CHANGE OF CONTROL AGREEMENT
This Change of Control Agreement ("Agreement") between
Xxxxxxx Enterprises, Inc., a Louisiana corporation (the
"Company"), and Xxxxxxxx X. Xxxxxxx (the "Employee") is
dated as of December 5, 1995 (the "Change of Control
Agreement Date").
ARTICLE I
DEFINITIONS
1.1 Employment Agreement. After a Change of Control
(defined below), this Agreement supersedes the Employment
Agreement dated as of August 1, 1995 between Employee and
the Company (the "Employment Agreement") except to the
extent that certain provisions of the Employment Agreement
are expressly incorporated by reference herein. After a
Change of Control (defined below), the definitions in this
Agreement supersede definitions in the Employment Agreement,
but capitalized terms not defined in this Agreement have the
meanings given to them in the Employment Agreement.
1.2 Definition of "Company". As used in this
Agreement, "Company" shall mean the Company as defined above
and any successor to or assignee of (whether direct or
indirect, by purchase, merger, consolidation or otherwise)
all or substantially all of the assets or business of the
Company.
1.3 Change of Control Defined. "Change of Control"
shall mean:
(a) the acquisition by any individual, entity or
group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Exchange Act) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of more than 30% of the outstanding
shares of the Company's Class A Common Stock, no par
value per share (the "Common Stock"); provided,
however, that for purposes of this subsection (a), the
following acquisitions shall not constitute a Change of
Control:
(i) any acquisition of Common Stock directly
from the Company,
(ii) any acquisition of Common Stock by the
Company,
(iii) any acquisition of Common Stock by any
employee benefit plan (or related trust) sponsored
or maintained by the Company or any corporation
controlled by the Company, or
(iv) any acquisition of Common Stock by any
corporation pursuant to a transaction that
complies with clauses (i), (ii) and (iii) of
subsection (c) of this Section 1.3; or
(b) individuals who, as of the Change of Control
Agreement Date, constitute the Board (the "Incumbent
Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any
individual becoming a director subsequent to the Change
of Control Agreement Date whose election, or nomination
for election by the Company's shareholders, was
approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be
considered a member of the Incumbent Board, unless such
individual's initial assumption of office occurs as a
result of an actual or threatened election contest with
respect to the election or removal of directors or
other actual or threatened solicitation of proxies or
consents by or on behalf of a person other than the
Incumbent Board; or
(c) consummation of a reorganization, merger or
consolidation, or sale or other disposition of all of
substantially all of the assets of the Company (a
"Business Combination"), in each case, unless,
following such Business Combination,
(i) all or substantially all of the
individuals and entities who were the beneficial
owners of the Company's outstanding common stock
and the Company's voting securities entitled to
vote generally in the election of directors
immediately prior to such Business Combination
have direct or indirect beneficial ownership,
respectively, of more than 50% of the then
outstanding shares of common stock, and more than
50% of the combined voting power of the then
outstanding voting securities entitled to vote
generally in the election of directors, of the
corporation resulting from such Business
Combination (which, for purposes of this paragraph
(i) and paragraphs (ii) and (iii), shall include a
corporation which as a result of such transaction
controls the Company or all or substantially all
of the Company's assets either directly or through
one or more subsidiaries), and
(ii) except to the extent that such ownership
existed prior to the Business Combination, no
person (excluding any corporation resulting from
such Business Combination or any employee benefit
plan or related trust of the Company or such
corporation resulting from such Business
Combination) beneficially owns, directly or
indirectly, 20% or more of the then outstanding
shares of common stock of the corporation
resulting from such Business Combination or 20% or
more of the combined voting power of the then
outstanding voting securities of such corporation,
and
(iii) at least a majority of the members of
the board of directors of the corporation
resulting from such Business Combination were
members of the Incumbent Board at the time of the
execution of the initial agreement, or of the
action of the Board, providing for such Business
Combination; or
(d) approval by the shareholders of the Company of
a complete liquidation or dissolution of the Company.
1.4 Affiliate. "Affiliate" or "affiliated companies"
shall mean any company controlled by, controlling, or under
common control with, the Company.
1.5 Cause. "Cause" shall mean:
(a) the willful and continued failure of the
Employee to perform substantially the Employee's
duties with the Company or its affiliates (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 Employee by the Board of the
Company which specifically identifies the manner
in which the Board believes that the Employee has
not substantially performed the Employee's duties,
or
(b) the willful engaging by the Employee in
illegal conduct or gross misconduct which is
materially and demonstrably injurious to the
Company or its affiliates.
For purposes of this provision, no act or failure to act, on
the part of the Employee, shall be considered "willful"
unless it is done, or omitted to be done, by the Employee in
bad faith or without reasonable belief that the Employee's
action or omission was in the best interests of the Company
or its affiliates. Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the
Board or upon the instructions of a senior officer of the
Company or based upon the advice of counsel for the Company
or its affiliates shall be conclusively presumed to be done,
or omitted to be done, by the Employee in good faith and in
the best interests of the Company or its affiliates. The
cessation of employment of the Employee shall not be deemed
to be for Cause unless and until there shall have been
delivered to the Employee a copy of a resolution duly
adopted by the affirmative vote of not less than three-
quarters of the entire membership of the Board at a meeting
of the Board called and held for such purpose (after
reasonable notice is provided to the Employee and the
Employee is given an opportunity, together with counsel, to
be heard before the Board), finding that, in the good faith
opinion of the Board, the Employee is guilty of the conduct
described in subparagraph (a) or (b) above, and specifying
the particulars thereof in detail.
1.6 Good Reason. "Good Reason" shall mean:
(a) Any failure of the Company or its affiliates
to provide the Employee with the position, authority,
duties and responsibilities at least commensurate in
all material respects with the most significant of
those held, exercised and assigned at any time during
the 120-day period immediately preceding the Change of
Control. Employee's position, authority, duties and
responsibilities after a Change of Control shall not be
considered commensurate in all material respects with
Employee's position, authority, duties and
responsibilities prior to a Change of Control unless
after the Change of Control Employee holds (i) an
equivalent position in the Company or, (ii) if the
Company is controlled or will after the transaction be
controlled by another company (directly or indirectly),
an equivalent position in the ultimate parent company.
(b) The assignment to the Employee of any duties
inconsistent in any material respect with Employee's
position (including status, offices, titles and
reporting requirements), authority, duties or
responsibilities as contemplated by Section 2.1(b) of
this Agreement, or any other action that results in a
diminution in such position, authority, duties or
responsibilities, excluding for this purpose an
isolated, insubstantial and inadvertent action not
taken in bad faith that is remedied within 10 days
after receipt of written notice thereof from the
Employee to the Company;
(c) Any failure by the Company or its affiliates
to comply with any of the provisions of this Agreement,
other than an isolated, insubstantial and inadvertent
failure not occurring in bad faith that is remedied
within 10 days after receipt of written notice thereof
from the Employee to the Company;
(d) The Company or its affiliates requiring the
Employee to be based at any office or location other
than as provided in Section 2.1(b)(ii) hereof or
requiring the Employee to travel on business to a
substantially greater extent than required immediately
prior to the Change of Control;
(e) Any purported termination of the Employee's
employment otherwise than as expressly permitted by
this Agreement; or
(f) Any failure by the Company to comply with and
satisfy Sections 3.1(c) and (d) of this Agreement.
For purposes of this Section 1.6, any good faith
determination of "Good Reason" made by the Employee shall be
conclusive. Anything in this Agreement to the contrary
notwithstanding, a termination by the Employee for any
reason during the 30-day period immediately following the
first anniversary of the Change of Control shall be deemed
to be a termination for Good Reason.
ARTICLE II
CHANGE OF CONTROL BENEFIT
2.1 Employment Term and Capacity after Change of
Control. (a) If a Change of Control occurs on or before
October 31, 2000, then the Employee's employment term (the
"Employment Term") shall continue through the later of (a)
the second anniversary of the Change of Control or (b)
October 31, 2000, subject to any earlier termination of
Employee's status as an employee pursuant to this Agreement.
(b) After a Change of Control and during the
Employment Term, (i) the Employee's position (including
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 120-day period immediately preceding the
Change of Control and (ii) the Employee's service shall be
performed at the location where the Employee was employed
immediately preceding the Change of Control or any office or
location less than 35 miles from such location. Employee's
position, authority, duties and responsibilities after a
Change of Control shall not be considered commensurate in
all material respects with Employee's position, authority,
duties and responsibilities prior to a Change of Control
unless after the Change of Control Employee holds (x) an
equivalent position in the Company or, (y) if the Company is
controlled or will after the transaction be controlled by
another company (directly or indirectly), an equivalent
position in the ultimate parent company. Employee shall
devote himself to his employment responsibilities with the
Company (or, if applicable, the ultimate parent entity) as
provided in Article I Section 3 of the Employment Agreement.
2.2 Compensation and Benefits. During the Employment
Term, Employee shall be entitled to the following
compensation and benefits:
(a) Salary. A salary ("Base Salary") at the rate
of $225,000 per year, payable to the Employee at such
intervals no less frequent than the most frequent
intervals in effect at any time during the 120-day
period immediately preceding the Change of Control or,
if more favorable to the Employee, the intervals in
effect at any time after the Change of Control for
other peer employees of the Company and its affiliated
companies.
(b) Bonus. Employee's incentive bonus with
respect to the period ending October 31, 1995, to the
extent not already paid, shall be paid upon a Change of
Control. For the period beginning November 1, 1995,
the Employee shall be eligible to receive a bonus (the
"Bonus") of up to $75,000 for each 12-month period
thereafter. Such Bonus shall be comprised of two
elements, the quantitative element and the qualitative
element:
(i) The quantitative element shall be equal
to 75% of the maximum Bonus of $75,000 and shall
be based on the attainment of certain goals to be
established by the Company's compensation
committee, or any similar body, and Employee.
(ii) The qualitative element shall be 25% of
the maximum Bonus of $75,000 and shall be awarded
at the discretion of the Company's Chairman of the
Board. The Chairman of the Board and Employee
shall establish incentive goals and other criteria
for the award of the qualitative element.
The Bonus shall be paid in cash no later than 30 days
following the date on which the information needed to
calculate the Bonus becomes available.
(c) Fringe Benefits. The Employee shall be
entitled to fringe benefits (including, but not limited
to, automobile allowance, reimbursement for membership
dues, and first class air travel) in accordance with
the most favorable agreements, plans, practices,
programs and policies of the Company and its affiliated
companies in effect for the Employee at any time during
the 120-day period immediately preceding the Change of
Control or, if more favorable to the Employee, as in
effect generally at any time thereafter with respect to
other peer employees of the Company and its affiliated
companies.
(d) Expenses. The Employee shall be entitled to
receive prompt reimbursement for all reasonable
expenses incurred by the Employee in accordance with
the most favorable agreements, policies, practices and
procedures of the Company and its affiliated companies
in effect for the Employee at any time during the 120-
day period immediately preceding the Change of Control
or, if more favorable to the Employee, as in effect
generally at any time thereafter with respect to other
peer employees of the Company and its affiliated
companies.
(e) Incentive, Savings and Retirement Plans. The
Employee shall be entitled to participate in all
incentive, savings and retirement plans, practices,
policies and programs applicable generally to other
peer employees of the Company and its affiliated
companies, but in no event shall such plans, practices,
policies and programs provide the Employee with
incentive opportunities (measured with respect to both
regular and special incentive opportunities, to the
extent, if any, that such distinction is applicable),
savings opportunities and retirement benefit
opportunities, in each case, less favorable than the
most favorable of those provided by the Company and its
affiliated companies for the Employee under any
agreements, plans, practices, policies and programs as
in effect at any time during the 120-day period
immediately preceding the Change of Control or, if more
favorable to the Employee, those provided generally at
any time after the Change of Control to other peer
employees of the Company and its affiliated companies.
(f) Welfare Benefit Plans. The Employee and/or
the Employee's family, as the case may be, shall be
eligible for participation in and shall receive all
benefits under welfare benefit plans, practices,
policies and programs provided by the Company and its
affiliated companies (including, without limitation,
medical, prescription, dental, disability, employee
life, group life, accidental death and travel accident
insurance plans and programs) to the extent applicable
generally to other peer employees of the Company and
its affiliated companies, but in no event shall such
plans, practices, policies and programs provide the
Employee with benefits, in each case, less favorable
than the most favorable of any agreements, plans,
practices, policies and programs in effect for the
Employee at any time during the 120-day period
immediately preceding the Change of Control or, if more
favorable to the Employee, those provided generally at
any time after the Change of Control to other peer
employees of the Company and its affiliated companies.
(g) Office and Support Staff. The Employee shall
be entitled to an office or offices of a size and with
furnishings and other appointments, and to exclusive
personal secretarial and other assistance, at least
equal to the most favorable of the foregoing provided
to the Employee by the Company and its affiliated
companies at any time during the 120-day period
immediately preceding the Change of Control or, if more
favorable to the Employee, as provided generally at any
time thereafter with respect to other peer employees of
the Company and its affiliated companies.
(h) Vacation. The Employee shall be entitled to
paid vacation in accordance with the most favorable
agreements, plans, policies, programs and practices of
the Company and its affiliated companies as in effect
for the Employee at any time during the 120-day period
immediately preceding the Change of Control or, if more
favorable to the Employee, as in effect generally at
any time thereafter with respect to other peer
employees of the Company and its affiliated companies.
2.3 Termination of Employment after a Change of
Control. After a Change of Control and during the
Employment Term, the Employee's status as an employee shall
terminate or may be terminated by the Employee, the Company
(or, if applicable, the ultimate parent company), as
provided in Article III of the Employment Agreement
(provided, however, that the definitions of "Cause" and
"Good Reason" in this Agreement shall supersede those
definitions in the Employment Agreement).
2.4 Obligations upon Termination after a Change of
Control.
(a) Termination by Company for Reasons other than
Death, Disability or Cause; by Employee for Good
Reason. If, after a Change of Control and during the
Employment Term, the Company (or, if applicable the
ultimate parent company), terminates the Employee's
employment other than for Cause, death or Disability,
or the Employee terminates employment for Good Reason,
the Company shall pay to the Employee in a lump sum in
cash within 30 days of the Date of Termination an
amount equal to one and one-half (1.5) times the sum of
(i) the amount of Base Salary in effect at the Date of
Termination, plus (ii) the maximum Bonus for which the
Employee is eligible for the 12-month period in which
the Date of Termination occurs.
(b) Death. If, after a Change of Control and
during the Employment Term, the Employee's status as an
employee is terminated by reason of the Employee's
death, this Agreement shall terminate without further
obligation to the Employee's legal representatives
(other than those already accrued to the Employee),
other than the obligation to make any payments due
pursuant to employee benefit plans maintained by the
Company or its affiliated companies.
(c) Disability. If, after a Change of Control and
during the Employment Term, Employee's status as an
employee is terminated by reason of Employee's
Disability (as defined in the Employment Agreement),
this Agreement shall terminate without further
obligation to the Employee (other than those already
accrued to the Employee), other than the obligation to
make any payments due pursuant to employee benefit
plans maintained by the Company or its affiliated
companies.
(d) Cause. If, after a Change of Control and
during the Employment Term, the Employee's status as an
employee is terminated by the Company (or, if
applicable, the ultimate parent entity) for Cause, this
Agreement shall terminate without further obligation to
the Employee other than for obligations imposed by law
and obligations imposed pursuant to any employee
benefit plan maintained by the Company or its
affiliated companies.
(e) Termination by Employee for Reasons other than
Good Reason. If, after a Change of Control and during
the Employment Term, the Employee's status as an
employee is terminated by the Employee for reasons
other than Good Reason, then the Company shall pay to
the Employee an amount equal to one-half of a single
year's Base Salary in effect at the Date of
Termination, payable in equal installments over a two-
year period at such intervals as other salaried
employees of the Company are paid.
(f) Nondisclosure, Noncompetition and Proprietary
Rights. The rights and obligations of the Company and
Employee contained in Article V ("Nondisclosure,
Noncompetition and Proprietary Rights") of the
Employment Agreement shall continue to apply after a
Change of Control, except as provided in Section 2.10
of this Agreement.
2.5 Accrued Obligations and Other Benefits. It is the
intent of the Employment Agreement and this Agreement that
upon termination of employment for any reason the Employee
be entitled to receive promptly, and in addition to any
other benefits specifically provided, (a) the Employee's
Base Salary through the Date of Termination to the extent
not theretofore paid, (b) any accrued vacation pay, to the
extent not theretofore paid, and (c) any other amounts or
benefits required to be paid or provided or which the
Employee is entitled to receive under any plan, program,
policy practice or agreement of the Company.
2.6 Stock Options. The foregoing benefits are
intended to be in addition to the value of any options to
acquire Common Stock of the Company the exercisability of
which is accelerated pursuant to the terms of any stock
option, incentive or other similar plan heretofore or
hereafter adopted by the Company.
2.7 Protection of Benefits. To the extent permitted
by applicable law, the Company shall take all reasonable
steps to ensure that the Employee is not, by reason of a
Change of Control, deprived of the economic value (including
any value attributable to the Change of Control transaction)
of (a) any options to acquire Common Stock of the Company or
(b) any Common Stock of the Company beneficially owned by
the Employee.
2.8 Certain Additional Payments. If after a Change of
Control Employee is subjected to an excise tax as a result
of the "excess parachute payment" provisions of section 4999
of the Internal Revenue Code of 1986, as amended, whether by
virtue of the benefits of this Agreement or by virtue of any
other benefits provided to Employee in connection with a
Change of Control pursuant to Company plans, policies or
agreements (including the value of any options to acquire
Common Stock of the Company the exercisability of which is
accelerated pursuant to the terms of any stock option,
incentive or similar plan heretofore or hereafter adopted by
the Company), the Company shall pay to Employee (whether or
not his employment has terminated) such amounts as are
necessary to place Employee in the same position after
payment of federal income and excise taxes as he would have
been if such provisions had not been applicable to him.
2.9 Legal Fees. The Company agrees to pay as
incurred, to the full extent permitted by law, all legal
fees and expenses which the Employee may reasonably incur as
a result of any contest (regardless of the outcome thereof)
by the Company, the Employee or others of the validity or
enforceability of, or liability under, any provision of this
Agreement (including as a result of any contest by the
Employee about the amount or timing of any payment pursuant
to this Agreement.)
2.10 Set-Off; Mitigation. After a Change of Control,
the Company's and its affiliates' obligations to make the
payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by
any set-off, counterclaim, recoupment, defense or other
claim, right or action which the Company or its affiliates
may have against the Employee or others. After a Change of
Control, an asserted violation of the provisions of Article
V ("Nondisclosure, Noncompetition and Proprietary Rights")
of the Employment Agreement shall not constitute a basis for
deferring or withholding any amounts otherwise payable to
the Employee; specifically, the third through sixth
sentences of Article V Section 4 shall not apply after a
Change of Control. It is the intent of the Employment
Agreement and this Agreement that in no event shall the
Employee be obligated to seek other employment or take any
other action by way of mitigation of the amounts payable to
the Employee under any of the provisions of this Agreement
or the Employment Agreement.
ARTICLE III
MISCELLANEOUS
3.1 Binding Effect; Successors.
(a) This Agreement shall be binding upon and
inure to the benefit of the Company and any of its
successors or assigns.
(b) This Agreement is personal to the Employee
and shall not be assignable by the Employee without the
consent of the Company (there being no obligation to give
such consent) other than such rights or benefits as are
transferred by will or the laws of descent and distribution.
(c) The Company shall require any successor to or
assignee of (whether direct or indirect, by purchase,
merger, consolidation or otherwise) all or substantially all
of the assets or businesses of the Company (i) to assume
unconditionally and expressly this Agreement and (ii) to
agree to perform or to cause to be performed all of the
obligations under this Agreement in the same manner and to
the same extent as would have been required of the Company
had no assignment or succession occurred, such assumption to
be set forth in a writing reasonably satisfactory to the
Employee.
(d) The Company shall also require all entities
that control or that after the transaction will control
(directly or indirectly) the Company or any such successor
or assignee to agree to cause to be performed all of the
obligations under this Agreement, such agreement to be set
forth in a writing reasonably satisfactory to the Employee.
3.2 Notices. All notices hereunder must be in writing
and shall be deemed to have given upon receipt of delivery
by: (a) hand (against a receipt therefor), (b) certified or
registered mail, postage prepaid, return receipt requested,
(c) a nationally recognized overnight courier service
(against a receipt therefor) or (d) telecopy transmission
with confirmation of receipt. All such notices must be
addressed as follows:
If to the Company, to:
Xxxxxxx Enterprises, Inc.
000 Xxxxxxxx Xxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx, III
If to the Employee, to:
Xxxxxxxx X. Xxxxxxx
0000 Xxxxxxxx
Xxxxxx, XX 00000
or such other address as to which any party hereto may have
notified the other in writing.
3.3 Governing Law. This Agreement shall be construed
and enforced in accordance with and governed by the internal
laws of the State of Louisiana without regard to principles
of conflict of laws, except as expressly provided in Article
V Section 6 of the Employment Agreement with respect to the
resolution of disputes arising under, or the Company's
enforcement of, such Article V.
3.4 Withholding. The Employee agrees that the Company
has the right to withhold, from the amounts payable pursuant
to this Agreement, all amounts required to be withheld under
applicable income and/or employment tax laws, or as
otherwise stated in documents granting rights that are
affected by this Agreement.
3.5 Amendment, Waiver. No provision of this Agreement
may be modified, amended or waived except by an instrument
in writing signed by both parties.
3.6 Severability. If any term or provision of this
Agreement, or the application thereof to any person or
circumstance, shall at any time or to any extent be invalid,
illegal or unenforceable in any respect as written, Employee
and the Company intend for any court construing this
Agreement to modify or limit such provision so as to render
it valid and enforceable to the fullest extent allowed by
law. Any such provision that is not susceptible of such
reformation shall be ignored so as to not affect any other
term or provision hereof, and the remainder of this
Agreement, or the application of such term or provision to
persons or circumstances other than those as to which it is
held invalid, illegal or unenforceable, shall not be
affected thereby and each term and provision of this
Agreement shall be valid and enforced to the fullest extent
permitted by law.
3.7 Waiver of Breach. The waiver by either party of a
breach of any provision of this Agreement shall not operate
or be construed as a waiver of any subsequent breach
thereof.
3.8 Remedies Not Exclusive. No remedy specified
herein shall be deemed to be such party's exclusive remedy,
and accordingly, in addition to all of the rights and
remedies provided for in this Agreement, the parties shall
have all other rights and remedies provided to them by
applicable law, rule or regulation.
3.9 Company's Reservation of Rights. Employee
acknowledges and understands that the Employee serves at the
pleasure of the Board and that the Company has the right at
any time to terminate Employee's status as an employee of
the Company, or to change or diminish his status during the
Employment Term, subject to the rights of the Employee to
claim the benefits conferred by this Agreement.
3.10 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 shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the Company and the Employee have
caused this Agreement to be executed as of the Change of
Control Agreement Date.
XXXXXXX ENTERPRISES, INC.
By: ___________________________
Xxxxx X. XxXxxxxxx
Compensation Committee Chairman
EMPLOYEE:
____________________________
Xxxxxxxx X. Xxxxxxx
