EMPLOYMENT AGREEMENT
This Employment Agreement is made and entered into on August 1,
1996 (the "Effective Date") by and between The Lane Company,
Incorporated, a Virginia corporation ("Lane") and K. Xxxxx Xxxxx, Xx.
("Executive").
WHEREAS, Executive is now and has been employed by Lane in senior
management executive positions and is broadly experienced in all
facets of Lane's operations; and
WHEREAS, it is in the best interests of Lane to assure that it
will have the continued dedication of Executive;
NOW THEREFORE, for good and valuable consideration and in order
to induce Executive to remain in the employ of Lane, the parties
covenant and agree as follows:
1. Definitions. The following terms shall have the following
meanings for purposes of this Agreement.
a. "Cause" means (i) an act or acts of personal dishonesty
taken by Executive and intended to result in substantial personal
enrichment of Executive at the expense of Lane, (ii) violations
by Executive of this Agreement or Executive's employment
obligations to Lane which are demonstrably willful on Executive's
part and which are not remedied within a reasonable period of
time after receipt of written notice from Lane, or (iii) the
conviction of Executive of a felony involving moral turpitude.
b. "Disability" means the incapacity to attend to and perform
effectively one's duties and responsibilities which continues for
at least 26 weeks after its commencement, as determined by a
physician selected by Lane.
c. "Employment Period" that period beginning on the Effective
Date and ending upon Executive's retirement or earlier
termination of employment.
2. Employment. Lane agrees to employ Executive, and
Executive agrees to serve Lane in an executive, managerial and
supervisory capacity, subject to the direction and control of the
Board of Directors of Lane, all upon the terms and conditions
hereinafter set forth. During the Employment Period:
a. Executive's position (including, without limitation,
status, offices, titles and reporting requirements), authority,
duties and responsibilities shall be at least commensurate in all
material respects with the most significant of those held,
exercised and assigned at any time during the 90-day period
immediately preceding the Effective Date,
b. Executive's services shall be performed at the location
where the Executive is employed on the Effective Date, or at any
office or location not more than thirty-five (35) miles from such
location,
c. Executive shall continue to receive an annual base salary
at least equal to the annual base salary payable to the Executive
by Lane on the Effective Date ("Base Salary"),
d. Executive shall continue to have an annual cash bonus
potential, either pursuant to the Lane Executive Incentive Plan
in effect on the Effective Date or pursuant to a similar
incentive compensation plan of Lane, at least equal to the level
in existence on the Effective Date ("Annual Bonus"), and
e. Executive shall be entitled to participate in all
incentive, savings and retirement plans, practices, policies and
programs applicable to other key executive employees of Lane
("Benefit Plans").
The failure of Lane, without Executive's consent, to comply with the
terms and conditions of employment as set forth in this Section 2
shall constitute "Good Reason" for Executive's termination of his
employment with Lane.
3. Best Efforts. Executive agrees during the Employment
Period to devote his best efforts and substantially all of his
business time and attention to the business of Lane, it being agreed
that the Executive will have complied with this obligation if he
devotes to the business of Lane his same best efforts and the same
time and attention to the business of Lane that he has devoted to the
business of Lane during the twelve months next preceding the Effective
Date. Executive agrees that he will perform such other executive
duties for Lane and for Lane's subsidiaries relating to its business
as the Board of Directors of Lane may reasonably direct.
4. Term. Subject to the provisions of Sections 4 and 5 of
this Agreement, either party shall have the right to terminate the
Employment Period at any time. If Executive's employment with Lane is
terminated by Lane, other than for Cause or as a result of his death
or Disability, or if Executive terminates his employment with Lane for
Good Reason, then Lane will, for the greater of (a) the period ending
three years after the Effective Date or (b) a period of one year after
the termination date (or, if shorter, until Executive reaches "Normal
Retirement Age" (as such concept is used in the primary retirement
plan in which Executive is a participant on the Effective Date)), (i)
pay to Executive as and when normally payable his Base Salary as in
effect on the date of termination and an amount equal to the average
Annual Bonus received by such Executive for the past three years prior
to termination (or a pro-rated portion of such average Annual Bonus)
and (ii) subject to program eligibility requirements and continuation
of programs by Lane, continue his participation in the Benefit Plans
in which he was participating on the date of termination of
employment.
5. Split Dollar Insurance Policy. If Executive's employment
with Lane is terminated by Lane other than for Cause or as a result of
his death or Disability, or if during such period Executive terminates
his employment with Lane for Good Reason, then Lane will continue to
make premium payments for so long as Lane is making payments to
Executive under Section 4 hereof under any and all split dollar life
insurance programs in effect on the life of the Executive as of the
Effective Date, after which the Executive will be entitled to
ownership of the policy and Lane will be entitled to premium
retrieval, all in accordance with the terms of the program, but only
to the extent of the cash value of the policy, and without recourse to
the Executive for the balance of any such premium retrieval.
6. Non-Competition. During the three-year period commencing
on the Effective Date and, if longer, while employed by Lane, and for
a period of one year after termination of employment, Executive shall
not, without the prior written consent of Lane, directly or
indirectly, own, control, finance, manage, operate, join or
participate in the ownership, control, financing, management or
operation of, or be connected as an employee, consultant or in any
other capacity with, any business engaged in the manufacture or
distribution of residential furniture in the United States. Nothing
in this Section 6 shall, however, restrict Executive from making
investments in other ventures which are not competitive with Lane, or
restrict Executive from owning less than one percent (1%) of the
outstanding securities of companies listed on a national stock
exchange or actively traded in the "over-the-counter" market. In
addition, if the Employment Period is terminated by Lane (other than
for Cause) and the Executive elects to forego the payments called for
in Sections 4 and 5 hereof, the provisions of this Section 6 shall not
apply. Should any of the terms of this Section 6 be found to be
unenforceable because they are over-broad in any respects then they
shall be deemed amended to the extent, and only to the extent,
necessary to render them enforceable. Both parties stipulate that
money damages would be inadequate to compensate for any breaches of
the terms of this Section 6, and that such terms shall be enforceable
through appropriate equitable relief, without the necessity of proving
actual damages and to an equitable accounting of all earnings,
profits, and other benefits arising from such violation, which rights
shall be cumulative and in addition to any other rights and remedies
to which Lane may be entitled.
7. Confidentiality. During the Employment Period and at all
times thereafter, Executive shall maintain the confidentiality of, and
shall not disclose to any person (except as his duties as an employee
of Lane may require) any non-public information concerning Lane or its
business.
8 Miscellaneous. This Employment Agreement shall be binding
upon and shall inure to the benefit of Executive's heirs, executors,
administrators and legal representatives, and shall be binding upon
and inure to the benefit of Lane and its successors and assigns. This
Agreement shall supersede and stand in place of any and all other
agreements between Executive and Lane regarding severance pay and/or
any and all severance pay benefits pursuant to any plan or practice of
Lane. This Employment Agreement shall take effect as of the day and
year first above set forth, and its validity, interpretation,
construction and performance shall be governed by the laws of the
Commonwealth of Virginia.
9. Indemnification. In the event that either party hereto is
required to pursue litigation against the other party to enforce his
or its rights hereunder, the prevailing party in any such litigation
shall be entitled to reimbursement of the costs and expenses of such
litigation, including attorney's fees.
10. Waivers. In consideration of the undertakings of Lane
set forth in this Agreement, Executive hereby irrevocably waives and
forever releases any and all claims and causes of action of any nature
whatsoever that Executive has or may have against Lane or any of its
officers, directors, employees or agents arising out of the
negotiation, execution, delivery or terms of this Agreement,
including, without limitation, any claims arising under the Age
Discrimination in Employment Act, 29 U.S.C. Section 21 et seq., and
any state or local law relating to age discrimination.
11. Entire Agreement. This Agreement contains the entire
agreement of the parties with respect to its subject matter, and no
waiver, modification or change of any of its provisions shall be valid
unless in writing and signed by the party against whom such claimed
waiver, modification or change is sought to be enforced.
IN WITNESS WHEREOF, the parties hereto have each executed this
Agreement the date set forth below.
THE LANE COMPANY, INCORPORATED
By: Xxxxx X. Xxxxxx
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Vice President
Vice-President
Agreed to and Approved:
FURNITURE BRANDS K. XXXXX XXXXX, XX.
INTERNATIONAL, INC.
By: X.X. Xxxxx By: K. Xxxxx Xxxxx, Xx.
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Chairman of the Board
