EXHIBIT 10.8 (d)
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made as of January 1, 2002, between Xx. Xxxx Xxxxxxxx, (the
"Employee") and American Woodmark Corporation, a Virginia corporation (the
"Company").
WHEREAS, the Company desires to assure that it will have the benefit of the
continued service and experience of the Employee, who is an integral part of the
Company's senior management, and the Employee is willing to enter into an
agreement to such end upon the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
herein contained, the parties agree as follows:
1. Employment. The Company hereby employs the Employee and the Employee
hereby accepts employment upon and agrees to the terms and conditions set forth
herein.
2. Term. The term of employment under this Agreement (the "Term") shall
commence upon execution of this Agreement by both parties and end on December
31, 2003; provided, however, that beginning on January 1, 2003, and each January
1 thereafter, the Term of this Agreement shall automatically be extended for one
additional calendar year unless, on or before November 1 of the preceding year,
either party gives notice that employment under this Agreement will not be so
extended; and further provided that if a Change of Control (as defined below)
occurs during the original or extended term of this Agreement, this Agreement
shall
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continue in effect for a period of 24 months beyond the month in which the
Change of Control occurred.
Notwithstanding the foregoing, as provided in Section 7(c), this Agreement
shall terminate immediately upon the Employee's death, disability or retirement,
or if the Employee voluntarily terminates his employment under circumstances to
which Section 7(d) does not apply.
3. Compensation.
a. Salary. During the Employee's employment hereunder, the Company
shall pay the Employee for all services rendered by the Employee a base salary
at an annual rate of at least $249,952, with upward annual adjustments as the
Company shall deem appropriate from time to time and as approved according to
the general practices of and under the authority levels required by the Company.
Such salary shall be payable to the Employee in accordance with the Company's
usual payroll practices for salaried employees.
b. Annual Cash Bonus. In addition to base salary, the Employee shall
be eligible to participate in the Company's annual incentive program with a
bonus opportunity of between 0% and 100% of the Employee's base salary. The
actual amount of such bonus for any fiscal year shall be related to the
achievement of certain performance objectives to be set at the beginning of each
fiscal year by the Board of Directors of the Company (the "Board"). Nothing in
this Agreement, however, shall be construed as a guarantee of an annual payment
of the annual cash bonus.
c. Other Executive Compensation Benefits. The Employee shall also be
covered by any other executive compensation policies, benefits, plans, or
programs as are
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afforded generally by the Company from time to time to its senior personnel,
including but not limited to grants of stock options and shareholder value units
and participation in the American Woodmark Corporation Pension Restoration Plan.
Nothing in this Agreement, however, shall be construed as a guarantee that the
Board or the Compensation Committee of the Board (the "Committee") will approve
any level of such benefits that are at the sole discretion of the Board or the
Committee.
d. Other Salaried Benefits. The Employee shall also be covered by any
employee benefit plans, policies, or programs as are generally available from
time to time to other salaried employees of the Company.
4. Duties. The Employee shall continue to perform his duties as Senior
Vice President, Finance and Chief Financial Officer of the Company and shall
faithfully and to the best of his ability perform such duties and
responsibilities as may be reasonably assigned by the Board.
5. Extent of Services. During the Employee's employment hereunder, the
Company expects and the Employee agrees that the Employee shall devote
sufficient time, attention and energy to the business of the Company so as to
adequately fulfill his assigned duties and responsibilities. Furthermore, the
Company and the Employee agree that the business of the Company shall take
reasonable priority over any other active business engaged in by the Employee.
6. Restrictive Covenants.
a. Non-competition Restriction. Except with the prior written consent
of the Company, the Employee shall not, either during his employment hereunder
or for the period of
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time after termination of his employment hereunder during which the Employee
accepts severance payments pursuant to Section 7(b) (if applicable), directly or
indirectly manage, operate, control, be employed by, participate in, consult
with, render services to, or be connected in any manner with the management,
operation, ownership or control of any business or venture in competition in the
United States with the business of the Company. For purposes of this Section
6(a), a business or venture shall be deemed to be in competition with the
business of the Company if that business or venture or any of its affiliates
manufactures, distributes, or otherwise engages in the design, sale, or
transportation of cabinets for residential use, including but not limited to,
such cabinet products intended for primary use in the kitchen or bathroom.
Nothing in this Section 6(a), however, shall prohibit the Employee from owning
securities of the Company or from owning as an inactive investor up to 5% of the
outstanding voting securities of any issuer which is listed on the New York or
American Stock Exchange or as to which trading is reported or quoted on the
NASDAQ system. If the Employee elects to directly or indirectly manage, operate,
control, be employed by, participate in, consult with, render services to, or be
connected in any manner with the management, operation, ownership or control of
any business or venture which is in competition in the United States with the
business of the Company, the Employee acknowledges that the Company is entitled
to immediately terminate any and all severance payments being made pursuant to
Section 7(b), if any, and other benefits payable under this Agreement as a
result of the Employee's termination of employment under the conditions set
forth in Section 7(b).
b. Non-solicitation Agreement. Except with the prior written consent
of the Company, the Employee shall not directly or indirectly hire or employ in
any capacity or solicit
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the employment of or offer employment to or entice away or in any other manner
persuade or attempt to persuade any person employed by the Company or any of its
subsidiaries to leave the employ of any of them. This Agreement shall remain in
full force and effect for a period of 18 months after the end of the Term.
c. Confidential Information. The Employee further agrees to keep
confidential, and not to use for his personal benefit or for any other person's
benefit, any and all proprietary information received by the Employee relating
to inventions, products, production methods, financial matters, sources of
supply, markets, marketing methods and customers of the Company in existence on
the date hereof or developed by or for the Company during the Term. This Section
6(c) shall remain in full force and effect after the Term without limit in point
of time, but shall cease to apply to information that legitimately comes into
the public domain.
d. Specific Enforcement. It is agreed and understood by the parties
hereto that, in view of the nature of the business of the Company, the
restrictions in Sections 6(a), (b) and (c) above are reasonable and necessary to
protect the legitimate interests of the Company, monetary damages alone are not
an adequate remedy for any breach of such provisions, and any violation thereof
would result in irreparable injuries to the Company. The Employee therefore
acknowledges that, in the event of his violation of any of such restrictions,
the Company shall be entitled to obtain from any court of competent jurisdiction
preliminary and permanent injunctive relief as well as damages and 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
or remedies to which the Company may be entitled.
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e. Severability and Extension. If the period of time or the area
specified in Section 7(a) above is determined to be unreasonable in any
proceeding, such period shall be reduced by such number of months or the area
shall be reduced by the elimination of such portion thereof, or both, so that
such restrictions may be enforced for such time and in such area as is
determined to be reasonable. If the Employee violates any of the restrictions
contained in Section 7(a) above, the restrictive period shall not run in favor
of the Employee from the time of the commencement of any such violation until
such time as such violation shall cease.
7. Termination of Employment and Severance Payments.
a. Termination for Cause. During the Term, the Company may terminate
the Employee's employment under this Agreement at any time for Cause (as
hereinafter defined) upon written notice specifying the Cause and the date of
termination. Payments under this Agreement shall cease as of the date of
termination for Cause. For purposes of this Agreement, "Cause" means neglect of
duty which is not corrected after 90 days' written notice thereof; misconduct,
malfeasance, fraud, or dishonesty which materially and adversely affects the
Company or its reputation in the industry; or the conviction for, or the
entering of a plea of Nolo Contendere to, a felony or a crime involving moral
turpitude.
b. Termination without Cause. During the Term, the Company may
terminate the Employee's employment under this Agreement at any time for any
reason other than Cause upon written notice specifying the date of termination.
If on an effective date that is during the Term, the Company terminates the
Employee's employment for reasons other than Cause (which includes but is not
limited to termination by the Company for what the Company believes to be Cause
when it is ultimately determined that the Employee was terminated without
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Cause), then the Company shall pay the Employee severance payments equal to his
base salary for a period of 18 months. For purposes of the preceding sentence,
the Employee's base salary shall be equal to the greater of (i) the base salary
in effect on the date of termination or (ii) the Employee's highest base salary
rate in effect during the Term of this Agreement. Severance payments shall be
made in accordance with the Company's usual payroll practices for salaried
employees over a period consistent with the period of severance as defined
above.
c. Termination in Event of Death, Disability, Retirement or Voluntary
Quit. If the Employee dies, becomes disabled, or retires during the Term, or if
the Employee voluntarily terminates his employment during the Term under
circumstances to which Section 7(d) does not apply, his employment under this
Agreement shall terminate immediately and payment of his base salary hereunder
shall cease as of the date of termination; provided, however, that the Company
shall remain liable for payment of any compensation owing but not paid as of the
date of termination for services rendered before termination of employment. For
purposes of this Agreement, the Employee shall be deemed to be disabled if the
Company determines, with the assistance of independent experts selected by the
Company, that the Employee is unable to perform his duties hereunder for any
period of three consecutive months or for six months in any twelve-month period.
d. Termination on Change of Control. By delivering 15 days' written
notice to the Company, the Employee may terminate his employment under this
Agreement for any reason at any time within two years after a Change of Control.
For purposes of this Agreement, "Change of Control" means an event described in
(i), (ii), (iii), or (iv):
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(i) The acquisition by a Group of Beneficial Ownership of 20% or more
of the Stock or the Voting Power of the Company, but excluding for this
purpose: (A) any acquisition of Stock by the Company (or a subsidiary), or
an employee benefit plan of the Company; (B) any acquisition of Stock by
management employees of the Company; or (C) the ownership of Stock by a
Group that owns 10% or more of the Stock or Voting Power of the Company on
the date of this Agreement; provided, however, that the acquisition of
additional Stock by any such Group other than management employees in an
amount greater than 5% of the then outstanding Stock shall not be excluded
and shall constitute a Change of Control.
(ii) Individuals who constitute the Board of Directors of the Company
on the date of this Agreement (the "Incumbent Board") cease to constitute
at least a majority of the Board of Directors of the Company, provided that
any director whose nomination was approved by a majority of the Incumbent
Board shall be considered a member of the Incumbent Board unless such
individual's initial assumption of office is in connection with an actual
or threatened election contest.
(iii) Approval by the shareholders of the Company of a reorganization,
merger or consolidation, in each case, in which the owners of 100% of the
Stock or Voting Power of the Company do not, following such reorganization,
merger or consolidation, beneficially own, directly or indirectly, more
than 50% of the Stock or Voting Power of the corporation resulting from
such reorganization, merger or consolidation.
(iv) A complete liquidation or dissolution of the Company or the sale
or other disposition of all or substantially all of the assets of the
Company.
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(v) For purposes of this Agreement, "Group" means any individual,
entity or group within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Act"); "Beneficial
Ownership" has the meaning in Rule 13d-3 promulgated under the Act; "Stock"
means the then outstanding shares of common stock of the Company; and
"Voting Power" means the combined voting power of the outstanding voting
securities entitled to vote generally in the election of directors.
x. Xxxxxxxxx Payments. If the Employee terminates his employment
within two years after a Change of Control pursuant to Section 7(d), or if the
Company terminates the Employee's employment for any reason other than Cause (as
defined in Section 7(a)) either within three months before or within two years
after a Change of Control, the Employee shall be entitled to a severance payment
under this Section 7(e) equal to 2.99 times the sum of (i) the Employee's annual
base salary in effect at the termination of employment or, if greater, the
Employee's largest annual base salary rate in effect during the term of this
Agreement, plus (ii) an amount equal to the greater of the average of the
bonuses paid to the Employee for the three fiscal years preceding the year in
which employment is terminated or 60% of the maximum eligible annual cash bonus
for the year of termination. This severance payment shall be made to the
Employee in a single lump sum within 10 business days of the date of the
Employee's termination of employment. Notwithstanding the preceding sentence, if
the independent accountants acting as auditors for the Company on the date of
the Change of Control determine that such single payment, together with other
compensation received by the Employee that is contingent on a Change of Control,
would constitute "excess parachute payments" within the meaning of Section 280G
of the Internal Revenue Code of 1986, as amended, and regulations
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thereunder, the single payment to the Employee shall be reduced to the maximum
amount which may be paid without such payments in the aggregate constituting
"excess parachute payments."
8. Vacation. During the Term, the Employee shall be entitled to a
vacation in each calendar year in accordance with the Company's policy; during
this vacation, his compensation shall be paid in full.
9. Insurance. In accordance with Section 3(d), while he is employed by
the Company, the Employee and his eligible dependents as insureds shall be
covered under existing insurance policies on the same terms and conditions as
offered to all full-time salaried employees. In accordance with Company policy,
coverage under the Company's insurance policies terminates on the date that
employment terminates. If the Company terminates the Employee's employment
during the Term of this Agreement for any reason except Cause, or if the
Employee terminates his employment within two years following a Change of
Control as contemplated by Section 7(d), the Company shall reimburse the
Employee for the required COBRA premiums to the extent the Company subsidizes
the premium for active salaried employees for a period not to exceed 18 months
so long as the Employee is not eligible for coverage under any other group
medical plan. If the Employee becomes eligible for coverage under another group
medical plan, the Company shall cease reimbursement for COBRA premiums on the
date the Employee first becomes eligible for coverage under the other plan. The
Company's reimbursement for COBRA premiums shall include a gross-up amount for
tax liability at the Employee's incremental tax rate. Nothing in this Section 9
shall be interpreted to prohibit the Company from changing or terminating any
benefit package or program at any time
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and from time to time so long as the benefits hereunder, considered in the
aggregate, are comparable at any given time to the benefits provided to
similarly situated employees of the Company at that time.
10. Notice. All notices, requests, demands and other communications
hereunder shall be in writing and shall be effective upon the mailing thereof by
registered or certified mail, postage prepaid, and addressed as set forth below:
a. If to the Company:
Xx. Xxxx Xxxx
President
American Woodmark Corporation
0000 Xxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
b. If to the Employee:
Xx. Xxxx Xxxxxxxx
000 Xxxxx Xxxx
Xxxxxxxxxx, XX 00000
Any party may change the address to which notices are to be sent by
giving the other party written notice in the manner herein set forth.
11. Waiver of Breach. Waiver by either party of a breach of any
provision of this Agreement by the other shall not operate as a waiver of any
subsequent breach by such other party.
12. Entire Agreement. This Agreement contains the entire agreement of
the parties in this matter and supersedes any other agreement, oral or written,
concerning the employment or compensation of the Employee by the Company. It may
be changed only by an agreement in writing signed by both parties hereto.
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13. Governing Law. This Agreement shall be governed by the laws of the
Commonwealth of Virginia, without regard to its choice of law provisions.
14. Benefit. This Agreement shall inure to the benefit of, and shall
be binding upon, and shall be enforceable by and against the Company, its
successors and assigns, and the Employee, his heirs, beneficiaries and legal
representatives.
IN WITNESS WHEREOF, the Employee and the Company have executed this
Agreement as of the day and year above written.
AMERICAN WOODMARK CORPORATION
By: __________________________________________
Xx. Xxxxx Xxxx
President and Chief Executive Officer
EMPLOYEE
__________________________________________
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