EXHIBIT 10.10
NORTH CAROLINA )
) EXECUTIVE EMPLOYMENT AGREEMENT
GUILFORD COUNTY )
THIS AGREEMENT, made and entered into the 5th day of March, 1996, and
effective as of March 5, 1996, by and between XXXX Furniture, Inc., a North
Carolina corporation ("Company"), and Xxxxxxx X. Xxxxx, an individual resident
of Virginia ("Executive");
WITNESSETH:
WHEREAS, Company is engaged in the manufacture, distribution, and sale of
furniture; and
WHEREAS, Company desires to employ Executive as its Executive Vice
President and Executive desires to accept such employment on the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual promises contained herein,
the parties agree as follows:
1. Employment. Company hereby employs Executive, and Executive hereby
accepts employment and agrees to remain in the employ of the company during the
term of this Agreement, on the terms and conditions hereinafter set forth.
2. Term of Employment. Subject to the provisions in Section 9 below, the
term of this Agreement shall be for a two-year period beginning on the date
hereof and terminating on January 1, 1998, unless otherwise terminated as
provided herein.
3. Nature of Employment. Executive is employed as Executive Vice President
of Company. Consistent with such position, Executive shall, subject to the
direction of the Chief Executive Officer and the Board of Directors of Company,
direct and manage the affairs of the Company as assigned. Executive shall report
to and be responsible to the Chief Executive Officer. During the term of this
Agreement and any extensions or renewals thereof, Executive shall have no other
employment of any nature whatsoever without the prior consent of Company.
Accordingly, unless otherwise approved by Company, Executive agrees to devote
his full working time to the business of Company; provided, however, nothing
herein contained shall restrict or prevent Executive from personally and for his
own account owning and dealing in stocks, bonds, securities, real estate,
commodities, or other investment properties for his own benefit or the benefit
of his family. Further, nothing herein contained shall restrict or prevent
Executive from serving on the Board of Directors of any entity which does not
directly of indirectly compete with Company.
4. Compensation.
(a) Base Salary. Compensation to Executive for the services rendered on
behalf of Company during the term of this Agreement shall be no less than two
hundred twenty-five dollars ($225,000) per year, payable in equal monthly
installments. From time to time during the term of this Agreement, Executive's
compensation may be increased if approved by the Board of Directors of Company,
but shall in no event be decreased from the amount of the base salary in effect
at that time. Company shall review Executive's compensation hereunder at least
on an annual basis.
(b) Incentive Compensation. In addition to Executive's base salary,
Executive shall be entitled to participate in incentive compensation plans and
programs generally available to executives of the Company, provided that
performance goals and award targets used in the computation of awards to the
Executive hereunder shall be no less favorable than those which are used in the
computation of awards to other executives of the Company and shall recognize the
level of responsibility of the Executive. The annual incentive opportunity shall
have a maximum no less than eighty hundred percent (80%) of Executive's then
current base salary.
5. Expenses. Executive is authorized to incur reason able expenses in
connection with the business of Company, including expenses for travel and
similar items. Company will reimburse Executive for all such expenses upon the
presentation by Executive, from time to time, of an itemized account of
expenditures.
6. Vacation. Executive shall be entitled to paid vacations during each
calendar year of the term of this Agreement at such times and for such duration
as may be determined by the Chief Executive Officer of the Company, taking into
consideration the needs and requirements of Company for Executive's services;
provided, however, the minimum paid vacation to which Executive shall be
entitled in any calendar year is four (4) weeks.
7. Death During Employment. If Executive dies during the term of this
Agreement, Company shall pay to the estate of Executive the compensation to
which he would otherwise be entitled through the end of the month in which death
occurs in accordance with Section 4(a) above, plus the sum of Five Thousand
Dollars ($5,000.00) as an additional death benefit. Company shall also pay to
the estate of Executive an amount equal to any bonus or other incentive payments
which would otherwise have been due to Executive had Executive been employed as
of fiscal year end, pro-rated to date of death. This Agreement shall thereupon
terminate, and Company shall have no further obligation to the estate of
Executive.
8. Permanent Disability During Employment. If Executive becomes permanently
disabled during the term of this Agreement, Company shall pay to Executive the
compensation, in accordance with Section 4(a) above, to which he would otherwise
be entitled to the end of the month in which such permanent disability occurs.
Thereafter, the Executive shall continue to receive his then base salary, minus
any payments provided by the Company's benefit plans and by any government
sponsored program, for a twenty-four (24) month period from the
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date of permanent disability. This Agreement shall thereupon terminate and
Company shall have no further obligation to Executive except as may be provided
under Company's short-term and long-term disability plans during the term of
such disability and any prorata portion of any bonus or incentive plan.
Permanent disability for purposes of this Agreement shall mean a physical or
mental condition of Executive that renders Executive incapable of performing the
essential duties of his job and which condition shall be medically determined to
be of permanent duration as same is construed under Company's disability plans.
9. Renewal. Executive's term of employment shall be automatically extended
upon the same terms and conditions contained herein for successive one-year
periods unless a written notice of termination is given by either party at least
90 days before the end of the term of employment or any renewals or extensions
thereof. In the event the Company gives timely notice to terminate this
Agreement, the severance provision of Section 11 pertaining to termination
without cause shall become effective.
10. Termination for Cause. Company may terminate Executive's employment at
any time "for cause". The term "for cause" shall mean (i) a material default or
other breach by Executive of his obligations under this Agreement, (ii) material
failure by Executive to diligently and competently perform his duties under this
Agreement, which shall be determined by Company's Board of Directors in its
reasonable discretion, (iii) insubordination or other act or acts by Executive
detrimental to Company or damaging to Company's relationships with customers,
suppliers or employees or (iv) fraud, dishonesty, misappropriation of Company's
assets, or conviction of a felony. Upon the occurrence of (i), (ii) or (iii)
above, Company shall be entitled to terminate the employment relationship
hereunder upon thirty (30) days prior written notice to Executive, which notice
shall state the reason for such termination and shall provide Executive an
opportunity to remedy or cure such cause during such period. If such cause is
not remedied or cured during such period, Company may terminate Executive's
employment immediately. In the event of a termination for cause, Company shall
have no obligation or liability to Executive under this Agreement except for the
compensation to which he is entitled through the end of the month of termination
in accordance with Section 4(a) above.
11. Termination Without Cause. Company shall be entitled to terminate the
employment relationship hereunder without cause at any time upon thirty (30)
days prior written notice to Executive. In such event, Executive, if requested
by Company, shall continue to render his services up to the date of termination
and shall be paid the compensation to which he is entitled through the end of
the month of termination in accordance with Section 4(a) above. In addition, if
Company terminates this Agreement for any reason other than for cause, as
specified in Section 10 above, the Executive shall be entitled to receive in
twenty-four (24) equal monthly payments in an amount equal to two times the sum
of (i) his then current base salary in accordance with Section 4(a) above and
(ii) the average annual incentive payments to the Executive during the preceding
three (3) years less earned income received during the 24-month severance
period. The Company shall thereafter have no other obligation or liability to
Executive under this Agreement.
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12. Termination upon Change of Control. In the event of a "change in
control" of the Company (as hereinafter defined), the Executive may terminate
his employment for Good Reason. For purposes of this Agreement, "Good Reason"
shall mean the occurrence of any of the following events during the twelve (12)
months immediately preceding or following the effective date of a change in
control of the Company:
(a) a material change in the scope of the Executive's assigned duties and
responsibilities from those in effect immediately prior to a change in control
of the Company or the assignment of duties or responsibilities that are
inconsistent with the Executive's status in the Company;
(b) a reduction by the Company in the Executive's base salary or incentive
compensation as in effect on the date of a change in control;
(c) the Company's requirement that the Executive be based anywhere other
than the Company's office at which he was based prior to the change in control
of the Company; or
(d) the failure by the Company to continue to provide the Executive with
benefits substantially similar to those specified in Section 14 of this
Agreement.
If the Executive shall terminate his employment for Good Reason, then the
Company shall pay him a lump sum severance payment in an amount equal to two
times the sum of (i) his then current base salary and (ii) the average annual
incentive payments to the Executive during the preceding three (3) years.
Further, upon termination for Good Reason, all outstanding stock options shall
become immediately exercisable.
For purposes of this Agreement, a "change in control" shall be deemed to
have occurred when (i) any person, corporation, or group of associated persons,
excluding affiliates of the Company, acquires a beneficial ownership of an
aggregate of more than fifty percent (50%) of the then outstanding shares of
voting stock of the Company or (ii) a merger or consolidation to which the
Company is a party and where the Company is not a surviving or continuing entity
has been completed.
13. Property of Company. Executive agrees that upon the termination of his
employment he will turn over to Company all property of Company which has come
into his possession while an Executive of Company.
14. Additional Benefits. During the term of this Agreement and any renewals
or extensions thereof, Company shall keep and maintain, for the benefit of
Executive, life insurance having a death benefit of not less one hundred percent
(100%) of base pay (not to
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exceed $300,000) and disability insurance that will provide Executive a
benefit of not less than sixty-percent (60%) of base pay per month during the
term of any disability. Executive and, as applicable, the Executive's family
shall also have the right to participate in any Executive benefit plans or other
fringe benefits adopted by Company for its officers and/or other key management
employees or as a part of Company's regular compensation structure for its
employees, including any group hospitalization, medical, dental, accidental
death and disability and long-term disability income replacement insurance plans
and any retirement income and capital accumulation plans. All such benefits
shall be in addition to the compensation payments provided by this Agreement.
15. Covenants by Executive.
(a) Non-competition. During the term of employment under this Agreement
including any renewals or extensions thereof, and for a period of two (2) years
thereafter, Executive shall not, without the prior written approval of Company,
directly or indirectly, as employer, employee, partner, stockholder, joint
venturer or otherwise, enter into or in any manner take part in any business or
other endeavor which would be in competition with Company in the continental
United States as such business is conducted at the time of termination.
(b) Respect for Economic Relationships. Executive will not, during the term
of his employment under this Agreement including any renewals or extensions
thereof, and for a period of two (2) years thereafter, in any fashion, form, or
manner, either directly or indirectly, solicit, interfere with, or endeavor to
entice away from Company any customer or person, firm or corporation, regularly
dealing with Company or directly or indirectly interfere with, entice away, or
cause any other entity to employ any other employee of Company.
(c) Validity of Covenants. Executive agrees that the covenants contained in
this Section are reasonably necessary to protect the legitimate interests of
Company, are reasonable with respect to time, territory and scope, and do not
interfere with the interests of the public. Executive further agrees that the
descriptions of the covenants contained in this Section are sufficiently
accurate and definite to inform Executive of the scope of such covenants.
Executive acknowledges that prior to entering into this Agreement he was
employed "at will", and agrees that the term of employment and termination
provisions contained in Sections 2, 9, 10 and 11 above constitute fully adequate
and sufficient consideration for the covenants contained in Sections 15 and 17
of this Agreement.
(d) Specific Performance. Executive agrees that a breach or violation of
any of the covenants under this Section will result in immediate and irreparable
harm to Company in an amount which will be impossible to ascertain at the time
of the breach or violation and that the award of monetary damages will not be
adequate relief to Company. Therefore, the failure on the part of Executive to
perform all of the covenants established by this Section shall give rise to a
right
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to Company to obtain enforcement of this Section in a court of equity by a
decree of specific performance or other injunctive relief. This remedy, however,
shall be cumulative and in addition to any other remedy Company may have.
16. Patent, Trade Dress and Trademark Assignment. Executive agrees without
additional compensation to assign promptly to Company all rights, title, and
interest in and to any and all trade secrets, inventions, letters patent,
applications for letters patent, trade dress, and trademarks whether or not
subject to state or federal trademark during the term of employment hereunder if
related to the then current products and activities of Company, such activities
to include, without limitation, product development by Company, or if developed
or made with the use of its facilities, equipment, materials, personnel, or
trade secrets, or result directly from any work performed by Executive for
Company. Executive further agrees to disclose promptly to Company any such trade
secrets, inventions, letters patent, applications for letters patent, trade
dress, and trademarks, and, at the request and expense of Company, to apply for
letters patent or registration thereon in every jurisdiction designated by
Company.
17. Confidential Information. Executive agrees both during the term of this
Agreement and thereafter to keep secret and confidential all information labeled
confidential or not generally known which is heretofore or hereafter acquired
concerning the business and affairs of Company, including without limitation,
information regarding trade secrets, trade dress, proprietary processes,
confidential business plans, market research data and financial data, and
further agrees not to disclose any such information to any person, firm, or
corporation or use the same in any manner other than in furtherance of the
business or affairs of Company or unless such information shall become public
knowledge by other means. Executive agrees that such information is a valuable,
special, and unique asset of Company. Upon the termination of Executive's
employment with Company, Executive shall immediately return to Company all
documents, records, notebooks, and similar repositories of information relating
to confidential information of Company and/or the development of any inventions.
18. Waiver of Breach. The waiver by Company or Executive of any breach of a
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach by the parties.
19. Notice. All notices, requests, demands, payments, or other
communications hereunder shall be deemed to have been duly given if in writing
and hand delivered or sent by certified or registered mail, return receipt
requested, to the appropriate address indicated below or to such other address
as may be given in a notice sent to all parties hereto:
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(a) If to Company, to:
XXXX Furniture, Inc.
Xxx Xxxxx Xxxxxx
X. X. Xxx XX-0
Xxxx Xxxxx, XX 00000
Attn: Chief Executive Officer
b) If to Executive, to:
Xxxxxxx X. Xxxxx
000 Xxxxxxxx Xx.
Xxxxxxxxxxxx, XX 00000
20. Entire Agreement. This Agreement supersedes any and all other
understandings and agreements, either oral or in writing, between the parties
hereto with respect to the subject matter hereof and constitutes the sole and
only agreement between the parties with respect to said subject matter. Each
party to this Agreement acknowledges that no representations, inducements,
promises, or agreements, oral or otherwise, have been made by any party or by
anyone acting on behalf of any party, which are not embodied herein, and that no
agreement, statement, or promise not contained in this Agreement shall be valid
or binding or of any force or effect. No change or modification of this
Agreement shall be valid or binding upon the parties hereto unless such change
or modification is in writing and is signed by the parties hereto.
21. Severability. If any one or more of the provisions contained in this
Agreement shall be held by a court of competent jurisdiction to be invalid,
illegal, or unenforceable in any respect for any reason, that invalidity,
illegality, or unenforceability shall not affect any other provisions hereof,
and this Agreement shall be construed as if that invalid, illegal, or
unenforceable provision had never been contained herein.
22. Parties Bound. The terms, promises, covenants, and agreements contained
in this Agreement shall apply to, be binding upon, and inure to the benefit of
the parties hereto and their respective successors and assigns; provided,
however, that this Agreement may not be assigned by Company or Executive without
the prior written consent of the other party.
23. Consolidation, Merger or Sale of Assets. Nothing in this Agreement
shall preclude the Company from consolidating or merging into, or with, or
transferring all or substantially all of its assets to another corporation which
assumes this Agreement and all obligations and undertakings of the Company
hereunder. Upon such a consolidation or merger, the use of the word "Company"
herein shall mean such other corporation, and this Agreement shall continue in
full force and effect.
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24. Survival. The provisions of Sections 15 and 17 of this Agreement shall
survive the termination of this Agreement and shall continue for the terms set
forth in Sections 15 and 17.
25. Captions. Captions to the Sections of this Agreement are inserted
solely for the convenience of the parties, are not a part of this Agreement, and
in no way define, limit, extend or describe the scope thereof or the intent of
any of the provisions.
26. Applicable Law. This Agreement shall be construed and the legal
relationship between the parties determined in accordance with the laws of the
State of North Carolina.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and
seals as of the day and year first above written, the corporate party acting
through duly authorized officers.
ATTEST: XXXX Furniture, Inc.
___________________________ By:_______________________________
Secretary President
(Corporate Seal)
___________________________ ____________________________(SEAL)
(Witness) Xxxxxxx X. Xxxxx
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