EXHIBIT 10.20
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EXECUTION COPY
DEFERRED COMPENSATION AGREEMENT
THIS DEFERRED COMPENSATION AGREEMENT (the "Agreement") is made and
entered into as of this 29th day of September, 2000, by and between Wilmar
Industries, Inc. (the "Company") and Xxxxxxx X. Xxxx ("Executive").
WITNESSETH:
WHEREAS, Executive has been employed by Xxxxxxx, Inc. ("Xxxxxxx") for a
number of years, and is currently the President and Chief Executive Officer of
Xxxxxxx; and
WHEREAS, the Company, BW Acquisition, Inc. ("Merger Sub") and Xxxxxxx
simultaneous with the execution and delivery of this Agreement, have closed the
merger pursuant to the Agreement and Plan of Merger dated as of July 10, 2000
(the "Merger Agreement"), pursuant to which Merger Sub has merged with and into
Xxxxxxx upon the terms and subject to the conditions set forth in the Merger
Agreement (the "Merger"); and
WHEREAS, the Company desires to compensate Executive for his future
services to the Company and to create an incentive for the Executive to remain
in the employ of the Company and continue to serve the Company following the
Merger;
NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the adequacy and
receipt of which are hereby acknowledged, the parties agree as follows:
1. DEFERRED COMPENSATION. The Company will credit $1,707,708 to
an account established on the books of the Company on behalf of Executive (the
"Account"). In addition, six months after the date hereof, and every six months
hereafter, and on the date of any distribution pursuant to the terms of the
Agreement, the Company will credit the Account with interest at the long-term
federal rate as of the date hereof, compounded semi-annually, on the balance of
the Account until the balance of the Account is distributed in full to
Executive.
2. PAYMENT OF DEFERRED COMPENSATION.
2.1. AMOUNT AND FORM. The Company will distribute to
Executive (or, in the case of the Employee's death, to his estate) the vested
balance of the Account in a lump sum determined pursuant to Section 3 hereof.
The balance of the Account as of any date shall equal the amounts theretofore
credited to such Account, including any interest credited pursuant to Section 1
as of such date.
2.2. TIMING. Distribution of the vested balance of the
Account determined pursuant to Section 3 hereof to Executive (or, in the case of
Executive's death, to his estate) will commence as soon as practicable following
the termination of Executive's employment with the Company, regardless of the
reason for such termination.
3. VESTING AND FORFEITURE OF DEFERRED COMPENSATION.
3.1. IN GENERAL. Subject to the terms of this Section 3,
Executive will become vested in the balance of the Account over twenty-four
months, with one-twenty-fourth (1/24th) of the balance of the Account to become
non-forfeitable on the first day of each of the first twenty-four months
following the date hereof; provided Executive is continuously employed by the
Company through the applicable monthly date. The numerator of the fraction of
the balance to become non-forfeitable each month will be 1, and the denominator
will be the number of months remaining before the entire Account could be vested
pursuant to this Section 3.1.
3.2. TERMINATION FOR CAUSE; TERMINATION WITHOUT GOOD
REASON. If Executive's employment with the Company is terminated by the Company
for Cause (as defined in the Employment Agreement entered into as of the date
hereof between the Company and the Executive (the "Employment Agreement")) or is
terminated by Executive for any reason other than death, Disability (as defined
in the Employment Agreement) or for Good Reason (as defined in the Employment
Agreement), the portion of the Account that is unvested as of the date of such
termination will be forfeited by the Executive without further consideration.
3.3. OTHER TERMINATIONS. If Executive's employment with
the Company is terminated due to (i) death, (ii) Disability, (iii) by the
Company other than for Cause or (iv) by Executive for Good Reason, the entire
balance of the Account will become fully vested and non-forfeitable as of the
date of such termination.
4. LIMITATION OF EXECUTIVE'S RIGHTS. Nothing in this Agreement
shall be construed as conferring upon Executive any right to continue in the
employment of the Company, nor shall it interfere with the rights of the Company
to terminate the employment of Executive. Any amounts payable hereunder shall
not be deemed salary or other compensation to Executive for the purposes of
computing benefits to which Executive may be entitled under any other
arrangement established by the Company for the benefit of its employees.
5. OBLIGATIONS TO THE COMPANY. If Executive becomes entitled to a
distribution of benefits under this Agreement, and if at such time Executive has
outstanding any debt or obligation to the Company pursuant to the Promissory
Note from Executive to the Company dated as of the date hereof, then the Company
may offset such amount owed to it against the amount of benefits otherwise
distributable.
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6. NONALIENATION OF BENEFITS. Except as expressly provided
herein, Executive will not have the power or right to transfer (otherwise than
by will or the laws of descent and distribution), alienate, pledge, or otherwise
encumber his interest under this Agreement. The Company's obligations under this
Agreement are not assignable or transferable, except to (a) any corporation or
partnership which acquires all or substantially all of the Company's assets or
(b) any corporation or partnership into which the Company may be merged or
consolidated. The provisions of this Agreement shall inure to the benefit of
Executive and Executive's heirs, executors, administrators or successors in
interest.
7. TAXES. The Company may make such provisions and take such
action as it may deem appropriate for the withholding of any taxes which the
Company is required by any law or regulation of any governmental authority,
whether federal, state or local, to withhold in connection with any benefits
under this Agreement. Such provisions may include, but will not be limited to,
the withholding of appropriate sums from any amount otherwise payable to
Executive (or his estate, as applicable), without regard to whether such sums
are payable to Executive under this Agreement. Executive, however, shall be
responsible for the payment of all individual tax liabilities relating to any
such benefits to the extent that such tax liabilities are not satisfied by the
withholding described in this Section.
8. UNFUNDED AGREEMENT. This is an unfunded deferred compensation
arrangement. Amounts payable hereunder shall be payable out of the general
assets of the Company, and no segregation of any assets whatsoever for such
benefits shall be made. Notwithstanding any segregation of assets or transfer to
a grantor trust, with respect to any payments not yet made to Executive, nothing
contained herein shall give any Executive any rights to assets that are greater
than those of a general creditor of the Company.
9. SEVERABILITY. If any provision of this Agreement is held
unenforceable, the remainder of this Agreement shall continue in full force and
effect without regard to such unenforceable provision and shall be applied as
though the unenforceable provision were not contained in this Agreement.
10. ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties hereto with respect to the matters contemplated herein and
supersedes all prior agreements or understandings among the parties related to
such matters.
11. AMENDMENT OR MODIFICATION; WAIVER. No provision of this
Agreement may be amended or waived unless such amendment or waiver is agreed to
in writing, signed by Executive and an officer of the Company thereunto duly
authorized. Except as otherwise specifically provided in this Agreement, no
waiver by either party hereto of any breach by the other party hereto of any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of a similar or dissimilar provision or condition at
the same or at any prior or subsequent time.
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12. GOVERNING LAW; JURISDICTION. The Agreement shall be construed
in accordance with and governed by the laws of the State of Florida, without
reference to the principles of conflict of laws. The parties agree to the
exclusive jurisdiction of the state and federal courts in Xxxxx County, Florida
for all disputes arising under this Agreement.
13. TITLES. Titles to the Sections and subsections in this
Agreement are intended solely for convenience and no provision of this Agreement
is to be construed by reference to the title of any Section or subsection.
14. NOTICES. All notices and other communications hereunder must
be in writing and will be deemed to have been given if delivered personally or
sent by registered or certified mail (return receipt requested), postage
prepaid, or by telecopy (immediately followed by telephone confirmation of
delivery of such telecopy with the intended recipient of such notice and by
notice in writing sent promptly by registered or certified mail as provided
above) to the parties to this Agreement at the following addresses or such other
address for a party as is specified in like notice:
To the Company: Wilmar Industries, Inc.
000 Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Telecopy: 000-000-0000
Attention: Chairman of the Board
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Facsimile: 212/373-2744
Attention: Xxxx Xxxxxxxxx, Esq.
To Executive: Xxxxxxx X. Xxxx
000 X. Xxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Telephone: 904/000-0000
With a copy to: Xxxxxxx X. Xxxx
0000 Xxxxxx Xxxx Xxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
All such notices and communications will be deemed to have been received on the
date of personal delivery, on the date that the telecopy is confirmed as having
been received or on the third business day after the mailing thereof, as the
case may be.
15. ATTORNEYS' FEES. In the event of one or more legal proceedings
relating to a dispute between the Company and Executive arising under this
Agreement, the losing party shall pay all costs, including reasonable attorneys'
fees and expenses, incurred by the prevailing party in connection with such
proceeding or proceedings, as
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applicable.
16. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, which together will constitute one agreement. It will not be
necessary for each party to sign each counterpart so long as each party has
signed at least one counterpart.
IN WITNESS WHEREOF, the parties hereto have executive this Agreement as
of the day and year first set forth above.
WILMAR INDUSTRIES, INC.
By: /s/ Xxxxxxx Xxxxxxx
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Name: Xxxxxxx Xxxxxxx
Title: Senior Vice President
/s/ Xxxxxxx X. Xxxx
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XXXXXXX X. XXXX
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