EXHIBIT (e)(1)
AGREEMENT
BETWEEN
XXXXXXX CORPORATION
A DELAWARE CORPORATION, AND ITS
WHOLLY OWNED SUBSIDIARY XXXXXXX COMMUNICATIONS, INC.,
A GEORGIA CORPORATION
AND
[EXECUTIVE'S NAME]
AS OF
MAY 2, 2003
TABLE OF CONTENTS
1. Defined Terms..............................................................................1
2. Term of Agreement..........................................................................2
3. Company's Covenants Summarized.............................................................2
4. The Executive's Covenants..................................................................3
5. Compensation Other Than Severance Payments.................................................3
6. Severance Payments.........................................................................4
7. Termination Procedures and Compensation During Dispute....................................11
8. No Mitigation.............................................................................14
9. Successors; Binding Agreement.............................................................14
10. Notices...................................................................................15
11. Miscellaneous.............................................................................15
12. Counterparts..............................................................................16
13. Settlement of Disputes; Arbitration.......................................................16
14. Definitions...............................................................................17
AGREEMENT
THIS AGREEMENT dated as of May 2, 2003 is made by and between Xxxxxxx
Corporation, a Delaware corporation (the "Parent"), and its wholly owned
subsidiary Xxxxxxx Communications, Inc., a Georgia corporation ("Subsidiary")
(Parent and Subsidiary hereinafter collectively referred to as "Company") and
[EXECUTIVE'S NAME] (the "Executive").
WHEREAS the Company considers it essential to the best interests of its
shareholders to xxxxxx the continuous employment of key management personnel;
and
WHEREAS the Board of Directors of the Parent (the "Board") recognizes
that, as is the case with many publicly-held corporations, the possibility of a
Change in Control (as defined in the last Section hereof) exists and that such
possibility, and the uncertainty and questions which it may raise among
management, may result in the departure or distraction of management personnel
to the detriment of the Parent and its shareholders; and
WHEREAS the Board has determined that appropriate steps should be taken
to reinforce and encourage the continued attention and dedication of members of
the Company's management, including the Executive, to their assigned duties
without distraction in the face of potentially disturbing circumstances arising
from the possibility of a Change in Control;
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Company and the Executive hereby agree as
follows:
1. Defined Terms. The definitions of capitalized terms used in this
Agreement are provided in the last Section hereof.
2. Term of Agreement. This Agreement shall commence on the date hereof
and shall continue in effect through December 31, 2004; provided, however, that
commencing on January 1, 2005 and each January 1 thereafter, the term of this
Agreement shall automatically be extended for one additional year unless, not
later than September 30 of the preceding year, the Company or the Executive
shall have given notice not to extend this Agreement or a Change in Control
shall have occurred prior to such January 1; provided, however, if a Change in
Control shall have occurred during the term of this Agreement, this Agreement
shall continue in effect for a period of not less than thirty-six (36) months
beyond the month in which such Change in Control occurred.
3. Company's Covenants Summarized. In order to induce the Executive to
remain in the employ of the Company and in consideration of the Executive's
covenants set forth in Section 4 hereof, the Company agrees, under the
conditions described herein, to pay the Executive the "Severance Payments"
described in Section 6.01 hereof and the other payments and benefits described
herein in the event the Executive's employment with the Company is terminated
following a Change in Control and during the term of this Agreement. Except as
provided by the second sentence of Section 6.01 hereof or the last sentence of
Section 9.01 hereof, no amount or benefit shall be payable under this Agreement
unless there shall have been a termination of the Executive's employment with
the Company following a Change in Control. This Agreement shall not be construed
as creating an express or implied contract of employment and, except as
otherwise agreed in writing between the Executive and the Company, the Executive
shall not have any right to be retained in the employ of the Company.
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4. The Executive's Covenants. The Executive agrees that, subject to the
terms and conditions of this Agreement, in the event of a Potential Change in
Control during the term of this Agreement, the Executive will remain in the
employ of the Company until the earliest of (i) a date which is six (6) months
after the date of such Potential Change of Control, (ii) the date of a Change in
Control, (iii) the date of termination by the Executive of the Executive's
employment for Good Reason, by reason of death, Disability or Retirement, or
(iv) the termination by the Company of the Executive's employment for any other
reason.
5. Compensation Other Than Severance Payments.
5.01 Following a Change in Control and during the term of this
Agreement, during any period that the Executive fails to perform the Executive's
full-time duties with the Company as a result of incapacity due to physical or
mental illness, the Company shall pay the Executive's full salary to the
Executive at the rate in effect at the commencement of any such period, together
with all compensation and benefits payable to the Executive under the terms of
any compensation or benefit plan, program or arrangement maintained by the
Company during such period, until the Executive's employment is terminated by
the Company for Disability.
5.02 If the Executive's employment shall be terminated for any
reason following a Change in Control and during the term of this Agreement, the
Company shall pay the Executive's full salary to the Executive through the Date
of Termination at the rate in effect at the time the Notice of Termination is
given, together with all compensation and benefits payable to the Executive
through the Date of Termination under the terms of any compensation or benefit
plan, program or arrangement maintained by the Company during such period.
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5.03 If the Executive's employment shall be terminated for any
reason following a Change in Control and during the term of this Agreement, the
Company shall pay the Executive's normal post-termination compensation and
benefits to the Executive as such payments become due. Such post-termination
compensation and benefits shall be determined under, and paid in accordance
with, the Company's retirement, insurance and other compensation or benefit
plans, programs and arrangements.
6. Severance Payments.
6.01 Subject to Section 6.02 hereof, the Company shall pay the
Executive the payments described in this Section 6.01 (the "Severance Payments")
upon the termination of the Executive's employment following a Change in Control
and during the term of this Agreement, in addition to the payments and benefits
described in Section 5 hereof, unless such termination is (i) by the Company for
Cause, (ii) by reason of death, Disability or Retirement, or (iii) by the
Executive without Good Reason. For purposes of the immediately preceding
sentence, if a termination of the Executive's employment occurs prior to a
Change in Control, but following a Potential Change in Control in contemplation
of and relating to said Change in Control, such termination shall be deemed to
have followed a Change in Control and to have been (i) by the Company without
Cause, if the Executive's employment is terminated without Cause at the
direction of such Person, or (ii) by the Executive with Good Reason, if the
Executive terminates his employment with Good Reason and the act (or failure to
act) which constitutes Good Reason occurs following such Potential Change in
Control and at the direction of such Person.
(A) In lieu of any further salary payments to the
Executive for periods subsequent to the Date of Termination and in lieu
of any severance benefit otherwise
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payable to the Executive, the Company shall pay to the Executive a lump
sum severance payment, in cash, equal to the sum of (i) the higher of
(x) [TWO AND ONE-HALF (2.5), WITH RESPECT TO ALL OF THE COMPANY'S
EXECUTIVE OFFICERS OTHER THAN THE COMPANY'S CONTROLLER] [ONE-HALF
(1/2), WITH RESPECT TO THE COMPANY'S CONTROLLER] times the Executive's
annual base salary in effect immediately prior to the occurrence of the
event or circumstance upon which the Notice of Termination is based or
(y) [TWO AND ONE-HALF (2.5), WITH RESPECT TO ALL OF THE COMPANY'S
EXECUTIVE OFFICERS OTHER THAN THE COMPANY'S CONTROLLER] [ONE-HALF
(1/2), WITH RESPECT TO THE COMPANY'S CONTROLLER] times the average of
Executive's annual base salary for the three (3) years immediately
prior to the occurrence of the event or circumstance upon which the
Notice of Termination is based, and (ii) the higher of (x) [TWO AND
ONE-HALF (2.5), WITH RESPECT TO ALL OF THE COMPANY'S EXECUTIVE OFFICERS
OTHER THAN THE COMPANY'S CONTROLLER] [ONE-HALF (1/2), WITH RESPECT TO
THE COMPANY'S CONTROLLER] times the amount paid to the Executive as an
annual discretionary bonus in the year preceding the year in which the
Date of Termination occurs or (y) [TWO AND ONE-HALF (2.5), WITH RESPECT
TO ALL OF THE COMPANY'S EXECUTIVE OFFICERS OTHER THAN THE COMPANY'S
CONTROLLER] [ONE-HALF (1/2), WITH RESPECT TO THE COMPANY'S CONTROLLER]
times the average annual discretionary bonus paid to the Executive in
the three (3) years preceding that in which the Date of Termination
occurs.
(B) The Company shall pay to the Executive a lump sum
amount, in cash, equal to the sum of (i) any annual discretionary bonus
which has been allocated or awarded to the Executive for a completed
fiscal year preceding the Date of Termination but has not yet been paid
(pursuant to Section 5.02 hereof or otherwise), and (ii) a pro rata
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portion of an annual discretionary bonus for the fiscal year in which
the Date of Termination occurs, determined by multiplying the
Executive's annual discretionary bonus awarded or paid for the most
recently completed fiscal year by a fraction, the numerator of which
shall be the number of full days the Executive was employed by the
Company during the fiscal year in which the Executive's Date of
Termination occurred and the denominator of which shall be three
hundred and sixty-five (365).
(C) At the option of Executive exercised by written
notice to the Board of Directors within thirty (30) days after and/or
before the Date of Termination, the Company shall repurchase all
Options held by Executive that the Executive elects to sell to the
Company (which Options shall be cancelled upon the making of the
payment referred to below) by the payment of a lump sum amount, in
cash, equal to the product of
(i) the excess of the higher of (x) the Current
Market Value of the Parent Shares (as hereinafter
defined) or (y) the highest per share price for
Parent Shares actually paid within six (6) months
preceding or after any Change in Control, over the
per share exercise price of each such Option held by
the Executive, times
(ii) the number of Parent Shares covered by each such
Option.
As used in this subparagraph, the term "Current Market Value" shall
mean the Closing Price of such shares on the Date of Termination, or if
no shares were traded or bid or ask quotations were published on such
date, then on the next preceding date on which such sales transactions
or quotations were actually made. The term "Closing Price" shall mean:
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(1) if the Parent Shares are listed on a national securities
exchange, the NASDAQ National Market, or authorized for trading in
any other market or quotation system in which last sale
transactions are reported on a contemporary basis, the last
reported sales price, regular way, of such security on such
exchange or in such quotation system for such day; or
(2) if the Parent Shares are not listed, or authorized for trading
in the markets described in (1) above, the last bid quotation in
the over-the-counter market on such trading day as reported by the
National Association of Securities Dealers, Inc. through NASDAQ,
its automated system for reporting quotations, or its successor or
such other generally accepted source of publicly reported bid
quotations as the Parent's Board of Directors may reasonably
designate; or
(3) if the Parent Shares are not traded in the organized
securities markets, the fair market value of the Parent's Shares
as determined by the Board of Directors of the Company in good
faith.
(D) For a [THIRTY (30), WITH RESPECT TO ALL OF THE
COMPANY'S EXECUTIVE OFFICERS OTHER THAN THE COMPANY'S CONTROLLER] [SIX
(6), WITH RESPECT TO THE COMPANY'S CONTROLLER] month period after the
Date of Termination, the Company shall arrange to provide the Executive
with life, disability, accident and health insurance benefits
substantially similar to those which the Executive is receiving
immediately prior to the Notice of Termination (without giving effect
to any reduction in such benefits subsequent to a Change in Control
which reduction constitutes Good Reason). Benefits otherwise receivable
by the Executive pursuant to this Section 6.01(D) shall be reduced to
the extent
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comparable benefits are actually received by or made available to the
Executive without cost during the [THIRTY (30), WITH RESPECT TO ALL OF
THE COMPANY'S EXECUTIVE OFFICERS OTHER THAN THE COMPANY'S CONTROLLER]
[SIX (6), WITH RESPECT TO THE COMPANY'S CONTROLLER] month period
following the Date of Termination (any such benefits actually received
by the Executive shall be reported to the Company by the Executive). If
the benefits provided to the Executive under this Section 6.01(D) shall
result in a decrease, pursuant to Section 6.02, in the Severance
Payments and these Section 6.01(D) benefits are thereafter reduced
pursuant to the immediately preceding sentence because of the receipt
of comparable benefits, the Company shall, at the time of such
reduction, pay to the Executive the lesser of (a) the amount of the
decrease made in the Severance Payments pursuant to Section 6.02, or
(b) the maximum amount which can be paid to the Executive without
being, or causing any other payment to be, nondeductible by reason of
section 280G of the Code.
6.02 Notwithstanding any other provisions of this Agreement,
in the event that any payment or benefit received or to be received by the
Executive in connection with and contingent on a Change in Control or the
termination of the Executive's employment (whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the Company, any
Person whose actions result in a Change in Control or any Person affiliated with
the Company or such Person) (all such payments and benefits, including the
Severance Payments, being hereinafter called "Total Payments") would not be
deductible (in whole or part), by the Company, an affiliate or Person making
such payment or providing such benefit, as a result of section 280G of the Code,
then, to the extent necessary to make the remaining portion
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of the Total Payments deductible (and after taking into account any reduction in
the Total Payments provided by reason of Section 280G of the Code in such other
plan, arrangement or agreement), (A) the cash Severance Payments and/or other
cash payments provided for hereunder, in each case, to the extent still unpaid,
shall first be reduced (if necessary, to zero), and (B) all other non-cash
Severance Payments and/or other non-cash benefits provided for hereunder, in
each case, to the extent still unfurnished, shall next be reduced (if necessary,
to zero), and (C) the Executive shall have no right to receive hereunder, and
neither the Company, any Person whose actions result in a Change in Control or
any Person affiliated with the Company or such Person shall be obligated to
make, pay or furnish to the Executive hereunder any payment or benefit in excess
of those payments or benefits provided hereunder as reduced, if applicable,
pursuant to clause (A) or clause (B) above. For purposes of this limitation (i)
no portion of the Total Payments the receipt or enjoyment of which the Executive
shall have effectively waived in writing prior to the Date of Termination shall
be taken into account, (ii) no portion of the Total Payments shall be taken into
account which in the opinion of tax counsel selected by the Company's
independent auditors and reasonably acceptable to the Executive does not
constitute a "parachute payment" within the meaning of section 280G(b)(2) of the
Code, including by reason of section 280G(b)(4)(A) of the Code, (iii) the
Severance Payments shall be reduced only to the extent necessary so that the
Total Payments (other than those referred to in clauses (i) or (ii)) in their
entirety constitute reasonable compensation for services actually rendered
within the meaning of section 280G(b)(4)(B) of the Code or are otherwise not
subject to disallowance as deductions, in the opinion of the tax counsel
referred to in clause (ii); and (iv) the value of any non-cash benefit or any
deferred payment or benefit included in the Total
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Payments shall be determined by the Company's independent auditors in accordance
with the principles of sections 280G(d)(3) and (4) of the Code.
If it is established pursuant to a final determination of a
court or an Internal Revenue Service proceeding that, notwithstanding the good
faith of the Executive and the Company in applying the terms of this Section
6.02, the aggregate "parachute payments" paid to or for the Executive's benefit
are in an amount that would result in any portion of such "parachute payments"
not being deductible by reason of section 280G of the Code, then the Executive
shall have an obligation to pay the Company upon demand an amount equal to the
sum of (i) the excess of the aggregate "parachute payments" paid to or for the
Executive's benefit over the aggregate "parachute payments" that could have been
paid to or for the Executive's benefit without any portion of such "parachute
payments" not being deductible by reason of section 280G of the Code; and (ii)
interest on the amount set forth in clause (i) of this sentence at the rate
provided in section 1274(b)(2)(B) of the Code from the date of the Executive's
receipt of such excess until the date of such payment.
6.03 The payments and other items provided for in Section 6.01
(other than Section 6.01(D)) hereof shall be made not later than the fifteenth
(15th) day following the Date of Termination or the date of exercise by
Executive of any of Executive's rights hereunder, provided, however, that if the
amounts of such payments, and the limitation on such payments set forth in
Section 6.02 hereof, cannot be finally determined on or before such day, the
Company shall pay to the Executive on such day an estimate, as determined in
good faith by the Company, of the minimum amount of such payments to which the
Executive is clearly entitled and shall pay the remainder of such payments
(together with interest at the rate provided in
10
section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be
determined but in no event later than the thirtieth (30th) day after the Date of
Termination. In the event that the amount of the estimated payments exceeds the
amount subsequently determined to have been due, such excess shall constitute a
loan by the Company to the Executive, payable on the fifth (5th) business day
after demand by the Company (together with interest at the rate provided in
section 1274(b)(2)(B) of the Code). At the time that payments are made under
this Section, the Company shall provide the Executive with a written statement
setting forth the manner in which such payments were calculated and the basis
for such calculations including, without limitation, any opinions or other
advice the Company has received from outside counsel, auditors or consultants
(and any such opinions or advice which are in writing shall be attached to the
statement).
6.04 The Company also shall pay to the Executive all legal and
accounting fees and expenses incurred by the Executive as a result of a
termination which entitles the Executive to the Severance Payments (including
all such fees and expenses, if any, incurred in disputing any such termination
or in seeking in good faith to obtain or enforce any benefit or right provided
by this Agreement or in connection with any tax audit or proceeding to the
extent attributable to the application of section 4999 of the Code to any
payment or benefit provided hereunder). Such payments shall be made within
fifteen (15) business days after delivery of the Executive's written requests
for payment accompanied with such evidence of fees and expenses incurred as the
Company reasonably may require.
7. Termination Procedures and Compensation During Dispute.
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7.01 Notice of Termination. After a Change in Control and
during the term of this Agreement, any purported termination of the Executive's
employment (other than by reason of death) shall be communicated by written
Notice of Termination from one party hereto to the other party hereto in
accordance with Section 10 hereof. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which shall indicate the specific termination
provision in this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated. Further, a Notice of
Termination for Cause is required to include a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters (3/4) of the entire
membership of the Board at a meeting of the Board which was called and held for
the purpose of considering such termination (after reasonable notice to the
Executive and an opportunity for the Executive, together with the Executive's
counsel, to be heard before the Board) finding that, in the good faith opinion
of the Board, the Executive was guilty of conduct set forth in clause (i) or
(ii) of the definition of Cause herein, and specifying the particulars thereof
in detail.
7.02 Date of Termination. "Date of Termination", with respect
to any purported termination of the Executive's employment after a Change in
Control or prior to a Change in Control, but following a Potential Change in
Control in contemplation of and relating to said Change in Control, and during
the term of this Agreement, shall mean (i) if the Executive's employment is
terminated for Disability, thirty (30) days after Notice of Termination is given
(provided that the Executive shall not have returned to the full-time
performance of the Executive's duties during such thirty (30) day period), and
(ii) if the Executive's employment is
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terminated for any other reason, the date specified in the Notice of Termination
(which, in the case of a termination by the Company, shall not be less than
thirty (30) days (except in the case of a termination for Cause) and, in the
case of a termination by the Executive, shall not be less than fifteen (15) days
nor more than sixty (60) days, respectively, from the date such Notice of
Termination is given).
7.03 Dispute Concerning Termination. If within fifteen (15)
days after any Notice of Termination is given, or, if later, prior to the Date
of Termination (as determined without regard to this Section 7.03), the party
receiving such Notice of Termination notifies the other party that a dispute
exists concerning the termination, the Date of Termination shall be the date on
which the dispute is finally resolved, either by mutual written agreement of the
parties or by a final judgment, order or decree of a court of competent
jurisdiction (which is not appealable or with respect to which the time for
appeal therefrom has expired and no appeal has been perfected); provided further
that the Date of Termination shall be extended by a notice of dispute only if
such notice is given in good faith and the party giving such notice pursues the
resolution in such dispute with reasonable diligence.
7.04 Compensation During Dispute. If a purported termination
of the Executive's employment occurs after a Change of Control, or prior to a
Change in Control but following a Potential Change in Control, and during the
term of this Agreement, and such termination is disputed in accordance with
Section 7.03 hereof, the Company shall continue to pay the Executive the full
compensation in effect when the Notice of Termination giving rise to the dispute
was given (including, but not limited to, salary) and continue the Executive as
a participant in all compensation, benefit and insurance plans in which the
Executive was
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participating when the notice giving rise to the dispute was given, until the
dispute is finally resolved in accordance with Section 7.03 hereof. Amounts paid
under this Section 7.04 are in addition to all other amounts due under this
Agreement (other than those due under Section 5.02 hereof) and shall not be
offset against or reduce any other amounts due under this Agreement.
8. No Mitigation. The Company agrees that, if the Executive's
employment by the Company is terminated during the term of this Agreement, the
Executive is not required to seek other employment or to attempt in any way to
reduce any amounts payable to the Executive by the Company pursuant to Section 6
or Section 7.04. Further, the amount of any payment or benefit provided for in
Section 6 (other than Section 6.01(D)) or Section 7.04 shall not be reduced by
any compensation earned by the Executive as the result of employment by another
employer, by retirement benefits, by offset against any amount claimed to be
owed by the Executive to the Company, or otherwise.
9. Successors; Binding Agreement.
9.01 In addition to any obligations imposed by law upon any
successor to the Company, the Company will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. Failure of the Company to obtain such assumption and agreement
prior to the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle the Executive to compensation from the Company in
the same amount and on the same terms as the Executive would be entitled to
hereunder if the Executive were to terminate the Executive's
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employment for Good Reason after a Change in Control, except that, for purposes
of implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination.
9.02 This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive shall die while any amount would still be payable to the Executive
hereunder (other than amounts which, by their terms, terminate upon the death of
the Executive) if the Executive had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to the executors, personal representatives or administrators of the
Executive's estate.
10. Notices. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below, or to such other address as either party
may have furnished to the other in writing in accordance herewith, except that
notice of change of address shall be effective only upon actual receipt:
To the Company: Xxxxxxx Corporation and Xxxxxxx Communications, Inc.
00000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
To the Executive: [EXECUTIVE'S ADDRESS]
11. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and such officer as may be specifically
designated by the Board. No waiver by
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either party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Georgia. All references to sections of the Exchange Act or the Code shall be
deemed also to refer to any successor provisions to such sections. Any payments
provided for hereunder sha11 be paid net of any applicable withholding required
under federal, state or local law and any additional withholding to which the
Executive has agreed. The obligations of the Company and the Executive under
Sections 6 and 7 shall survive the expiration of the term of this Agreement. The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.
12. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
13. Settlement of Disputes; Arbitration. All claims by the Executive
for benefits under this Agreement shall be directed to and determined by the
Board and shall be in writing. Any denial by the Board of a claim for benefits
under this Agreement sha11 be delivered to the Executive in writing and shall
set forth the specific reasons for the denial and the specific provisions of
this Agreement relied upon. Any dispute or controversy arising under or in
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connection with this Agreement shall be settled exclusively by arbitration in
Atlanta, Georgia in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered on the arbitrator's award in
any court having jurisdiction; provided, however, that the Executive shall be
entitled to seek specific performance of the Executive's right to be paid until
the Date of Termination during the pendency of any dispute or controversy
arising under or in connection with this Agreement.
14. Definitions. For purposes of this Agreement, the following
terms shall have the meanings indicated below:
(A) "Beneficial Owner" shall have the meaning defined
in Rule 13d-3 under the Exchange Act.
(B) "Board" shall mean the Board of Directors of each
of Parent and Subsidiary.
(C) "Cause" for termination by the Company of the
Executive's employment, after any Change in Control (or after any
Potential Change in Control under the circumstances described in the
second sentence of Section 6.01 hereof), shall mean (i) the willful and
continued failure by the Executive for a period of ninety (90) days to
substantially perform the Executive's duties with the Company (other
than any such failure resulting from the Executive's incapacity due to
physical or mental illness or any such actual or anticipated failure
after the issuance of a Notice of Termination for Good Reason by the
Executive pursuant to Section 7.01) after a written demand for
substantial performance is delivered to the Executive by the Board,
which demand specifically identifies the manner in which the Board
believes that the Executive has not substantially
17
performed the Executive's duties, or (ii) the willful engaging by the
Executive in conduct which is demonstrably and materially injurious to
the Company or its subsidiaries, monetarily or otherwise. For purposes
of clauses (i) and (ii) of this definition, no act, or failure to act,
on the Executive's part shall be deemed "willful" unless done, or
omitted to be done, by the Executive not in good faith and without
reasonable belief that the Executive's act, or failure to act, was in
the best interest of the Company.
(D) A "Change in Control" shall be deemed to have
occurred if the conditions set forth in any one of the following
paragraphs shall have been satisfied:
(I) any Person who is or becomes the Beneficial
Owner, directly or indirectly, of securities of the Parent
(not including in the securities beneficially owned by such
Person any securities acquired directly from the Parent or its
affiliates, as such term is defined in the rules and
regulations of the Securities and Exchange Commission)
representing 20% or more of the combined voting power of the
Company's then outstanding securities; or
(II) during any period of two consecutive years (not
including any period prior to the execution of this
Agreement), individuals who at the beginning of such period
constitute the Board of Parent and any new director (other
than a director designated by a Person who has entered into an
agreement with the Parent to effect a transaction described in
clause (I), (III) or (IV) of this paragraph) whose election by
the Board or nomination for election by the Parent's
stockholders was approved by a vote of at least two-thirds
(2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or
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nomination for election was previously so approved, cease for
any reason to constitute a majority thereof; or
(III) the consummation of a merger or statutory share
exchange of the Parent with any other corporation, other than
(i) a merger or statutory share exchange which would result in
the voting securities of the Parent outstanding immediately
prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of
the surviving entity), in combination with the ownership of
any trustee or other fiduciary holding securities under an
employee benefit plan of the Parent, at least 75% of the
combined voting power of the voting securities of the Parent
or such surviving entity outstanding immediately after such
merger or statutory share exchange in substantially the same
proportions as their ownership immediately prior to such
merger or statutory share exchange, or (ii) a merger or
statutory share exchange effected to implement a
recapitalization of the Parent (or similar transaction) in
which no Person acquires more than 50% of the combined voting
power of the Parent's then outstanding securities; or
(IV) the shareholders of the Parent approve a plan of
complete liquidation of the Parent or an agreement for the
sale or disposition by the Company of all or substantially all
the Company's assets.
(E) "Code" shall mean the Internal Revenue Code of
1986, as amended from time to time.
(F) "Parent" shall mean Xxxxxxx Corporation and any
successor to its business and/or assets which assumes and agrees to
perform this Agreement by operation
19
of law, or otherwise (except in determining, under Section 15(D)
hereof, whether or not any Change in Control of the Parent has occurred
in connection with such succession).
(G) "Parent Shares" shall mean shares of common stock
of the Parent or any equity securities into which such shares have been
converted.
(H) "Date of Termination" shall have the meaning
stated in Section 7.02 hereof.
(I) "Disability" shall be deemed the reason for the
termination by the Company of the Executive's employment, if, as a
result of the Executive's incapacity due to physical or mental illness,
the Executive shall have been absent from the full-time performance of
the Executive's duties with the Company for a period of six (6)
consecutive months, the Company shall have given the Executive a Notice
of Termination for Disability, and, within thirty (30) days after such
Notice of Termination is given, the Executive shall not have returned
to the full-time performance of the Executive's duties.
(J) "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended from time to time.
(K) "Executive" shall mean the individual named in
the first paragraph of this Agreement.
(L) "Good Reason" for termination by the Executive of
the Executive's employment shall mean the occurrence (without the
Executive's express written consent) after any Change in Control, or
after any Potential Change in Control under the circumstances described
in the second sentence of Section 6.01 hereof (treating all references
in paragraphs (I) through (VII) below to a "Change in Control" as
references
20
to a "Potential Change in Control"), of any one of the following acts
by the Company, or failures by the Company to act:
(I) the assignment to the Executive of any duties
materially inconsistent with the Executive's status as an
executive officer of the Company or a substantial adverse
alteration in the nature or status of the Executive's
responsibilities from those in effect immediately prior to the
Change in Control;
(II) a reduction by the Company in the Executive's
annual base salary as in effect on the date hereof or as the
same may be increased from time to time;
(III) the relocation of the Company's principal
executive offices to a location outside a twenty (20) mile
radius from the location at which such offices are located
immediately prior to the Change in Control) or the Company's
requiring the Executive to be based anywhere other than the
metropolitan area in which the Executive is based immediately
prior to the Change in Control except for required travel on
the Company's business to an extent substantially consistent
with the Executive's present business travel obligations;
(IV) the failure by the Company to pay to the
Executive any portion of the Executive's current compensation
or to pay to the Executive any portion of an installment of
deferred compensation under any deferred compensation program
of the Company, within seven (7) days of the date such
compensation is due;
(V) the failure by the Company to continue in effect
any compensation plan in which the Executive participates
immediately prior to the Change in Control which is material
to the Executive's total compensation, including but not
limited
21
to the Company's stock option, incentive compensation, bonus
and other plans or any substitute plans adopted prior to the
Change in Control, unless an equitable arrangement (embodied
in an ongoing substitute or alternative plan) has been made
with respect to such plan, or the failure by the Company to
continue the Executive's participation therein (or in such
substitute or alternative plan) on a basis not materially less
favorable, both in terms of the amount of benefits provided
and the level of the Executive's participation relative to
other participants, as existed at the time of the Change in
Control;
(VI) the failure by the Company to continue to
provide the Executive with benefits substantially similar to
those enjoyed by the Executive under any of the Company's
pension, life insurance, medical, dental, health and accident,
or disability plans in which the Executive was participating
at the time of the Change in Control, the taking of any action
by the Company which would directly or indirectly materially
reduce any of such benefits or deprive the Executive of any
material fringe benefit enjoyed by the Executive at the time
of the Change in Control, or the failure by the Company to
provide the Executive with the number of paid vacation days to
which the Executive is entitled on the basis of years of
service with the Company in accordance with the Company's
normal vacation policy in effect at the time of the Change in
Control; or
(VII) any purported termination of the Executive's
employment which is not effected pursuant to a Notice of
Termination satisfying the requirements of
22
Section 7.01; for purposes of this Agreement, no such
purported termination shall be effective.
The Executive's right to terminate the Executive's employment
for Good Reason shall not be affected by the Executive's incapacity due to
physical or mental illness. The Executive's continued employment shall not
constitute consent to, or a waiver of rights with respect to, any act or failure
to act constituting Good Reason hereunder.
(M) "Notice of Termination" shall have the meaning
stated in Section 7.01 hereof.
(N) "Options" shall mean options for Parent Shares
granted to the Executive under the Parent's stock option plans.
(O) "Person" shall have the meaning given in Section
3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and
14(d) thereof; however, a Person shall not include (i) the Parent or
any of its subsidiaries, (ii) a trustee or other fiduciary holding
securities under an employee benefit plan of the Parent or any of its
subsidiaries, (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities, or (iv) a corporation
owned, directly or indirectly, by the stockholders of the Parent in
substantially the same proportions as their ownership of stock of the
Parent.
(P) "Potential Change in Control" shall be deemed to
have occurred if the conditions set forth in any one of the following
paragraphs shall have been satisfied;
(I) the Parent enters into an agreement, the
consummation of which would result in the occurrence of a
Change in Control;
23
(II) the Parent or any Person publicly announces an
intention to take or to consider taking actions which, if
consummated, would constitute a Change in Control;
(III) any Person who is or becomes the Beneficial
Owner, directly or indirectly, of securities of the Parent
representing 10% or more of the combined voting power of the
Parent's then outstanding securities, increases such Person's
beneficial ownership of such securities by 5% or more over the
percentage so owned by such Person on the date hereof; or
(IV) the Board adopts a resolution to the effect
that, for purposes of this Agreement, a Potential Change in
Control has occurred.
(Q) "Retirement" shall be deemed the reason for the
termination by the Company or the Executive of the Executive's
employment if such employment is terminated in accordance with the
Company's retirement policy, not including early retirement, generally
applicable to its salaried employees, as in effect immediately prior to
the Change in Control, or in accordance with any retirement arrangement
established with the Executive's consent with respect to the Executive.
(R) "Severance Payments" shall mean those payments
described in Section 6.01 hereof.
(S) "Shares" shall mean shares of the common stock of
the Parent.
(T) "Subsidiary" shall mean Xxxxxxx Communications,
Inc., a Georgia corporation.
24
(U) "Total Payments" shall mean those payments
described in Section 6.02 hereof.
[signatures appear on the following page]
25
IN WITNESS WHEREOF, the parties hereto have set their hands and seals
all as of the day and year first above written.
XXXXXXX CORPORATION
By:______________________________
Name:
Title:
XXXXXXX COMMUNICATIONS, INC.
By:______________________________
Name:
Title:
EXECUTIVE
__________________________________
[EXECUTIVE'S NAME]
26
