Exhibit 11
Xxxxxx General Corporation
000 Xxxxx Xxxx Xxxx
Xxxxx Xxxx, Xxx Xxxx 00000
July 9, 1998
Xx. Xxx X. Xxxxxxx
Xx. Xxxxxxx X. Xxxxx
c/x Xxxxxx General Corporation
000 Xxxxx Xxxx Xxxx
Xxxxx Xxxx, Xxx Xxxx 00000
Dear Xxx and Xxxx:
Each of you, together with certain other directors or executives of
Xxxxxx General Corporation (the "Company"), is considering the possibility of
proposing to the Company a transaction which would result in you and other
members of the Company's management becoming the owners of all outstanding
shares of the Company's common stock (the "Potential Transaction"). It is
understood and agreed that except as otherwise specifically set forth in this
letter agreement, (i) the Company will not be responsible for any costs or
expenses incurred by or on behalf of you in connection with your evaluation and
possible pursuit of the Potential Transaction and (ii) the Company will not
reimburse you for any such costs or expenses.
It is agreed as follows:
1. The Company will not be responsible or reimburse you for the
first $250,000 of "Fees and Expenses" (as defined in paragraph 4 below) incurred
by you in connection with the Potential Transaction.
2. In order to induce you to continue your evaluation of a Potential
Transaction, the Company will reimburse you for fifty percent (50%) of Fees and
Expenses incurred by you in connection with the Potential Transaction in excess
of $250,000, up to a maximum of $500,000 of aggregate Fees and Expenses, so that
the Company's maximum reimbursement obligation shall be $125,000.
NYFS10...:\80\57780\0003\1948\LTRN108X.040
3. The Company will not reimburse you for any portion of your Fees
and Expenses incurred in connection with the Potential Transaction in excess of
the aggregate amount of $500,000, it being understood that the Company's sole
reimbursement obligation shall be pursuant to paragraph 2 above.
4. As used herein, the term "Fees and Expenses" means reasonable,
documented, out-of-pocket costs and expenses incurred by either or both of you
or other members of management in connection with the Potential Transaction,
relating to (a) reasonable out-of-pocket expenses incurred by your financial
advisors in connection with a Potential Transaction, (b) fees paid to your legal
counsel based on standard hourly billing rates of such legal counsel and
reasonable expenses and disbursements incurred by such legal counsel in
connection with the Potential Transaction, (c) fees paid to the Company's
independent public accountant for any services rendered to you in connection
with the Potential Transaction and reasonable expenses and disbursements
incurred by such independent public accountant in connection with the Potential
Transaction, (d) fees, expenses and disbursements paid by you to other advisors,
and (e) other expenses incurred by you in connection with the Potential
Transaction. It is also agreed that the term "Fees and Expenses" does not
include (i) any transaction, "success" fee or similar type of financial advisory
fee paid to any financial advisor or investment banking firm retained by or
providing services to you or (ii) any commitment fees or expenses or similar
fees paid to lending institutions or financing sources in connection with the
financing of the Potential Transaction.
5. You agree to apprise the Special Committee of the Company's Board
of Directors (the "Committee") or its representatives, from time to time, of the
amount of Fees and Expenses incurred by you in connection with the Potential
Transaction. If and when you have incurred $250,000 in Fees and Expenses, you
agree to advise the Committee or its representatives as to the status of the
prospective financing for the Potential Transaction and furnish the Committee or
its representatives with any agreed upon term sheets or other agreements (which
may be redacted to eliminate information regarding any price you may determine
to propose that you pay for shares of the Company's stock or which you or your
advisors deem to be strategically sensitive to a transaction you may determined
to propose) relating to the prospective financing arrangements for the Potential
Transaction.
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Please indicate your agreement with the foregoing by signing and
returning one copy of this letter.
Sincerely,
XXXXXX GENERAL CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Member of Special Committee of
the Board of Directors
Agreed and Accepted by:
/s/ Xxx X. Xxxxxxx
-----------------------------------
Xxx X. Xxxxxxx
/s/ Xxxxxxx X. Xxxxx
-----------------------------------
Xxxxxxx X. Xxxxx
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