EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), made and
entered into on the _3rd_ of _January_, 1997, to be effective as
of the 1st day of October, 1996, by and between DIMON INCORPORATED, a
Virginia Corporation (the "Company"), and XXXXX X. XXXXXX (the
"Executive").
R E C I T A L S:
The Company and its affiliates are engaged in two business
segments -- the business of purchasing, processing, storing and selling
leaf tobacco (the "Tobacco Business"), and the business of distributing
fresh cut flowers. The Executive is experienced in, and knowledgeable
concerning, all aspects of the Tobacco Business. The Executive has
heretofore been employed by DIMON International, Inc. ("DIMON
International"), a wholly-owned subsidiary of the Company, as its
Senior Vice President and Director of International Operations pursuant
to the terms of an Employment Agreement by and between the Executive
and DIMON International dated October 18, 1994 and effective as of July
1, 1994 (the "Predecessor Agreement"). The Company desires to employ
the Executive as Executive Vice-President and Chief Financial Officer,
and the Executive desires to be employed by the Company in that
capacity. Furthermore, the Company desires to provide for the
Executive certain disability, death, severance and supplemental
retirement benefits in addition to those provided by the employee
benefit plans of the Company. The Company and the Executive desire to
amend and restate the Predecessor Agreement in order to reflect the
terms of their new understanding and to provide for the Executive's
employment by the Company pursuant to the terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations herein and the compensation the Company agrees herein to
pay the Executive, and of other good and valuable consideration, the
receipt of which is hereby acknowledged, the Company and the Executive
agree as follows:
ARTICLE 1. EMPLOYMENT OF EXECUTIVE. Subject to the terms
and conditions set forth in this Agreement, the Company hereby employs
the Executive and the Executive hereby accepts such employment for the
period stated in ARTICLE 3 of this Agreement.
ARTICLE 2. POSITION, RESPONSIBILITIES AND DUTIES.
2.1 Position and Responsibilities. During the Term (as
defined in Section 3.1), the Executive shall serve as Executive
Vice-President and Chief Financial Officer of the Company on the
conditions herein provided. The Executive shall provide such executive
services in the management of the Company's business not inconsistent
with his position and the provisions of Section 2.2 as shall be
assigned to him from time to time by the Board of Directors of the
Company (the "Board") or by such officers of the Company as may be
senior in authority to the Executive.
2.2 Duties. In addition to having the responsibilities
described in Section 2.1, during the Term, the Executive shall also
serve, if elected, as an officer and director of the Company or of any
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subsidiary or affiliate of the Company. During the Term and except for
illness, reasonable vacation periods, and reasonable leaves of absence,
the Executive shall devote his full business time, attention, skill,
energies and efforts to the faithful performance of his duties
hereunder and to the business and affairs of the Company and any
subsidiary or affiliate of the Company and shall not during the Term be
employed in any other business activity, whether or not such activity
is pursued for gain, profit or other pecuniary advantage; provided,
however, that (i) with the approval of the Board, the Executive may
serve, or continue to serve, on the boards of directors of, and hold
any other offices or positions in, companies or organizations, which,
in the Board's judgment, will not present any conflict of interest with
the Company or any of its subsidiaries or affiliates or divisions, or
materially affect the performance of the Executive's duties pursuant to
this Agreement and (ii) the Executive shall not be prevented from
investing his personal assets in any business which does not compete
with the Company or with any subsidiary or affiliate of the Company,
where the form or manner of such investment will not require
substantial services on the part of the Executive in the operation of
the business in which such investment is made. Notwithstanding the
foregoing, the duties of the Executive (i) shall not be expanded
without the Executive's prior approval and (ii) shall not require him
to relocate his residence from Danville, Virginia, and shall not make
it impractical for him to continue to reside there or cause him to
reside away from there for extended periods of time.
ARTICLE 3. TERM.
3.1 Term of Employment. The term of the Executive's
employment (the "Initial Term") under this Agreement shall commence
effective as of October 1, 1996, and shall continue until the earliest
to occur of the following dates (the "Termination Date"): (i)
September 30, 1999 (except as otherwise provided in this Section 3.1);
(ii) the last day of the Employment Year (as defined in this Section
3.1) in which the Executive attains the age of sixty (60); (iii) the
date of death of the Executive; (iv) the date coinciding with the end
of one hundred eighty (180) days of continuous "Total Disability" of
the Executive (as defined in Section 7.4); (v) the specified date of
termination under the Notice Exception (as defined in Section 3.2);
(vi) the date of termination under the Cause Exception (as defined in
Section 3.3) determined pursuant to Section 3.5; or (vii) the date the
Executive terminates his employment for Good Reason (as defined in
Section 3.4) determined pursuant to Section 3.5. In the event that the
Initial Term shall expire on account of the terminating event described
in subparagraph (i) of this Section 3.1, then, notwithstanding the
provisions of subparagraph (i) of this Section 3.1, the Initial Term
shall be extended automatically, without any further action by the
Company or the Executive, for successive one-year periods (each, an
"Extension Period") following the expiration of the Initial Term (by
reason of the terminating event described in subparagraph (i) of this
Section 3.1) or any succeeding one-year Extension Period (except as
otherwise provided in this Section 3.1). If either party hereto
desires for the Term to expire at the end of the Initial Term or at the
end of any succeeding one-year Extension Period, such party shall give
written notice of such desire to the other party no later than August 1
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of the Employment Year (as defined in this Section 3.1) in which the
Initial Term will expire or August 1 of any succeeding one-year
Extension Period. All references herein to the term of the Executive's
employment (the "Term") shall refer to the Initial Term and shall
include any Extension Period. Each twelve-month period beginning
October 1 during the Term is referred to herein as an "Employment
Year."
3.2 Termination by Giving Notice. If either party hereto
desires to terminate the Executive's employment prior to the expiration
of the Term, such party shall give not less than sixty (60) days
written notice of such desire to the other party specifying the date of
termination (the "Notice Exception"). Notwithstanding the foregoing,
the Notice Exception shall not be effected by the Company while the
Executive is Totally Disabled as provided in ARTICLE 7.
3.3 Termination for Cause; Automatic Termination. Subject
to the requirements of Section 3.5 of this Agreement, the Company shall
at all times have the right to discharge the Executive for cause. For
purposes of this Agreement, for cause shall be limited to one or more
of the following: (i) habitual intoxication by the Executive while
performing his duties under this Agreement; (ii) theft or embezzlement;
(iii) alcoholism; (iv) drug addiction; (v) conviction of a felony; or
(vi) willful, flagrant, deliberate and repeated infractions of material
published policies and regulations of the Company of which the
Executive has actual knowledge (the "Cause Exception").
Notwithstanding the foregoing, if the Company desires to discharge the
Executive for the reason described in subparagraph (vi) of this Section
3.3 (a "Policy Infraction"), it shall give notice to the Executive as
provided in Section 3.5 and the Executive shall have thirty (30) days
after notice has been given to him in which to cure the Policy
Infraction. If the Policy Infraction is timely cured by the Executive,
the Company's notice shall become null and void. For purposes of this
Agreement, for cause shall not include the Executive's Total Disability
(as defined in Section 7.4).
3.4 Good Reason. Subject to the requirements of Section
3.5 of this Agreement, the Executive may terminate his employment at
any time for Good Reason (as defined in this Section 3.4). If the
Executive desires to terminate his employment for Good Reason, he shall
give notice to the Company as provided in Section 3.5. For purposes of
this Section 3.4, "Good Reason" shall mean any of the following:
(a) The Executive's resignation from the Company's
employment on account of the failure by the Board or any officer of the
Company as may be senior in authority to the Executive to reelect or
reappoint the Executive to a responsible executive position in the
Company and the Executive then elects to leave the Company's employment
within six (6) months of such failure to so reelect or reappoint the
Executive;
(b) The Executive's resignation from the Company's
employment on account of a material modification by the Board or any
officer of the Company as may be senior in authority to the Executive
of the duties, functions and responsibilities of the Executive as
Executive Vice-President and Chief Financial Officer without his
consent within six (6) months of such modification; or
(c) The Executive's resignation from the Company's
employment on account of any material breach of a provision of this
Agreement by the Company, which breach is not cured within thirty (30)
days after notice has been given to the Company by the Executive.
Without limiting the generality of the foregoing sentence, the Company
shall be in material breach of its obligations hereunder if, for
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example, the Company shall not permit the Executive to exercise such
responsibilities as are consistent with the Executive's position and
are of such a nature as are usually associated with such offices of a
corporation engaged in substantially the same business as the Company,
or the Executive shall at any time be required to report to anyone
other than directly to the Board or any officer of the Company as may
be senior in authority to the Executive, or the Company causes the
Executive to relocate his residence from Danville, Virginia, or makes
it impractical for him to continue to reside there or causes him to
reside away from there for extended periods of time, or the Company
shall fail to make a payment when due to the Executive.
Notwithstanding the foregoing, if the Executive desires to terminate
his employment for Good Reason as defined in this Section 3.4(c), he
shall give notice to the Company as provided in Section 3.5 and the
Company shall have thirty (30) days after notice has been given to it
in which to cure the reason for the Executive's desire to terminate his
employment for Good Reason. If the reason for the Executive's desire
to terminate his employment for Good Reason as defined in this Section
3.4(c) is timely cured by the Company, the Executive's notice shall
become null and void.
3.5 Notice of Termination. Any termination by the Company
under the Cause Exception or by the Executive for Good Reason shall be
communicated by Notice of Termination to the other party hereto. For
purposes of Sections 3.3 and 3.4, a "Notice of Termination" means a
written notice which (i) indicates the specific termination provision
in this Agreement relied upon, (ii) sets 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 and (iii)
sets forth the Termination Date. If the Executive's employment is
terminated by reason of one of the events described in subparagraph
(vi) of Section 3.3 or Section 3.4(c), the Termination Date shall be
not less than thirty (30) days nor more than forty-five (45) days after
the receipt of the Notice of Termination by the Executive or the
Company. If the Executive's employment is terminated by reason of one
of the events described in subparagraphs (i), (ii), (iii), (iv) or (v)
of Section 3.3, Section 3.4(a) or Section 3.4(b), the Termination Date
shall be not more than fifteen (15) days after the receipt of the
Notice of Termination by the Executive or the Company.
3.6 Rights of Executive Upon Termination of Employment.
(a) Following the date the Term expires on account of one of
the terminating events described in subparagraphs (i), (ii), or (vii)
of Section 3.1, or the Company's exercise of the Notice Exception as
provided in subparagraph (v) of Section 3.1, the rights of the
Executive shall be as provided in ARTICLES 4, 5, 6, 9, 10, 12, 13, 14,
15, 16, 18 and 26.
(b) Following the date the Term expires on account of the
Executive's death as provided in subparagraph (iii) of Section 3.1, the
rights of the Executive's personal representative and designated
beneficiary (as determined pursuant to ARTICLE 16) shall be as provided
in ARTICLES 4, 5, 8, 10, 12, 14, 15, 16, 18 and 26.
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(c) Following the date the Term expires on account of the
Executive's Total Disability as provided in subparagraph (iv) of
Section 3.1, the rights of the Executive shall be as provided in
ARTICLES 4, 5, 7, 9, 10, 12, 13, 14, 15, 16, 18 and 26.
(d) Following the date the Term expires on account of the
Executive's exercise of the Notice Exception as provided in
subparagraph (v) of Section 3.1, or the date the Executive is
terminated for cause as provided in subparagraph (vi) of Section 3.1,
the rights of the Executive shall be as provided in ARTICLES 4, 5, 9,
10, 12, 13, 14, 15, 16, 18 and 26.
ARTICLE 4. COMPENSATION.
4.1 Base Salary. For all services rendered by the Executive
during the Term, including without limitation, services as an
executive, officer, director (except fees and reimbursements to which
all members of the Board, or a subsidiary or affiliate of the Company,
are generally entitled) or member of any committee of the Company or of
any subsidiary, affiliate, or division thereof, the Company shall pay
the Executive as compensation a base annual salary (the "Base Salary"),
payable in appropriate installments to conform with regular payroll
dates for salaried personnel of the Company. Effective as of October
1,1996, the annual rate of the Executive's Base Salary shall be
$250,000 (the "Annual Base Salary Rate"). The Executive's Annual Base
Salary Rate shall be automatically increased on July 1 of each
Employment Year to reflect increases in the cost of living (as
hereinafter described). In no event, however, shall the Executive's
Annual Base Salary Rate under this Agreement ever be less than
$250,000. In addition to any cost of living increase in the
Executive's Annual Base Salary Rate, the Board may, in its sole
discretion, increase the Executive's Annual Base Salary Rate based on
his performance. The amount of any annual automatic cost of living
increase in the Executive's Annual Base Salary Rate shall be determined
by multiplying the most recent Annual Base Salary Rate times a fraction
whose numerator shall be the Consumer Price Index (the "CPI") [All
Urban Consumers, South Region Average (1982-84 = 100); All Items,
Bureau of Labor Statistics of The United States Department of Labor],
for the month of May next preceding the July 1 of the current
Employment Year, and whose denominator shall be the CPI for the month
of May next preceding the July 1 of the Employment Year immediately
prior to the current Employment Year. If the quotient obtained in the
foregoing fraction shall be a number less than one (1), the Annual Base
Salary Rate shall be equal to the Annual Base Salary Rate in effect on
June 30 of the current Employment Year. In the event (i) the CPI
ceases to use the 1982-84 average of 100 as the base of calculation, or
(ii) a substantial change is made in the quality or quantity of the
items utilized in determining the CPI, or (iii) the publishing of the
CPI shall be discontinued for any reason, the United States Department
of Labor shall be requested to furnish a new index comparable to the
CPI, together with the information which will make possible the
conversion of such new index to replace the CPI for the purposes of
computing the Annual Base Salary Rate as provided for herein. If for
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any reason the United States Department of Labor does not furnish such
an index and information, the parties hereto shall thereafter accept
and use, as determined by the Board, such other index or comparable
statistics to measure the cost of living as shall be computed and
published by (i) an agency of the United States Government, (ii) a
reasonable financial periodical or (iii) a recognized authority
mutually selected by the Company and the Executive.
4.2 Bonus. As of the date of this Agreement, the Company
sponsors for the benefit of its senior executives the DIMON Cash Bonus
Plan (the "Cash Bonus Plan"). In addition to the Base Salary provided
for in Section 4.1 and the Deferred Benefit provided for in Section
6.1, the Executive shall be entitled to such bonus or bonuses, if any,
as may be awarded to the Executive from time to time under the Cash
Bonus Plan (or any successor or replacement bonus plan or arrangement)
(the "Awarded Bonus"). The Awarded Bonus shall be payable in the
manner specified in the Cash Bonus Plan (or the successor or
replacement bonus plan or arrangement, as the case may be).
ARTICLE 5. REIMBURSEMENT OF EXPENSES, OFFICE AND SECRETARIAL
ASSISTANCE. The Company recognizes that the Executive will incur, from
time to time, expenses for the benefit of the Company and in
furtherance of the Company's business, including, but not limited to,
expenses for entertainment, travel and other business expenses
consistent with the Company's past practices. During the Term and any
Compensation Continuance Period (as defined in ARTICLE 12), the
Executive will be reimbursed for his reasonable expenses incurred for
the benefit of the Company in accordance with the general policy of the
Company as adopted from time to time by the Board. To receive such
reimbursement, the Executive must present to the Company an itemized
accounting, in such detail as the Company may reasonably request, of
such expenditures. The Company further agrees to furnish the Executive
during the Term and any Compensation Continuance Period (as defined in
ARTICLE 12) with an office and such secretarial assistance as shall be
suitable to the character of the Executive's position with the Company
and adequate for the performance of his duties hereunder. In the event
of the termination of the Executive's employment for any reason, the
Company shall reimburse the Executive (or in the event of death, his
personal representative) for expenses incurred by the Executive on
behalf of the Company prior to the Termination Date to the extent such
expenses have not been previously reimbursed by the Company.
ARTICLE 6. SPECIAL SUPPLEMENTAL RETIREMENT BENEFIT; SPECIAL
HEALTH CARE BENEFIT.
6.1 Special Supplemental Retirement Benefit. In addition to
the other benefits provided for in this Agreement, upon the expiration
of the Term for any reason that would entitle the Executive to receive
the Severance Benefit (as defined in Section 12.3), the Executive shall
be entitled to receive a special supplemental annual retirement benefit
(the "Deferred Benefit") equal to fifty percent (50%) of his Average
Annualized Base Salary (as defined in this Section 6.1). The Deferred
Benefit shall be payable for six (6) years in approximately equal
monthly installments commencing on the first day of the month next
following the end of the Severance Period (as defined in Section 12.3),
and continuing for seventy-one (71) consecutive calendar months
thereafter. The Deferred Benefit payments shall be paid in accordance
with the payroll schedule for salaried personnel of the Company. For
purposes of this Agreement, the "Average Annualized Base Salary" of the
Executive shall mean the average of his Annualized Base Salary (as
defined in this Section 6.1) for the three (3) most recent consecutive
Employment Years completed under this Agreement as of the Termination
Date. If the Executive has not completed three (3) consecutive
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Employment Years under this Agreement as of the Termination Date, the
Average Annualized Base Salary shall mean the average of the
Executive's Annualized Base Salary for the number of Employment Years
completed under this Agreement as of the Termination Date. If the
Termination Date occurs in the Executive's first Employment Year, the
Average Annualized Base Salary shall be $250,000. For purposes of this
Agreement, the Executive's "Annualized Base Salary" for an Employment
Year shall be the amount of Base Salary actually received by the
Executive during that Employment Year.
6.2 Special Health Care Benefit. In addition to the other
benefits provided for in this Agreement, upon the expiration of the
Term for any reason that would entitle the Executive to receive the
Severance Benefit (as defined in Section 12.3), the Executive shall be
entitled for the period commencing on the Termination Date and ending
on the earlier of (i) the date of the Executive's death or (ii) the
expiration of the Severance Period (as defined in Section 12.3) (the
"Coverage Period") to participate in any group health plan or program
(whether insured or self-insured, or any combination thereof) provided
by the Company for the benefit of its active employees (the "Company
Plan"). The Company, consistent with sound business practices, shall
use its best efforts to provide the Executive with coverage for the
Executive and his spouse under the Company Plan during the Coverage
Period (and any period thereafter to the extent required by applicable
state and federal law), including, if necessary, amending the
applicable provisions of the Company Plan and negotiating the addition
of any necessary riders to any group health insurance contract. If the
amount of the premium charged for coverage of the Executive and his
spouse under the Company Plan shall exceed the amount of the premium
charged an active employee participating in the Company Plan with
respect to coverage under the Company Plan for the active employee and
his spouse (or, the active employee and his family, in the event the
Company Plan does not offer employee and spouse only coverage) (the
"Maximum Premium Charge"), the amount of the premium charged for
coverage of the Executive and his spouse under the Company Plan in
excess of the Maximum Premium Charge shall be paid by the Company. In
addition, regardless of the Executive's years of service with the
Company as of the Termination Date, the Company shall pay the Maximum
Premium Charge with respect to coverage of the Executive and his spouse
to the extent of the highest premium paid by the Company for other
active employees and their spouses (or families, as the case may be).
The portion of the Maximum Premium Charge not paid by the Company, if
any, shall be paid by the Executive. In the event the Company is
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unable for whatever reason to provide the Executive with coverage under
the Company Plan, the Company, consistent with sound business
practices, shall use its best efforts to provide the Executive with an
individual policy of health insurance providing coverage for the
Executive and his spouse (the "Individual Policy") during the Coverage
Period. If the amount of the premium charged for the Individual Policy
shall exceed the Maximum Premium Charge, the amount of the premium
charged for the Individual Policy in excess of the Maximum Premium
Charge shall be paid by the Company. In addition, regardless of the
Executive's years of service with the Company as of the Termination
Date, the Company shall pay the Maximum Premium Charge with respect to
the Individual Policy to the extent of the highest premium paid by the
Company for other active employees and their spouses (or families, as
the case may be) under the Company Plan. The portion of the Maximum
Premium Charge with respect to the Individual Policy not paid by the
Company, if any, shall by paid by the Executive. The coverage to be
provided to the Executive pursuant to this ARTICLE 6 (whether under the
Company Plan or the Individual Policy) shall consist of coverage which,
as of the time the coverage is being provided, is identical (or, with
respect to an Individual Policy, substantially identical) to the
coverage provided under the Company Plan to active employees and their
dependents. Notwithstanding the foregoing, the Company shall
coordinate coverage for the Executive under this ARTICLE 6 with any
applicable federal or state government programs (e.g., Medicare or
Medicaid) when the Executive is eligible to begin receiving benefits
under such program. Any premiums required to be paid for coverage of
the Executive under such government programs shall be paid by the
Executive.
ARTICLE 7. DISABILITY BENEFITS.
7.1 Commencement of Total Disability. If the Executive
suffers a "Total Disability" (as defined in Section 7.4), he shall be
deemed totally disabled ("Totally Disabled") for purposes of this
Agreement as of the date such Total Disability commenced.
7.2 Benefits Payable Upon Total Disability. In the event of
the Total Disability of the Executive, the Company shall continue to
pay the Executive his Base Salary during the Disability Period (as
defined in this Section 7.2); provided, however, that if the Term shall
otherwise expire during the Disability Period pursuant to the
provisions of ARTICLE 3, the Company shall cease paying the Executive
his Base Salary under this Section 7.2 as of the Termination Date, and
the remaining provisions of this Agreement shall apply. In the event
that the Executive's Total Disability continues for a period of one
hundred eighty (180) days (measured from the date the Executive became
Totally Disabled), the Term shall automatically expire, as provided in
subparagraph (iv) of Section 3.1, at the end of such one hundred eighty
day period (the "Disability Period"). If the Term shall expire on
account of the Executive's Total Disability, the Company shall pay to
the Executive an annual disability benefit (the "Disability Benefit")
equal to fifty percent (50%) of his Average Annualized Base Salary (as
defined in Section 6.1). The annual disability benefit shall be
payable to the Executive for five (5) years in approximately equal
monthly installments on the first day of each calendar month commencing
with the calendar month next following the month in which the Term
expires on account of the Executive's Total Disability and continuing
for fifty-nine (59) consecutive calendar months thereafter. The
Disability Benefit payments shall be paid in accordance with the
payroll schedule for salaried personnel of the Company.
7.3 Cessation of Disability. Notwithstanding the provisions
of Section 7.2, if prior to the end of the Disability Period, the
Executive's Total Disability shall have ceased under the definition of
Total Disability set forth in Section 7.4 and he shall have commenced
to perform his regular duties hereunder, the following special
provisions shall apply: (i) this Agreement shall continue in full
force and effect (except as otherwise provided in ARTICLE 3); and (ii)
the Executive shall be entitled to resume his employment under this
Agreement and to receive thereafter compensation in accordance with
ARTICLE 4 as though he had not been Totally Disabled; provided,
however, that unless the Executive shall perform his regular duties
hereunder for a continuous period of at least sixty (60) days following
a period of Total Disability before he again becomes Totally Disabled,
he shall not be entitled to start a new Disability Period, but instead
must continue under the remaining portion of the original Disability
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Period. In this event, the resumption of the original Disability
Period shall commence on the date such Total Disability resumed.
7.4 Definition of Total Disability. For purposes of this
Agreement, "Total Disability" shall mean the permanent and total
inability, by reason of physical or mental infirmity, or both, of the
Executive to perform his regular and customary duties with the Company
in a satisfactory manner. The total and irrevocable loss of the sight
of both eyes, or of the use of both hands, or of both feet, or of one
hand and one foot, or of speech or hearing shall be considered Total
Disability. The determination of the existence or nonexistence of
Total Disability shall be made by the Board, pursuant to a medical
examination by a medical doctor licensed to practice medicine in the
state of Virginia selected or approved by the Board.
ARTICLE 8. DEATH BENEFIT. Upon the expiration of the Term
on account of the Executive's death (as provided in subparagraph (iii)
of Section 3.1), the Company shall pay to the Executive's designated
beneficiary (as determined pursuant to ARTICLE 16) an annual death
benefit (the "Death Benefit") equal to twenty-five percent (25%) of the
Executive's Average Annualized Base Salary (as defined in Section 6.1).
The Death Benefit shall be payable to the Executive's designated
beneficiary for four (4) years in approximately equal monthly
installments on the first day of each calendar month commencing with
the calendar month next following the month in which the Term expires
on account of the Executive's death and continuing for forty-seven (47)
consecutive calendar months thereafter.
ARTICLE 9. DEATH FOLLOWING COMMENCEMENT OF PAYMENTS. Upon
the expiration of the Term under circumstances entitling the Executive
to receive payments pursuant to Section 6.1 or ARTICLES 7 or 12, and if
he shall die prior to receiving any or all of the monthly installments
to which he is due hereunder, then such remaining monthly installments
shall be payable to his designated beneficiary (as determined pursuant
to ARTICLE 16).
ARTICLE 10. OTHER EMPLOYEE BENEFITS. The Executive shall be
entitled to participate in any and all retirement, health, disability,
life insurance, long-term disability insurance, nonqualified deferred
compensation and tax-qualified retirement plans or any other plans or
benefits offered by the Company to its executives generally, if and to
the extent the Executive is eligible to participate in accordance with
the terms and provisions of any such plan or benefit program. Nothing
in this ARTICLE 10 is intended, or shall be construed, to require the
Company to institute any particular plan, program or benefit. Benefits
payable pursuant to this Agreement shall be in addition to benefits
payable to the Executive under all other employee benefit plans or
programs of the Company.
ARTICLE 11. VACATION AND SICK LEAVE. The Executive shall be
entitled to reasonable periods of vacation and sick leave during each
Employment Year, commensurate with his position and in accordance with
established Company policy. The Executive shall continue to receive
his Base Salary during the time of his vacation and sick leave.
Vacation and sick leave not taken during the applicable Employment Year
cannot be accumulated and taken during a subsequent Employment Year nor
will the Executive be paid for vacation and sick leave not taken.
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ARTICLE 12. TERMINATION COMPENSATION.
12.1 Monthly Compensation. Upon the expiration of the Term
for any reason, the Executive shall be entitled to continue to receive
his Base Salary through the last day of the month in which the
Termination Date occurs (the "Termination Month").
12.2 Compensation Continuance. In addition to the
compensation provided for in Section 12.1, upon the termination of the
Executive's employment by the Company's exercise of the Notice
Exception or by the Executive for Good Reason, the Executive (or in the
event of his subsequent death, his designated beneficiary) shall be
entitled to continue to receive during the remainder of the Term
following the last day of the Termination Month (the "Compensation
Continuance Period"), (i) the Base Salary (as increased each year to
reflect increases in the cost of living) that he would have received
pursuant to Section 4.1 during the Compensation Continuance Period if
the Term had not expired, and (ii) the Awarded Bonus (if any) that he
would have received pursuant to Section 4.2 during the Compensation
Continuance Period if the Term had not expired. In the event of the
Executive's death during the Compensation Continuance Period, such
death shall not be deemed the expiration of the Term for purposes of
determining the end of the Compensation Continuance Period, and the
Executive's designated beneficiary (as determined pursuant to ARTICLE
16) shall be entitled to receive payments under this Section 12.2
during the remainder of the Compensation Continuance Period. During
the Compensation Continuance Period, the Executive shall (i) subject to
the provisions of ARTICLE 6, continue to participate in all employee
benefit plans or programs of the Company (as described in ARTICLE 10),
and (ii) be available at reasonable times to provide consulting
services to the Company.
12.3 Special Severance Benefit. In addition to the
compensation provided for in Sections 12.1 and 12.2, upon the
expiration of the Term on account of the Executive's attainment of age
sixty (60), or upon the termination of the Executive's employment by
the Company's exercise of the Notice Exception, or by the Executive for
Good Reason, or by the Company's giving notice which would cause the
Term to expire at the end of the Initial Term or at the end of any
succeeding Extension Period, the Executive (or in the event of his
subsequent death, his designated beneficiary) shall be entitled to a
special severance benefit (the "Severance Benefit") equal to the sum of
his Annualized Base Salary and Awarded Bonus (if any) for the
Employment Year immediately prior to the Employment Year in which the
Term expires, provided that if the Term expires during the Employment
Year ending September 30, 1997, the Annualized Base Salary for purposes
of determining the Severance Benefit shall include the amount of the
Base Salary the Executive would have received during the Employment
Year had the Term not expired prior to September 30, 1997. The
Severance Benefit shall be payable for one (1) year in approximately
equal monthly installments commencing on the first day of the month
next following the expiration of the Compensation Continuance Period
(or the last day of the Termination Month, as the case may be), and
continuing for eleven (11) consecutive calendar months thereafter (the
"Severance Period"). The Severance Benefit payments shall be paid in
accordance with the payroll schedule for salaried personnel of the
Company.
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See ARTICLE 6 for additional benefits the Executive may be entitled to
receive following receipt of the compensation provided for in this
ARTICLE 12.
ARTICLE 13. POST-TERMINATION OBLIGATIONS. All payments and
benefits to the Executive under this Agreement shall be subject to the
Executive's compliance with the following provisions during the Term
and following the termination of the Executive's employment:
13.1 Assistance in Litigation. The Executive shall, upon
reasonable notice, furnish such information and assistance to the
Company as may reasonably be required by the Company in connection with
any litigation in which it is, or may become, a party, and which arises
out of facts and circumstances known to the Executive. The Company
shall promptly reimburse the Executive for his out-of-pocket expenses
incurred in connection with the fulfillment of his obligations under
this Section 13.1.
13.2 Confidential Information. The Executive shall not
disclose or reveal to any unauthorized person any trade secret or other
confidential information relating to the Company, its subsidiaries or
affiliates, or to any businesses operated by them, and the Executive
confirms that such information constitutes the exclusive property of
the Company; provided, however, that the foregoing shall not prohibit
the Executive from disclosing such information to the extent necessary
or desirable in connection with obtaining financing for the Company (or
furnishing such information under any agreements, documents or
instruments under which such financing may have been obtained) or
otherwise disclosing such information to third parties or governmental
agencies in furtherance of the interests of the Company; or as may be
required by law.
13.3 Noncompetition. The Executive shall not: (i) during
the Term and for the one-year period following the expiration of the
Term, without the prior written consent of the Company, engage directly
or indirectly, as a licensee, owner, manager, consultant, officer,
employee, director, investor or otherwise, in any business in
competition with the Company, within the state of Virginia; or (ii)
usurp for his own benefit any corporate opportunity under consideration
by the Company during his employment, unless the Company shall have
finally decided not to take advantage of such corporate opportunity.
The restrictions of part (i) of this Section 13.3 shall not apply if
the employment of the Executive is terminated by the Company's exercise
of the Notice Exception or by the Executive for Good Reason, and shall
further not apply to a passive investment by the Executive constituting
ownership of less than five percent (5%) of the equity of any entity
engaged in any business described in part (i) of this Section 13.3.
The Executive acknowledges that the possible restrictions on his
activities which may occur as a result of his performance of his
obligations under this Section 13.3 are required for the reasonable
protection of the Company.
13.4 Failure to Comply. In the event that the Executive
shall fail to comply with any provision of this ARTICLE 13, and such
failure shall continue for ten (10) days following delivery of notice
thereof by the Company to the Executive, all rights hereunder of the
Executive and any person claiming under or through him shall thereupon
terminate and no person shall be entitled thereafter to receive any
payments or benefits hereunder (except for benefits under employee
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benefit plans or programs as provided in ARTICLE 10 which have been
earned or otherwise fixed or determined to be payable prior to such
termination). In addition to the foregoing, in the event of a breach
or threatened breach by the Executive of the provisions of this ARTICLE
13, the Company shall have and may exercise any and all other rights
and remedies available to the Company at law or otherwise, including
but not limited to obtaining an injunction from a court of competent
jurisdiction enjoining and restraining the Executive from committing
such violation, and the Executive hereby consents to the issuance of
such injunction.
ARTICLE 14. ADDITIONAL PAYMENTS BY COMPANY. In the event
that any amount required to be paid or distributed to the Executive
pursuant to this Agreement shall constitute a parachute payment within
the meaning of Section 280G of the Internal Revenue Code of 1986, as
amended (the "Code"), and the aggregate of such parachute payments and
any other amounts otherwise required to be paid or distributed to the
Executive by the Company shall cause the Executive to be subject to the
excise tax on excess parachute payments under Section 4999 of the Code
(the "Excise Tax"), or any successor or similar provision thereof, the
Company shall pay to the Executive an additional amount (the "Gross-Up
Payment") such that the net amount the Executive shall receive after
the payment of any Excise Tax, shall equal the amount which he would
have received if the Excise Tax had not been imposed. The Gross-Up
Payment shall be the sum of the following:
(a) The rate of the Excise Tax multiplied by the amount of
the excess parachute payments;
(b) Any federal income tax, social security tax,
unemployment tax or Excise Tax imposed upon the Executive as a result
of the Gross-Up Payment required to be made under this ARTICLE 14; and
(c) Any state income or other tax imposed upon the Executive
as a result of the Gross-Up Payment required to be made under this
ARTICLE 14.
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 for individuals in
the calendar year in which the Excise Tax is required to be paid. In
addition, the Executive shall be deemed to pay state income taxes at a
rate determined in accordance with the following formula:
( 1 - (highest marginal rate of federal income taxation for
individuals)) x (highest marginal rate of Virginia income taxes for
individuals in the calendar year in which the Excise Tax is required to
be paid).
In the event the Executive is subject to the provisions of Section 68
of the Code, the combined federal and state income tax rate determined
above shall be adjusted to reflect any loss in the federal deduction
for state income taxes on the Gross-Up Payment.
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The Gross-Up Payment shall be made not later than the fifth
(5th) day, or as soon thereafter as the Company deems practicable,
following the date the Executive becomes subject to payment of the
Excise Tax; provided, however, that if the amount of such payment
cannot be 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 payment and shall
pay the remainder of such payment (together with interest at the rate
provided under Section 1274(b)(2)(B) of the Code) as soon as the amount
can be determined but no later than the thirtieth (30th) day after the
date the Executive becomes subject to the payment of the Excise Tax.
In the event the amount of the estimated payment 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) day
after demand by the Company (together with interest at the rate
provided in Section 1274(b)(2)(B) of the Code).
In the event that the Excise Tax is subsequently determined
to be less than the amount taken into account hereunder at the time the
Gross-Up Payment is made, 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 the portion of the Gross-Up Payment attributable to the
Excise Tax, federal and state taxes imposed on the Gross-Up Payment
being repaid by the Executive, if such repayment results in a reduction
in Excise Tax and/or a federal or state 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 the Gross-Up Payment is made, (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 in respect of such excess (plus any interest payable with
respect to such excess) at the time that the amount of such excess is
finally determined.
ARTICLE 15. ATTORNEYS' FEES. In the event that the
Executive incurs any attorneys' fees in protecting or enforcing his
rights under this Agreement or under any employee benefit plans or
programs sponsored by the Company in which the Executive is a
participant, the Company shall reimburse the Executive for such
reasonable attorneys' fees and for any other reasonable expenses
related thereto. Such reimbursement shall be made within thirty (30)
days following final resolution of the dispute or occurrence giving
rise to such fees and expenses.
ARTICLE 16. BENEFICIARY. The Executive shall name one or
more primary beneficiaries and one or more contingent beneficiaries,
who shall be entitled to receive any death benefit payable under
ARTICLE 8 or any benefits payable under ARTICLE 9 due to the
Executive's death following commencement of payments under Section 6.1
or ARTICLES 7 or 12, which beneficiary or beneficiaries shall be
subject to change from time to time by notice in writing to the Board.
A beneficiary may be a trust, an individual or the Executive's estate.
If the Executive fails to designate a beneficiary, primary or
contingent, then and in such event, such benefit shall be paid to the
surviving spouse of the Executive or, if he shall leave no surviving
spouse, then to the Executive's estate. If a named beneficiary
entitled to receive any death benefit is not living or in existence at
the death of the Executive or dies prior to asserting a written claim
for any such death benefit, then and in any such event, such death
benefit shall be paid to the other primary beneficiary or beneficiaries
named by the Executive who shall then be living or in existence, if
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any, otherwise to the contingent beneficiary or beneficiaries named by
the Executive who shall then be living or in existence, if any; but if
there are no primary or contingent beneficiaries then living or in
existence, such benefit shall be paid to the surviving spouse of the
Executive or, if he shall leave no surviving spouse, then to the
Executive's estate. If a named beneficiary is receiving or is entitled
to receive payments of any such death benefit and dies before receiving
all of the payments due him, any remaining benefits shall be paid to
the other primary beneficiary or beneficiaries named by the Executive
who shall then be living or in existence, if any, otherwise to the
contingent beneficiary or beneficiaries named by the Executive who
shall then be living or in existence, if any; but if there are no
primary or contingent beneficiaries then living or in existence, the
balance shall be paid to the estate of the beneficiary who was last
receiving the payments.
ARTICLE 17. DECISIONS BY COMPANY; FACILITY OF PAYMENT. Any
powers granted to the Board hereunder may be exercised by a committee,
appointed by the Board, and such committee, if appointed, shall have
general responsibility for the administration and interpretation of
this Agreement. Subject to and to the extent not inconsistent with the
provisions of ARTICLE 16, if the Board or the committee shall find that
any person to whom any amount is or was payable hereunder is unable to
care for his affairs because of illness or accident, or is a minor, or
has died, then the Board or the committee, if it so elects, may direct
that any payment due him or his estate (unless a prior claim therefore
has been made by a duly appointed legal representative) or any part
thereof be paid or applied for the benefit of such person or to or for
the benefit of his spouse, children or other dependents, an institution
maintaining or having custody of such person, any other person deemed
by the Board or committee to be a proper recipient on behalf of such
person otherwise entitled to payment, or any of them, in such manner
and proportion as the Board or committee may deem proper. Any such
payment shall be in complete discharge of the liability of the Company
therefor.
ARTICLE 18. INDEMNIFICATION. The Company shall indemnify
the Executive during his employment and thereafter to the maximum
extent permitted by applicable law for any and all liability of the
Executive arising out of, or in connection with, his employment by the
Company or membership on the Board; provided, that in no event shall
such indemnity of the Executive at any time during the period of his
employment by the Company be less than the maximum indemnity provided
by the Company at any time during such period to any other officer or
director under and indemnification insurance policy or the bylaws or
charter of the Company or by agreement.
ARTICLE 19. SOURCE OF PAYMENTS; NO TRUST. The obligations
of the Company to make payments hereunder shall constitute a liability
of the Company to the Executive. Such payments shall be from the
general funds of the Company, and the Company shall not be required to
establish or maintain any special or separate fund, or otherwise to
segregate assets to assure that such payments shall be made, and
neither the Executive nor his designated beneficiary shall have any
interest in any particular asset of the Company by reason of its
obligations hereunder. Nothing contained in this Agreement shall
create or be construed as creating a trust of any kind or any other
fiduciary relationship between the Company and the Executive or any
other person. To the extent that any person acquires a right to
receive payments from the Company hereunder, such right shall be no
greater than the right of an unsecured creditor of the Company.
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ARTICLE 20. SEVERABILITY. All agreements and covenants
contained herein are severable, and in the event any of them shall be
held to be invalid by any competent court, this Agreement shall be
interpreted as if such invalid agreements or covenants were not
contained herein.
ARTICLE 21. ASSIGNMENT PROHIBITED. This Agreement is
personal to each of the parties hereto, and neither party may assign
nor delegate any of his or its rights or obligations hereunder without
first obtaining the written consent of the other party; provided,
however, that nothing in this ARTICLE 21 shall preclude (i) the
Executive from designating a beneficiary to receive any benefit payable
under this Agreement upon his death or (ii) the executors,
administrators, or other legal representatives of the Executive or his
estate from assigning any rights under this Agreement to the person or
persons entitled thereto.
ARTICLE 22. NO ATTACHMENT. Except as otherwise provided in
this Agreement or required by applicable law, no right to receive
payments under this Agreement shall be subject to anticipation,
commutation, alienation, sale, assignment, encumbrance, charge, pledge
or hypothecation or to execution, attachment, levy, or similar process
or assignment by operation of law, and any attempt, voluntary or
involuntary, to effect any such action shall be null, void and of no
effect.
ARTICLE 23. HEADINGS. The headings of articles, paragraphs
and sections herein are included solely for convenience of reference
and shall not control the meaning or interpretation of any of the
provisions of this Agreement.
ARTICLE 24. GOVERNING LAW. The parties intend that this
Agreement and the performance hereunder and all suits and special
proceedings hereunder shall be construed in accordance with and under
and pursuant to the laws of the State of Virginia and that in any
action, special proceeding or other proceeding that may be brought
arising out of, in connection with, or by reason of this Agreement, the
laws of the State of Virginia shall be applicable and shall govern to
the exclusion of the law of any other forum, without regard to the
jurisdiction in which any action or special proceeding may be
instituted.
ARTICLE 25. BINDING EFFECT. This Agreement shall be binding
upon, and inure to the benefit of, the Executive and his heirs,
executors, administrators and legal representatives and the Company and
its permitted successors and assigns.
ARTICLE 26. MERGER OR CONSOLIDATION. The Company will not
consolidate or merge into or with another corporation, or transfer all
or substantially all of its assets to another corporation (the
"Successor Corporation") unless the Successor Corporation shall assume
this Agreement, and upon such assumption, the Executive and the
Successor Corporation shall become obligated to perform the terms and
conditions of this Agreement.
ARTICLE 27. COUNTERPARTS. This Agreement may be executed
simultaneously in one or more counterparts, each of which shall be
deemed an original but all of which together shall constitute one and
the same instrument.
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ARTICLE 28. ENTIRE AGREEMENT. This Agreement expresses the
whole and entire agreement between the parties with reference to the
employment of the Executive and, as of the effective date hereof,
supersedes and replaces any prior employment agreement, understanding
or arrangement (whether written or oral) between the Company and the
Executive. Each of the parties hereto has relied on his or its own
judgment in entering into this Agreement.
ARTICLE 29. NOTICES. All notices, requests and other
communications to any party under this Agreement shall be in writing
(including telefacsimile transmission or similar writing) and shall be
given to such party at its address or telefacsimile number set forth
below or such other address or telefacsimile number as such party may
hereafter specify for the purpose by notice to the other party:
(a) If to the Executive:
Xxxxx X. Xxxxxx
c/o DIMON Incorporated
000 Xxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxx, Xxxxxxxx 00000-0000
(b) If to the Company:
DIMON Incorporated
000 Xxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxx, Xxxxxxxx 00000-0000
Fax Number: (000) 000-0000
Each such notice, request or other communication shall be effective (i)
if given by mail, 72 hours after such communication is deposited in the
mails with first class postage prepaid, addressed as aforesaid or (ii)
if given by any other means, when delivered at the address specified in
this ARTICLE 29.
ARTICLE 30. MODIFICATION OF AGREEMENT. No waiver or
modification of this Agreement or of any covenant, condition, or
limitation herein contained shall be valid unless in writing and duly
executed by the party to be charged therewith. No evidence of any
waiver or modification shall be offered or received in evidence at any
proceeding, arbitration, or litigation between the parties hereto
arising out of or affecting this Agreement, or the rights or
obligations of the parties hereunder, unless such waiver or
modification is in writing, duly executed as aforesaid. The parties
further agree that the provisions of this ARTICLE 30 may not be waived
except as herein set forth.
ARTICLE 31. TAXES. To the extent required by applicable
law, the Company shall deduct and withhold all necessary Social
Security taxes and all necessary federal and state withholding taxes
and any other similar sums required by law to be withheld from any
payments made pursuant to the terms of this Agreement.
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ARTICLE 32. RECITALS. The Recitals to this Agreement are
incorporated herein and shall constitute an integral part of this
Agreement.
ARTICLE 33. EFFECT OF PRIOR AGREEMENTS. This agreement
expresses the whole and entire agreement between the parties with
reference to the employment of the Executive and supersedes and
replaces any prior employment agreement (including, without limitation,
the Predecessor Agreement), understanding or arrangement (whether
written or oral) between the Company and the Executive. Each of the
parties hereto has relied on his or its own judgment in entering into
this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement
on the day and year first above written.
EXECUTIVE
/s/ Xxxxx X. Xxxxxx
_______________________________(SEAL)
Xxxxx X. Xxxxxx
WITNESS:
/s/ Xxxxxxx X. X'Xxxxxx
DIMON INCORPORATED
By: /s/ Xxxxxx X. Xxxx, Xx.
Chairman and Chief Executive Officer
Attest:
/s/ X. X. Xxxxxxxxx
___________________________________
Secretary/Asst. Secretary
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