Exhibit 10.17
Dated as of April 24, 1997
Xxxx X. Xxxxxx, Xx.
HomeCrest Corporation
0000 Xxxxxxxxxx Xxxxx Xxxxx
Xxxxxx, XX 00000
Dear Xx. Xxxxxx:
Omega Holdings, Inc. ("Holdings"), the ultimate parent company of HomeCrest
Corporation ("HomeCrest") is presently contemplating a sale. In recognition of
your past service and future contributions and in order to obtain your
cooperation in the sale and transition process, we wish to implement a special
transition compensation program. While it is our hope that the program outlined
in this Letter Agreement ("Agreement") will never have cause to be implemented,
the following paragraphs will address some of your concerns in the event they
are and highlight the benefits that will be available to you under those
circumstances.
If a Change of Control (as defined herein) occurs on or prior to September
30, 1997, and your employment with HomeCrest under the new owner is terminated
within one hundred and eighty (180) days following the date of such Change in
Control (i) by HomeCrest without Cause (as defined herein) or (ii) voluntarily
by you for Good Reason (as defined herein), you will be paid severance pay, in
one lump sum at the time of such termination of employment, in an amount equal
to eighteen (18) months of your base monthly salary (as in effect immediately
prior to Change of Control or, if greater, as in effect immediately prior to the
termination of your employment). The foregoing severance payment, however, will
be reduced to the maximum amount which will avoid treatment of the severance pay
and other consideration (if any) paid to you as a result of the Change of
Control as a parachute payment as defined in section 280G of the Internal
Revenue Code of 1986, as amended ("Code").
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For purposes of this Agreement, "Cause" shall mean your conviction of a
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felony, or any conduct by you involving crime or moral turpitude materially and
adversely affecting HomeCrest; a "Change of Control" shall be deemed to have
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occurred if the present shareholders of Holdings no longer own, either
individually or in the aggregate, more than fifty percent (50%) of the voting
power of all of the then outstanding securities of Holdings or upon the
occurrence of any other transaction in which the business of Holdings and its
subsidiaries is sold; and "Good Reason" shall mean a reduction in salary,
benefits or perquisites, relocation of more than twenty-five (25) miles without
your consent, or a material reduction in position, duties and/or
responsibilities.
Upon termination of employment in the manner described above, you will also
be entitled to the additional benefits outlined in the following paragraphs.
You will also be entitled to all compensation earned, including
compensation for vacation time earned or accrued, up to and including the date
of termination of employment. In addition, you will be entitled to reimbursement
for business related expenses incurred by you up to and including the date of
your termination of employment.
You will also be entitled to any and all vested benefits and account
balances accrued under the terms of any qualified retirement plan(s) through the
date of your termination of employment. All such benefits shall be payable to
you or for your benefit at your direction in accordance with the terms of the
qualified plans.
You will also be entitled to continuation of coverage under the group
health, group life, group long-term disability and any other group plans
maintained by HomeCrest, at the expense of HomeCrest, until the earlier to occur
of (i) that date on which you become eligible for comparable coverage under
another group plan, including a plan maintained by a new employer, or (ii) the
expiration of two (2) years from the date of termination. If such continued
participation is precluded by the provisions of such plans or by applicable law,
HomeCrest shall provide you with comparable benefits of equal value. In
addition, you and your dependents may be entitled to the right to continued
health benefits at your cost under section 4980B of the Code, Part 6 of Subtitle
B of the Title I of ERISA and applicable state law.
You will also be eligible for executive outplacement assistance consisting
of consultation services, testing, if appropriate, and resume preparation at the
expense of HomeCrest.
All amounts payable under this Agreement will be subject to the applicable
federal, state and local income tax withholding, which will result in lesser
amounts being paid directly to you.
You will be entitled to payment of the severance pay and other benefits
described herein without any obligation to seek or accept other employment and,
in the case of any breach hereof by HomeCrest, you will have no duty to mitigate
damages. If you obtain other employment, any compensation payable to you will
not reduce the amounts payable to you hereunder.
Our entering into this Agreement does not terminate any existing agreement,
arrangement or plan of HomeCrest to which you are a party or in which you are a
participant. To the extent, however, payments or benefits are provided under
this Agreement, they will be in substitution of comparable payments or benefits
pursuant to any such other agreement, arrangement or plan. To the extent
payments or benefits are not provided under this Agreement, you remain entitled
to the payments and benefits provided under the terms of all such other
agreements, arrangements or plans.
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If for any reason Holdings decides not to sell or the closing of such sale
does not occur for any reason prior to September 30, 1997, the severance
payments and other benefits described in this letter will not be payable.
This Agreement shall be binding upon and inure to the successors and
assigns of HomeCrest and to your heirs and legal representatives. If necessary,
HomeCrest will require any successor (whether direct or indirect, by purchase,
merger, consolidation, reorganization or otherwise) to all or substantially all
of the business and/or assets of HomeCrest to expressly assume and agree to
perform HomeCrest's obligations under the terms of this Agreement in the same
manner and to the same extent that HomeCrest would be required to perform them
if no such succession had occurred.
PLEASE REMEMBER THAT THE CONTENTS OF THIS LETTER ARE STRICTLY CONFIDENTIAL.
YOU ARE NOT TO DISCUSS THE CONTENTS OF THIS LETTER WITH ANYONE.
Very truly yours,
Xxxxxx X. Xxxxxxx, Vice President
HomeCrest Corporation
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