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EXHIBIT 10.2
FORM OF XXXXXXX EMPLOYMENT AGREEMENT
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THIS AGREEMENT is made as of this day of
, 1997 by and between ROCK OF AGES CORPORATION, a
Delaware corporation with a principal place of business at 000 Xxxxx Xxxxx
Xxxxxx, Xxxxxxx, Xxx Xxxxxxxxx 00000 ("ROAC" or the "Company"), and Xxxx X.
Xxxxxxx ("Executive"), an individual residing at 000 Xxxxxx Xxxx Xxxx,
Xxxxxxxxx, Xxx Xxxxxxxxx 00000.
ROAC wishes to employ Executive as President and Chief Executive
Officer (the "Position"), and Executive wishes to accept such employment,
subject to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the foregoing, and the covenants
and agreements of the parties herein contained, ROAC and Executive agree as
follows:
1. EMPLOYMENT.
(a) ROAC agrees to employ Executive in the Position, and
Executive accepts employment in the Position, reporting directly to the Board of
Directors of ROAC (the "Board"). As President and Chief Executive Officer,
Executive shall oversee and direct the operations of ROAC, and perform such
other duties consistent with the responsibilities of President and Chief
Executive Officer as the Board shall determine.
2. TERM. The employment of Executive by ROAC hereunder will commence
on the date (the "Commencement Date") of the consummation of ROAC's initial
public offering (the "IPO") and end on the fifth anniversary of the Commencement
Date, unless extended or sooner terminated as hereinafter provided (the "Term").
Commencing with the third anniversary of the Commencement Date, the Term shall
automatically be extended, on each anniversary of the Commencement Date, for an
additional twelve (12) months from the then current expiration date of the Term,
unless either the Executive or the Company provide written notice to the other
party electing not to extend the Term, such notice to be provided at least 90
days prior to the applicable anniversary date.
3. COMPENSATION.
(a) BASE SALARY. During the Term, ROAC shall pay Executive an
annual base salary ("Base Salary") not less than $310,320 or such higher rate
as may from time to time be determined by the Board,
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payable in equal monthly installments, or as otherwise required by law. The Base
Salary may be increased from time to time and, if so increased, shall not
thereafter be decreased. Executive's Base Salary will be reviewed by the Board
not less often than annually during the Term.
(b) BONUS. Executive may also be awarded a bonus or bonuses from
time to time during the Term at such time and in such amounts as the Board may
determine in its sole discretion.
(c) EXPENSES. Executive shall be entitled to receive prompt
reimbursement for all reasonable and customary expenses incurred by Executive
during the Term in connection with his services hereunder, including, without
limitation, all travel and living expenses while away from home on business or
at the request of and in the service of ROAC, provided that such expenses are
incurred and accounted for in accordance with policies and procedures
established by ROAC.
(d) EQUITY BASED AWARDS. During the Term, Executive may be
granted such stock, options or other equity based awards, on such terms, as the
Board may determine in its sole discretion.
4.FRINGE BENEFITS. During the Term, Executive shall be entitled to
participate in such fringe benefits as, from time to time, may be applicable to
ROAC's other executive officers, subject to the terms and conditions of such
fringe benefit plans, including without limitation the following fringe
benefits:
(i) medical and major medical health insurance, paid for by
ROAC;
(ii) life insurance paid for by ROAC equal to one and
one-half (1 1/2) times Executive's Base Salary (capped at $280,000 while
Executive is employed hereunder and at $60,000 during retirement);
(iii) participation in ROAC's qualified 401(k) profit
sharing plan pursuant to the terms thereof;
(iv) participation in ROAC's qualified defined benefits
Salaried Employees Pension Plan pursuant to the terms thereof;
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(v) the use of an automobile comparable to the automobiles
provided to other executive officers of ROAC and payment by ROAC of the costs of
operation and maintenance of the automobile; and
(vi) vacation in accordance with ROAC's employee policies,
in effect from time to time.
5. TERMINATION OF EMPLOYMENT.
(a) DEATH OR DISABILITY. The Executive's employment hereunder
shall terminate automatically upon the Executive's death. If the Company
determines in good faith that Disability of the Executive has occurred (pursuant
to the definition of Disability set forth below), it may give to Executive
written notice in accordance with Section 15(d) of this Agreement of its
intention to terminate Executive's employment hereunder. In such event,
Executive's employment hereunder shall terminate effective on the 30th day after
receipt of such notice by the Executive (the "Disability Effective Date"),
provided that, within the 30 days after such receipt, the Executive shall not
have returned to full-time performance of the Executive's duties. For purposes
of this Agreement, "Disability" shall mean the absence of the Executive from the
Executive's duties with the Company on a full-time basis for 180 consecutive
business days as a result of incapacity due to mental or physical illness which
is determined to be total and permanent by a physician selected by the Company
or its insurers and acceptable to the Executive or the Executive's legal
representative.
(b) TERMINATION FOR CAUSE. Subject to Section 5(e), ROAC may
terminate the employment of Executive hereunder at any time for Cause. For
purposes of this Agreement, "Cause" shall mean:
(i) the willful failure of the Executive to perform
substantially the Executive's duties with the Company (other than any such
failure resulting from incapacity due to physical or mental illness), which
failure is not cured within 30 days after a written demand for substantial
performance is delivered to the Executive by the Board which specifically
identifies the manner in which the Board believes
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that the Executive has not substantially performed the Executive's duties,
or
(ii) the willful engaging by the Executive in illegal
conduct or gross misconduct, which is materially and demonstrably injurious
to the Company.
For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without a reasonable belief that the
Executive's action or omission was in the best interests of the Company.
(c) GOOD REASON. Executive shall be entitled to terminate
his employment hereunder for Good Reason. For purposes of this Agreement, "Good
Reason" shall mean:
(i) the assignment to the Executive of any duties
inconsistent in any respect with the Executive's position (including
status, offices, titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 1(a) of this Agreement, or any
other action by the Company which results in a diminution in such position,
authority, duties or responsibilities;
(ii) any failure by the Company to comply with any of the
provisions of Sections 3 or 4 of this Agreement or any other provision
hereof requiring a payment or provision of a benefit to the Executive,
other than an isolated, insubstantial and inadvertent failure not occurring
in bad faith and which is remedied by the Company promptly after receipt of
notice thereof given by the Executive;
(iii) the Company's requiring the Executive to be based at
any office or location other than the Company's executive offices on the
date hereof in Concord, New Hampshire or any office or location less than
35 miles from such location, or the Company's requiring the Executive to
travel on Company business to a substantially greater extent than required
immediately prior to the date hereof;
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(iv) any purported termination by the Company of the
Executive's employment otherwise than as expressly permitted by this Agreement;
or
(v) any failure by the Company to comply with and satisfy
Section 14(c) of this Agreement.
For purposes of this Section 5(c), any good faith determination of "Good
Reason" made by the Executive shall be conclusive.
(d) NO LIABILITY FOR TERMINATION BY EXECUTIVE. Nothing in
this Agreement shall restrict the Executive from terminating his employment with
the Company hereunder (including without limitation in connection with a Change
in Control (as defined herein)), and no such termination by the Executive shall
be deemed a breach of this Agreement.
(e) NOTICE OF TERMINATION.
(i) Any termination of the Executive's employment
hereunder by the Company for Cause or by the Executive shall be effected by
Notice of Termination to the other party hereto given in accordance with
Section 15(d) of this Agreement. For purposes of this Agreement, a "Notice
of Termination" means a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) to the extent
applicable, sets 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 and (iii) if the Date of Termination (as
defined below) is other than the date of receipt of such notice, specifies
the termination date (which date shall be not more than thirty days after
the giving of such notice). The failure by the Executive or the Company to
set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right
of the Executive or the Company, respectively, hereunder or preclude the
Executive or the Company, respectively from asserting such fact or
circumstances in enforcing the Executive's or the Company's rights
hereunder.
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(ii) Any Notice of Termination for Cause must be given
within sixty (60) days of the Board learning of the event(s) or
circumstance(s) which the Board believes constitute(s) Cause. Prior to any
Notice of Termination for Cause being given (and prior to any termination
for Cause being effective), the Executive shall be entitled to a hearing
before the Board at which he may, at his election, be represented by
counsel and at which he shall have a reasonable opportunity to be heard.
Such hearing shall be held on not less than fifteen days prior written
notice to the Executive stating the Board's intention to terminate the
Executive for Cause and stating in detail the particular event(s) or
circumstance(s) which the Board believes constitute(s) Cause for
termination.
(f) DATE OF TERMINATION. "Date of Termination" means (i) if the
Executive's employment hereunder is terminated by the Company for Cause or by
the Executive, the date of receipt of the Notice of Termination or any later
date specified therein, as the case may be, subject, in the case of termination
by the Company, for Cause, to the Company's compliance with Section 5(e)(ii);
(ii) if the Executive's employment hereunder is terminated by the Company other
than for Cause or Disability, the Date of Termination shall be the date on which
the Company notifies the Executive of such termination; and (iii) if the
Executive's employment hereunder is terminated by reason of the Executive's
death or Disability, the Date of Termination shall be the date of death of the
Executive or the Disability Effective Date, as the case may be.
6. EFFECT OF TERMINATION OF EMPLOYMENT.
(a) IN CONNECTION WITH A CHANGE IN CONTROL. In the event of any
termination of Executive's employment hereunder (x) by the Company (other than a
termination due to the Executive's death, Disability or for Cause) within 12
months after a Change in Control, or prior to a Change in Control if it is
reasonably demonstrated by the Executive that such termination of employment (1)
was at the request of a third party who has taken steps reasonably calculated to
effect a Change in Control or (2) otherwise arose in connection with or in
anticipation of a Change in Control, or (y) by the Execu-
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tive for any reason or no reason within 12 months after a Change in Control:
(i) the Company shall pay to the Executive a lump sum in
cash within 5 business days after the Date of Termination the aggregate of
the following amounts:
A. the sum of (1) the Executive's Base Salary through the Date of
Termination to the extent not theretofore paid, (2) the product of (x) the
higher of (I) the highest annual cash bonus paid to the Executive in the last
three fiscal years prior to the Date of Termination or (II) the amount of any
annual bonus payable but not yet paid, if any, including any bonus or portion
thereof which has been earned but deferred (and annualized for any fiscal year
consisting of less than twelve full months or during which the Executive was
employed for less than twelve full months), in respect of the most recently
completed fiscal year during the Term (the "Annualized Unpaid Bonus Amount"; the
higher of (I) and (II) being referred to as the "Highest Annual Bonus") and (y)
a fraction, the numerator of which is the number of days in the current fiscal
year through the Date of Termination, and the denominator of which is 365 (the
"Pro Ration Fraction") and (3) any compensation previously deferred by the
Executive (together with any accrued interest or earnings thereon), excluding
amounts payable under the Salary Continuation Agreement between the Company and
the Executive (the "Salary Continuation Agreement"), and any accrued vacation
pay, in each case to the extent not theretofore paid (the sum of the amounts
described in clauses (1), (2), and (3) being hereinafter referred to as the
"Highest Accrued Obligations"), and
B. the amount equal to the product of (1) three and (2) the sum
of (x) the Executive's Base Salary and (y) the Highest Annual Bonus.
(ii) for 36 months after the Executive's Date of
Termination, or such longer period as may be provided by the terms of the
appropriate plan, program, practice or policy, the Company shall continue
benefits to the Executive and/or the Executive's family at least equal to
those which would have been provided to them in accordance with the plans,
programs, practices and policies described in Section 4 of this Agreement
if the Executive's
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employment had not been terminated or, if more favorable to the Executive,
as in effect generally at any time thereafter with respect to other peer
executives of the Company and its affiliated companies and their families,
provided, however, that if the Executive becomes reemployed with another
employer and is eligible to receive medical or other welfare benefits under
another employer-provided plan, the medical and other welfare benefits
described herein shall be secondary to those provided under such other plan
during such applicable period of eligibility. For purposes of determining
eligibility (but not the time of commencement of benefits) of the Executive
for retiree benefits pursuant to such plans, practices, programs and
policies, the Executive shall be considered to have remained employed until
36 months after the Date of Termination and to have retired on the last day
of such period; and
(iii) to the extent not theretofore paid or provided, the Company
shall timely pay or provide to the Executive any other amounts or benefits
required to be paid or provided or which the Executive is eligible to receive
under any plan, program, policy or practice or contract or agreement of the
Company and its affiliated companies (such other amounts and benefits shall be
hereinafter referred to as the "Other Benefits").
For purposes of this Agreement, a "Change in Control" shall mean:
(i) The acquisition by an 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 "Exchange Act")) (a "Person") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) after the
Commencement Date of 30% or more of either (A) the then-outstanding shares of
common stock of the Company (the "Outstanding Company Common Stock") or (B) the
combined voting power of the then-outstanding voting securities of the Company
entitled to vote generally in the election of directors (the "Outstanding
Company Voting Securities"); provided, however, that for purposes of this
paragraph (i), the following acquisitions shall not constitute a Change in
Control: (1) any acquisition directly from the Company, (2) any acquisition by
the Company, (3) any acquisition
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by any employee benefit plan (or related trust) sponsored or maintained by the
Company or by any corporation controlled by the Company, (4) any acquisition
pursuant to a transaction which satisfies the criteria set forth in clauses (A),
(B) and (C) of paragraph (iii) below, or (5) any acquisition by the Executive or
his siblings, any Permitted Transferee (as defined in the Company's Amended and
Restated Certificate of Incorporation as in effect on the Commencement Date) of
the Executive or such siblings, any Person controlled by any such Person(s) or
any group of which any such Person is a member (any of the Persons described in
this clause (5) being referred to as an "Excluded Person"); or
(ii) Individuals who, as of the Commencement Date constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a majority
of the Board; provided, however, that any individual becoming a director after
the Commencement Date whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or
(iii) Consummation by the Company of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all of the
assets of the Company, other than with or to an Excluded Person (a "Business
Combination"), in each case, unless, following such Business Combination, (A)
all or substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of, respectively, the
then-outstanding shares of common stock and the combined voting power of the
then-outstanding voting securities entitled to vote generally in the election of
directors, of the corporation or other entity resulting from such Business
Combination (which as used in this paragraph (iii) shall include, without
limitation, a corporation or other entity which as a result of such transaction
owns the Company or all or substantially all
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of the Company's assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may be,
immediately prior to such Business Combination (B) no Person (excluding any
Excluded Person, any corporation or other entity resulting from such Business
Combination or any employee benefit plan (or related trust) of the Company or
such corporation or other entity resulting from such Business Combination)
beneficially owns, directly or indirectly, 30% or more of, respectively, the
then outstanding shares of common stock of the corporation or other entity
resulting from such Business Combination, or the combined voting power of the
then-outstanding voting securities of such corporation or other entity and (C)
at least half of the members of the board of directors or other governing body
of the corporation or other entity resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination; or
(iv) Approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company, unless such transaction was initiated
by an Excluded Person.
Notwithstanding the foregoing, if the Executive is entitled to receive
the lump sum payment provided for in this Section 6(a), he may elect, by notice
to the Company prior to receipt of such payment, to receive in lieu of such lump
sum payment, either (i) a lump sum payment equal to the total amount which the
Executive would be entitled to receive hereunder if his employment hereunder was
terminated by the Company without Cause or by the Executive for Good Reason or
(ii) the amount referred to in clause (i) immediately above, paid over the
remainder of the Term (without regard to the termination of the Executive's
employment hereunder) as provided in Section 6(d).
(b) DEATH OR DISABILITY. If Executive's employment is terminated
because of Executive's death or Disability, Executive shall be entitled to (i)
payment in cash in a lump sum of an amount equal to the sum of (A) the
Executive's Base Salary through the Date of Termination to the extent not
theretofore paid, (B) the product of (1) the Annualized Unpaid Bonus Amount and
(2) the Pro Ration Fraction, and (C) any compensation previously
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deferred by the Executive (together with any accrued interest or earnings
thereon) and any accrued vacation pay, in each case to the extent not
theretofore paid (the sum of the amounts described in (A), (B) and (C) being
referred to as the "Accrued Obligations"), payable within 30 days of the Date of
Termination, (ii) payment of the Executive's Base Salary for the remainder of
the Term (without regard to such termination) and (iii) timely payment and
provision of Other Benefits.
(c) CAUSE; OTHER THAN FOR GOOD REASON. If Executive's employment
hereunder is terminated for Cause or is voluntarily terminated by the Executive,
excluding such a termination for Good Reason, as of the Date of Termination the
Company shall have no further obligations to the Executive hereunder other than
for Accrued Obligations which shall be paid in a lump sum within 30 days of the
Date of Termination, and the timely payment or provision of Other Benefits.
(d) VOLUNTARY TERMINATION BY THE COMPANY OR BY THE EXECUTIVE FOR
GOOD REASON. If Executive's employment hereunder is terminated by ROAC without
Cause or by Executive for Good Reason, then subject to Section 6(a), Executive
shall be entitled to (i) payment in cash in a lump sum of the Highest Accrued
Obligations, payable within 30 days of the Date of Termination, (ii) payment of
the Executive's Base Salary for the remainder of the Term (without regard to
such termination) and (iii) timely payment and provision of Other Benefits.
7. NONEXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent
or limit the Executive's continuing or future participation in any plan,
program, policy or practice provided by the Company or any of its affiliated
companies and for which the Executive may qualify, nor shall anything herein
limit or otherwise affect such rights as the Executive may have under any such
plan, program, policy or practice, or any contract or agreement with the Company
or any of its affiliated companies, including without limitation the Salary
Continuation Agreement. Amounts which are vested benefits or which the Executive
is otherwise entitled to receive under any plan, policy, practice or program of,
or any contract or agreement with, the Company or any of its affiliated
companies at or subsequent to the Date of Termination shall be payable in
accordance with such plan, policy, practice or program or contract or agreement,
except as explicitly modified by this Agreement.
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8. FULL SETTLEMENT. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive (under this Agreement or otherwise) or others. In no event shall the
Executive be obligated to seek other employment or take any other action by way
of mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement and such amounts shall not be reduced whether or
not the Executive obtains other employment. The Company agrees to pay as
incurred, to the full extent permitted by law, all legal, accounting and other
fees and expenses (including, without limitation, of expert witnesses) which the
Executive may reasonably incur (i) as a result of any contest (regardless of the
outcome thereof) by the Company, the Executive or others of the validity or
enforceability of, or liability under, any provision of this Agreement or any
guarantee of performance thereof (including as a result of any contest by the
Executive about the amount of any payment pursuant to this Agreement), plus in
each case interest on any delayed payment at the applicable Federal rate
provided for in Section 7872(f)(2)(A) of the Internal Revenue Code of 1986, as
amended (the "Code"), (ii) in connection with the negotiation and preparation of
this Agreement and (iii) in connection with the Executive's performance of his
obligations under Section 9(c).
9. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.
(a) Anything in this Agreement to the contrary notwithstanding
and except as set forth below, in the event that it shall be determined that any
payment or distribution by the Company to or for the benefit of Executive
(whether paid or payable or distributed or distributable pursuant to the terms
of this Agreement or otherwise, but determined without regard to any additional
payments required under this Section 9) (a "Payment") would be subject to the
excise tax imposed by Section 4999 of the Code, or any interest or penalties are
incurred by Executive with respect to such excise tax (such excise tax, together
with any such interest and penalties, are hereinafter collectively referred to
as the "Excise Tax"), then Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that after payment by Executive
of all taxes (including any interest or penalties imposed with respect to such
taxes), including, without limitation, any income
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taxes (and any interest and penalties imposed with respect thereto) and Excise
Tax imposed upon the Gross-Up Payment, Executive retains an amount of the
Gross-Up Payment equal to the amount of Excise Tax imposed upon the Payments;
provided, however, that if Executive would not receive, after taking into
account all such payments (including the Gross-Up Payment), a net after tax
benefit of at least $50,000 (taking into account both income taxes and any
Excise Tax) as compared to the net after-tax proceeds to the Executive resulting
from an elimination of the Gross-Up Payment and a reduction of the Payments to
an amount (the "Reduced Amount") such that the receipt of the Payments would not
give rise to any Excise Tax, then no Gross-Up Payment shall be paid and the
Payments, in the aggregate, will be reduced to the Reduced Amount.
(b) Subject to the provisions of Section 9(c), all determinations
required to be made under this Section 9, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumptions
to be utilized in arriving at such determination, shall be made by KPMG Peat
Marwick LLP or such other certified public accounting firm as may be designated
by the Executive (the "Accounting Firm") which shall provide detailed supporting
calculations both to ROAC and Executive within 15 business days of the receipt
of notice from the Executive that there has been a Payment, or such earlier time
as is requested by ROAC. In the event of a conflict of interest, the Executive
shall appoint another nationally recognized accounting firm to make the
determinations required hereunder (which accounting firm shall then be referred
to as the Accounting Firm hereunder). All fees and expenses of the Accounting
Firm shall be paid solely by ROAC. Any Gross-Up Payment, as determined pursuant
to this Section 9, shall be paid by ROAC to the Executive within five days of
the receipt of the Accounting Firm's determination. Any determination by the
Accounting Firm shall be binding upon ROAC and the Executive. As a result of the
uncertainty in the application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by ROAC should have been made
("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that ROAC exhausts its remedies pursuant to Section 9(c)
and the Executive thereafter is required to make a payment of any Excise Tax,
the Accounting Firm shall determine the amount of the Under-
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payment that has occurred and any such Underpayment shall be promptly paid by
ROAC to or for the benefit of the Executive.
(c) The Executive shall notify ROAC in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment by
ROAC of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than thirty business days after the Executive is
informed in writing of such claim and shall apprise ROAC of the nature of such
claim and the date on which such claim is requested to be paid. The Executive
shall not pay such claim prior to the expiration of the thirty-day period
following the date on which he gives such notice to ROAC (or such shorter period
ending on the date that any payment of taxes with respect to such claim is due).
If ROAC notifies the Executive in writing prior to the expiration of such period
that it desires to contest such claim, the Executive shall:
(i) give ROAC any information reasonably requested by ROAC
and available to the Executive relating to such claim;
(ii) take such action in connection with contesting such
claim as ROAC shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with respect
to such claim by an attorney reasonably selected by ROAC;
(iii) cooperate with ROAC in good faith in order
effectively to contest such claim; and
(iv) permit ROAC to participate in any proceedings relating
to such claim;
provided, however, that ROAC shall bear and pay directly all costs and expenses
(including additional interest and penalties) incurred in connection with such
contest and shall indemnify and hold the Executive harmless, on an after-tax
basis, for any Excise Tax or income tax (including interest and penalties with
respect thereto) imposed as a result of such representation and payment of costs
and expenses. Without limitation of the foregoing provisions of this Section
9(c), ROAC shall control all proceedings taken in connection with such contest
and, at its sole option, may pursue or forgo any and all administrative
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appeals, proceedings, hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option, either direct the Executive
to pay the tax claimed and xxx for a refund or to contest the claim in any
permissible manner, and the Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as ROAC shall determine;
provided, however, that if ROAC directs the Executive to pay such claim and xxx
for a refund, ROAC shall advance the amount of such payment to the Executive, on
an interest-free basis and shall indemnify and hold the Executive harmless, on
an after-tax basis, from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and further provided
that any extension of the statute of limitations relating to payment of taxes
for the taxable year of the Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested amount.
Furthermore, ROAC's control of the contest shall be limited to issues with
respect to which a Gross-Up Payment would be payable hereunder and the Executive
shall be entitled to settle or contest, as the case may be, any other issue
raised by the Internal Revenue Service or other taxing authority.
(d) If, after the receipt by the Executive of an amount advanced
by ROAC pursuant to Section 9(c), the Executive becomes entitled to receive any
refund with respect to such claim, the Executive shall (subject to ROAC's
complying with the requirements of Section 9(c) promptly pay to ROAC the amount
of such refund (together with any interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by the Executive of an amount
advanced by ROAC pursuant to Section 9(c), a determination is made that the
Executive shall not be entitled to any refund with respect to such claim and
ROAC does not notify the Executive in writing of its intent to contest such
denial of refund prior to the expiration of 30 days after such determination,
then such advance shall be forgiven and shall not be required to be repaid and
the amount of such advance shall offset, to the extent thereof, the amount of
Gross-Up Payment required to be paid.
10. CONFIDENTIAL INFORMATION. The Executive shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge
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or data relating to the Company or any of its affiliated companies, and their
respective businesses, which shall have been obtained by the Executive during
the Executive's employment by the Company or any of its affiliated companies and
which shall not be or become public knowledge (other than by acts by the
Executive or representatives of the Executive in violation of this Agreement).
After termination of the Executive's employment with the Company, the Executive
shall not, without the prior written consent of the Company or as may otherwise
be required by law or legal process, communicate or divulge any such
information, knowledge or data to anyone other than the Company and those
designated by it. In no event shall an asserted violation of the provisions of
this Section 10 constitute a basis for deferring or withholding any amounts or
benefits otherwise payable or to be provided to the Executive under this
Agreement.
11. NON-SOLICITATION OF EMPLOYEES, CLIENTS AND CUSTOMERS. During the
Term, and for the period, if any, of Executive's non-competition covenant set
forth in Section 12 hereof following the termination of the Executive's
employment hereunder, Executive agrees not to, on his own behalf or on behalf of
any other Person, directly or indirectly, solicit or induce any client,
customer, employee or sales representative of Company, or of any of the
Company's direct or indirect subsidiaries, affiliates, parent or their
respective successors and assigns (the "ROAC Corporate Group"), to stop doing
business with or to leave any of said companies for any reason whatsoever or to
hire any of their employees.
12. NON-COMPETITION. The Company and the Executive acknowledge that
(i) the Company and the ROAC Corporate Group are currently engaged in the
business of quarrying, manufacturing, marketing and selling granite memorials
and other granite products at wholesale and at retail (herein referred to as the
"Restricted Business", it being understood and agreed, however, that "Restricted
Business" shall not include the curb and landscape business of Xxxxxxx Granite
(as defined herein) substantially as conducted on the Commencement Date), (ii)
the Company and the ROAC Corporate Group are engaged in the Restricted Business
in all of the states of the United States and in all of the provinces of Canada
(the territory of all such states and provinces is referred to herein as the
"Restricted Territory") and (iii) the Company has entered into this Agreement
with the Executive to secure the Executive's services in order to expand and
grow the Restricted Business in the Restricted Territory. Accordingly,
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as a material and essential inducement to the Company to enter into this
Agreement and in consideration of Company's agreements with the Executive
hereunder, the Executive agrees that during the Term and, if the Executive's
employment hereunder is terminated due to the Executive's Disability, by the
Company for Cause or by the Executive other than for Good Reason pursuant to
Section 5(c) and other than in connection with a Change in Control as
contemplated by Sections 5(d) and 6(a), then, subject to the further provisions
of this Section 12, for a period of two (2) years after the Date of Termination,
the Employee will not, in the Restricted Territory, directly or indirectly, in
any manner whatsoever:
(a) compete with Company, its successor and assigns, or the ROAC
Corporate Group, its successors and assigns, in the Restricted Business;
(b) engage in the Restricted Business, except as an employee of the
Company or the ROAC Corporate Group;
(c) have any ownership interest in (other than the ownership of less
than five percent (5%) of the ownership interests of a company whose stock
or other ownership interests are publicly traded) any business entity which
engages, directly or indirectly, in the Restricted Business in the
Restricted Territory except for any ownership interest owned by the
Executive during the Term, and after termination of Executive's employment
hereunder, in the Company, any member of the ROAC Corporate Group or
Xxxxxxx Granite Company, Inc. and its successors and assigns ("Xxxxxxx
Granite");
(d) contract, subcontract, work for, solicit work from, solicit
Company or ROAC Corporate Group employees for, or solicit customers for,
advise or become affiliated with, any business entity which engages in the
Restricted Business in the Restricted Territory except as an employee of
Company or of the ROAC Corporate Group; or
(e) lend money or provide anything of value to any entity which
engages in the Restricted Business in the Restricted Territory.
The term "compete" as used in this Section 12 means engage in competition,
directly or indirectly, either as
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an owner (except as permitted above), agent, member, consultant, partner, sole
proprietor, stockholder, or any other ownership form or other capacity; provided
that "compete" shall not include the Executive, and nothing contained herein
shall prohibit the Executive from, (i) continuing to have an ownership interest
in Xxxxxxx Granite, (ii) serving on Xxxxxxx Granite's Board of Directors or
equivalent governing body (including as the Chairman thereof) as a non-employee
member thereof so long as, during the Term, the Executive has no material
involvement in the day-to-day management or affairs of Xxxxxxx Granite, or (iii)
serving as an employee, officer or director of, or consultant to, Xxxxxxx
Granite after the Date of Termination so long as during the period of such
service, if the Executive's non-competition covenant set forth in this Section
12 is in effect, Xxxxxxx Granite is not engaged in the Restricted Business.
While the restrictions as set forth herein are considered by the parties
hereto to be reasonable in all circumstances, it is recognized that any one or
more of such restrictions might fail for unforeseen reasons. Accordingly, it is
hereby agreed and declared that if any of such restrictions shall be adjudged to
be void as unreasonable in all circumstances for the protection of the Company
and the ROAC Corporate Group and their interests, but would be valid if part of
the wording thereof were deleted, the period thereof reduced, or the range of
activities or area dealt with reduced in scope, such restrictions shall apply
with the minimum modification as may be necessary to make them valid and
effective, while still affording to Company and the ROAC Corporate Group the
maximum amount of protection contemplated thereby.
The Executive represents that he has carefully reviewed the non-competition
covenants set forth in this Section 12 and has determined that these covenants
will not impose undue hardship, financial or otherwise, on the Executive; that
its Restrictive Territory and duration will not impose a hardship on the
Executive; that it protects Company's and the ROAC Corporate Group's legitimate
interests in their investment in the Executive and their Restricted Business;
and that in the Executive's opinion the Executive not being able to compete in
the Restrictive Territory for the duration of this covenant will not be
injurious to the public interest.
The Executive agrees that breach of his covenants in this Section 12 will
cause irreparable harm to Company and the ROAC Corporate Group.
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13. LOYALTY. During the Term, Employee shall devote his full time and
best efforts to the performance of his employment under this Agreement. During
the Term, Employee shall not at any time or place whatsoever, either directly or
indirectly, engage in the Restricted Business or any other profession or active
business to any extent whatsoever, except on, pursuant to or as permitted by the
terms of this Agreement, or with the prior written consent of Company. Employee
agrees that he will not, while employed hereunder, do any unlawful acts or
engage in any unlawful habits or usages which injure, directly or indirectly,
Company and its business or the ROAC Corporate Group and its businesses.
14. SUCCESSORS.
(a) This Agreement is personal to the Executive and, without the
prior written consent of the Company, shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Executive's heirs and
legal representatives.
(b) This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation, recapitalization or otherwise) to
all or substantially all of the business and/or assets of the Company to assume
expressly 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. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid.
15. MISCELLANEOUS.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without reference to
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. This Agreement may not
be amended or modified otherwise than by a written agreement executed by the
parties
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hereto or their respective successors and legal representatives.
(b) The descriptive headings of the several sections of this
Agreement are inserted for convenience of reference only and shall not control
or affect the meaning or construction of any of the provisions hereof.
(c) If any provision of this Agreement shall be held invalid or
unenforceable according to law, such provision shall be deemed modified to the
extent necessary to bring it within the legal requirements. Any such invalidity
or unenforceability shall not affect the remaining provisions of this Agreement,
and such remaining provisions shall continue in full force and effect.
(d) Any notice or other communication required or permitted under
this Agreement shall be in writing and shall be deemed to have been duly given
(i) upon hand delivery, or (ii) on the third day following delivery to the U.S.
Postal Service as certified or registered mail, return receipt requested and
postage prepaid, or (iii) on the first day following delivery to a nationally
recognized United States overnight courier service for next business day
delivery, fee prepaid, return receipt or other confirmation of delivery
requested, or (iv) when telecopied or sent by facsimile transmission if an
additional notice is also delivered under (i), (ii) or (iii) above within three
days thereafter. Any such notice or communication shall be directed to a party
at its address (or facsimile number) set forth below or at such other address
(or facsimile number) as may be designated by a party in a notice given to all
other parties hereto in accordance with the provisions of this Section.
To ROAC:
--------
Rock of Ages Corporation
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxx Xxxxxxxxx 00000
Attention: Chairman of the Compensation
Committee of the Board of Directors
Facsimile: (000) 000-0000
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with copies to:
Xxxx X. Xxxxxx, Esquire
Xxxxxx & Xxxxxx, P.A
00 Xxxxxx Xxxxxx
Post Office Box 808
Manchester, New Hampshire 03105-0808
Facsimile: (000) 000-0000; and
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxx Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000
To the Executive:
-----------------
Xxxx X. Xxxxxxx
000 Xxxxxx Xxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxxxxx 00000
Facsimile: (000) 000-0000
(e) The Company may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
(f) The Executive's or the Company's failure to insist upon
strict compliance with any provision of this Agreement or the failure to assert
any right the Executive or the Company may have hereunder, including, without
limitation the right of the Executive to terminate employment following a Change
in Control pursuant to Section 5(a) or for Good Reason pursuant to Section 5(c)
of this Agreement, shall not be deemed to be a waiver of such provision or right
or any other provision or right of this Agreement.
(g) This Agreement contains all of the terms agreed upon by the
parties with respect to the subject matter hereof and supersedes all prior
agreements, representations and warranties of the parties as to the subject
matter hereof.
(h) This Agreement may be amended, or any provision of this
Agreement may be waived, provided that
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any such amendment or waiver will be binding on the party against which such
amendment or waiver is sought to be enforced only if such amendment or waiver is
set forth in a writing executed by such party.
(i) This Agreement may be executed in counterparts, each of which
shall be deemed an original but which together shall constitute a single
instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
---------------------------
Xxxx X. Xxxxxxx
ROCK OF AGES CORPORATION
By:
------------------------
Name:
Title:
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