EXHIBIT 10.5
EMPLOYMENT AGREEMENT
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THIS AGREEMENT made this 28th day of March, 1994, by and between
XXXXXXXX-XXXXX COMPANY, a Mississippi corporation ("Company"); and XXXXXXX X.
XXXXX, XX., of Memphis, Tennessee ("Executive").
WITNESSETH:
WHEREAS, the Executive is presently employed by the Company as President
and Chairman of the Board;
WHEREAS, the Board of Directors of the Company acting through its Salary
and Benefits Committee ("Board") recognizes that the Executive's contribution to
the growth and success of the Company over the past years has been substantial;
WHEREAS, the Board desires to assure the Company of the continued superior
performance of the Executive, and to make certain changes in the Executive's
employment arrangements with the Company which the Board has determined will
reinforce and encourage the continued attention and dedication to the Company of
the Executive as the leader of the Company's management team, in the best
interest of the Company and its shareholders; and
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WHEREAS the Executive is willing to commit himself to continue to serve the
Company, in a superior fashion;
NOW, THEREFORE, in consideration of the premises and the respective
covenants and agreements of the parties herein contained, and intending to be
legally bound hereby, the parties hereto agree as follows:
Section 1. Executive Employment. The Executive agrees that he will
continue to perform his regular duties as President and Chairman of the Board of
the Company, and such other duties as may be assigned to him by the Board.
Notwithstanding the foregoing, the Board may terminate the Executive's
employment at any time, subject to the Company's providing the benefits
hereinafter specified, if applicable.
Section 2. Termination. The Executive shall be entitled to the benefits
provided in Section 3 hereof upon the termination of his employment by the
Company, unless such termination is (a) because of the Executive's death or
Retirement, (b) by the Company for Cause or Disability, (c) by the Executive
other than for Good Reason.
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(i) Disability; Retirement.
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(A) Termination by the Company of the Executive's employment for
"Disability" shall mean termination because of his absence from
his duties with the Company on a full time basis for one hundred
thirty (130) consecutive business days as a result of his
incapacity due to physical or mental illness, unless within
thirty (30) days after Notice of Termination (as hereinafter
defined) is given following such absence he shall have returned
to the full time performance of his duties.
(B) Termination by the Company or the Executive of the Executive's
employment for "Retirement" shall mean termination in accordance
with the Company's retirement policy, including early retirement,
generally applicable to its salaried employees.
(ii) Cause. Termination by the Company of the Executive's employment
for "Cause" shall mean termination upon (A) the willful and continued
failure by the Executive to substantially perform his duties with the
Company (other than any such failure resulting
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from his incapacity due to physical or mental illness) after a demand
for substantial performance is delivered to the Executive by the
Board, which specifically identifies the manner in which the
Executive has not substantially performed his duties; or (B) the
willful engaging by the Executive in misconduct which is materially
injurious to the Company, monetarily or otherwise. For purposes of
this paragraph, no act, or failure to act, on the Executive's part
shall be considered "willful" unless done, or omitted to be done, by
the Executive not in good faith and without reasonable belief that
his action or omission is in the best interest of the Company.
Notwithstanding the foregoing, the Executive shall not be deemed to
have been terminated for Cause unless and until there shall have been
delivered to him a copy of a Notice of Termination from the Board,
after a reasonable opportunity has been afforded him, together with
his counsel, to be heard before the Board, and a finding in good
faith by the Board that the Executive was guilty of conduct set forth
in clauses (A) or (B) of the first sentence of this paragraph,
specifying the particulars thereof in detail.
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(iii) Good Reason. Termination by the Executive of his employment for
"Good Reason" shall mean termination based on:
(A) without the Executive's express written consent, the assignment
to him of any duties inconsistent with his positions, duties,
responsibilities and status with the Company as of the date of
this Agreement, or a change in his reporting responsibilities,
titles or offices as in effect as of the date of this Agreement,
or any removal of him from or any failure to re-elect him to any
of such positions, except in connection with the termination of
his employment for Cause, Disability or Retirement or as a result
of his death or by him other than for Good Reason;
(B) except where such action is taken at the same time and is
proportionate with the same action relative to all other
executives of the Company,
(1) a reduction by the Company in the Executive's base salary as
in effect on the date of this Agreement or as the same may
be increased from time to time;
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(2) a failure by the Company to continue any bonus plans in which
the Executive is entitled to participate from time to time,
or his participation in such plans;
(3) the failure by the Company to continue in effect any benefit
or compensation plan, including but not limited to any
retirement plan, life insurance plan, health-and-accident
plan or disability plan in which the Executive is
participating at the time of this Agreement (or plans
providing him with substantially similar benefits), the
taking of any action by the Company which would adversely
affect the Executive's participation in or materially reduce
his benefits under any such plans or deprive him of any
material fringe benefit enjoyed by him at the time of this
Agreement, the failure by the Company to include the
Executive in any such plan, benefit or arrangement which may
become applicable in the future to other similarly-situated
executives of the Company or the failure by the Company to
provide the Executive with the number of paid vacation days
to which
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he is then entitled in accordance with the Company's
normal vacation policy in effect on the date of this
Agreement;
(C) without the Executive's express written consent, the Company's
requiring him to be based anywhere other than within fifty (50)
miles of his present Memphis, Tennessee office location, except
for required travel on the Company's business to an extent
substantially consistent with his present business travel
obligations;
(D) the failure by the Company to obtain the assumption of this
Agreement by any successor as contemplated in Section 4 hereof; or
(E) Any purported termination of the Executive's employment which is
not effected pursuant to a Notice of Termination satisfying the
requirements of paragraph (iv) below (and, if applicable,
paragraph (ii) above); and for purposes of this Agreement, no such
purported termination shall be effective.
(iv) Notice of Termination. Any purported termination by the Company
pursuant to paragraph (i) or (ii) above or by the Executive pursuant to
subparagraph (B) of
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paragraph (i) or paragraph (iii) above shall be communicated by written
Notice of Termination to the other party. 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.
(v) Date of Termination. For purposes of this Agreement, "Date of
Termination" shall mean (A) 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 performance
of his duties on a full-time basis during such thirty (30) day period);
(B) if the Executive's employment is terminated pursuant to paragraph
(ii) above, the date specified in the Notice of Termination; and (C) if
the Executive's employment is terminated for any other reason, the date
on which a Notice of Termination is given; provided that if within
thirty (30) days after any Notice of Termination is given the party
receiving such Notice of Termination notifies the other party that a
dispute exists concerning the termination, the
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Date of Termination shall be the date on which the dispute is finally
determined, either by mutual written agreement of the parties, by a
binding and final arbitration award or by a final judgment, order or
decree of a court of competent jurisdiction entered upon such
arbitration award (the time for appeal therefrom having expired and no
appeal having been perfected).
Section 3. Certain Benefits Upon Termination. If the Executive's
employment by the Company shall be terminated (a) by the Company other than for
Cause, Retirement or Disability, or (b) by the Executive for Good Reason (and
other than for Retirement or by death), then the Executive shall be entitled to
the benefits provided under paragraphs (i), (ii) and (iii) immediately below:
(i) the Company shall pay to the Executive his full base salary through the
Date of Termination at the rate in effect at the time Notice of
Termination is given, plus credit for any vacation earned but not taken
and the amount, if any, of any bonus for a past fiscal year which has
not yet been awarded or paid to him under any bonus plan;
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(ii) the Company shall pay as supplemental deferred compensation to the
Executive, no later than the fifth day following the Date of Termination
(or in the event of the Executive's death following his entitlement to
benefits hereunder and prior to payment thereof, as soon as reasonably
practicable, but in no event more than sixty (60) days following his
death), a lump sum cash amount equal to the product of the Executive's
average annual compensation payable to him by the Company in his
capacity as President and Chairman of the Board and includible in his
gross income for Federal income tax purposes during his most recent five
(5) taxable years ending before the Date of Termination (or during such
shorter number of his most recent taxable years as he has served as
President and Chairman of the Board, with any partial year being
annualized for the purpose of this computation), multiplied by three (3)
and less $1.00; and
(iii) the Company at its sole expense shall maintain in full force and effect
for the benefit of the Executive and his eligible dependents the health-
and-accident plan coverage provided the Executive immediately prior to
the Notice of Termination, until the earlier of (A) the expiration of
twenty-four (24)
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months following the Date of Termination or (B) eligibility of the
Executive and his dependents for coverage under the health-and-accident
plan of a successor employer of the Executive providing comparable
benefits to that of the Company provided, however, if such continued
coverage is barred for any reason, the Company shall provide comparable
coverage during such period; provided further, however, if at the time
continued coverage hereunder is to terminate, the Executive presents
verifiable evidence to the Company of his uninsurability thereafter
under a health-and-accident plan providing comparable benefits, the
Company shall make such coverage available to the Executive at the
Executive's sole expense, as determined on a reasonable actuarial basis.
In no event shall the Executive be required to mitigate the amount of any
payment provided for in this Section 3 by seeking other employment or otherwise,
nor shall the amount of any payment provided for in this Section 3 be reduced by
any compensation earned by the Executive as the result of employment by another
employer after the Date of Termination, or otherwise.
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Section 4. Successors; Binding Agreement.
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(i) 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, by agreement in form and
substance satisfactory to the Executive, 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. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which executes and delivers the agreement provided for in this
Section 4 or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law.
(ii) This Agreement shall inure to the benefit of and be enforceable by the
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devises and legatees. If the Executive
should die while any amount would still be payable to him hereunder if he
had continued to live, all such amounts, unless
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otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to his devisee, legatee or other designee or, if there be
no such designee, to his estate.
Section 5. Notice. 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 certified or
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below:
If to the Company:
Xxxxxxxx-Xxxxx Company
X.X. Xxx 00
Xxxxxxx, XX 00000
Attention: Secretary
If to the Executive:
Xxxxxxx X. Xxxxx, Xx.
000 X. Xxxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxx 00000
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or other such address as either party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
Section 6. Miscellaneous. No provisions of this Agreement may be modified,
waived or discharged, unless such waiver, modification or discharge is agreed to
in writing signed by the Executive and the Company. No waiver by 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. The rights of the Executive
hereunder shall be solely those of a general unsecured creditor of the Company.
All payments hereunder shall be made from the general assets of the Company. The
interest of the Executive hereunder is not subject to pledge, assignment or
other alienation, any attempt at which shall be void. 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 set forth
expressly in this Agreement. This Agreement shall be governed by and construed
in accordance with the laws of the State of Tennessee.
Section 7. Validity. The invalidity or unenforceability of any provisions
of this Agreement shall not effect the validity or
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enforceability of any other provision of this Agreement, which shall remain in
full force and effect.
Section 8. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
XXXXXXXX-XXXXX COMPANY
By: The Salary and Benefits
Committee of the Board of
Directors of Xxxxxxxx-Xxxxx
Company (the "Committee")
/s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx, Director and
Member of the Committee
/s/ Xxxxxxx X. Xxxxxxxxxx
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Xxxxxxx X. Xxxxxxxxxx, Xx.,
Director and Member of the Committee
/s/ Xxxx Xxxxxx, Xx.
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Xxxx Xxxxxx, Director and
Member of the Committee
/s/ Xxxxxxx X. Xxxxx, Xx.
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XXXXXXX X. XXXXX, XX.
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AGREEMENT
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THIS AGREEMENT dated December 10, 1996, is made by and between
Xxxxxxxx-Xxxxx Company, a Mississippi corporation (the "Company"), and Xxxxxxx
X. Xxxxx, Xx. (the "Executive").
WHEREAS, the Company considers it generally in its best interests and
those of its shareholders to xxxxxx the continuous employment of key management
personnel; and
WHEREAS, the Company considers it appropriate that the interests of
its key executives be aligned as closely as possible with those of its
shareholders; and
WHEREAS, the Salary and Benefits Committee (the "Committee") of the
Board of Directors of the Company (the "Board") recognizes that when the
possibility of a Change in Control (as defined in Section 10.2 hereof) exists,
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
Company and its shareholders, and the Committee recognizes that in such a case
there is a special need to insure the attention of the Executive to any
responsibilities that the Executive may have in connection with preparing for
the Change in Control, without distraction; and
WHEREAS, the Committee has determined that appropriate steps should
be taken (a) to reinforce and encourage the continued attention and dedication
of key members of the Company's management, including the Executive, to their
assigned duties without distraction concerning the possibility of a Change in
Control, (b) to secure the performance of such duties by management and the
Executive in connection with the proposed Change in
Control as may be assigned to management and to the Executive, and (c) to
compensate Executive for Executive's efforts in performing his duties to the
Company and to recognize Executive's contributions to the appreciation of the
value of the Company upon realization or recognition in connection with 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
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Agreement are provided in Section 10 and elsewhere in this Agreement.
2. Term of Agreement. This Agreement shall commence on the date hereof and
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shall remain in effect thereafter until April 30, 1999; provided, however, that
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the obligations of the Company and the Executive provided for herein arising out
of a Change in Control effected prior to that date shall continue thereafter
until the obligations of such parties have been performed in full; and provided
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further that this Agreement may be terminated for Cause as set forth in Section
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3.3. This Agreement may be continued after April 30, 1999, by the mutual written
agreement of the Company and the Executive executed before or after that date.
3. Company's Basic Covenant Summarized; Limitation on Employment
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Commitment; Termination of this Agreement for Cause.
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3.1 Basic Covenant. In order to induce the Executive to remain in the
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employ of the Company and in consideration of the Executive's covenants set
forth in Section 4 hereof, the Company agrees, under and subject to the terms
and conditions set forth herein, that (a) upon a Change in Control during the
term of this Agreement, certain benefits shall be paid to the extent set
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forth in Section 5 hereof, and (b) if the Executive is discharged or terminated
without Cause in Anticipation of a Change of Control, the Company shall pay to
the Executive the benefits and other payments provided for hereunder to the same
extent as if the Executive had remained employed by the Company on the date of
the Change in Control.
3.2 Limitation; No Employment Commitment. This Agreement is not
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a commitment or agreement by the Company to employ the Executive. It does not,
however, modify or change any other written agreement between the Company and
the Executive providing for the Executive's employment, although it supersedes
any agreement or purported agreement between the Company and the Executive with
respect to the Executive's employment which is not evidenced by a writing signed
on behalf of the Company by an authorized officer and by the Executive. Without
limiting the generality of the foregoing, the Company, without obligation under
this Agreement, may discharge the Executive at any time (subject in such case
only to the Executive's rights under any other written agreement referred to
above) with or without Cause, but subject to clause (b) of Section 3.1.
3.3 Termination of this Agreement for Cause. This Agreement may
---------------------------------------
be terminated at any time for Cause by the Board or the chief executive officer
of the Company by a notice in writing, whether or not the Executive's employment
is terminated in connection with such Cause; and upon such termination of this
Agreement for Cause, this Agreement shall have no further force or effect and
neither party shall have any rights under it.
4. The Executive's Employment Covenants. (a) The Executive agrees
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that, subject to the terms and conditions of this Agreement, in the event of
each and every Potential Change in Control, the Executive will remain in the
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employ of the Company until the earliest of (i) a date which is nine (9) months
after the date of such Potential Change of Control; (ii) the date on which such
Potential Change of Control shall cease to exist; or (iii) the date of a Change
in Control. The agreement of Executive in this clause (a) of this Section 4
contained shall come into effect each time that there shall be a Potential
Change in Control during the term hereof. The Executive is not obligated by this
Agreement to remain employed by the Company at any time other than the times
referred to in the first sentence of this clause (a) of this Section 4 and may,
as far as this Agreement is concerned, terminate his employment at any time
other than within the time periods referred to in such sentence. The only
consequences of a violation by the Executive of the Agreement contained in the
first sentence of this clause (a) of this Section 4 is the loss of entitlement
to any and all benefits or other sums payable by the Company hereunder. Nothing
in this Agreement contained affects the obligations of the Executive with
respect to the Executive's employment by the Company under any other written
agreement between the Company and the Executive.
(b) The Executive agrees that if incident to a Change in Control a
Person shall succeed to the Company, or a Person shall be merged into the
Company, Executive will remain in the employ of the Company or such successor
for a period of one year following the Change in Control, if so requested in
writing by such successor prior to the Change in Control or by the Company
immediately following the Change in Control; provided that, the Company or such
successor shall: (i) during such year compensate Executive by way of base salary
and other compensation arrangements and plans (apart from this Agreement or any
agreement referred to in the final sentence of this clause (b) of this Section
4) at no less than the level prevailing at the Company
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immediately prior to the Change in Control; (ii) require of Executive only
duties of commensurate responsibility to those which Executive had immediately
prior to such Change in Control; and (iii) not require any change in the place
of employment of Executive more than 25 miles from the place at which Executive
was employed immediately prior to the Change of Control. This clause (b) of this
Section 4 shall not affect the payment or the time of payment of any sums
payable under Sections 5, 6 or 8, and the only remedy of the Company or such
successor in the case of any breach of this clause (b) of this Section 4 by
Executive shall be compensatory damages for loss of services, brought in an
arbitration subject to Section 9.14. If Executive and the Company have, prior to
the date of this Agreement, entered into another agreement providing for
payments to Executive upon the termination of Executive's employment, for the
purposes of such agreement the employment of Executive shall have deemed to have
been terminated by the Company without cause upon the Change in Control,
regardless of whether the Company or its successor exercises its option to
continue Executive's employment under this clause (b) of this Section 4.
5. Payment in the Event of a Change in Control.
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5.1 Basic Calculation. Upon the occurrence of a Change in Control, the
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Executive, if then employed by the Company or if Terminated by the Company
without Cause in Anticipation of the Change of Control in question, shall
receive in cash the amount computed under the following table:
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TOTAL SHAREHOLDER PORTION OF TOTAL SHAREHOLDER
CONSIDERATION PAID IN CONSIDERATION PAID
RESPECT OF THE CHANGE TO BE PAID TO EXECUTIVE
IN CONTROL --------------------------
-----------------
If not in excess of 0.15%
$60,000,000
If in excess of $60,000,000 $90,000, plus 0.24% of the
but not in excess of excess over $60,000,000
$120,000,000
If in excess of $120,000,000 $232,000, plus 0.3% of the
but not in excess of excess over $120,000,000
$180,000,000
If in excess of $180,000,000 $414,000, plus 0.45% of the
but not in excess of excess over $180,000,000
$240,000,000
If in excess of $240,000,000 $684,000, plus 0.6% of the
excess over $240,000,000
5.2 Payment. The Company shall, within three (3) days
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following the Change in Control, pay any amount calculated under Section
5.1 and under Section 6 to Executive, subject to Section 7.
5.3 Limitation. In no case shall more than one Change in
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Control be taken into account under this Section 5, and following a Change
in Control, there shall be no liability of the Company or any of its
successors for the making of any payment under this Section 5 in respect of
any subsequent Change in Control; and upon such first Change of Control the
obligations of payment and employment provided for by Sections 3, 4, 5 and
6 hereof shall cease and have no further effect, but the obligations of
the Company and the Executive under any other agreement of employment shall
remain in full force and effect subject to their terms, unless by their
terms they terminate upon such Change in Control, and in any case subject
to any other applicable provision for their termination.
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6. Gross-Up Payment. (a) In the event that the Executive becomes
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entitled to any payments under Section 5 or Section 8 of this Agreement, or
under any other agreement, plan or arrangement for the making of payments to the
Executive upon a Change in Control or upon the termination of employment caused
by, subsequent to, or otherwise with respect to a Change in Control (together,
the "Total Benefits"), and in the event that any of the Total Benefits will be
subject to the Excise Tax, the Company shall pay to the Executive an additional
amount (the "Gross-Up Payment") such that the net amount retained by the
Executive, after deduction of any Excise Tax on the Total Benefits and any
federal, state and local income tax and Excise Tax upon the payment provided for
by this Section 6, shall be equal to the Total Benefits. If no payment is due
Executive upon a Change of Control under Section 5 of this Agreement, no payment
shall be made under this Section 6.
(b) For purposes of determining whether any of the Total Benefits
will be subject to the Excise Tax and the amount of such Excise Tax, (i) any
other payments or benefits received or to be received by the Executive in
connection with a Change in Control or the Executive's termination of employment
(whether pursuant to the terms of this Agreement or any other agreement, plan or
arrangement with the Company, any Person whose actions result in a Change in
Control or any Person affiliated with the Company or such Person) shall be
treated as "parachute payments" within the meaning of Section 280G(b)(2) of the
Code, and all "excess parachute payments" within the meaning of Section
280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion
of tax counsel ("Tax Counsel") selected by the Company's independent auditors
and acceptable to the Executive, such other payments or benefits (in whole or in
part) do not constitute parachute payments, or such
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excess parachute payments (in whole or in part) represent reasonable
compensation for services actually rendered within the meaning of Section
280G(b)(4) of the Code in excess of the Base Amount, or are otherwise not
subject to the Excise Tax, (ii) the amount of the Total Benefits which shall be
treated as subject to the Excise Tax shall be equal to the lesser of (A) the
total amount of the Total Benefits reduced by the amount of such Total Benefits
that in the opinion of Tax Counsel are not parachute payments, or (B) the
amount of excess parachute payments within the meaning of Section 280G(b)(1)
(after applying clause (i), above, and (iii) the value of any non-cash
benefits or any deferred payment or benefit shall be determined by the
Company's independent auditors in accordance with the principles of sections
280G(d)(3) and (4) of the Code. For purposes of determining the amount of the
Gross-Up Payment, the Executive shall be deemed to pay federal income taxes at
the highest marginal rate of federal income taxation in the calendar year in
which the Gross-Up Payment is to be made and state and local income taxes at the
highest marginal rate of taxation in the state and locality of the Executive's
residence on the Date of Termination, net of the reduction in federal income
taxes which could be obtained from deduction of such state and local taxes
(calculated by assuming that any reduction under Section 68 of the Code in the
amount of itemized deductions allowable to the Executive applies first to reduce
the amount of such state and local income taxes that would otherwise be
deductible by the Executive).
(c) In the event that the Excise Tax is subsequently determined to
be less than the amount taken into account hereunder at the time of termination
of the Executive's employment, the Executive shall repay to the Company, at the
time that the amount of such reduction in Excise Tax is finally determined, the
portion of the Gross-Up Payment attributable to such reduction (plus that
portion
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of the Gross-Up Payment attributable to the Excise Tax and federal, state
and local income tax imposed on the Gross-Up Payment being repaid by the
Executive to the extent that such repayment results in a reduction in
Excise Tax and/or a federal, state or local income tax deduction) plus
interest on the amount of such repayment at the rate provided in Section
1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined
to exceed the amount taken into account hereunder at the time of the
termination of the Executive's employment (including by reason of any
payment the existence or amount of which cannot be determined at the time
of the Gross-Up Payment), the Company shall make an additional Gross-Up
Payment to the Executive in respect of such excess (plus any interest,
penalties or additions payable by the Executive with respect to such
excess) at the time that the amount of such excess is finally determined.
(d) If Executive is entitled to any other payments or
benefits in connection with a Change in Control or the termination of
Executive's employment, as referred to in clause (b) of this Section 6,
otherwise than those payable under this Agreement (collectively, "Other
Arrangements"), and if any of those Other Arrangements are subject to a
limitation designed to prevent payments under them from being "parachute
payments" or "excess parachute payments" within the meaning of the
provisions of the Code referred to in clause (b) of this Section 6 through
an express reference to such limitations in the Code, then, if any amount
is payable to Executive under Section 5 of this Agreement, such limitations
shall no longer be deemed to be effective for any purpose of those Other
Arrangements or in making calculations under this Section 6.
7. Timing of Section 6 Payments. The payments provided for in
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Section 6 shall be made not later than the third (3rd) day following the
Change in Control, provided, however, that if the amounts of such payments
cannot be
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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 and shall pay the remainder of such payments
(together with interest at the rate provided in Section 1274(b)(2)(B) of the
Code from the third (3rd) day following the Change of Control to the payment of
such remainder) as soon as the amount thereof can be determined but in no event
later than the thirtieth (30th) day after the Change in Control. 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 from the third (3rd) day following the Change in Control to the date of
repayment of such excess).
8. REIMBURSEMENT OF CERTAIN LEGAL COSTS. The Company shall pay to the
------------------------------------
Executive all reasonable actual legal fees and expenses incurred by the
Executive as a result of a Change in Control which entitles the Executive to any
payments under this Agreement relating to such entitlement including without
limitation all such fees and expenses, if any, incurred (a) in seeking in good
faith to obtain or enforce (subject to Section 9.14) any right or benefit
provided by this Agreement or (b) 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 five
(5) 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.
-10-
9. Miscellaneous.
-------------
9.1 No Mitigation. The Company agrees that in the case of a
-------------
Termination without Cause of the Executive in Anticipation of a Change in
Control, the Executive will not be required to seek other employment or to
attempt in any way to reduce any amounts payable to the Executive by the Company
pursuant to this Agreement. Further, the amount of any payment or benefit
provided for under this Agreement shall not be reduced by any compensation
earned by the Executive as the result of employment by another employer, by
retirement benefits, or by offset against any amount claimed to be owed by the
Executive to the Company (including, without limitation, any claim by the
Company or a successor to the Company for breach of the agreement contained in
clause (b) of Section 4), except such amount as may be evidenced by promissory
notes or similar obligations executed by the Executive.
9.2 Successors. In addition to any obligations imposed by law
----------
upon any successor to the Company, the Company shall be obligated to require any
successor (whether direct or indirect, by purchase, merger, consolidation,
operation of law, or otherwise) to all or substantially all of the business and
/or assets of the Company expressly to assume and agree, in an instrument in
writing, to perform this Agreement in the same manner and to the same extent
that the Company would have been required to perform it if no such succession
had taken place, subject, however, to Section 5.3 hereof. Failure of the Company
to obtain such assumption and agreement prior to the effectiveness of any such
succession shall deemed to be a breach of this Agreement in which the successor
shall be deemed to have participated.
9.3 Incompetency. Any benefit payable to or for the benefit of
------------
the Executive, if legally incompetent or incapable of giving a receipt therefor,
-11-
shall be deemed paid when paid to the Executive's guardian or to the party
providing or reasonably appearing to the Company to be providing for the care of
such person, and such payment shall fully discharge the Company.
9.4 Death. 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 is payable to the Executive hereunder
(other than obligations 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. If the Executive shall die after a Potential Change in
Control shall have occurred and a Related Change of Control thereafter occurs,
the Executive shall be deemed for the purposes of Sections 5 and 6 hereof to
have been employed by the Company upon the date of the Change in Control, and
the same shall be the case in the event the Executive shall have been Terminated
following a Potential Change of Control without Cause in Anticipation of a
Change in Control and shall have died prior to the Related Change in Control. In
no other case shall an Executive who is dead upon the date of a Change in
Control receive any payments under this Agreement.
9.5 Notices. For the purpose of this Agreement, notices and all
-------
other communications required or permitted 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
-12-
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:
Xxxxxxxx-Xxxxx Company
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Attention: President
To the Executive:
Xxxxxxx X. Xxxxx, Xx.
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
9.6 Modification, Waiver. 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 on behalf of the Company by
such officer as may be specifically designated by the Board. No waiver by
either party hereto at any time of any breach by the other party hereto of, or
of 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.
9.7 Entire Agreement. 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.
9.8 GOVERNING LAW. THE VALIDITY, INTERPRETATION, CONSTRUCTION
-------------
AND PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
MISSISSIPPI WITHOUT REFERENCE TO ANY CONFLICT-OF-LAWS PRINCIPLES.
-13-
9.9 Statutory Changes. All references to sections of the
-----------------
Exchange Act or the Code shall be deemed also to refer to any successor
provisions to such sections.
9.10 Withholding. Any payments provided for hereunder shall be
-----------
subject to any applicable withholding required under federal, state or local law
and any additional withholding to which the Executive has agreed.
9.11 Validity. The invalidity or unenforceability or 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.
9.12 No Right to Continued Employment. Nothing in this
--------------------------------
Agreement shall be deemed to give any Executive the right to be retained in the
employ of the Company, or to interfere with the right of the Company to
discharge the Executive at any time and for any lawful reason, subject in all
cases only to the express terms of this Agreement.
9.13 No Assignment of Benefits. Except as otherwise provided
-------------------------
herein or by law, no right or interest of any Executive under the Agreement
shall be assignable or transferable, in whole or in part, either directly or by
operation of law or otherwise, including without limitation by execution, levy,
garnishment, attachment or pledge, or in any other manner; no attempted
assignment or transfer thereof shall be effective; and no right or interest of
any Executive under this Agreement shall be liable for, or subject to, any
obligation or liability of such Executive.
9.14 ARBITRATION. NO SUIT SHALL BE BROUGHT IN ANY COURT FOR THE
-----------
PAYMENT OF ANY SUM PAYABLE UNDER THIS AGREEMENT, OR IN ANY WAY ARISING UNDER
THIS AGREEMENT, AND NO SUIT SHALL BE BROUGHT IN ANY COURT TOUCHING OR
-14-
CONCERNING THIS AGREEMENT OR ITS SUBJECT MATTER WHETHER OR NOT FOR THE PAYMENT
OF MONEY, EXCEPT A SUIT TO REQUIRE THE MAKING OF THE ARBITRATION CONTEMPLATED BY
THE ARBITRATION PROTOCOL ATTACHED HERETO AS ATTACHMENT A OR TO OBTAIN A JUDGMENT
UPON ANY SUCH AWARD MADE IN SUCH ARBITRATION, OR TO ENFORCE ANY SUCH JUDGMENT;
BUT WITH SUCH EXCEPTIONS, ANY SUCH MATTER OR DISPUTE SHALL BE SUBMITTED TO
ARBITRATION UNDER SUCH ARBITRATION PROTOCOL.
9.15 Reduction of Benefits By Legally Required Benefits.
--------------------------------------------------
Notwithstanding any other provision of this Agreement to the contrary, if the
Company is obligated by law (other than under this Agreement or other written
contract) to pay severance pay, a termination indemnity, notice pay, or the
like, or if the Company is obligated by law or by contract to provide advance
notice of separation ("Notice Period"), then any amounts payable under Section 5
hereof shall be reduced by the amount of any such severance pay, termination
indemnity, notice pay or the like, as applicable, and by the amount of any pay
received during any Notice Period.
9.16 Headings; Sections. The headings and captions herein are
------------------
provided for reference and convenience only, shall not be considered part of the
Agreement, and shall not be employed in the construction of the Agreement.
References to "Sections" herein, other than to the Code or the Exchange Act, are
references to the Sections of this Agreement.
10. Definitions.
-----------
10.1 "Business Combination" has the meaning set forth in
--------------------
Section 10.3(b).
-15-
10.2 "Cause" means:
-----
(a) The willful and continued failure of the Executive
to substantially perform the Executive's duties with the Company (other than any
such failure resulting from incapacity due to physical or mental illness), after
a written demand for substantial performance is delivered to the Executive by
the Board or the chief executive officer of the Company which specifically
identifies the manner in which the Board or Chief Executive Officer believes
that the Executive has not substantially performed the Executive's duties; or
(b) The willful engaging by the Executive in illegal
conduct or gross misconduct which is materially injurious to the Company; or
(c) The initiation by the Executive of discussions or
negotiations with any Person who would be involved in effecting a Change of
Control concerning a Potential Change of Control or Change of Control (whether
with that Person or any other Person), or the participation by the Executive in
any discussions or negotiations whatsoever with any Person who would be involved
in effecting a Change in Control concerning a Potential Change of Control or
Change of Control, unless such discussions or negotiations have been expressly
approved in writing by the Board or by the chief executive officer of the
Company; or
(d) The disclosure at any time prior to a Change in
Control by the Executive to any Person (except as provided for by law, or to the
auditors of the Company in connection with the making of their audit) of this
Agreement or any similar agreement or of the material terms hereof or thereof,
without the written approval of the Board or the chief executive officer of the
Company, except in connection with any enforcement of this Agreement.
-16-
10.3 A "Change in Control" means:
-----------------
(a) The acquisition or holding by any Person of beneficial
ownership (within the meaning of Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder, whether or not the Company is then
subject to such Section 13(d) of 50% or more of the shares of common stock of
the Company, other than by any such Person who on November 15, 1996, had
beneficial ownership (within the meaning aforesaid) of 25% of the shares of
common stock of the Company;
(b) The consummation of any merger, reorganization,
recapitalization, consolidation or other form of business combination (a
"Business Combination") if, following consummation of such Business Combination,
the Persons who were stockholders of the Company immediately prior to the
consummation of such Business Combination are not, as a result of such Business
Combination and of such stockholding in the Company, the owners of more than 50%
of the total voting power of all outstanding voting securities of the surviving
entity or entities;
(c) The consummation of any sale or other disposition of
all or substantially all of the assets of the Company, other than to a
corporation (or other business entity) of which the Persons who were
stockholders of the Company immediately prior to such sale or disposition own as
a result of such stockholdings in the Company pro rata to such stockholdings,
more than 50% of the total voting power of all outstanding voting securities of
such corporation (or other business entity), or
(d) The approval by shareholders of a liquidation or
dissolution of the Company otherwise than in connection with such a sale or
other disposition.
-17-
10.4 "Code" means the Internal Revenue Code of 1986, as amended
----
from time to time.
10.5 "Company" means Xxxxxxxx-Xxxxx Company, a Mississippi
-------
corporation. If the Executive becomes employed by a subsidiary or affiliate of
the Company, the "Company" shall be deemed to refer to the subsidiary (or
affiliate) thereof by which the Executive is employed, except for the purposes
of Section 9.3. In such case, references to payments, benefits, privileges or
other rights to be accorded by the "Company" shall be deemed to refer to such
payments, benefits, privileges or other rights to be provided by the subsidiary
or affiliate by which the Executive is employed or to Xxxxxxxx-Xxxxx Company, as
the case may be, to correspond to the corporate entity obligated to make
payments or provide benefits, privileges or other rights pursuant to employee
benefit plans affected by the provisions hereof, and in the absence of any such
existing plans or provisions, such reference shall be deemed to be to Xxxxxxxx-
Xxxxx Company. As used in this Section 10.5, a "subsidiary" is any corporation
or limited liability company 50% or more whose common stock or ownership
interests or voting securities or interests are owned by the Company, either
directly or through one or more subsidiaries, and an "affiliate" of the Company
is any entity other than a subsidiary which is otherwise controlled by the
Company, including, without limitation, any limited partnership in which the
Company and/or one or more of its subsidiaries is or are the only general
partner or general partners or in which the Company or one of its subsidiaries
is the managing general partner.
10.6 "Exchange Act" means the Securities Exchange Act of 1934,
------------
as amended from time to time.
-18-
10.7 "Excise Tax" means any excise tax imposed under
----------
Section 4999 of the Code.
10.8 "Person" shall have the meaning given in Section
------
3(a)(9) of the Exchange Act, as modified and used in Section 13(d)(3)
thereof.
10.9 A "Potential Change in Control" means, and shall
---------------------------
commence upon the occurrence of, any of the following:
(a) The Company, beneficial owners of 50% or more
of the Company's common stock or any Person acting or purporting to act on
their behalf, make or makes a public announcement that it (or they) (i)
intends to take, (ii) is taking or (iii) has taken actions which would lead
to a Change in Control (a "public announcement" being defined for this
purpose as any statement quoted or otherwise reported in any print,
broadcast, wire service or other means of publication available to the
public in the locality in which the principal executive offices of the
Company are located);
(b) The Company enters into any contract,
agreement or other arrangement with any Person which would lead to a Change
in Control; or
(c) The Board of the Company approves a
transaction described in clause (b) or (c) of the definition of Change in
Control contained in Section 10.3 hereof.
A Potential Change of Control shall terminate when any such
announcement referred to in clause (a) is rescinded, any such contract,
agreement or other arrangement referred to in clause (b) is terminated,
or any such transaction is abandoned.
A "Change in Control" is "Related to" a "Potential Change in
Control" when the Change in Control involves (apart from the Company) the
same Person
-19-
(or any Person controlled by, controlling, or under common control with the same
Person) as that involved in the Potential Change of Control.
10.10 A "Termination in Anticipation of a Change in Control" means a
--------------------------------------------------
termination of the employment of Executive by the Company during a Potential
Change of Control if there shall subsequently be a Change of Control within the
term of this Agreement that is Related to such Potential Change of Control.
10.11 "Total Shareholder Consideration Paid" means:
------------------------------------
(a) In the case of a Business Combination, the Value of the total
consideration paid to or received by the shareholders of the Company (assuming
that no shareholders dissent and seek any available appraisal remedy for their
shares), except that if the Business Combination takes the form of a sale or
other disposition of assets, it shall be subject to clause (b) below.
(b) In the case of a sale of all or substantially all of the
Company's assets for securities or cash or other property, whether or not
constituting a Business Combination, the Value of the consideration paid for
such sale or disposition, less any liabilities of the Company not assumed by the
Person to which such sale or disposition is made, plus the Value of any assets
not sold or disposed of by the Company;
(c) In the case of a liquidation or dissolution of the Company
otherwise than in connection with the sale of all or substantially all of the
assets of the Company, the Value of the assets of the Company less the
liabilities of the Company; and
(d) In the case of a Change of Control as defined in clause (a) of
Section 10.3, the highest price per share of the Company's Common Stock paid by
the Person acquiring or holding such 50% or more of the shares of
-20-
Common Stock of the Company in the period of 12 months next preceding the date
upon which such Person first became the beneficial owner of such 50% or more of
the Common Stock of the Company, times the total number of shares of Common
Stock of the Company outstanding at such time.
In the case of any Change in Control falling within clauses (b) or
(c) of the definition thereof in Section 10.3, at a time when the Company or
any subsidiary of the Company is general partner of Xxxxxxxx-Xxxxx Veneers,
L.P., a Mississippi limited partnership ("Veneers"), and when the partnership
interests in Veneers are transferable only in tandem with shares of the
Company's Common Stock, and in connection with such Change of Control the Person
succeeding to the business of the Company, or a Person affiliated with such
Person, succeeds to the business, assets or partnership interests in Veneers,
any consideration paid to or received by the shareholders of the Company in
their capacities as limited partners or assignees of partnership interests in
Veneers shall also be taken into account, without duplication, as part of "Total
Shareholder Consideration Paid."
10.12 "Value" means, in the case of cash or evidences of
-----
indebtedness, the face or principal amount of such cash or evidence of
indebtedness; in the case of stocks or other securities (other than
nonconvertible evidences of indebtedness) traded on a national securities
exchange or upon a nationally-recognized automated quotation system, the
average of the reported closing sales prices in consolidated trading, or, if
sales prices are not reported, the mean of the reported closing bid and asked
prices, in each case for the five days on which trading of stocks on the New
York Stock Exchange takes place next preceding the date of the determination and
as reported in the Wall Street Journal or, if the Wall Street Journal be not
published, another newspaper chosen by the Board publishing market quotations;
and in the case of a securities not so
-21-
listed or so traded and any other property or asset, its fair
market value as determined in good faith by the Board.
IN WITNESS WHEREOF, the Company has caused this
Agreement to be executed by its officer, thereunto duly
authorized, and Executive has executed this Agreement, all as of
the day and year first above written.
XXXXXXXX-XXXXX COMPANY
By /s/ Xxxx Xxxxxx, Xx.
---------------------------
Name:
Title: Director
/s/ Xxxxxxx X. Xxxxx, Xx.
--------------------------
Xxxxxxx X. Xxxxx, Xx.
-22-
Attachment A
ARBITRATION PROTOCOL
--------------------
This is the "Arbitration Protocol" referred to in Section 9.14 of the
Agreement ("Agreement") between Xxxxxxxx-Xxxxx Company and Xxxxxxx X. Xxxxx, Xx.
(the "Executive"), dated December 10, 1996.
1. REQUIREMENT OF ARBITRATION. No dispute concerning or relating to the
--------------------------
construction or enforcement of the Agreement, relating to the entitlement to or
quantum of any payment hereunder, or in any way touching or concerning the
subject matter of this Agreement shall be the subject of any complaint, civil
action or other proceeding in court (except to require the arbitration provided
for in this Arbitration Protocol or to enforce its award or a judgment entered
on such award), but all such disputes shall be submitted to arbitration, in
accordance with this Arbitration Protocol.
2. DEFINITIONS. Terms defined in Section 10 or elsewhere in the Agreement
-----------
are used herein in their defined senses. The term "Parties" refers to the
Company and the Executive or any other claimant or claimants or respondent or
respondents in a Dispute. Other terms are defined in the remaining sections of
this Arbitration Protocol.
3. DEMAND TO ARBITRATE. If the Parties do not resolve any Dispute by
-------------------
agreement any Party may give the other Parties written notice of its intention
to arbitrate the Dispute and a demand for arbitration (a "Demand Notice"). If a
Party gives a Demand Notice, such Dispute shall be determined and settled by
arbitration conducted in accordance with this Arbitration Protocol. Such Demand
Notice shall be given within a reasonable time after the Dispute has arisen;
-2-
provided, however, that in no event shall such Demand Notice be given after the
-------- -------
date upon which any legal or equitable proceeding with respect thereto would be
barred by any applicable statute of limitations.
4. PROCEDURE
---------
(a) Within twenty (20) days after delivery of the Demand Notice, each
Party shall deliver to the other(s) a list of acceptable arbitrators who are not
affiliated with, or have substantial business or personal relations with, any
Party. Thereafter, the Parties who have submitted such lists shall attempt to
agree upon selection of a single arbitrator from such lists. If the Parties are
unable to agree within twenty (20) additional days after the exchange of such
lists, any Party may apply to the American Arbitration Association ("AAA") for
the appointment of a single arbitrator in accordance with the procedures
therefor contained in Section 13 of the Commercial Arbitration Rules of the AAA
as in effect on November 1, 1993. All arbitrations conducted under this
Arbitration Protocol shall be before a single arbitrator. (The arbitrator so
selected is referred to in this Arbitration Protocol as the "Arbitrator" or
"Arbitrators"). Notwithstanding the foregoing, if only one Party (or
Arbitrator) shall deliver a list of acceptable arbitrators in accordance with
this paragraph (a), then that Party (or Arbitrator) may select an Arbitrator
from its list to arbitrate the Dispute.
(b) Every Dispute submitted to arbitration pursuant to this Protocol
shall be resolved in a single hearing (or such limited number of hearings as the
Arbitrator reasonably deems necessary), such single hearing (or first hearing)
to be held as soon as possible upon ten (10) days' written notice from the
Arbitrator but in no event later than thirty (30) days after completion of such
discovery by the parties as the Arbitrator may permit, which discovery shall,
absent good reason to the contrary, (i) be as permitted by the Federal Rules of
Civil
-3-
Procedure then in effect, but (ii) without discovery from non-Parties. The
hearing shall be held in Memphis, Tennessee, in accordance with the procedures
of the Commercial Arbitration Rules of the AAA and the provisions of this
Arbitration Protocol. If the Arbitrator is chosen by the AAA, or if any Party
shall by notice in writing demand that the arbitration shall be administered by
the AAA, the arbitration shall be administered by the AAA under the Commercial
Arbitration Rules of the AAA. In any case, whether or not administered by the
AAA, such Commercial Arbitration Rules and this Arbitration Protocol shall
govern the procedure in such arbitration, and shall apply to the making of the
award in the arbitration and to the determination of any question, matter or
issue that may arise in connection with the arbitration, and such award and any
such determination shall be made by the Arbitrator. Such award (or other
determination) of the Arbitrator shall be final and binding on the Parties and
may be enforced by any court of competent jurisdiction. In the case of a
conflict between this Arbitration Protocol and the Commercial Arbitration Rules
of the AAA, this Arbitration Protocol shall govern.
5. CONFIDENTIALITY. The arbitration shall be closed to the public and
---------------
only the Arbitrator, his, her or their support staff, the Parties, and counsel
for the Parties (apart from witnesses when actually giving testimony) shall be
permitted to attend the arbitration proceedings, and the arbitration, the
evidence introduced at it, and the award shall be kept confidential, except to
the extent necessary to enforce the award or any other determination of the
Arbitrator or as required in connection with the proceedings for such
enforcement.
6. FEES. The Arbitrator shall be paid a reasonable fee for his or her
----
services, and, if the arbitration is conducted under the administration of the
AAA, the administrative charges and fees of the AAA shall be paid, and shall
-4-
constitute costs. After the conduct of any arbitration, the Arbitrator shall
determine what amount of any such administrative charges and fees, Arbitrator's
fees, and related expenses of such arbitration each Party shall bear. If the
Arbitrator fails so to determine, the Parties shall each pay an equal share of
such charges and expenses. Subject to the provisions of Section 9 of the
Agreement, which the Arbitrator shall have jurisdiction to interpret, apply and
enforce, each Party shall pay its own legal fees incurred in connection with any
arbitration subject to Section 9.14 of the Agreement.
7. MODIFICATIONS. Modifications of the procedures provided for in this
-------------
Arbitration Protocol may be made as to any arbitration through an instrument in
writing signed by the Parties to such arbitration.
SUPPLEMENTAL AND CLARIFYING AGREEMENT
-------------------------------------
THIS SUPPLEMENTAL AND CLARIFYING AGREEMENT, dated as of December 31, 1997,
is made by and between Xxxxxxxx-Xxxxx Company, a Mississippi corporation (the
"Company"), and Xxxxxxx X. Xxxxx, Xx. (the "Executive").
WHEREAS, the Company and the Executive entered into an agreement (the
"Agreement") dated December 10, 1996, by authority of the Salary and Benefits
Committee (the "Committee") of the Board of Directors of the Company, designed
to xxxxxx the continuous employment of key personnel, align the Company's key
executives' interests as closely as possible with those of its shareholders, and
insure the attention of the Company's management to their responsibilities in
the case of any Change in Control; and
WHEREAS, the Company is being restructured (the "Restructuring") to qualify
as a real estate investment trust ("REIT") and has already taken steps in
furtherance of that objective, including a substantial distribution of earnings
and profits effected by resolution of the Board of Directors adopted September
22, 1997; and
WHEREAS, it would not be equitable to permit the restructuring of the
Company in connection with its becoming a REIT, which is in the interests of the
Company and its shareholders, to negate or restrict the benefits contemplated by
the Agreement or to interfere with its purposes in any way; and
WHEREAS, the Committee has authorized the execution and delivery of this
Supplemental and Clarifying Agreement (this "Supplemental Agreement") making
certain amendments and clarifications to give effect to the foregoing and to
make certain clarifying revisions in the definition of "Cause";
NOW, THEREFORE, in consideration of the premises, of the Agreement, and of
the mutual covenants herein contained, the Company and the Executive hereby
agree as follows:
1. Defined Terms. Terms defined in the Agreement are used herein in their
-------------
defined meanings.
2. Revision of Definition of "Total Shareholder Consideration Paid." The
---------------------------------------------------------------
final, unnumbered paragraph of Section 10.11 of the Agreement ("Total
Shareholder Consideration Paid") is hereby amended to read as follows:
In the case of any Change in Control falling within clauses (b) or (c)
of the definition thereof in Section 10.3, at a time when the Company or
any subsidiary of the Company is general partner of Xxxxxxxx-Xxxxx Veneers,
L.P., a Mississippi limited partnership ("Partnership"), or where at any
time during the Related Potential Change of Control the Company or such
subsidiary was such general partner and in connection with such Change of
Control any Person succeeds to the entirety or a substantial amount of the
business or assets of, or the partnership interests in the Partnership, any
consideration paid to or received, directly or indirectly, by the limited
partners or assignees of partnership interests in the Partnership with
respect thereto and the value of any retained assets of the Partnership,
shall also be taken into account, without duplication, as part of "Total
Shareholder Consideration Paid." In the case of any Change in Control
falling within clauses (b) or (c) of the definition thereof in Section
10.3, at a time when the Company has taken action looking towards its
qualification as a REIT (whether or not it has actually so qualified) any
distribution to shareholders (otherwise than a distribution by way of
ordinary dividends reflecting current earnings for the current fiscal
period or the immediately preceding fiscal period) made within 18 months
next preceding the date of the Change in Control, shall also be taken into
account, without duplication, as part of "Total Shareholder Consideration
Paid." Without limiting the generality of the foregoing, the distribution
of $100,000 per share paid to the stockholders of the Company by authority
of the resolution of the Board adopted September 22, 1997, shall be so
taken into account as part of the "Total Shareholder Consideration Paid" in
respect of any Change of Control occurring within 18 months after such
distribution.
-2-
3. Revision of Definition of "Cause." Section 10.2 of the Agreement is
--------------------------------
hereby amended: (i) by inserting in paragraph (b) thereof, before the final ";
or" the following:
", or the participation by the Executive in any activity in opposition to
or obstruction of a Potential Charge of Control or Change of Control which
has been approved by the Board, or the engaging or attempting to engage in
competition with the Company or the Partnership or any of their
subsidiaries during the time of employment of the Executive, or within one
year thereafter, including, without limitation, the direct or indirect
hiring away or seeking to hire away of any employee or employees of the
Company, the Partnership or any of their subsidiaries, whether such
activities are conducted for the Executive's own account or for the account
of any other Person."
and (ii) by adding the following paragraph at the end of such Section 10.2:
"If a termination of employment is originally without Cause and
thereafter Cause occurs or is discovered, the Company may give Executive
notice that such termination is changed to a termination for Cause and upon
the giving of such notice, such termination shall be deemed to have been
for Cause, if such Cause in fact exists."
4. Agreement Not Otherwise Amended. Except as expressly set forth herein,
-------------------------------
all terms and conditions of the Agreement shall remain in full force and effect,
and shall be applicable to the Agreement as amended by this Supplemental
Agreement.
IN WITNESS WHEREOF, the Company has caused this Supplemental Agreement to
be executed by its officer, thereunto duly authorized, and Executive has
executed this Agreement, all as of the day and year first above written.
XXXXXXXX-XXXXX COMPANY
By /s/ Xxxxx Xxxxx Xxxx /s/ Xxxxxxx X. Xxxxx, Xx.
________________________________ ____________________________
Executive
-3-
