the close of business on the
date immediately preceding execution of this
Agreement to purchase an aggregate of one hundred
thousand (100,000) shares of Class A Common Stock of
the Company, with twenty thousand (20,000) shares
vesting immediately and twenty thousand (20,000)
vesting annually, on the anniversary date of this
Agreement, over the next four (4) years
(collectively, the "Initial Grant").
B. Emergence Equity Grant. Upon the effective date of a
plan of reorganization under chapter 11 of the
United States Bankruptcy Code as approved by the
Bankruptcy Court of (the "Plan of Reorganization)
(the "Emergence"), the Executive shall be entitled
to receive a grant of stock options equal to 0.875%
of the total amount of New Xxxxxxxx'x Common Stock
(as defined the Company's Plan of Reorganization)
(the "Emergence Grant"). Subject to accelerated
vesting as described below, such Emergence Grant
shall vest and become exercisable as follows (i)
fifty percent (50%) of the stock options on the date
of Emergence (the "Emergence Date"), (ii)
twenty-five percent (25%) on the first anniversary
of the Emergence Date and (iii) twenty-five percent
(25%) on the second anniversary of the Emergence
Date. Notwithstanding the foregoing, upon the
issuance of the Emergence Grant, the Initial Grant
shall immediately expire.
C. Accelerated Vesting. All stock options held by the
Executive shall be accelerated and vest immediately
upon a Change of Control (as defined below), upon
the Executive's death or Disability, as hereinafter
defined, upon termination of employment by the
Company for other than Cause, as hereinafter
defined, or upon termination by the Executive for
Good Reason, as hereinafter defined. Upon such
cessation of the Executive's employment, the
Executive shall have until the later of (i) one
hundred twenty (120) days following the date of
termination of Executive's employment or (ii) the
second (2nd) anniversary of the Emergence Date, to
exercise or forfeit such fully vested option shares;
provided, however, that the Executive shall have not
less than one (1) year following the date of
termination of employment in the event such
termination of employment is as a result of the
Executive's death or Disability.
(3) Emergence Payments. Upon Emergence, the Executive shall
be entitled to receive a cash bonus equal to eighty-three percent (83%) of the
Executive's Base Salary, which payments shall become payable as follows (A)
fifty percent (50%) on the date of Emergence (the "Emergence Date"), (ii)
twenty-five percent (25%) on the six-month anniversary of the Emergence Date
and (iii) twenty-five percent (25%) on the one-year anniversary of the
Emergence Date.
(d) Retirement, Medical, Dental and Other Benefits. During the
Employment Term, the Executive shall, in accordance with the terms and
conditions of the applicable plan documents and all applicable laws, be
eligible to participate in the various retirement, medical, dental and other
employee benefit plans made available by the Company, from time to time, for
its senior executive officers.
(e) Vacation; Sick Leave. During the Employment Term, the Executive
shall be entitled to four (4) weeks of vacation per year, and to sick leave in
accordance with the Company's policies and practices with respect to its
senior executive officers.
(f) Expenses. The Executive shall be reimbursed by the Company for
all reasonable business expenses, including travel costs, actually incurred by
him in connection with the performance of his duties hereunder in accordance
with policies established by the Company from time to time and upon receipt by
the Company of appropriate documentation. In addition, the Company shall
reimburse the Executive for reasonable housing expenses and travel to and from
Savannah, Georgia and the Executive's primary residence in Orlando, Florida.
The Company further agrees that reasonable moving and relocation expenses as
incurred by the Executive will be paid by the Company.
(g) Indemnification; D&O Insurance. The Company shall indemnify the
Executive for any liability he incurs arising from his actions within the
scope and course of his employment hereunder in accordance with the form of
Indemnity Agreement to be executed herewith and to be applicable during the
term hereof and the Company's Certificate of Incorporation and By-laws,
provided that (i) the Executive conducted himself in good faith, and (ii) the
Executive reasonably believed that his actions were in the best interests of
the Company. During the Employment Term, the Company shall maintain a
directors' and officers' liability insurance policy covering the Executive in
an amount and on terms customary for similarly situated companies and with
coverage and on other terms reasonably determined by the Board.
(h) Legal Fees. The Company shall reimburse the Executive for
reasonable attorney's fees the Executive incurs in connection with the
negotiation, preparation and/or execution of this Agreement up to Seven
Thousand Five Hundred Dollars ($7,500), subject to the receipt by the Company
of a statement from such attorney including rates and hours. If it becomes
necessary for either party to file a lawsuit to enforce this Agreement, and if
a final judgment is rendered by the court in such a lawsuit, the
non-prevailing party shall pay the reasonable attorney's fees and costs
incurred by the prevailing party.
(i) Automobile. The Company shall pay to the Executive a car
allowance of Five Hundred Dollars ($500) per month and shall promptly
reimburse the Executive for any expenses incurred by the Executive to maintain
the car.
(j) Services Furnished. The Company shall furnish the Executive with
office space, secretarial and/or administrative assistance, office supplies,
support services and such other facilities and services as shall be suitable
to the Executive's position and adequate for the performance of his duties
hereunder.
5. Covenants of the Executive. The Executive acknowledges that in the
course of his employment with the Company he has and will become familiar with
the Company's and its subsidiaries' and affiliates' trade secrets and with
other confidential information concerning the Company and its subsidiaries and
affiliates, and that his services are of special, unique and extraordinary
value to the Company and its subsidiaries and affiliates. Therefore, the
Company and the Executive mutually agree that it is in the interest of both
parties for the Executive to enter into the restrictive covenants set forth in
this Section 5 and that such restrictions and covenants are reasonable given
the nature of the Executive's duties and the nature of the Company's business.
(a) Noncompetition. During the Employment Term and for eighteen (18)
months thereafter following termination of the Employment Term, the Executive
shall not, within any jurisdiction or marketing area in which the Company or
any of its subsidiaries or affiliates is doing business during the Executive's
employment or as of the date of termination (as applicable), directly or
indirectly, own, manage, operate, control, be employed by or participate in
the ownership, management, operation or control of, or be connected in any
manner with, any business substantially of the type and character engaged in
or competitive with that conducted by the Company or any of its subsidiaries
or affiliates; provided, that the Executive's ownership of securities of up to
two percent (2%) or less of any class of securities of a public company shall
not, by itself, be considered to be competition with the Company or any of its
subsidiaries or affiliates.
(b) Nonsolicitation. During the Employment Term and for twelve (12)
months following termination of the Employment Term, the Executive shall not,
directly or indirectly, (i) employ, solicit for employment or otherwise
contract for the services of any individual who is or was (within one hundred
eighty (180) days of the termination date) an employee of the Company or any
of its subsidiaries or affiliates; (ii) otherwise induce or attempt to induce
any employee of the Company or its subsidiaries or affiliates to leave the
employ of the Company or such subsidiary or affiliate, or in any way knowingly
interfere with the relationship between the Company or any such subsidiary or
affiliate and any employee respectively thereof; or (iii) solicit or attempt
to solicit any client, customer, supplier, licensee or other business relation
of the Company or any subsidiary or affiliate of the Company or induce any
such client, customer, supplier, licensee or business relation to cease doing
business with the Company or such subsidiary or affiliate, or interfere in any
way with the relationship between any such client, customer, supplier,
licensee or business relation and the Company or any subsidiary or affiliate
thereof.
(c) Nondisclosure; Inventions. For the Employment Term and
thereafter, (i) the Executive shall not divulge, transmit or otherwise
disclose (except as legally compelled by court order, and then only to the
extent required, after prompt notice to the Board of any such order), directly
or indirectly, other than in the regular and proper course of business of the
Company and its subsidiaries, any customer lists, trade secrets or other
confidential knowledge or information with respect to the operations or
finances of the Company or any of its subsidiaries or affiliates or with
respect to confidential or secret processes, services, techniques, customers
or plans with respect to the Company or its subsidiaries or affiliates (all of
the foregoing collectively hereinafter referred to as, "Confidential
Information"), and (ii) the Executive will not use, directly or indirectly,
any Confidential Information for the benefit of anyone other than the Company
and its subsidiaries or affiliates; provided, however, that the Executive has
no obligation, express or implied, to refrain from using or disclosing to
others any such knowledge or information which is or hereafter shall become
available to the general public other than through disclosure by the
Executive. All Confidential Information, new processes, techniques, know-how,
methods, inventions, plans, products, patents and devices developed, made or
invented by the Executive, alone or with others, while an employee of the
Company which are related to the business of the Company and its subsidiaries
and affiliates shall be and become the sole property of the Company, unless
released in writing by the Board, and the Executive hereby assigns any and all
rights therein or thereto to the Company.
(d) Nondisparagement. During the Employment Term and thereafter,
neither the Company nor the Executive shall take any action to disparage or
publicly criticize one another (including their respective affiliates,
employees, officers, directors or owners). Nothing contained in this Section
5(d) shall preclude the Executive from enforcing his rights under this
Agreement.
(e) Return of Company Property. All Confidential Information, files,
records, correspondence, memoranda, notes or other documents (including,
without limitation, those in computer-readable form) or property relating or
belonging to the Company or its subsidiaries or affiliates, whether prepared
by the Executive or otherwise coming into his possession in the course of the
performance of his services under this Agreement, shall be the exclusive
property of the Company and shall be delivered to the Company, and not
retained by the Executive (including, without limitation, any copies thereof),
promptly upon request by the Company and, in any event, promptly upon
termination of the Employment Term.
(f) Enforcement. The Executive acknowledges that a breach of his
covenants contained in this Section 5 may cause irreparable damage to the
Company and its subsidiaries and affiliates, the exact amount of which would
be difficult to ascertain, and that the remedies at law for any such breach or
threatened breach would be inadequate. Accordingly, the Executive agrees that
if he breaches or threatens to breach any of the covenants contained in this
Section 5, in addition to any other remedy which may be available at law, the
Company and its subsidiaries and affiliates shall be entitled to specific
performance and injunctive relief to prevent the breach or any threatened
breach thereof without bond or other security or a showing that monetary
damages will not provide an adequate remedy.
(g) Scope of Covenants. The Company and the Executive further
acknowledge that the time, scope, geographic area and other provisions of this
Section 5 have been specifically negotiated by sophisticated commercial
parties and agree that they consider the restrictions and covenants contained
in this Section 5 to be reasonable and necessary for the protection of the
interests of the Company and its subsidiaries and affiliates, but if any such
restriction or covenant shall be held by any court of competent jurisdiction
to be void but would be valid if deleted in part or reduced in application,
such restriction or covenant shall apply with such deletion or modification as
may be necessary to make it valid and enforceable. The restrictions and
covenants contained in each paragraph of this Section 5 shall be construed as
separate and individual restrictions and covenants and shall each be capable
of being severed without prejudice to the other restrictions and covenants or
to the remaining provisions of this Agreement.
6. Termination. The employment of the Executive hereunder shall
automatically terminate at the end of the Employment Term. The employment of
the Executive hereunder and the Employment Term may also be terminated at any
time by the Company with or without Cause. For purposes of this Agreement,
"Cause" shall mean: (i) embezzlement, theft or misappropriation by the
Executive of any property of the Company or its subsidiaries or affiliates;
(ii) any breach by the Executive of the Executive's covenants under Section 5;
(iii) any breach by the Executive of any other material provision of this
Agreement which breach is not cured, to the extent susceptible to cure, within
fourteen (14) days after the Company has given notice to the Executive
describing such breach; (iv) misconduct in the discharge of the Executive's
duties (after receiving written notice from the Board specifying the manner in
which he is alleged to have failed properly to discharge his duties and having
had the opportunity to cure such failure within thirty (30) days from receipt
of such notice); (v) any act by the Executive constituting a felony or
otherwise involving theft, fraud, dishonesty or misrepresentation; (vi) the
Executive's breach of his fiduciary obligations to the Company or its parent
or subsidiaries; or (vii) any chemical or alcohol dependence by the Executive
which adversely affects the performance of his duties and responsibilities to
the Company or its parent or subsidiaries. If, after the expiration of any
applicable cure period, the Company asserts that grounds exist for termination
with Cause, it shall so notify the Executive and within fifteen (15) days
shall afford the Executive a hearing before the Board regarding any disputed
facts. The Board shall make a determination regarding the existence of "Cause"
upon completion of such hearing; provided, however, that any determination
that Cause exists shall require the affirmative vote of two-thirds of the
Directors other than the Executive. If any such determination remains pending
after such fifteen (15) day period, the Company shall be entitled to suspend
(with pay and benefits) the Executive's duties pending determination of the
existence of Cause. Any determination or decision as to "Cause" must be made
in good faith and must be reasonable given the relevant facts and
circumstances. The employment of the Executive may also be terminated at any
time by the Executive by notice of resignation delivered to the Company not
less than ninety (90) days prior to the effective date of such resignation.
7. Severance.
(a) If the Executive's employment hereunder is terminated during the
Employment Term (1) by the Company other than for Cause and not due to
disability as determined in good faith and consistent with the Company's long
term disability policy ("Disability") or death, (2) by the Executive for Good
Reason (as defined in paragraph (b) of this Section 7), or (3) upon
non-renewal by the Company, the Executive shall be entitled to receive as
severance, and the Company shall pay, an amount equal to two (2) times the sum
of (x) the Executive's then current annual salary and (y) the greater of (i)
the Executive's most recent annual Incentive Bonus and (ii) the arithmetic
mean of the Executive's annual Incentive Bonus for the two (2) most recent
years, payable in a lump sum on the eighth day after the date the Executive
signs the release referenced below in favor of the Company and its
subsidiaries, provided, however, that if the Company liquidates its business
operations in the chapter 11 cases pending in the Bankruptcy Court at any time
prior to December 31, 2006, then the Executive shall be entitled to receive a
severance payment equal only to two (2) times Base Salary. In addition, in the
event that the Executive's employment is terminated other than for Cause or
death, or in the event that the Executive terminates his employment for Good
Reason, as defined herein, the Executive shall be entitled to continued
healthcare coverage equivalent to the coverage received while employed by the
Company, for a period of one (1) year from the date of termination or until
the Executive receives coverage from a subsequent employer, whichever event
occurs sooner; provided, however, that, thereafter, he shall be entitled to
elect to continue his health benefits pursuant to Section 4980B of the
Internal Revenue Code of 1986, as amended ("COBRA"). If the Executive's
employment is terminated otherwise than as described in this Section 7, the
Executive shall not be entitled to any severance, termination pay or similar
compensation or benefits. As a condition of receiving any severance for which
he otherwise qualifies under this Section 7, the Executive agrees to execute,
deliver and not revoke (within the time period permitted by applicable law) a
general release of the Company and its subsidiaries and affiliates and their
respective officers, directors, employees and owners from any and all claims,
obligations and liabilities of any kind whatsoever arising from or in
connection with the Executive's employment or termination of employment with
the Company or this Agreement (including, without limitation, civil rights
claims), in such form as is attached hereto as Exhibit A. The Executive
acknowledges and agrees that, except as specifically described in this Section
7, all of the Executive's rights to any compensation (other than base salary e
earned through the date of termination of employment), benefits, bonuses or
severance from the Company or its subsidiaries or affiliates after termination
of the Employment Term shall cease upon such termination.
(b) For purposes of this Agreement, "Good Reason" shall mean the
occurrence, without the Executive's consent, of any of the following events
(without the Executive's express written consent): (i) a reduction by the
Company in the Executive's base salary stated in Section 4(a) or a reduction
in the target bonus stated in Section 4(c), (ii) a diminution in the
Executive's duties with respect to the Company, or (iii) any material breach
of this Agreement by the Company. For the avoidance of doubt, termination by
the Executive for Good Reason is conditioned on the Executive's delivery of a
written notice of resignation delivered to the Company not less than thirty
(30) days prior to the effective date of such resignation, as set forth in
Section 6.
8. Change In Control.
(a) Within twelve (12) months after a Change in Control (as defined
in paragraph (b) of this Section 8), the Company may, on ninety (90) business
days' prior notice to the Executive, terminate the Employment Term. In such
circumstances, except where the Company has previously issued a notice of
termination for Cause pursuant to Section 7 or the Employment Term is
terminated by reason of the Executive's death or disability, the Company
shall: (i) pay to the Executive an amount equal to two hundred percent (200%)
of the Executive's last year's base salary and annual incentive bonus as in
effect on the date of the Executive's termination of employment (payable, at
the Company's option, in a lump-sum). The payments set forth in this Section 8
are hereinafter referred to as the "Change in Control Severance." Payment of
the Change in Control Severance shall be subject to the following conditions:
(i) as a condition precedent to any such Change in Control Severance, the
Executive agrees to execute, deliver and not revoke (within the time period
permitted by applicable law) a general release of the Company and its
subsidiaries and affiliates and their respective officers, directors,
employees and owners in the form of Exhibit A hereto.
(b) For purposes of this Agreement, "Change in Control" shall mean:
(i) the acquisition by any person or group of persons (as such term is defined
in Rule 13d-5(b)(1) promulgated under the Securities Exchange Act of 1934, as
amended to date) of shares carrying more than fifty percent (50%) of the
voting rights at general meetings of the Company, (ii) the shareholders of the
Company approve a merger or consolidation of the Company with any other
company, other than (x) a merger or consolidation which actually results in
the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than fifty percent (50%)
of the combined voting power of the voting securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation,
or (y) a merger or consolidation effected to implement a recapitalization of
the Company (or similar transaction) in which no person or group of persons
acquires more than fifty percent (50%) of the combined voting power of the
Company's then outstanding securities, or (iii) the shareholders of the
Company approve a plan of complete liquidation of the Company or an
arrangement for the sale or disposition of the Company or all or substantially
all of the Company's overall assets or any transaction having a similar
effect; provided, that no Change of Control shall be deemed to result from any
corporate changes to the Company's certificate of incorporation or by-laws at
the Company not resulting from one of the events specified above or from any
change in the relative rights and powers of one or more classes of the
Company's capital stock whether effected by contract or otherwise, in each
case to the extent that they result from or are related to the settlement of
any criminal or civil litigation or do not result in the occurrence of any of
the events specified in clauses (i) through (iii) of this definition. For the
avoidance of doubt, the consummation of a Plan of Reorganization and the
transactions contemplated thereby (including, without limitation, changes in
ownership and voting rights) shall not be deemed a Change in Control for
purposes of this Agreement.
(c) The amounts payable pursuant to this Section 8 shall be in lieu
of any other severance payments (including, but not limited to that provided
for in Section 7 above) to which the Executive may be entitled on termination
of the Employment Term, and the Executive acknowledges that he shall not,
thereupon, be entitled to payment of severance pursuant to the Company's
severance plans, policies or practices in effect on the date of this Agreement
or in effect from time to time. Notwithstanding the foregoing, all unvested
options shall vest and any restrictions on restricted stock, if applicable,
shall lapse upon a Change of Control.
(d) To the extent that the amount of any payments under this Section
8, or any other payment in the nature of compensation (within the meaning of
Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the
"Code")), to or for the benefit of the Executive, whether paid or payable
pursuant to this Agreement or otherwise by the Company (the "Payments"), are
subject to the excise tax provisions of Section 4999 of the Code, the Company
shall pay the Executive a tax equalization payment ("Tax Equalization
Payment") in accordance with this Section 8(d), in addition to the payments
otherwise payable under this Section 8. The Tax Equalization Payment shall be
in an amount that when added to the Payments will place the Executive in the
same after-tax (including, without limitation, income taxes, excise taxes, and
any interest and penalties imposed with respect thereto) position as if the
excise tax penalty of Section 4999 of the Code, did not apply to any of the
Payments. The amount of this Tax Equalization Payment shall be determined by
the Company's independent accountants and shall be remitted to the applicable
United States federal, state and local tax jurisdictions. All fees of the
accounting firm for such determination shall be borne by the Company. The
Executive shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by the Company
of a Tax Equalization Payment (as an additional Tax Equalization Payment). The
Executive shall cooperate with the Company to determine whether, and how, to
contest such claim. The Company shall bear and pay directly all costs and
expenses (including additional taxes, interest and penalties) incurred in
connection with such claim and/or contest and shall indemnify and hold the
Executive harmless, on an after-tax basis, for excise tax or income tax
(including interest and penalties with respect thereto) imposed as a result of
such claim and/or contest and payment of costs and expenses.
9. Notice. Any notices required or permitted hereunder shall be in
writing and shall be deemed to have been given when personally delivered or
when mailed, certified or registered mail, or sent by reputable overnight
courier, postage prepaid, to the addresses set forth as follows:
If to the Company: Xxxxxxxx'x Inc.
000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: General Counsel
With copies (which shall
not constitute notice) to: White & Case LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: X. Xxxx Xxxxxxxxx, Esq.
If to the Executive: Xxxx Xxxxxx
Xxxxxxxx'x Inc.
000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxx 00000
With copies (which shall
not constitute notice) to: [Xx. Xxxxxx' Counsel]
or to such other address as shall be furnished in writing by either party to
the other party; provided that such notice or change in address shall be
effective only when actually received by the other party.
10. General.
(a) Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Georgia applicable to contracts executed and to be performed entirely within
said State.
(b) Jurisdiction. Any judicial proceeding brought against the
Executive regarding any dispute arising out of this Agreement or any matter
related hereto may be brought in the courts of the State of Georgia, or in any
United States District Court sitting in Georgia, and, by execution and
delivery of this Agreement, the Executive accepts the exclusive jurisdiction
of such courts. The Executive hereby agrees that service of any process,
summons, notice or document by U.S. registered mail addressed to the Executive
shall be effective service of process for any action, suit or proceeding
brought against the Executive in any such court. The Executive hereby
irrevocably and unconditionally waives any objection to the laying of venue of
any such suit, action or proceeding brought in any such court and any claim
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum. The Executive agrees that a final judgment
in any such suit, action or proceeding brought in any such court shall be
conclusive and binding upon the Executive and may be enforced in any other
courts to whose jurisdiction the Executive is or may be subject, by suit upon
such judgment.
(c) Construction and Severability. If any provision of this Agreement
shall be held invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired, and the parties undertake
to implement all efforts which are necessary, desirable and sufficient to
amend, supplement or substitute all and any such invalid, illegal or
unenforceable provisions with enforceable and valid provisions which would
produce as nearly as may be possible the result previously intended by the
parties without renegotiation of any material terms and conditions stipulated
herein.
(d) Assignability. The Executive may not assign his interest in or
delegate his duties under this Agreement. This Agreement is for the employment
of the Executive, personally, and the services to be rendered by him under
this Agreement must be rendered by him and no other person. This Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
Company and its successors and assigns. Without limiting the foregoing and
notwithstanding anything else in this Agreement to the contrary, the Company
may assign this Agreement to, and all rights hereunder shall inure to the
benefit of, any subsidiary of the Company or any person, firm or corporation
resulting from the reorganization of the Company or succeeding to the business
or assets of the Company by purchase, merger, consolidation or otherwise.
(e) Warranty by the Executive. The Executive represents and warrants
to the Company that the Executive is not subject to any contract, agreement,
judgment, order or decree of any kind, or any restrictive agreement of any
character, that restricts the Executive's ability to perform his obligations
under this Agreement or that would be breached by the Executive upon his
performance of his duties pursuant to this Agreement.
(f) Compliance with Rules and Policies. The Executive shall perform
all services in accordance with the policies, procedures and rules established
by the Company and the Board. In addition, the Executive shall comply with all
laws, rules and regulations that are generally applicable to the Company or
its subsidiaries and their respective employees, directors and officers.
(g) Withholding Taxes. All amounts payable hereunder shall be subject
to the withholding of all applicable taxes and deductions required by any
applicable law.
(h) Entire Agreement; Modification. This Agreement, together with the
KECP which is incorporated herein by reference, constitute the entire
agreement of the parties hereto with respect to the subject matter hereof,
supersedes all prior agreements and undertakings, both written and oral, and
may not be modified or amended in any way except in writing by the parties
hereto. In the event that the terms of the KECP as they relate to the
Executive conflict with the terms of this Agreement, then the terms of the
KCEP shall govern.
(i) Duration. Notwithstanding the Employment Term hereunder, this
Agreement shall continue for so long as any obligations remain under this
Agreement.
(j) Survival. The covenants set forth in Section 5 of this Agreement
shall survive and shall continue to be binding upon the Executive
notwithstanding the termination of this Agreement for any reason whatsoever.
(k) Waiver. No waiver by either party hereto of any of the
requirements imposed by this Agreement on, or any breach of any condition or
provision of this Agreement to be performed by, the other party shall be
deemed a waiver of a similar or dissimilar requirement, provision or condition
of this Agreement at the same or any prior or subsequent time. Any such waiver
shall be express and in writing, and there shall be no waiver by conduct.
Pursuit by either party of any available remedy, either in law or equity, or
any action of any kind, does not constitute waiver of any other remedy or
action. Such remedies are cumulative and not exclusive.
(l) Counterparts. This Agreement may be executed in two or more
counterparts, all of which taken together shall constitute one instrument.
(m) Section References. The words Section and paragraph herein shall
refer to provisions of this Agreement unless expressly indicated otherwise.
* * *
IN WITNESS WHEREOF, the parties hereto, intending to be legally
bound, have hereunto executed this Agreement as of the day and year first
written above.
XXXXXXXX'X INC.
Date: April __, 2005 By:
----------------------------- ---------------------------
Name: Xxxxx Xxxxxxx
Title: Chairman
Date: April __, 2005 By:
---------------------------- ---------------------------
Xxxx Xxxxxx
Exhibit A
GENERAL RELEASE
I, XXXX XXXXXX, for myself, my successors, administrators, heirs and
assigns, hereby fully release, waive and forever discharge XXXXXXXX'X INC. and
each of its predecessors, successors, subsidiaries and affiliated and parent
companies (collectively, the "Company"), and, in such capacities, all of the
shareholders, directors, officers, attorneys, employees, assigns and owners,
whether past, present or future, respectively, of, and any other person or
entity connected with, any of the foregoing (the "Released Parties") from any
and all administrative claims, actions, suits, debts, demands, damages,
claims, judgments, and/or liabilities of any nature, including costs,
attorneys' fees and expenses, whether known or unknown, arising out of my
employment with or separation from the Company, such as (by way of example
only) any claims for compensation, bonus, severance, or other benefits, claims
for breach of contract, wrongful discharge, workers' compensation benefits,
tort claims (e.g., infliction of emotional distress, defamation, negligence,
privacy, fraud, misrepresentation), claims under federal, state, and local
wage and hour laws and wage payment laws, claims for reimbursements; and/or
claims under the following, in each case as amended: (1) Title VII of the
Civil Rights Act of 1964 (race, color, religion, sex and national origin
discrimination); (2) 42 U.S.C. ss. 1981 (discrimination); (3) 29 U.S.C. ss.
206(d)(1) (equal pay); (4) Executive Order 11246 (race, color, religion, sex
and national origin discrimination); (5) Age Discrimination in Employment Act
("ADEA") and Executive Order 11141 (age discrimination); (6) the Americans
with Disabilities Act of 1990, 42 U.S.C. ss. 12101, et seq.; (7) the Family
and Medical Leave Act; (8) the Immigration Reform and Control Act; (9) the
Employee Retirement Income Security Act of 1974, 29 U.S.C. ss. 1001 et seq.;
(10) the Vietnam Era Veterans Readjustment Assistance Act; (11) xx.xx. 503-504
of the Rehabilitation Act of 1973 (handicap discrimination); and/or (12) any
other claims under any other state, federal, local, non-U.S. law, statute,
regulation, or common law or claims at equity relating to conduct or events
occurring prior to the date on which this General Release is fully executed,
with regard to my employment with the Company and the termination thereof.
This General Release shall not extend to or include any matter,
occurrence or event occurring after the execution of this General Release or
the following: (a) any rights or obligations under applicable law which cannot
be waived or released pursuant to an agreement, (b) any rights to payments or
benefits under Sections 7 and 8 of the Employment Agreement, dated as of July
[_], 2004, by and between the Company and myself (as amended or supplemented
through the date hereof, the "Agreement") to which I am entitled, (c) my
rights of indemnification and directors and officers liability insurance
coverage to which I may be entitled with regard to my service as an officer or
director of the Company, including, without limitation, as set forth in
Section 4(g) of the Agreement and in my Indemnification Agreement with the
Company; (d) my rights with regard to accrued benefits under any employee
benefit plan, policy or arrangement maintained by the Company or under COBRA;
(e) my rights under the provisions of the Agreement that are intended to
survive my termination of employment; and (f) my rights as a stockholder. I
represent and warrant that, as of the date of my execution of this General
Release, I have not assigned or transferred any claims of any nature I would
otherwise have against the Company, its successors or assigns.
By signing this General Release, I acknowledge that:
(i) I have read and fully understand the terms of this General
Release and have had the opportunity to negotiate its terms;
(ii) I have been advised and urged to consult with my attorneys
concerning the terms of this General Release, and that I have done so to the
extent I deem necessary;
(iii) I have agreed to this General Release knowingly and
voluntarily;
(iv) I have been given twenty-one (21) days to consider this General
Release, and acknowledge that in the event that I execute this General Release
prior to the expiration of the twenty-one (21) day period, I hereby waive the
balance of said period;
(v) I will have seven (7) days following the execution of this
General Release to revoke this General Release and this General Release shall
not become effective or enforceable until the revocation period has expired.
Any revocation within this seven (7) day period must be submitted in writing
and personally delivered, or mailed to [Name, Address] and postmarked, within
seven (7) days of my execution of this General Release. No payments or
benefits provided for in Sections 7 and 8 of the Agreement shall be paid or
provided until after the seven (7) day period has expired and the General
Release has become effective. If this General Release is revoked by me then I
shall forfeit the payments and benefits set forth in Sections 7 and 8 of the
Agreement, and the Company shall not be required to provide any such payment
or other consideration; and
(vi) I have agreed that no provision of this General Release may be
modified, changed, waived or discharged unless such waiver, modification,
change or discharge is agreed to in writing and signed by the Company and me.
------------------------------
XXXX XXXXXX
Dated: ______________________
Sworn to before me this
day of , 20__.
___________________________
Notary Public
