EMPLOYMENT AGREEMENT
This Employment Agreement is made and entered into on August 1,
1996 (the "Effective Date") by and between Broyhill Furniture
Industries, Inc., a North Carolina corporation ("Broyhill") and Xxxxx
X. Xxxxxxx ("Executive").
WHEREAS, Executive is now and has been employed by Broyhill in
senior management executive positions and is broadly experienced in
all facets of Broyhill's operations; and
WHEREAS, it is in the best interests of Broyhill 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 Broyhill, 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 Broyhill, (ii)
violations by Executive of this Agreement or Executive's
employment obligations to Broyhill 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
Broyhill, 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 Broyhill.
c. "Employment Period" that period beginning on the Effective
Date and ending upon Executive's retirement or earlier
termination of employment.
2. Employment. Broyhill agrees to employ Executive, and
Executive agrees to serve Broyhill in an executive, managerial and
supervisory capacity, subject to the direction and control of the
Board of Directors of Broyhill, 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 Broyhill on the Effective Date ("Base Salary"),
d. Executive shall continue to have an annual cash bonus
potential, either pursuant to the Broyhill Executive Incentive
Plan in effect on the Effective Date or pursuant to a similar
incentive compensation plan of Broyhill, 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 Broyhill
("Benefit Plans").
The failure of Broyhill, 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 Broyhill.
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 Broyhill, it being
agreed that the Executive will have complied with this obligation if
he devotes to the business of Broyhill his same best efforts and the
same time and attention to the business of Broyhill that he has
devoted to the business of Broyhill during the twelve months next
preceding the Effective Date. Executive agrees that he will perform
such other executive duties for Broyhill and for Broyhill's
subsidiaries relating to its business as the Board of Directors of
Broyhill may reasonably direct.
4. Term. Subject to the provisions of this Section 4 of this
Agreement, either party shall have the right to terminate the
Employment Period at any time. If Executive's employment with
Broyhill is terminated by Broyhill, other than for Cause or as a
result of his death or Disability, or if Executive terminates his
employment with Broyhill for Good Reason, then Broyhill 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
Broyhill, continue his participation in the Benefit Plans in which he
was participating on the date of termination of employment.
5. Non-Competition. During the three-year period commencing
on the Effective Date and, if longer, while employed by Broyhill, and
for a period of one year after termination of employment, Executive
shall not, without the prior written consent of Broyhill, 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 5 shall, however, restrict Executive from making
investments in other ventures which are not competitive with Broyhill,
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 Broyhill (other
than for Cause) and the Executive elects to forego the payments called
for in Section 4 hereof, the provisions of this Section 5 shall not
apply. Should any of the terms of this Section 5 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 5, 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 Broyhill may be entitled.
6. 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 Broyhill may require) any non-public information concerning
Broyhill or its business.
7. 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 Broyhill and its successors and assigns.
This Agreement shall supersede and stand in place of any and all other
agreements between Executive and Broyhill regarding severance pay
and/or any and all severance pay benefits pursuant to any plan or
practice of Broyhill. 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 State of North Carolina.
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
Broyhill 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 Broyhill
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.
BROYHILL FURNITURE
INDUSTRIES, INC.
By: Xxxxx X. Xxxxxx
------------------------
Vice-President
Agreed to and Approved:
FURNITURE BRANDS XXXXX X. XXXXXXX
INTERNATIONAL, INC.
By: Xxxxxxx X. Xxxxx By: Xxxxx X. Xxxxxxx
-------------------- ------------------------
Chairman of the Board
