Exhibit 99.1
XXXXXXXX CORPORATION
EMPLOYMENT AGREEMENT
This agreement (this "Agreement") has been entered into this 9th
day of September, 2004, by and between Xxxxxxxx Corporation, a Missouri
corporation (the "Company"), and Xxxx X. Xxxxxxxx, an individual (the
"Executive").
WHEREAS, the Board of Directors of the Company has determined that
it is in the best interests of the Company and its stockholders to retain
the Executive in the employ of the Company as Vice President of the Company
and President of the Company's Textile Services business operations as of
the Effective Date (as defined below); and
WHEREAS, this Agreement contains the terms and conditions that have
been negotiated by the Company and the Executive as an inducement to the
Executive to continue in the employment of the Company and as an incentive
to reinforce and encourage the continued attention and dedication of the
Executive to the Company and its business throughout the Employment Period
(as defined below), even in the face of a potential Change in Control;
NOW THEREFORE, in consideration of the mutual promises herein
contained, the parties hereby agree as follows:
SECTION 1: DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. For purposes of this Agreement, the following
words and phrases, whether or not capitalized, shall have the meanings
specified below, unless the context plainly requires a different meaning.
1.1(a) "ACCRUED OBLIGATIONS" has the meaning set forth in
Section 4.1(a) of this Agreement.
1.1(b) "ADDITIONAL RETIREMENT BENEFITS" has the meaning set
forth in Section 2.4(f) of this Agreement.
1.1(c) "ANNUAL BONUS" has the meaning set forth in Section
2.4(b) of this Agreement.
1.1(d) "ANNUAL BASE SALARY" has the meaning set forth in
Section 2.4(a) of this Agreement.
1.1(e) "BOARD" means the Board of Directors of the Company.
1.1(f) "CAUSE" has the meaning set forth in Section 3.3 of this
Agreement.
1.1(g) "CHANGE IN CONTROL" means:
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(i) The acquisition by any individual, entity or group,
or a Person (within the meaning of Section 13(d)(3) or
14(d)(2) of the Exchange Act) of ownership of 20% or
more of either (a) the then outstanding shares of common
stock of the Company (the "Outstanding Company Common
Stock") or (b) the combined voting power of the then
outstanding voting securities of the Company entitled to
vote generally in the election of directors (the
"Outstanding Company Voting Securities"); or
(ii) Individuals who, as of the date hereof, constitute
the Board (the "Incumbent Board") cease for any reason
to constitute at least a majority of the Board;
provided, however, that any individual becoming a
director subsequent to the date hereof whose election,
or nomination for election, by the Company's
stockholders was approved by a vote of at least a
majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were
a member of the Incumbent Board, but excluding, as a
member of the Incumbent Board, any such individual whose
initial assumption of office occurs as a result of
either an actual or threatened election contest (as such
terms are used in Rule l4a-11 of Regulation l4A
promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board; or
(iii) Approval by the stockholders of the Company of a
reorganization, merger or consolidation, in each case,
unless, following such reorganization, merger or
consolidation, (1) more than 50% of, respectively, the
then outstanding shares of common stock of the
corporation resulting from such reorganization, merger
or consolidation and the combined voting power of the
then outstanding voting securities of such corporation
entitled to vote generally in the election of directors
is then beneficially owned, directly or indirectly, by
all or substantially all of the individuals and entities
who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company
Voting Securities immediately prior to such
reorganization, merger or consolidation in substantially
the same proportions as their ownership, immediately
prior to such reorganization, merger or consolidation,
of the Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be, (2) no
Person beneficially owns, directly or indirectly, 20% or
more of, respectively, the then outstanding shares of
common stock of the corporation resulting from such
reorganization, merger or consolidation or the combined
voting power of the then outstanding voting securities
of such corporation, entitled to vote generally in the
election of directors, and (3) at least a majority of
the members of the board of directors of the corporation
resulting from such reorganization, merger or
consolidation were members of the Incumbent Board at the
time of the execution of the initial agreement providing
for such reorganization, merger or consolidation; or
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(iv) Approval by the stockholders of the Company of (a)
a complete liquidation or dissolution of the Company or
(b) the sale or other disposition of all or
substantially all of the assets of the Company, other
than to a corporation, with respect to which following
such sale or other disposition, (1) more than 50% of,
respectively, the then outstanding shares of common
stock of such corporation and the combined voting power
of the then outstanding voting securities of such
corporation entitled to vote generally in the election
of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock
and Outstanding Company Voting Securities immediately
prior to such sale or other disposition in substantially
the same proportion as their ownership, immediately
prior to such sale or other disposition, of the
Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be, (2) no Person
beneficially owns, directly or indirectly, 20% or more
of, respectively, the then outstanding shares of common
stock of such corporation and the combined voting power
of the then outstanding voting securities of such
corporation entitled to vote generally in the election
of directors and (3) at least a majority of the members
of the board of directors of such corporation were
members of the Incumbent Board at the time of the
execution of the initial agreement or action of the
Board providing for such sale or other disposition of
assets of the Company.
1.1(h) "CHANGE IN CONTROL DATE" means the date that a Change in
Control first occurs.
1.1(i) "COMPANY" has the meaning set forth in the first
paragraph of this Agreement and, with regard to successors, in
Section 6.2 of this Agreement.
1.1(j) "DATE OF TERMINATION" has the meaning set forth in
Section 3.8 of this Agreement.
1.1(k) "DISABILITY" has the meaning set forth in Section 3.2 of
this Agreement.
1.1(l) "DISABILITY EFFECTIVE DATE" has the meaning set forth in
Section 3.2 of this Agreement.
1.1(m) "EFFECTIVE DATE" means the date of this Agreement.
1.1(n) "EMPLOYMENT PERIOD" means the period beginning on the
Effective Date and ending on the Date of Termination.
1.1(o) "EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended.
1.1(p) "GOOD REASON" has the meaning set forth in Section 3.4
of this Agreement.
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1.1(q) "INCUMBENT BOARD" has the meaning set forth in Section
1.1(g)(ii) of this Agreement.
1.1(r) "NOTICE OF TERMINATION" has the meaning set forth in
Section 3.7 of this Agreement.
1.1(s) "OTHER BENEFITS" has the meaning set forth in Section
4.3 of this Agreement.
1.1(t) "OUTSTANDING COMPANY COMMON STOCK" has the meaning set
forth in Section 1.1(g)(i) of this Agreement.
1.1(u) "OUTSTANDING COMPANY VOTING SECURITIES" has the meaning
set forth in Section 1.1(g)(i) of this Agreement.
1.1(v) "PERSON" means any "person" within the meaning of
Sections 13(d) and 14(d) of the Exchange Act.
1.1(w) "SUPPLEMENTAL PLAN" has the meaning set forth in Section
2.4(d) of this Agreement.
1.2 GENDER AND NUMBER. When appropriate, pronouns in this Agreement
used in the masculine gender include the feminine gender, words in the
singular include the plural, and words in the plural include the singular.
1.3 HEADINGS. All headings in this Agreement are included solely
for ease of reference and do not bear on the interpretation of the text.
Accordingly, as used in this Agreement, the terms "Article" and "Section"
mean the text that accompanies the specified Article or Section of the
Agreement.
1.4 APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Missouri, without
reference to its conflict of law principles.
SECTION 2: TERMS AND CONDITIONS OF EMPLOYMENT.
2.1 PERIOD OF EMPLOYMENT; TERM OF AGREEMENT. The Executive shall
remain in the employ of the Company throughout the Employment Period in
accordance with the terms and provisions of this Agreement. Either party to
this Agreement may terminate the Employment Period (and the Executive's
employment with the Company) at any time by giving the other party a Notice
of Termination, subject only to the obligation of the Company to pay the
benefits to the Executive as specified in Section 4 of this Agreement. The
term of this Agreement shall begin as of the Effective Date and shall end on
the Date of Termination.
2.2 POSITIONS AND DUTIES.
2.2(a) Throughout the Employment Period, the Executive shall
serve as President, Textile Services and Vice President of the
Company, subject to the reasonable directions
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of the Chief Executive Officer of the Company and the Board.
The Executive shall have such authority and shall perform such
duties as are specified in or contemplated by the Bylaws of the
Company for the offices to which he has been appointed and
shall so serve subject to the control exercised by the Chief
Executive Officer of the Company and the Board from time to
time.
2.2(b) Throughout the Employment Period (but excluding any
periods of vacation and sick leave to which the Executive is
entitled), the Executive shall devote reasonable attention and
time during normal business hours to the business and affairs
of the Company and shall use his reasonable best efforts to
perform faithfully and efficiently such responsibilities as are
assigned to him under or in accordance with this Agreement;
provided that, it shall not be a violation of this Section
2.2(b) for the Executive to (i) serve on corporate, civic or
charitable boards or committees (subject to the restrictions
and limitations set forth in the two immediately succeeding
sentences of this Section 2.2(b)), (ii) deliver lectures or
fulfill speaking engagements, or (iii) manage personal
investments, so long as such activities do not significantly
interfere with the performance of the Executive's
responsibilities as an employee of the Company in accordance
with this Agreement or violate the Company's conflict of
interest policy as is in effect at such times.
2.3 SITUS OF EMPLOYMENT. Throughout the Employment Period, the
Executive's services shall be performed at the Company's divisional
headquarters offices located in the greater Atlanta, Georgia metropolitan
area.
2.4 COMPENSATION.
2.4(a) ANNUAL BASE SALARY. The Executive will initially receive
an annual base salary ("Annual Base Salary") of Three Hundred
Thousand Dollars ($300,000.00), which shall be paid in equal or
substantially equal semi-monthly installments. During the
Employment Period, the Annual Base Salary payable to the
Executive shall be reviewed by the Board and/or the
Compensation and Organization Committee at least once annually
and shall be increased at the discretion of the Board or the
Compensation and Organization Committee of the Board but shall
not be reduced without the consent of the Executive.
2.4(b) ANNUAL INCENTIVE BONUSES. In addition to Annual Base
Salary, the Executive will be entitled to earn an incentive
bonus on an annual basis (the "Annual Bonus") during the
Employment Period. The Board will set, on or before the 90th
day of such fiscal year, the criteria which will be required to
be achieved by the Executive during the fiscal year to earn all
or a specified percentage of his Annual Bonus. The maximum
Annual Bonus that the Executive may earn is 80%, and the target
bonus is 40%, of the Executive's then-current Annual Base
Salary. If a Change in Control occurs, the Executive will
receive a lump-sum payment on or before the Change in Control
Date equal to the Executive's maximum Annual Bonus, prorated
with the numerator being the number of months in the fiscal
year to the Change in Control Date (including the month in
which the Change in Control occurs as a full month) and the
denominator being 12.
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This payment will be in lieu of any right of the Executive to
receive an Annual Bonus for the fiscal year in which the Change
in Control occurs.
2.4(c) LONG-TERM INCENTIVE PLAN AWARDS. The Executive will be
entitled to earn long-term incentive bonus awards payable in
accordance with a plan established by the Board or the
Compensation and Organization Committee (the "Long-Term
Bonus"). The Executive will be eligible to earn a Long-Term
Bonus during the Employment Period on the basis of the
achievement of performance goals during a three-year
performance period. The Board will set, on or before the 90th
day of such fiscal year, the performance goals to be achieved
during the performance period that is then commencing in order
for the Executive to earn all or a specified portion of his
Long-Term Bonus. The Long-Term Bonus amount that may be earned
by the Executive will be set at 50% of the Executive's
then-current Annual Base Salary.
2.4(d) SAVINGS, DEFERRED COMPENSATION AND RETIREMENT PLANS.
Throughout the Employment Period, the Executive shall be
entitled to participate in all savings, deferred compensation
and retirement plans generally available to other peer
executives of the Company, including the Company's 401(k) Plan,
the Mirror 401(k) and Deferred Compensation Plan, the qualified
defined benefit Pension Plan and the Supplemental Retirement
Benefits Plan. For purposes of the Supplemental Retirement
Benefits Plan (the "Supplemental Plan"), the Executive will
participate at the maximum percentage of thirty-five percent
(35%) of his final average compensation for purposes of
computing the Executive's benefits thereunder.
2.4(e) WELFARE BENEFIT PLANS. Throughout the Employment Period
(and thereafter, subject to Section 4.2(d) of this Agreement),
the Executive and/or the Executive's family, as the case may
be, shall be eligible for participation in and shall receive
all benefits under welfare benefit plans, practices, policies
and programs provided by the Company (including, without
limitation, medical, prescription, dental, disability, salary
continuance, employee life, group life, accidental death and
travel accident insurance plans and programs) to the extent
generally available to other peer executives of the Company.
2.4(f) BUSINESS EXPENSES. Throughout the Employment Period, the
Executive shall be entitled to receive prompt reimbursement for
all reasonable business expenses incurred by the Executive in
the conduct of the business of the Company (including travel
and entertainment expenses) in accordance with the policies,
practices and procedures generally applicable within the
Company.
2.4(g) OFFICE AND SUPPORT STAFF. Throughout the Employment
Period, the Executive shall be entitled to an office or offices
of a size and with furnishings and other appointments, and to
secretarial and other assistance commensurate with his office,
duties and responsibilities with the Company.
2.4(h) VACATION. Throughout the Employment Period, the
Executive shall be entitled to paid vacation equal to four (4)
weeks per year.
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SECTION 3: TERMINATION OF EMPLOYMENT.
3.1 DEATH. The Executive's employment shall terminate automatically
upon the Executive's death during the Employment Period.
3.2 DISABILITY. If the Company determines in good faith that the
Disability of the Executive has occurred during the Employment Period
(pursuant to the definition of Disability set forth below), the Company may
give to the Executive written notice in accordance with Section 7.2 of its
intention to terminate the Executive's employment. In such event, the
Executive's employment with the Company shall terminate effective on the
thirtieth (30th) day after receipt of such notice by the Executive (the
"Disability Effective Date"), provided that, within the thirty (30) days
after such receipt, the Executive shall not have returned to full-time
performance of the Executive's duties. For purposes of this Agreement,
"Disability" shall mean that the Executive has been unable to perform the
services required of the Executive under this Agreement on a full-time basis
for a period of one hundred eighty (180) consecutive regular business days
by reason of a physical and/or mental condition. "Disability" shall be
deemed to exist when certified by a physician selected by the Company and
acceptable to the Executive or the Executive's legal representative (such
agreement as to acceptability not to be withheld unreasonably). The
Executive will submit to such medical or psychiatric examinations and tests
as such physician deems necessary to make any such Disability determination.
3.3 TERMINATION FOR CAUSE. The Company may terminate the
Executive's employment during the Employment Period for "Cause," which shall
mean termination based upon: (a) the Executive's willful and continued
failure to substantially perform his duties with the Company (other than as
a result of incapacity due to physical or mental condition), after a written
demand for substantial performance is delivered to the Executive by the
Board or the Chief Executive Officer, which specifically identifies the
manner in which the Executive has not substantially performed his duties,
(b) the Executive's commission of an act constituting a criminal offense
involving moral turpitude, dishonesty, or breach of trust, or (c) the
Executive's material breach of any provision of this Agreement. For purposes
of this Section 3.3, no act or failure to act on the Executive's part shall
be considered "willful" unless done or omitted to be done without good faith
on the part of the Executive and without the Executive's reasonable belief
that the act or omission was in the best interest of the Company.
Notwithstanding the foregoing, the Executive shall not be deemed to have
been terminated for Cause unless and until (x) he receives a Notice of
Termination from the Company, (y) he is given the opportunity, with counsel,
to be heard before the Board or the Compensation and Organization Committee,
and (z) the Board or the Compensation and Organization Committee, as the
case may be, finds, in its good faith opinion, the Executive was guilty of
the conduct set forth in the Notice of Termination.
3.4 GOOD REASON. The Executive may terminate his employment with
the Company during the Employment Period for "Good Reason," which shall
mean:
3.4(a) the assignment to the Executive of any duties
inconsistent in any respect with the Executive's position
(including status, offices, titles and reporting requirements),
authority, duties or responsibilities as contemplated by
Section 2.2(a) or any other action by the Company which results
in a diminution in such position, authority, duties or
responsibilities, excluding for this purpose any action not
taken in bad faith by the
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Company and which the Company remedies promptly after receipt
of notice thereof given by the Executive;
3.4(b) (i) the failure by the Company to continue in effect any
benefit or compensation plan, stock ownership plan, life
insurance plan, health and accident plan or disability plan to
which the Executive is entitled as specified in Section 2.4,
provided that the Company may amend, modify or replace any such
plan or plans as long as the Executive is entitled to benefits
under the amended, modified or replaced plan or plans that are
substantially similar to those of the plan or plans so amended,
modified or replaced, (ii) the taking of any action by the
Company which would adversely affect the Executive's
participation in, or materially reduce the Executive's benefits
under, any plans described in Section 2.4, or deprive the
Executive of any benefits enjoyed by the Executive as described
in Section 2.4(f) and (g), or (iii) the failure by the Company
to provide the Executive with paid vacation to which the
Executive is entitled as described in Section 2.4(h);
3.4(c) the Company's requiring the Executive to be based at any
office or location other than that described in Section 2.3;
3.4(d) a material breach by the Company of any provision of
this Agreement;
3.4(e) any purported termination by the Company of the
Executive's employment otherwise than as expressly permitted by
this Agreement; or
3.4(f) in connection with a Change in Control, the failure of a
successor of the Company to expressly assume and agree to
perform this Agreement pursuant to the provisions of Section
6.2 of this Agreement prior to the Change in Control Date;
provided, however, that a termination of employment by the
Executive: (A) subsequent to an express assumption and
agreement to perform this Agreement by such successor on or
after the Change in Control Date, or (B) subsequent to a date
that is two years after a Change in Control Date, shall not be
deemed to be for "Good Reason" under this subsection.
For purposes of this Section, any good faith determination of "Good
Reason" made by the Executive shall be conclusive unless and until such
determination is overturned by a court of competent jurisdiction.
3.5 VOLUNTARY TERMINATION BY THE EXECUTIVE. The Executive may
voluntarily terminate his employment with the Company for any reason or for
no reason at any time during the Employment Period.
3.6 TERMINATION BY THE COMPANY WITHOUT CAUSE. The Company may
terminate the Executive's employment with the Company for any reason or for
no reason, without citing Cause, at any time during the Employment Period,
subject to the provisions of Section 4 of this Agreement.
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3.7 NOTICE OF TERMINATION. Any termination by the Company or by the
Executive shall be communicated by Notice of Termination given in accordance
with Section 7.2 to the other party. For purposes of this Agreement, a
"Notice of Termination" means a written notice which (i) indicates the
specific termination provision in this Agreement relied upon, (ii) to the
extent applicable, 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) if the Date of
Termination (as defined in Section 3.8 hereof) is other than the date of
receipt of such notice, specifies the Date of Termination. The failure by
the Executive or the Company to set forth in the Notice of Termination any
fact or circumstance which contributes to a showing of Good Reason or Cause
shall not waive any right of the Executive or the Company hereunder or
preclude the Executive or the Company from asserting such fact or
circumstance in enforcing the Executive's or the Company's rights hereunder.
3.8 DATE OF TERMINATION. "Date of Termination" means (i) if the
Executive's employment is terminated by the Company for Cause or any other
reason, the date of receipt by the Executive of the Notice of Termination or
any later date specified therein, as the case may be, (ii) if the
Executive's employment is terminated by reason of death or Disability, the
date of death of the Executive or the Disability Effective Date, as the case
may be, or (iii) if the Executive's employment is terminated by the
Executive for Good Reason, the date specified in the Notice of Termination
which date shall not be more than thirty (30) or less than fifteen (15) days
after the receipt of such notice; or (iv) if the Executive's employment is
terminated by the Executive voluntarily (either prior to or after a Change
in Control Date), the date that is specified in the Notice of Termination.
If within thirty (30) days after any Notice of Termination is given, the
party receiving such Notice of Termination notifies the other party that a
dispute exists concerning the termination, the Date of Termination shall be
the date on which the dispute is finally determined, either by mutual
written agreement of the parties, or by a final judgment, order or decree of
a court of competent jurisdiction (the time for appeal therefrom having
expired and no appeal having been perfected).
SECTION 4: CERTAIN BENEFITS UPON TERMINATION.
4.1 TERMINATION WITHOUT CAUSE OR FOR GOOD REASON NOT IN CONNECTION
WITH A CHANGE IN CONTROL. If, prior to a Change in Control Date during the
Employment Period (except in the event that one of the following
terminations of employment occurs within the six-month period prior to the
earlier of (a) a Change in Control Date or (b) the execution of a definitive
agreement or contract that eventually results in a Change in Control, which
shall result in the payment of severance benefits set forth in Section 4.2
of this Agreement), (i) the Company shall terminate the Executive's
employment without Cause, or (ii) the Executive shall terminate his
employment for Good Reason, the Executive shall be entitled to the payment
of the benefits provided below:
4.1(a) ACCRUED OBLIGATIONS. Within thirty (30) days after the
Date of Termination, the Company shall pay to the Executive the
sum of (i) the Executive's Annual Base Salary through the Date
of Termination to the extent not previously paid, (ii) the
accrued benefit payable to the Executive under any compensation
plan, program or arrangement in which the Executive is a
participant subject to the computation of benefits provisions
of such plan, program or arrangement, and (iii) any accrued
vacation pay; in each case to the extent not previously paid
(the "Accrued Obligations").
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4.1(b) ANNUAL BASE SALARY CONTINUATION. For a period of
twenty-four (24) months beginning in the month immediately
subsequent to the month in which the Date of Termination
occurs, the Company shall pay to the Executive, on a
semi-monthly basis consistent with its then-existing payroll
practices, an amount equal to one/twenty-fourth (1/24th) of the
Executive's then-current Annual Base Salary; provided, however,
that during months thirteen (13) through twenty-four (24) of
such period, the amount of such payments shall be reduced by
the amounts, if any, earned by the Executive during such months
as a result of self-employment and/or employment with another
employer. As a condition of payment during months thirteen
through twenty-four, the Executive agrees to provide the
Company with verification, reasonably acceptable to the
Company, substantiating the amounts of any such earnings or the
Executive's lack of other employment, as the case may be. The
Company at any time may elect to pay the balance of such
payments then remaining in a lump sum, without discount.
4.1(c) CONTINUATION OF MEDICAL AND HEALTH BENEFITS. The Company
shall, during the period specified below in this Section
4.1(c), continue to make available to the Executive and to
other eligible members of his immediate family, medical and
health benefits equivalent to those to which the Executive and
the eligible members of his immediate family would have been
entitled had the Executive's employment with the Company
continued. Such benefits will be made available to the
Executive for a period not to exceed twenty-four (24) months
following the Date of Termination, or until such time as
reasonably comparable benefits become available to the
Executive and the eligible members of his immediate family
under another employer-provided plan, whichever occurs earlier.
Such benefits, for so long as they are made available
hereunder, shall be made available to the Executive at a cost
to the Executive that is not greater than his cost would have
been had his employment with the Company continued.
4.1(d) ACCELERATION OF VESTING OF CERTAIN STOCK OPTIONS.
Notwithstanding anything to the contrary contained in this
Agreement, in any stock-based compensation plan maintained by
the Company under which stock options have been granted to the
Executive, or in any stock option agreement entered into
between the Company and the Executive pursuant to such plan,
any stock options held by the Executive that have not expired
as of the Date of Termination that are scheduled to vest in
accordance with their respective terms within the twelve-month
period following the Date of Termination shall be deemed to
have vested immediately prior to the Date of Termination. Any
such option, and each option that vested prior to the Date of
Termination but remain unexercised on the Date of Termination,
shall remain exercisable in accordance with the terms of the
stock-based compensation plan and/or the stock option agreement
under which such stock option was initially awarded to the
Executive.
4.2 BENEFITS UPON TERMINATION WITHOUT CAUSE OR FOR GOOD REASON IN
CONNECTION WITH A CHANGE IN CONTROL. If (a) a Change in Control occurs
during the Employment Period and within two (2) years after the Change in
Control Date (i) the Company shall terminate the Executive's employment
without Cause, or (ii) the Executive shall terminate employment with the
Company for Good Reason, OR, alternatively, (b) if one of the
above-described terminations of employment occurs within the six-month
period prior to the earlier of (i) a Change in Control Date or (ii) the
execution of a definitive agreement
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or contract that eventually results in a Change in Control, then the
Executive shall become entitled to the payment of the benefits as provided
below as of either (y) the Date of Termination, in the case where the
sequence of the requisite events is as set forth in subsection (a) above or
(z) the Change in Control Date, in the case where the sequence of the
requisite events occurred as set forth in subsection (b) above (the relevant
date for purposes of entitlement to the benefits as set forth in this
Section 4.2 is hereinafter referred to as the "Entitlement Date"):
4.2(a) ACCRUED OBLIGATIONS. Within thirty (30) days after the
Entitlement Date, the Company shall pay to the Executive the
Accrued Obligations.
4.2(b) SEVERANCE AMOUNT. Within thirty (30) days after the
Entitlement Date, the Company shall pay to the Executive as
severance pay in a lump sum, in cash, an amount equal to one
and one-half (1 1/2) times an amount equal to the Executive's
then-current Annual Base Salary.
4.2(c) STOCK OPTIONS AND RESTRICTED STOCK. To the extent not
otherwise provided for under the terms of the Company's
stock-based compensation plans or the Executive's award or
grant agreements, all stock options and restricted stock held
by the Executive that have not expired in accordance with their
respective terms shall fully vest as of the Entitlement Date.
4.2(d) MEDICAL AND HEALTH BENEFIT CONTINUATION. The Executive
will be entitled to the continuation for two (2) years after
the Entitlement Date of medical and health benefits to the
Executive and/or the Executive's family at least equal to those
which would have been provided to them in accordance with the
plans, programs, practices and policies described in Section
2.4(e) if the Executive's employment had not been terminated;
provided, however, that if the Executive becomes reemployed
with another employer and is eligible to receive medical or
health benefits under another employer-provided plan, the
medical and health benefits described herein shall be secondary
to those provided under such other plan during such applicable
period of eligibility.
4.2(e) SUPPLEMENTAL RETIREMENT BENEFITS. The Company shall
credit the Executive with an additional five (5) years of
service to be aggregated with the Executive's actual years of
service under the Supplemental Plan for purposes of the
calculation of the Executive's entitlement to benefits under
such plan.
4.3 DEATH. If the Executive's employment is terminated by reason of
the Executive's death during the Employment Period (either prior or
subsequent to the Change in Control Date), this Agreement shall terminate
without further obligations to the Executive's legal representatives under
this Agreement, other than for (i) payment of Accrued Obligations (which
shall be paid to the Executive's estate or beneficiary, as applicable, in a
lump sum in cash within thirty (30) days of the Date of Termination) and
(ii) the timely payment or provision of such other benefits required to be
paid or provided by the Company to the Executive or the Executive's family
under any plan, program, policy, practice, contract or agreement of the
Company generally provided to other peer executives and their families
("Other Benefits"), including all such benefits payable in the event of
death.
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4.4 DISABILITY. If the Executive's employment is terminated by
reason of the Executive's Disability during the Employment Period (either
prior or subsequent to a Change in Control), this Agreement shall terminate
without further obligations to the Executive, other than for (i) payment of
Accrued Obligations (which shall be paid to the Executive in a lump sum in
cash within thirty (30) days of the Date of Termination) and (ii) the timely
payment or provision of Other Benefits including all such benefits payable
in the event of Disability.
4.5 TERMINATION FOR ANY OTHER REASONS. If the Executive's
employment shall be terminated for Cause or by the Executive voluntarily
(either prior or subsequent to a Change in Control Date), this Agreement
shall terminate without further obligations to the Executive other than the
obligation to pay to the Executive the Accrued Obligations. In such case,
all of the Executive's Accrued Obligations shall be paid to the Executive in
a lump sum in cash within thirty (30) days of the Date of Termination.
4.6 ENTIRE AGREEMENT; PRIOR AGREEMENTS AND BENEFITS UNDER OTHER
PLANS SUPERCEDED. This Agreement is the entire agreement of the parties on
the subject matter contained herein and shall supercede all prior
agreements, arrangements and understandings that the Executive and the
Company may have had with respect to the Executive's employment with the
Company and the payment of benefits by the Company to the Executive in the
event of a termination of the Executive's employment, either prior to or in
conjunction with a Change in Control, including but not limited to that
certain Employment Agreement dated February 1, 2003, as amended September
15, 2003 and February 1, 2004, by and between the Executive and the Company.
The benefits payable pursuant to this Agreement are in lieu of and in
substitution for any termination benefits payable by the Company in
conjunction with any other plan, program, policy, practice, contract or
agreement that the Company may have had either in the past, currently or in
the future.
4.7 FULL SETTLEMENT. The parties agree that the Company's
obligation to make the payments provided for in this Agreement and otherwise
to perform its obligations hereunder are intended to be in full settlement
of all claims that the Executive may have against the Company with respect
to the termination of the Executive's employment with the Company and the
Executive may be required to execute and deliver an agreement to this effect
prior to receipt of any payments under this Agreement. The payments to be
made by the Company or any other obligation that the Company is required to
perform pursuant to this Agreement shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action which the
Company may have against the Executive or others. In no event shall the
Executive be obligated to seek other employment or take any other action by
way of mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement and, except as provided in Sections 4.1(a),
4.1(c) and 4.2(d), such amounts shall not be reduced whether or not the
Executive obtains other employment. To the extent the Executive prevails in
any contest with respect to the validity or enforceability of, or liability
under, any provision of this Agreement or any guarantee of performance
thereof (including as a result of any contest by the Executive regarding the
amount of any payment pursuant to this Agreement), the Company agrees to pay
promptly, to the full extent permitted by law, all legal fees and expenses
which the Executive may reasonably incur as a result of any such contest,
plus in each case interest on any delayed payment at the applicable Federal
rate provided for in Code Section 7872(f)(2)(A).
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4.8 RESOLUTION OF DISPUTES. If there shall be any dispute between
the Company and the Executive (i) as to whether any termination of the
Executive's employment was for Cause, or (ii) as to whether any termination
of the Executive's employment for Good Reason was made in good faith, then,
unless and until there is a final, non-appealable judgment by a court of
competent jurisdiction declaring that such termination was for Cause or that
the determination by the Executive of the existence of Good Reason was not
made in good faith, the Company shall pay all amounts, and provide all
benefits, to the Executive and/or the Executive's family or other
beneficiaries, as the case may be, that the Company would be required to pay
or provide pursuant to Section 4.1 or 4.2 as though such termination was
without Cause or for Good Reason, as the case may be; provided, however,
that the Company shall not be required to pay any disputed amounts pursuant
to this Section 4.8 except upon receipt of an undertaking by or on behalf of
the Executive to repay all such amounts to which the Executive is ultimately
adjudged by such court not to be entitled.
SECTION 5: NON-COMPETITION.
5.1 NON-COMPETE AGREEMENT.
5.1(a) During the period beginning on the Date of Termination
and ending one (1) year thereafter, the Executive shall not,
without prior written approval of the Board, become a partner,
officer, director, stockholder, advisor, employee, consultant,
agent, salesman or otherwise of any business enterprise in
substantial direct competition (as defined in Section 5.1(b))
with the Company or any of its subsidiaries in the United
States or in any other country in which Xxxxxxxx does business
on the Date of Termination; provided that, if the Executive's
employment is terminated for Good Reason, then the Executive
will not be subject to the restrictions of this Section 5.1(a).
This restriction will not limit the Executive's right to invest
in five percent (5%) or less of the outstanding capital stock
or other equity securities of any corporation, the stock or
securities of which are publicly traded on a national stock
exchange.
5.1(b) For purposes of Section 5.1, a business enterprise with
which the Executive becomes associated shall be considered in
substantial direct competition, if such entity competes with
the Company or its subsidiaries in any business in which the
Company or any of its subsidiaries is engaged and is within the
Company's or the subsidiary's market area as of the Date
Termination.
5.1(c) During the period beginning on the date the Employment
Period terminates and ending one (1) year thereafter, the
Executive shall not directly or indirectly solicit the
employment of, recruit, employ, hire, cause to be employed or
hired, entice away or establish a business relationship with,
(i) any then current employee of the Company or any of its
subsidiaries or (ii) any person who was employed by the Company
or any of its subsidiaries during the six (6) months
immediately prior to the date that the Executive first solicits
such person.
5.2 CONFIDENTIAL INFORMATION. The Executive shall hold in a
fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any of its
affiliated companies, and their respective businesses, which shall have been
obtained by the
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Executive during the Executive's employment by the Company and which shall
not be or become public knowledge (other than by acts by the Executive or
representatives of the Executive in violation of this Agreement). After
termination of the Executive's employment with the Company, the Executive
shall not, without the prior written consent of the Company, or as may
otherwise be required by law or legal process, communicate or divulge any
such information, knowledge or data to anyone other than the Company and
those designated by it. In no event shall an asserted violation of the
provisions of this Section constitute a basis for deferring or withholding
any amounts otherwise payable to the Executive under this Agreement.
SECTION 6: SUCCESSORS.
6.1 SUCCESSORS OF EXECUTIVE. This Agreement is personal to the
Executive and, without the prior written consent of the Company, the rights
(but not the obligations) shall not be assignable by the Executive otherwise
than by will or the laws of descent and distribution. This Agreement shall
inure to the benefit of and be enforceable by the Executive's legal
representatives.
6.2 SUCCESSORS OF COMPANY. The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to assume expressly and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform
it if no such succession had taken place. Failure of the Company to obtain
such agreement prior to the effectiveness of any such succession shall be a
breach of this Agreement and shall entitle the Executive to terminate this
Agreement at his option on or after the Change in Control Date for Good
Reason. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets which
assumes and agrees to perform this Agreement by operation of law, or
otherwise.
SECTION 7: MISCELLANEOUS.
7.1 OTHER AGREEMENTS. The Board may, from time to time in the
future, provide other incentive programs and bonus arrangements to the
Executive with respect to the occurrence of a Change in Control that will be
in addition to the benefits required to be paid in the designated
circumstances in connection with the occurrence of a Change in Control. Such
additional incentive programs and/or bonus arrangements will affect or
abrogate the benefits to be paid under this Agreement only in the manner and
to the extent explicitly agreed to by the Executive in any such subsequent
program or arrangement.
7.2 NOTICE. For purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall
be deemed to have been duly given when delivered or mailed by certified or
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses as set forth below; provided that all notices to the
Company shall be directed to such other address as one 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.
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Notice to Executive:
Xxxx X. Xxxxxxxx
c/o Xxxxxxxx Textile Services, Inc.
0000 Xxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Notice to Company:
Xxxxxxxx Corporation
000 Xxxxx Xxxxx Xxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Secretary
7.3 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.
7.4 WITHHOLDING. The Company may withhold from any amounts payable
under this Agreement such Federal, state or local taxes as shall be required
to be withheld pursuant to any applicable law or regulation.
7.5 WAIVER. The Executive's or the Company's failure to insist upon
strict compliance with any provision hereof or any other provision of this
Agreement or the failure to assert any right the Executive or the Company
may have hereunder, including, without limitation, the right of the
Executive to terminate employment for Good Reason pursuant to Section 3.4
shall not be deemed to be a waiver of such provision or right or any other
provision or right of this Agreement.
IN WITNESS WHEREOF, the Executive and, the Company, pursuant to the
authorization from its Board, have caused this Agreement to be executed in
its name on its behalf, all as of the day and year first above written.
"Executive"
/s/ Xxxx X. Xxxxxxxx
----------------------------------------
Xxxx X. Xxxxxxxx
"Company"
XXXXXXXX CORPORATION
By: /s/ Xxxxxxx X. X'Xxxx
-------------------------------------
Name: Xxxxxxx X. X'Xxxx
-----------------------------------
Title: President & CEO
----------------------------------
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