EXHIBIT 10(b)(3)
[IMPERIAL XXXXX CORPORATION LETTERHEAD APPEARS HERE]
December 19, 1997
Xx. Xxxxxxx X. Xxxxxxx III
00 Xxxx 00xx Xxxxxx
Xxxxxxxx, Xxxxxxx 00000
Employment Agreement
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Dear Xx. Xxxxxxx:
The following sets forth our agreement regarding the terms and
conditions of your employment with Imperial Xxxxx Corporation ("IHK") during the
Term. Capitalized words which are not otherwise defined herein shall have the
meanings assigned to such words in Section 8 of this Agreement.
1. Term of Employment Under the Agreement. The period of your
employment under this Agreement (the "Term") shall commence on the Closing Date,
as defined in the Agreement and Plan of Merger, dated as of the date hereof,
among IHK, IHK Merger Sub Corporation and Savannah Foods & Industries, Inc.
(the "Company") (the "Effective Date"), and shall continue until the fifth
anniversary of the Effective Date. The Term will automatically be extended on
the third anniversary of the Effective Date (and on each anniversary
thereafter) for an additional one-year period unless either party to this
Agreement gives the other party hereto written notice of this intention not to
extend the Term at least ninety days prior to the applicable anniversary date.
2. Employment During the Term. During the Term, you shall be employed
as the President of the Company and shall report directly and exclusively to the
President and Chief Executive Officer of IHK. During the Term, you shall be
initially elected as a member of the Board for a term ending January 29, 1999,
and thereafter IHK shall cause you to be nominated for re-election to the Board.
It is understood and agreed that you shall devote substantially all your
business time and efforts during the Term to your duties hereunder but may
devote reasonable amounts of time to the management of your and your family's
personal finances or to charitable or community service. Your principal place of
employment shall be the executive offices of the Company in Savannah, Georgia,
(which shall not be moved from the Savannah, Georgia area without your consent),
although you understand and agree that you may be required to travel from time
to time for business purposes.
3. Compensation During the Term.
(a) Base Salary. As compensation to you for all services rendered to
the Company, IHK will cause the Company to pay you a base salary (the "Salary")
at the rate of $430,000 per annum. Your salary will be paid to you in
accordance with the Company's regular payroll practices applicable to its
executive officers, as established from time to time. Your rate of salary will
be reviewed at least annually by the Board and may be increased, but not
decreased, on the basis of such review.
(b) Annual Bonus.
(i) For each Fiscal Year during the Term, you shall be eligible to
earn an annual bonus (the "Annual Bonus") based upon IHK and/or the Company
achieving one or more performance goals and targets set in good faith by the
Compensation Committee of the Board (the "Compensation Committee") for such
Fiscal year after reasonable consultation with you. The Annual Bonus for a given
Fiscal year will be paid not later than one hundred eight days following the end
of the Fiscal Year to which such Annual Bonus relates, or such earlier date as
you and the Company may agree.
(ii) The target amount for the Annual Bonus fore each Fiscal Year (the
"Target Amount") shall be 50% of your annual rate of Salary as of the start of
such year subject to the achievement of the performance goals and targets for
such year. The Annual Bonus payable to you for a Fiscal Year may equal up to
150% of the Target Amount based upon performance in excess of the target or
targets set by the Compensation Committee for that year, and may equal 50% of
the Target Amount based upon performance that is at least equal to 50% of the
target or targets for that year. The adjustment to the Annual Bonus between 50%
and 150% of the Target Amount shall be determined in accordance with criteria
set by the Compensation Committee after reasonable consultation with you. If the
bonus payable under the criteria set forth in IHK's Performance Incentive Plan
would be greater than the Annual Bonus, such larger amount shall be deemed the
Annual Bonus.
(iii) Beginning with the Annual Bonus for the Fiscal Year ending
September 30, 1999 and each Fiscal Year thereafter during the Term, IHK will
establish an annual bonus plan (which may be the IHK Performance Incentive Plan)
in which you will participate that will meet the requirements applicable to
"performance-based" compensation under Section 162(m) of the Internal Revenue
Code ("Annual Plan") and that will provide you with the same bonus opportunity
described in this Section 3(b). Annual bonuses under the Agreement for each
Fiscal Year will thereafter be paid pursuant to the terms of the Annual Plan
based upon IHK's attainment of performance targets related to one or more
performance goals, which will include, without limitations (A) predicted
economic value per share of Common Stock, (B) earnings per share, (C) return on
average common equity, (D) pre-tax income, (E) pre-tax operating income, (F) net
revenue, (G) net income, (H) profits before taxes, (I) book value per share, (J)
stock price and (K) earnings available to common stockholders and (L) such other
goals as IHK may include in the
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Annual Plan. Subject to the terms of the Annual Plan, the Compensation Committee
shall select and establish relative weights for the performance goals for each
fiscal year after reasonable consultation with you.
(iv) The amount of the Annual Bonus for any partial Fiscal Year during
the Term shall be prorated by multiplying the amount of the Annual bonus that
would be paid to you for the full Fiscal Year by a fraction, the numerator of
which shall be the number of days in such Fiscal Year occurring during the Term,
and the denominator of which shall be 365; provided, however, that no proration
shall apply to the Annual Bonus payable to you for the Fiscal Year ending
September 30, 1998.
(c) Long-Term Incentive Compensation.
(i) On January 31, 1998, IHK will grant you an option (the "Option")
to purchase 135,000 shares of Common Stock, and will enter into a stock option
agreement related to the Option. The Option will have an exercise price equal to
the fair market value of a share of Common Stock on the date of grant. The
Option will vest and become exercisable in five equal annual installments on
each of the first through fifth anniversaries of the date of grant and will
become fully vested and exercisable in full if your employment ends for any
reason other than your termination for Cause or your resignation without Good
Reason. The Option will have a ten-year term and will remain exercisable in full
for the shorter of (A) the remaining term thereof or (B) one year (three years
if after the fifth anniversary of the Effective Date), if your employment ends
for any reason other than your termination for Cause or your resignation without
Good Reason.
(ii) During the Term, you will be eligible to receive additional stock
option grants each year and to participate in each other long-term incentive
program established by IHK for its senior executives in a manner consistent with
your position as the senior most executive officer of the Company.
(d) SERP and Deferred Compensation Agreement.
(i) During the Term, you shall continue to participate in the
Supplemental Executive Retirement Plan of the Company and Subsidiaries, as
amended to date (the "SERP"), and to accrue service thereunder, notwithstanding
the amendment of the SERP by the Board of Directors of the Company, effective
June 30, 1996, to terminate future service accruals. At all times during the
Term, the terms and provisions of the SERP shall be no less favorable to you
than the terms and provisions of the SERP in effect immediately prior to the
Effective Date. As of the Effective Date and at all times thereafter, your
accrued benefit under the SERP shall be fully vested and nonforfeitable. If your
employment ends in an Involuntary Termination or by reason of death or
Disability, the accrual fraction used to calculate your SERP benefit shall be no
less than twenty-nine thirty-ninths (29/39).
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(ii) During the Term, the Deferred Compensation Agreement between you
and the Company (the "Deferred Compensation Agreement") shall remain in full
force and effect, and you shall continue to have the option to elect to defer
compensation thereunder in accordance with the terms and conditions thereof. If
your employment ends in an Involuntary Termination or by reason of death or
Disability, you shall be entitled to elect to receive payment from the Company
of your benefit under the Deferred Compensation Agreement as soon as practicable
following such termination, provided that such benefit shall be actuarially
reduced in accordance with the factors used to calculate such benefit set forth
in the Deferred Compensation Agreement.
(e) Benefit Plans and Perquisites.
(i) During the Term, you and, where applicable, your eligible
dependents shall be eligible to participate in each pension, welfare, insurance,
perquisite and fringe benefit program made available generally to executives of
IHK. Without limiting the foregoing, you and your eligible dependents also will
continue to participate in any executive medical program currently in effect
during the Term and following your retirement. During the Term, in addition to
any other professional services to be provided under this Agreement, you also
will be entitled to reimbursement of up to $5,000 for financial planning,
accounting and legal advice each year.
(ii) IHK will reimburse you for the cost and expenses (including
initiation fees and annual dues) of two social clubs, and such other business
clubs as you and IHK deem appropriate, it being understood and agreed that
additional club membership in varying geographic locations may be approved if
such memberships would benefit the business of IHK's enterprise situated near
such locations.
(iii) During the Term, you shall be provided with office space,
secretarial and other staff support, and communications equipment no less
favorable than those currently made to you.
(iii) You shall be entitled to not less than four weeks of paid vacation
per year of employment.
(v) IHK will cause the Company to promptly reimburse you for all
business expenses incurred by you in connection with the performance of your
duties IHK, the Company and any subsidiaries thereof.
(iii) In the event that you shall relocate or be required to relocate
your principal or secondary residences for IHK's benefit, you shall be
reimbursed for all out-of-pocket expenses involved in such move, including
packing and transport of personal, family, and household goods and vehicles by
suitable service providers, reimbursement for the relocation expenses of any
personal staff (including personal goods), reimbursement for
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any brokerage fees for the sale or purchase of any residences, of any loss of
economic value occasioned by the timing of the sale or by your inability to
recover monies invested in any personal residence sold, temporary housing costs
in suitable alternative housing, all utility severance and hook-up costs, and
any other typical expenses, all such sums to be grossed-up for the impact of any
federal, state or local taxes levied against you for such portions of such
reimbursement as shall be taxable and non-deductible to you.
4. Indemnification. IHK will, to the fullest extent permitted by law,
indemnify and hold you harmless from any and all liability arising from your
service as an employee, officer or director of IHK or the Company and its
affiliates. To the fullest extent permitted by law, the Company will retain
counsel to defend you or will advance legal fees and expenses to you for
counsel selected by you in connection with any litigation or proceeding related
to your service as an employee, officer and director of IHK or the Company.
5. Effect of Termination of Employment. Subject to the provisions of
this Section 5, IHK may terminate your employment and you may resign your
employment for any lawful reason or for no stated reason.
(a) Termination or Resignation in General. In the event of your
termination or resignation of employment, IHK shall cause the Company to pay you
the full amount of the accrued but unpaid Salary and Annual Bonus for any
completed Fiscal Year you may have earned through the Date of Termination (as
defined in Section 5(c)), plus a cash payment (calculated on the basis of your
rate of Salary then in effect) for all unused vacation time which you may have
accrued as of the Date of Termination. In addition, IHK shall cause the Company
to pay you a pro rata portion of your Annual Bonus for the Fiscal Year of IHK in
which such termination or resignation occurs. Such Salary and accrued vacation
shall be paid to you within five days following the Date of Termination. Such
Annual Bonuses, if any, shall be paid at the time contemplated by Section 3(b).
(b) Involuntary Termination.
(i) In addition to any amount payable to you under Section 5(a), in the
event of your Involuntary Termination, IHK will cause the Company to pay you
within five days of the Date of Termination a cash lump sum amount equal to the
product of "X" multiplied by "Y", where "X" equals the sum of the highest
annual rate of Salary during the Term and the highest Annual Bonus paid to you
during the Term (provided, however, that the bonus amount for this calculation
shall be not less than $215,000, regardless of whether an Annual Bonus has been
paid), and "Y" equals three. In addition, your benefit under the SERP shall be
calculated in the manner contemplated by Section 3(d) and your Option shall vest
fully and remain exercisable in the manner contemplated by Section 3(c). In
addition, all other options and long-term incentive awards granted to you during
the Term shall immediately vest and become nonforfeitable as of the Date of
Termination, and the amount of any performance-based awards shall be determined
assuming the greater of 100% achievement of all performance measures, or the
actual achievement.
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(ii) In the event of your Involuntary Termination, you and your
eligible dependents shall continue to be eligible to participate during
the Benefit Continuation Period in the medical, dental, health, life and
other fringe benefit plans and arrangements applicable to you
immediately prior to your Involuntary Termination on the same terms and
conditions in effect for you and your dependents immediately prior to
such Involuntary Termination or such more generous benefits as may
thereafter be in effect at IHK for other peer executives, provided,
however, that your coverage under such plans and arrangements shall end
on the date that you and your dependents are eligible and elect coverage
under the plans of a subsequent employer which provide substantially
equivalent or greater benefits to you and your dependents. Furthermore,
to the extent not heretofore paid or provided, IHK shall cause the
Company to timely pay or provide to you any other amounts or benefits
required to be paid or provided or which you or anyone claiming under
you is eligible to receive under any other plan, program, policy or
practice, contract or agreement of the Company ("Other Benefits").
(c) Termination for Cause; Resignation Without Good Reason. In the event
you resign without Good Reason or you are terminated by IHK for Cause, IHK shall
cause the Company to pay you the amounts contemplated by Section 5(a) and the
Other Benefits. In the event of such a termination or resignation, you will
immediately forfeit as of the Date of Termination the Option and all other
long-term incentive compensation that is not then vested. You shall remain
entitled to your SERP benefit, but you shall not accrue any additional service
for purposes of the SERP after the Date of Termination. Except as noted in this
Section 5(c), you shall be entitled to no additional compensation from IHK or
the Company under this Agreement.
(d) Death or Disability. If your employment with IHK ends as a result of
your death or Disability during the Term, IHK shall cause the Company to pay you
(or, in the event of your death, your Beneficiary) the full amount contemplated
by Section 5(a). In addition, your benefit under the SERP and your benefit under
the Deferred Compensation Agreement shall be calculated and payable to you (or,
in the event of your death, to your Beneficiary) in the manner contemplated by
Section 3(d) and your Option shall vest fully and remain exercisable in the
manner contemplated by Section 3(d). In addition, all other options and
long-term incentive awards granted to you during the Term shall immediately vest
and become nonforfeitable as of the Date of Termination and the amount of any
performance-based awards shall be determined assuming the greater of 100%
achievement of all performance measures, or the actual achievement.
(e) Date and Note of Termination. Any termination of your employment by
IHK or by you during the Term shall be communicated by a notice of termination
to the other party hereto (the "Notice of Termination"). The Notice of
Termination 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 your employment under the
provision so indicated. The date of your termination of employment with the
Company (the "Date of Termination") shall be determined as follows: (i) if your
employment is terminated for
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Disability, thirty days after a Notice of Termination is given (provided that
you shall not have returned to the full-time performance of your duties during
such thirty-day period), (ii) if your employment is terminated by IHK in an
Involuntary Termination, five days after the date the Notice of Termination is
received by you, and (iii) if your employment is terminated by IHK for Cause,
the later of the date specified in the Notice of Termination or ten days
following the date such notice is received by you. If the basis for your
Involuntary Termination is your resignation for Good Reason, the Date of
Termination shall be ten days after the date your Notice of Termination is
received by IHK. The Date of Termination for a resignation of employment other
than for Good Reason shall be the date set forth in the applicable notice, which
shall be no earlier than ten days after the date such notice is received by IHK.
The Date of Termination in the event of your death shall be the date of your
death. The date of your termination of employment is a result of the expiration
of the Term in accordance with Section 1 (including an expiration of the Term
that constitutes an Involuntary Termination) shall be the last day of the Term.
No failure to include in the Notice of Termination any fact or circumstance
which could support the basis of your termination shall waive your rights to
present such reasons at a later date or to preclude you from relying upon such
factors in support of any claim under this Agreement.
6. Additional Payment.
(a) Gross-Up Payment. Notwithstanding anything herein to the contrary,
if it is determined that any Payment would be subject to the excise tax imposed
by Section 4999 of the Internal Revenue Code or any interest or penalties with
respect to such excise tax (such excise tax, together with any interest or
penalties thereon, is herein referred to as an "Excise Tax"), then you shall be
entitled to an additional payment (a "Gross-Up Payment") in an amount that,
after taking into account all excise, income and other taxes on such additional
payment will place you in the same after-tax economic position that you would
have enjoyed if the Excise Tax had not applied to the Payment. The amount of the
Gross-Up Payment shall be determined by the Accounting Firm in accordance with
such formula as the Accounting Firm deems appropriate.
(b) Determination of Gross-Up Payment. Subject to the provisions of
Section 6(c), all determinations required under this Section 6, including
whether a Gross-Up Payment is required, the amount of the Payments constituting
excess parachute payments, and the amount of the Gross-Up Payment, shall be made
by the Accounting Firm, which shall provide detailed supporting calculations
both to you and to IHK and the Company within fifteen days of any date
reasonable requested by you or IHK on which a determination under this Section 6
is necessary or advisable, IHK shall cause the Company to pay to you the initial
Gross-Up Payment with five days of the receipt by you and IHK of the Accounting
Firm's determination. If the Accounting Firm determines that no Excise Tax is
payable by you, IHK shall cause the Accounting Firm to provide you with an
opinion that the Accounting Firm has substantial authority under the Internal
Revenue Code and Regulations for you not to report as Excise Tax on your federal
income tax return. Any determination by the Accounting Firm shall be binding
upon you, the Company and IHK. If the initial Gross-Up Payment is insufficient
to cover the amount of the Excise Tax that is ultimately determined to be owing
by you with respect to any Payment (hereinafter an "Underpayment"), IHK shall
cause the Company after exhausting IHK's
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remedies under Section 6(c) below, to promptly pay to you an additional Gross-Up
Payment in respect of the Underpayment.
(c) Procedure. You shall notify IHK in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Company of a Gross-Up Payment. Such notice shall be given as soon as practicable
after you know of such claim and shall advise IHK of the nature of the claim and
the date on which the claim is requested to be paid. You agree not to pay the
claim until the expiration of the thirty-day period following the date on which
you notify IHK, or such shorter period ending on the date the Taxes with respect
to such claim are due (the "Notice Period"). If IHK notifies you in writing
prior to the expiration of the Notice Period that it desires to contest the
claim, you shall: (i) give IHK any information reasonably requested by IHK
relating to the claim; (ii) take such action in connection with the claim as IHK
may reasonably request, including, without limitation, accepting legal
representation with respect to such claim by an attorney reasonably selected by
you and reasonably acceptable to IHK; (iii) cooperate with IHK in good faith in
contesting the claim; and (iv) permit IHK to participate in any proceedings
relating to the claim. You shall permit IHK to control all proceedings related
to the claim and, at its option, permit IHK to pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim. If requested by IHK, you agree either to pay
the tax claimed and xxx for a refund or contest the claim in any permissible
manner and to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts as IHK shall determine; provided, however, that if IHK directs
you to pay such claim and pursue a refund, IHK shall, or shall cause the Company
to, advance the amount of such payment to you on an after-tax and interest-free
basis (the "Advance"). IHK's control of the contest related to the claim shall
be limited to the issues related to the Gross-Up Payment and you shall be
entitled to settle or contest, as the case may be, any other issues raised by
the Internal Revenue Service or other taxing authority. If IHK does not notify
you in writing prior to the end of the Notice Period of its desire to contest
the claim, IHK shall cause the Company to pay to you an additional Gross-Up
Payment in respect of the excess parachute payments that are the subject of the
claim, and you agree to pay the amount of the Excise Tax that is the subject of
the claim to the applicable taxing authority in accordance with applicable law.
(d) Repayments. If, after receipt by you of an Advance, you become
entitled to a refund with respect to the claim to which such Advance relates,
you shall pay, at IHK's option, IHK or the Company the amount of the refund
(together with any interest paid or credited thereon after Taxes applicable
thereto). If, after receipt by you of an Advance, a determination is made that
you shall not be entitled to any refund with respect to the claim and IHK does
not promptly notify you of its intent to contest the denial or refund, then the
amount of the Advance shall not be required to be repaid by you and the amount
thereof shall offset the amount of the additional Gross-Up Payment then owing to
you.
(e) Further Assurances. IHK shall indemnify you and hold you harmless,
on an after-tax basis, from any costs, expenses, penalties, fines, interest or
other liabilities ("Losses") incurred by you with respect to the exercise by IHK
of any of its rights under this Section 6,
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including, without limitation, any Losses related to IHK's decision to contest
a claim or any imputed income to you resulting from any Advance or action taken
on your behalf by IHK hereunder. IHK shall pay all legal fees and expenses
incurred under this Section 6, and shall promptly reimburse you for the
reasonable expenses incurred by you in connection with any actions taken by IHK
or required to be taken by you hereunder. IHK shall also pay (or cause the
Company to pay) all of the fees and expenses of the Accounting Firm, including,
without limitation, the fees and expenses related to the opinion referred to in
Section 6(b). Any payments owing to you and not made to you within 30 days of
delivery to IHK of evidence of your entitlement shall be paid to you together
with interest at the maximum rate permitted by law.
(f) Other Taxes. In the event that federal or state legislation is
enacted imposing additional excise or supplementary income taxes on compensation
payable to you (other than a mere change in marginal income tax rates), IHK
agrees to review the Agreement with you and to consider in good faith any
changes hereto that may be required to preserve the economic purposes of the
Agreement;
7. Successors; Binding Agreement.
(a) Assumption by Successor. IHK will require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of IHK expressly to assume and to
agree to perform this Agreement in the same manner and to the same extent that
IHK would be required to perform it if no such succession had taken place;
provided, however, that no such assumption shall relieve IHK of its obligations
hereunder.
(b) Enforcement; Beneficiaries. This Agreement shall be binding upon and
inure to the benefit of you (and your personal representatives and heirs), the
Company and IHK and any organization which succeeds to substantially all of the
business or assets of IHK, whether by means of merger, consolidation,
acquisition of all or substantially all of the assets of IHK or otherwise. This
Agreement shall inure to the benefit of and be enforceable by your personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees or other Beneficiary. If you should die
while any amount would still be payable to you hereunder if you had continued to
live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to your Beneficiary.
8. Definitions.
For purposes of this Agreement, the following capitalized words shall
have the meanings set forth below:
"Accounting Firm" shall mean a national accounting firm as shall be
designated by agreement between you and the Company.
"Annual Bonus" shall have the meaning set forth in Section 3(b).
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"Beneficiary" shall mean the person or persons designated by you in
writing to receive any benefits payable to you hereunder in the event of your
death or, if no such persons are so designated, your estate. No Beneficiary
designation shall be effective unless it is in writing and received by IHK prior
to the date of your death.
"Benefit Continuation Period" shall mean the period beginning on the
Date of Termination and ending on the later to occur of (i) the third
anniversary of the Date of Termination and (ii) the expiration of the Term as in
effect immediately prior to the Date of Termination.
"Board" shall mean the Board of Directors of IHK.
"Cause" shall mean your willful, material and repeated nonperformance of
your duties to the "Company (other than by reason of your illness, incapacity or
Disability) after written notice from the Board of such nonperformance (which
notice specifically identifies the manner and sets forth specific facts,
circumstances and examples in which the Board believes that you have not
substantially performed your duties) and your continued willful, material and
repeated nonperformance of such duties after your receipt of such notice. For
purposes of the previous sentence, no act or failure to act on your part shall
be deemed "willful" unless done, or omitted to be done, by you not in good faith
and without reasonable belief that your action or omission was in the best
interest of IHK. (Assuming the disclosure of all pertinent facts any action
taken by you after consultation with, and in accordance with the advice of,
nationally recognized counsel reasonably acceptable to IHK shall be deemed to be
taken in good faith and to not be willful under this Agreement). Notwithstanding
the foregoing, you shall not be deemed to have been terminated for Cause unless
and until there shall have been delivered to you a copy of the resolution duly
adopted by the Board at a meeting of the Board called and held for such purpose
(after reasonable notice to you and an opportunity for you, together with your
counsel, to be heard before the Board), finding that in the good faith opinion
of the Board you were guilty of conduct set forth above and specifying the
particulars thereof in reasonable detail.
"Common Stock" shall mean the Common Stock, par value $.25 per share, of
IHK.
"Compensation Committee" shall have the meaning set forth in Section
3(b).
"Deferred Compensation Agreement" shall have the meaning set forth in
Section 3(d)(ii).
"Disability" shall mean your incapacity due to physical or mental
illness which causes you to be absent from the performance of your duties with
the Company or IHK for six consecutive months, followed by your failure to
return to performance of your duties with the Company or IHK within thirty days
after written Notice of Termination due to disability is given to you. Any
question as to the existence of your Disability upon which you and IHK cannot
agree
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shall be determined by a qualified independent physician selected by you (or, if
you are unable to make such selection, such selection shall be made by any adult
member of your immediate family), and approved by IHK, which approval shall not
be unreasonably withheld. The determination of such physician made in writing to
IHK and to you shall be final and conclusive for all purposes of this Agreement.
"Fiscal Year" of IHK shall mean the twelve-month period ending on
September, 30.
"Good Reason" shall mean (i) an adverse and material change to your
duties, titles, or reporting responsibilities (including, without limitation,
your good faith determination that, as a consequence of either (a) a Change of
Control or (b) the adoption by the Board, over your objection, of a business
plan or strategy that you believe either cannot be achieved or is sufficiently
outside the scope of IHK's traditional business lines or plans as to not be in
the best interest of IHK, your role in managing and directing the business and
affairs of the Company or IHK has been adversely and materially affected), (ii)
a material breach by IHK of any term of this Agreement, (iii) a reduction in
your Salary or Annual Bonus opportunity or the failure of IHK or the Company to
pay you any material amount of compensation when due or (iv) the relocation of
your principal place of employment from the Savannah, Georgia area without your
prior written consent, or in the event that you consent to such a relocation,
the failure of the Company or IHK to provide you with the benefits set forth in
Section 3(c)(ix). For purposes of this definition, "Change of Control" shall be
deemed to have occurred if any of the following shall have taken place: (a) a
change in control is reported by IHK in response to either Item 6(e) of Schedule
14A of Regulation 14A promulgated under the Securities Exchange Act of 1934 (the
"Exchange Act") or Item 1 of Form 8-K promulgated under the Exchange Act; (b)
any "person" (as such term is used in Sections 13(d) and 14(d)(2) of the
Exchange Act), is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
representing forty percent (40%) or more of the combined voting power of IHK's
then outstanding securities; or (c) following the election or removal of
directors, a majority of the Board of Directors consists of individuals who were
not members of the Board two (2) years before such election or removal, unless
the election of each director who was not a director at the beginning of such
two-year period has been approved in advance by directors representing at least
a majority of the directors then in office who were directors at the beginning
of the two-year period.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986, as
amended, and any successor provisions thereto.
"Involuntary Termination" shall mean (i) your termination of employment
by IHK during the Term other than for Cause or Disability, or (ii) your
resignation of employment with IHK during the Term for Good Reason, or (iii) the
expiration of the Term in accordance with Section 1 as a result of IHK's
election not to extend the Term.
"Option" shall have the meaning set forth in Section 3(c).
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"Other Benefits" shall have the meaning set forth in Section 5(b)(ii).
"Payment" means (i) any amount that is due or paid to you under this
Agreement, (ii) any amount that is due or paid to you under any plan, program or
arrangement of the Company or IHK, and (iii) any amount or benefit that is due
or payable to you under this Agreement or under any plan, program or arrangement
of the Company or IHK not otherwise covered under clause (i) or (ii) hereof
which must reasonably be taken into account under Section 280G of the Internal
Revenue Code and the Regulations in determining the amount of the "parachute
payments" received by you, including, without limitation, any amounts which must
be taken into account under the Internal Revenue Code and Regulations as a
result of (A) the acceleration of the vesting of any option, restricted stock or
other equity award granted hereunder or under any equity plan of IHK, (B) the
acceleration of the time at which any payment or benefit is receivable by you or
(C) any contingent severance or other amounts that are payable by you.
"Regulations" shall mean the proposed, temporary and final regulations
under Section 280G of the Internal Revenue Code or any successor provision
thereto.
"Salary" shall have the meaning set forth in Section 3(a).
"SERP" shall have the meaning set forth in Section 3(d)(i).
"Target Amount" shall have the meaning set forth in Section 3(b).
"Taxes" shall mean the federal, state and local income or payroll taxes
to which you are subject at the time of determination, calculated on the basis
of the highest marginal rates then in effect, plus any additional payroll or
withholding taxes to which you are then subject.
9. Notice.
For the purpose of this Agreement, notices and all other communications
provided for in this 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 President and Chief
Executive Officer of IHK, at One Imperial Square, P. O. Xxx 0, Xxxxx Xxxx, Xxxxx
00000, with a copy to the General Counsel of the Company at such address, or to
you at the address set forth on the first page of this Agreement or to such
other address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be
effective only upon receipt.
10. Miscellaneous.
(a) Amendments, Waivers, Etc. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing. No waiver by either party hereto at any time of any breach
by the other party hereto of,
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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 time or at any prior or subsequent time. 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 and this Agreement shall supersede all
prior agreements, negotiations, correspondence, undertakings and communications
of the parties, oral or written, with respect to the subject matter hereof. In
addition, upon the Effective Date, your change of control letter agreement with
the Company, dated as of January 7, 1991, shall be of no further force or
effect.
(b) No Mitigation, Reduction or Offset. You shall not be required to
mitigate the amount of any severance or termination payment provided for in this
Agreement by seeking other employment or otherwise, nor shall the amount of any
payment or benefit provided for in this Agreement be reduced by any compensation
earned by you as the result of employment by another employer or by any
compensation or benefits paid by IHK or any other employer. No payments to you
under this Agreement may be subject to any manner of offset or set off or shall
be reduced by any amounts you may owe to IHK or by any claims that IHK may have
against you.
(c) Validity. The invalidity or unenforceability of 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.
(d) Attorney's Fees. IHK will cause the Company to pay or reimburse you
for the reasonable attorney's fees and expenses incurred by you in enforcing
your rights under this Agreement, whether or not incurred in connection with
litigation activities. IHK will cause the Company promptly to pay (or reimburse
you) for all monies due under this paragraph. In the event that the Company does
not so pay such sums within 30 days of receipt, IHK will or will cause the
Company to pay to you interest at the maximum rate permissible under the law of
the State of Georgia.
(e) Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
(f) Withholding. Amounts paid to you hereunder shall be subject to all
applicable federal, state and local wage withholding.
(g) Source of Payments. All payments provided under this Agreement shall
be paid in cash from the general funds of IHK or the Company, and no special or
separate fund shall be established, and no other segregation of assets made, to
assure payment. You will have no right, title or interest whatsoever in or to
any investments which IHK or the Company may make to aid it in meeting its
obligations hereunder. To the extent that any person acquires a right to
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receive payments from IHK or the Company hereunder, such right shall be no
greater than the right of an unsecured creditor of IHK or the Company.
(h) Headings. The headings contained in this Agreement are intended
solely for convenience of reference and shall not affect the rights of the
parties to this Agreement.
(i) Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Georgia, without regard to principles of conflicts of law.
Any dispute under this Agreement shall be litigated or, at either
party's option, arbitrated. Any litigation or arbitration by either party with
respect to this Agreement must be filed in the county of your principal
residence, and, if a litigation, must be proceeded by a 20-day notice, provided
confidentially to the other party, during which period, such other party, at its
option, may notify the party filing such litigation that any such claim(s) must
be arbitrated pursuant to the rules of the American Arbitration Association with
a panel to be composed of business executives or professionals of a peer group
to you, including compensation levels. At either party's option, upon written
notice, any such arbitration shall be confidential, including a prohibition
against disclosures of any pertinent facts, save the amount of an award, in any
litigation (whether brought to enforce the arbitration award, or otherwise).
If you concur with the terms of this employment agreement, please so
indicate by signing in the space provided below, whereupon this letter shall
become a binding agreement between you and IHK.
Very truly yours,
IMPERIAL XXXXX CORPORATION
[signature appears here]
By: _______________________________
Name:
Title:
AGREED TO AND ACCEPTED
this 23 day of December, 1997
/s/ Xxxxxxx X. Xxxxxxx III
By: __________________________
Xxxxxxx X. Xxxxxxx III
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