Exhibit 10.1
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EXECUTION COPY
FORM OF AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement"), dated as of April
__, 2005, by and between XXXXXXXX'X INC., a Delaware corporation (the
"Company"), and XXX XXXXXX, an individual residing in the State of Florida
(the "Executive").
W I T N E S S E T H :
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WHEREAS, the Executive is currently employed pursuant to an
Employment Agreement by and between the Company and the Executive dated June
22, 2004 (the "Prior Agreement");
WHEREAS, on January 14, 2005 the Company filed a voluntary
petition for relief under Chapter 11 of the United States Bankruptcy Code (the
"Bankruptcy") in the United States Bankruptcy Court for the Southern District
of Georgia, Savannah District (the "Bankruptcy Court");
WHEREAS, in conjunction with the Bankruptcy, the Company
intends to implement, upon approval of the Bankruptcy Court, a Key Employee
Compensation Program (the "KECP") pursuant to which the Executive will be
entitled to receive certain bonuses and severance benefits; and
WHEREAS, the Company and the Executive wish to amend the
Employment Agreement as set forth in this Amended and Restated Employment
Agreement to incorporate those payments and benefits under the KECP to which
the Executive is entitled;
NOW, THEREFORE, in consideration of the mutual covenants and
promises contained herein and for good and valuable consideration, the receipt
of which is hereby acknowledged, the parties hereto, each intending to be
legally bound hereby, agree as follows:
1. Employment. On the terms and subject to the conditions set forth
herein, the Company hereby agrees to employ the Executive as the Chief
Executive Officer of the Company, and the Executive hereby agrees to accept
such employment, for the Employment Term (as defined in Section 3). During the
Employment Term, the Executive shall serve as the Chief Executive Officer of
the Company and shall report to the Board of Directors of the Company (the
"Board"), and shall have such responsibilities, duties and authority as are
generally consistent and customary with the position of Chief Executive
Officer including, but not limited to, selection of other senior executive
officers, as appropriate, subject to the oversight of the Board, and shall
have such other powers and perform such other duties as may from time to time
be assigned to him by the Board. The Executive shall also be elected to serve
as a director of the Company (or any parent company subsequently formed) and,
if requested, as an executive, officer and/or director of the Company's
subsidiaries without additional compensation, and shall be nominated to stand
for election at each Annual or Special Meeting of Shareholders (as applicable)
as long as he serves as Chief Executive Officer and such nomination shall be
affirmatively recommended to the shareholders for election.
2. Performance; Place of Employment. The Executive will serve the
Company faithfully and to the best of his ability and will devote his full
business time, energy, experience and talents to the business of the Company
and its subsidiaries and affiliates; provided, however, that it shall not be a
violation of this Agreement for the Executive to (a) manage his personal
investments, (b) with the prior consent of the Board (not to be unreasonably
withheld or conditioned) serve on for-profit corporate boards, other than
those of the Company and its subsidiaries, or, (c) with prior notice to the
Board, to serve on industry, civic, community, charitable, educational, or
religious boards so long, in the case of clause (b) and (c), as such service
does not interfere with the Executive's performance of his duties hereunder.
The Executive will maintain his principal office, and his principal place of
work shall be, at the Company's primary executive offices in Savannah,
Georgia.
3. Employment Term/Prior Agreement. Subject to earlier termination
pursuant to Section 6, the term of employment of the Executive hereunder shall
begin on June 22, 2004 (the "Commencement Date"), and shall continue through
the date which is two (2) years following the Commencement Date (the "Initial
Term"); provided, however, that upon the failure of the Company to give timely
notice of non-renewal, such term of employment shall be automatically extended
by an additional one (1) year beyond the end of the then-current term, unless,
at least one hundred twenty (120) days before the expiration of the Initial
Term, or one hundred twenty (120) days before any such subsequent anniversary
thereof, as the case may be, the Company gives notice to the Executive that
the Company does not desire to extend the term of this Agreement, in which
case the term of employment hereunder shall terminate as of the end of the
Initial Term or the end of the then-current one-year extension term, as
applicable (the term of employment hereunder, including any extensions, in
accordance with this Section 3, shall be referred to herein as the "Employment
Term"). From and after the date hereof, the terms of this Agreement shall
supersede in all respects the terms of any prior arrangement or agreement, if
any, dealing with the matters herein, including the Employment Agreement.
4. Compensation and Benefits.
(a) Base Salary. As compensation for his services hereunder
and in consideration of the Executive's other agreements hereunder, during the
Employment Term, the Company shall pay the Executive a base salary, payable in
equal installments in accordance with the Company's payroll procedures, at an
annual rate of Seven Hundred Fifty Thousand Dollars ($750,000), subject to
annual review by the Board (which amount shall not be decreased except upon
mutual consent of the Executive and the Company).
(b) Signing Bonus. In consideration of the Executive's
agreements hereunder, the Company shall pay the Executive a signing bonus of
Five Hundred Thousand Dollars ($500,000), payable as follows: One Hundred
Thousand Dollars ($100,000) on the date of execution of this Agreement, and
One Hundred Thousand Dollars ($100,000) on each of July 30, 2004, August 31,
2004, September 30, 2004, and October 29, 2004.
(c) Bonus; Stock Options.
(1) Annual Incentive Plan. During the Employment Term,
the Executive shall be entitled to participate in the Company's incentive
bonus plan, the terms and conditions of which shall be determined by the Board
or a committee thereof. Such incentive bonus (the "Incentive Bonus") will have
a target amount of 1.00 times the Executive's annual base salary and may be up
to 1.25 times the Executive's annual Base Salary, at the rate of Base Salary
in effect in accordance with Section 4(a) during the period with respect to
which such Incentive Bonus is payable, if all performance targets are fully
satisfied at the highest level; provided, however, that the Incentive Bonus to
which the Executive may otherwise become entitled for calendar year 2004 shall
be a minimum of Two Hundred Fifty Thousand Dollars ($250,000), separate and
apart from the signing bonus in Section 4(b), and the Incentive Bonus to which
the Executive may otherwise become entitled for calendar year 2005 shall vest
on December 31, 2005 and be paid to the Executive no later than March 15,
2006. In the event that the Executive's employment is terminated by the
Company without Cause or by the Executive for Good Reason, then the Executive
shall be entitled to receive a full Incentive Bonus at the target amount
payable at the time when annual incentive bonuses are paid to other executives
of the Company and payable only if target performance goals are achieved. In
the event that the Executive's employment is terminated by reason of the
Executive's death or Disability, then the Executive (or his estate, as
applicable) shall be entitled to receive a pro rata portion of the Incentive
Bonus at the target amount based on the number of days the Executive was
employed during the calendar year for which such Incentive Bonus was to be
earned payable at the time when annual incentive bonuses are paid to other
executives of the Company and payable only if target performance goals are
achieved.
(2) Equity Grants.
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(A) Initial Grant. The Executive shall also be
entitled to participate in the stock option
plan established by the Company, pursuant to
which the Executive shall receive options,
granted on the date of execution of this
Agreement at the market price of the Company's
stock at the close of business on the date
immediately preceding execution of the this
Agreement, to purchase an aggregate of five
hundred thousand (500,000) shares of Class A
Common Stock of the Company, with one hundred
thousand (100,000) shares vesting immediately
and one hundred thousand (100,000) vesting
annually, on the anniversary date of this
Agreement, over the next four years
(collectively, the "Initial Grant").
(B) Emergence Equity Grant. Upon the effective
date of a plan of reorganization under chapter
11 of the United States Bankruptcy Code as
approved by the Bankruptcy Court of (the "Plan
of Reorganization) (the "Emergence"), the
Executive shall be entitled to receive a grant
of stock options equal to 3.25% of the total
amount of New Xxxxxxxx'x Common Stock (as
defined the Company's Plan of Reorganization)
(the "Emergence Grant"). Subject to
accelerated vesting as described below, such
Emergence Grant shall vest and become
exercisable as follows (i) fifty percent (50%)
of the stock options on the date of Emergence
(the "Emergence Date"), (ii) twenty-five
percent (25%) on the first anniversary of the
Emergence Date and (iii) twenty-five percent
(25%) on the second anniversary of the
Emergence Date. Notwithstanding the foregoing,
upon the issuance of the Emergence Grant, the
Initial Grant shall immediately expire.
(C) Accelerated Vesting. All stock options held by
the Executive shall be accelerated and vest
immediately upon a Change of Control (as
defined below), upon the Executive's death or
Disability, as hereinafter defined, upon
termination of employment by the Company for
other than Cause, as hereinafter defined, or
upon termination by the Executive for Good
Reason, as hereinafter defined. Upon such
cessation of the Executive's employment, the
Executive shall have until the later of (i)
one hundred twenty (120) days following the
date of termination of Executive's employment
or (ii) the second (2nd) anniversary of the
Emergence Date, to exercise or forfeit such
fully vested option shares; provided, however,
that the Executive shall have not less than
one (1) year following the date of termination
of employment in the event such termination of
employment is as a result of the Executive's
death or Disability.
(3) Emergence Payments. Upon Emergence, the Executive
shall be entitled to receive a cash bonus equal to one hundred sixty-seven
percent (167%) of the Executive's Base Salary, which payments shall become
payable as follows (A) fifty percent (50%) on the date of Emergence (the
"Emergence Date"), (ii) twenty-five percent (25%) on the six-month anniversary
of the Emergence Date and (iii) twenty-five percent (25%) on the one-year
anniversary of the Emergence Date.
(d) Retirement, Medical, Dental and Other Benefits. During
the Employment Term, the Executive shall, in accordance with the terms and
conditions of the applicable plan documents and all applicable laws, be
eligible to participate in the various retirement, medical, dental and other
employee benefit plans made available by the Company, from time to time, for
its senior executive officers.
(e) Vacation; Sick Leave. During the Employment Term, the
Executive shall be entitled to four (4) weeks of vacation per year, and to
sick leave in accordance with the Company's policies and practices with
respect to its senior executive officers.
(f) Expenses. The Executive shall be reimbursed by the
Company for all reasonable business expenses, including travel costs, actually
incurred by him in connection with the performance of his duties hereunder in
accordance with policies established by the Company from time to time and upon
receipt by the Company of appropriate documentation. In addition, the Company
shall reimburse the Executive for housing expenses and travel to and from
Savannah, Georgia and the Executive's primary residence in Sarasota, Florida.
The Company further agrees that reasonable moving and relocation expenses as
incurred by the Executive will be paid by the Company. For purposes of the
moving and relocation benefits, the Executive's Nashville, Tennessee residence
shall be applicable.
(g) Indemnification; D&O Insurance. The Company shall
indemnify the Executive for any liability he incurs arising from his actions
within the scope and course of his employment hereunder in accordance with the
form of Indemnity Agreement to be executed herewith and to be applicable
during the term hereof and the Company's Certificate of Incorporation and
By-laws, provided that (i) the Executive conducted himself in good faith, and
(ii) the Executive reasonably believed that his actions were in the best
interests of the Company. During the Employment Term, the Company shall
maintain a directors' and officers' liability insurance policy covering the
Executive in an amount and on terms customary for similarly situated companies
and with coverage and on other terms reasonably determined by the Board.
(h) Legal Fees. The Company shall reimburse the Executive
for reasonable attorney's fees the Executive incurs in connection with the
negotiation, preparation and/or execution of this Agreement up to Twenty-Five
Thousand Dollars ($25,000), subject to the receipt by the Company of a
statement from such attorney including rates and hours. If it becomes
necessary for either party to file a lawsuit to enforce this Agreement, and if
a final judgment is rendered by the court in such a lawsuit, the
non-prevailing party shall pay the reasonable attorney's fees and costs
incurred by the prevailing party.
(i) Automobile. The Company shall pay to the Executive a car
allowance of Seven Hundred Fifty Dollars ($750) per month and shall promptly
reimburse the Executive for any expenses incurred by the Executive to maintain
the car.
(j) Services Furnished. The Company shall furnish the
Executive with office space, secretarial and/or administrative assistance,
office supplies, support services and such other facilities and services as
shall be suitable to the Executive's position and adequate for the performance
of his duties hereunder, including but not limited to providing personnel,
support services and technology and third party consultants and advisors
(including legal counsel, if needed) sufficient to enable the Executive to
perform all of his obligations under applicable laws such as the Executive's
certification obligations under The Xxxxxxxx-Xxxxx Act of 2002 and the rules
promulgated thereunder.
5. Covenants of the Executive. The Executive acknowledges that in the
course of his employment with the Company he has and will become familiar with
the Company's and its subsidiaries' and affiliates' trade secrets and with
other confidential information concerning the Company and its subsidiaries and
affiliates, and that his services are of special, unique and extraordinary
value to the Company and its subsidiaries and affiliates. Therefore, the
Company and the Executive mutually agree that it is in the interest of both
parties for the Executive to enter into the restrictive covenants set forth in
this Section 5 and that such restrictions and covenants are reasonable given
the nature of the Executive's duties and the nature of the Company's business.
(a) Noncompetition. During the Employment Term and for
eighteen (18) months thereafter following termination of the Employment Term,
the Executive shall not, within any jurisdiction or marketing area in which
the Company or any of its subsidiaries or affiliates is doing business during
the Executive's employment or as of the date of termination (as applicable),
directly or indirectly, own, manage, operate, control, be employed by or
participate in the ownership, management, operation or control of, or be
connected in any manner with, any business substantially of the type and
character engaged in or competitive with that conducted by the Company or any
of its subsidiaries or affiliates; provided, that the Executive's ownership of
securities of up to two percent (2%) or less of any class of securities of a
public company shall not, by itself, be considered to be competition with the
Company or any of its subsidiaries or affiliates.
(b) Nonsolicitation. During the Employment Term and for
twelve (12) months following termination of the Employment Term, the Executive
shall not, directly or indirectly, (i) employ, solicit for employment or
otherwise contract for the services of any individual who is or was (within
one hundred eighty (180) days of the termination date) an employee of the
Company or any of its subsidiaries or affiliates; (ii) otherwise induce or
attempt to induce any employee of the Company or its subsidiaries or
affiliates to leave the employ of the Company or such subsidiary or affiliate,
or in any way knowingly interfere with the relationship between the Company or
any such subsidiary or affiliate and any employee respectively thereof; or
(iii) solicit or attempt to solicit any client, customer, supplier, licensee
or other business relation of the Company or any subsidiary or affiliate of
the Company or induce any such client, customer, supplier, licensee or
business relation to cease doing business with the Company or such subsidiary
or affiliate, or interfere in any way with the relationship between any such
client, customer, supplier, licensee or business relation and the Company or
any subsidiary or affiliate thereof.
(c) Nondisclosure; Inventions. For the Employment Term and
thereafter, (i) the Executive shall not divulge, transmit or otherwise
disclose (except as legally compelled by court order, and then only to the
extent required, after prompt notice to the Board of any such order), directly
or indirectly, other than in the regular and proper course of business of the
Company and its subsidiaries, any customer lists, trade secrets or other
confidential knowledge or information with respect to the operations or
finances of the Company or any of its subsidiaries or affiliates or with
respect to confidential or secret processes, services, techniques, customers
or plans with respect to the Company or its subsidiaries or affiliates (all of
the foregoing collectively hereinafter referred to as, "Confidential
Information"), and (ii) the Executive will not use, directly or indirectly,
any Confidential Information for the benefit of anyone other than the Company
and its subsidiaries or affiliates; provided, however, that the Executive has
no obligation, express or implied, to refrain from using or disclosing to
others any such knowledge or information which is or hereafter shall become
available to the general public other than through disclosure by the
Executive. All Confidential Information, new processes, techniques, know-how,
methods, inventions, plans, products, patents and devices developed, made or
invented by the Executive, alone or with others, while an employee of the
Company which are related to the business of the Company and its subsidiaries
and affiliates shall be and become the sole property of the Company, unless
released in writing by the Board, and the Executive hereby assigns any and all
rights therein or thereto to the Company.
(d) Nondisparagement. During the Employment Term and
thereafter, neither the Company nor the Executive shall take any action to
disparage or publicly criticize one another (including their respective
affiliates, employees, officers, directors or owners). Nothing contained in
this Section 5(d) shall preclude the Executive from enforcing his rights under
this Agreement.
(e) Return of Company Property. All Confidential
Information, files, records, correspondence, memoranda, notes or other
documents (including, without limitation, those in computer-readable form) or
property relating or belonging to the Company or its subsidiaries or
affiliates, whether prepared by the Executive or otherwise coming into his
possession in the course of the performance of his services under this
Agreement, shall be the exclusive property of the Company and shall be
delivered to the Company, and not retained by the Executive (including,
without limitation, any copies thereof), promptly upon request by the Company
and, in any event, promptly upon termination of the Employment Term.
(f) Enforcement. The Executive acknowledges that a breach of
his covenants contained in this Section 5 may cause irreparable damage to the
Company and its subsidiaries and affiliates, the exact amount of which would
be difficult to ascertain, and that the remedies at law for any such breach or
threatened breach would be inadequate. Accordingly, the Executive agrees that
if he breaches or threatens to breach any of the covenants contained in this
Section 5, in addition to any other remedy which may be available at law, the
Company and its subsidiaries and affiliates shall be entitled to specific
performance and injunctive relief to prevent the breach or any threatened
breach thereof without bond or other security or a showing that monetary
damages will not provide an adequate remedy.
(g) Scope of Covenants. The Company and the Executive
further acknowledge that the time, scope, geographic area and other provisions
of this Section 5 have been specifically negotiated by sophisticated
commercial parties and agree that they consider the restrictions and covenants
contained in this Section 5 to be reasonable and necessary for the protection
of the interests of the Company and its subsidiaries and affiliates, but if
any such restriction or covenant shall be held by any court of competent
jurisdiction to be void but would be valid if deleted in part or reduced in
application, such restriction or covenant shall apply with such deletion or
modification as may be necessary to make it valid and enforceable. The
restrictions and covenants contained in each paragraph of this Section 5 shall
be construed as separate and individual restrictions and covenants and shall
each be capable of being severed without prejudice to the other restrictions
and covenants or to the remaining provisions of this Agreement.
6. Termination. The employment of the Executive hereunder shall
automatically terminate at the end of the Employment Term. The employment of
the Executive hereunder and the Employment Term may also be terminated at any
time by the Company with or without Cause. For purposes of this Agreement,
"Cause" shall mean: (i) embezzlement, theft or misappropriation by the
Executive of any property of the Company or its subsidiaries or affiliates;
(ii) any breach by the Executive of the Executive's covenants under Section 5;
(iii) any breach by the Executive of any other material provision of this
Agreement which breach is not cured, to the extent susceptible to cure, within
fourteen (14) days after the Company has given notice to the Executive
describing such breach; (iv) misconduct in the discharge of the Executive's
duties (after receiving written notice from the Board specifying the manner in
which he is alleged to have failed properly to discharge his duties and having
had the opportunity to cure such failure within thirty (30) days from receipt
of such notice); (v) any act by the Executive constituting a felony or
otherwise involving theft, fraud, dishonesty or misrepresentation; (vi) the
Executive's breach of his fiduciary obligations to the Company or its parent
or subsidiaries; or (vii) any chemical or alcohol dependence by the Executive
which adversely affects the performance of his duties and responsibilities to
the Company or its parent or subsidiaries. If, after the expiration of any
applicable cure period, the Company asserts that grounds exist for termination
with Cause, it shall so notify the Executive and within fifteen (15) days
shall afford the Executive a hearing before the Board regarding any disputed
facts. The Board shall make a determination regarding the existence of "Cause"
upon completion of such hearing; provided, however, that any determination
that Cause exists shall require the affirmative vote of two-thirds of the
Directors other than the Executive. If any such determination remains pending
after such fifteen (15) day period, the Company shall be entitled to suspend
(with pay and benefits) the Executive's duties pending determination of the
existence of Cause. Any determination or decision as to "Cause" must be made
in good faith and must be reasonable given the relevant facts and
circumstances. The employment of the Executive may also be terminated at any
time by the Executive by notice of resignation delivered to the Company not
less than ninety (90) days prior to the effective date of such resignation.
7. Severance.
(a) If the Executive's employment hereunder is terminated
during the Employment Term (1) by the Company other than for Cause and not due
to disability as determined in good faith and consistent with the Company's
long term disability policy ("Disability") or death, (2) by the Executive for
Good Reason (as defined in paragraph (b) of this Section 7), or (3) upon
non-renewal by the Company, the Executive shall be entitled to receive as
severance, and the Company shall pay, an amount equal to two (2) times the sum
of (x) the Executive's then current annual salary and (y) the greater of (i)
the Executive's most recent annual Incentive Bonus and (ii) the arithmetic
mean of the Executive's annual Incentive Bonus for the two (2) most recent
years, payable in a lump sum on the eighth day after the date the Executive
signs the release referenced below in favor of the Company and its
subsidiaries, provided, however, that if the Company liquidates its business
operations in the chapter 11 cases pending in the Bankruptcy Court at any time
prior to December 31, 2006, then the Executive shall be entitled to receive a
severance payment equal only to two (2) times Base Salary. In addition, in the
event that the Executive's employment is terminated other than for Cause or
death, or in the event that the Executive terminates his employment for Good
Reason, as defined herein, the Executive shall be entitled to continued
healthcare coverage equivalent to the coverage received while employed by the
Company, for a period of one (1) year from the date of termination or until
the Executive receives coverage from a subsequent employer, whichever event
occurs sooner; provided, however, that, thereafter, he shall be entitled to
elect to continue his health benefits pursuant to Section 4980B of the
Internal Revenue Code of 1986, as amended ("COBRA"). If the Executive's
employment is terminated otherwise than as described in this Section 7, the
Executive shall not be entitled to any severance, termination pay or similar
compensation or benefits. As a condition of receiving any severance for which
he otherwise qualifies under this Section 7, the Executive agrees to execute,
deliver and not revoke (within the time period permitted by applicable law) a
general release of the Company and its subsidiaries and affiliates and their
respective officers, directors, employees and owners from any and all claims,
obligations and liabilities of any kind whatsoever arising from or in
connection with the Executive's employment or termination of employment with
the Company or this Agreement (including, without limitation, civil rights
claims), in such form as is attached hereto as Exhibit A. The Executive
acknowledges and agrees that, except as specifically described in this Section
7, all of the Executive's rights to any compensation (other than base salary
earned through the date of termination of employment), benefits, bonuses or
severance from the Company or its subsidiaries or affiliates after termination
of the Employment Term shall cease upon such termination.
(b) For purposes of this Agreement, "Good Reason" shall mean
the occurrence, without the Executive's consent, of any of the following
events (without the Executive's express written consent): (i) a reduction by
the Company in the Executive's base salary stated in Section 4(a) or a
reduction in the target bonus stated in Section 4(c), (ii) a diminution in the
Executive's duties with respect to the Company, or (iii) any material breach
of this Agreement by the Company. For the avoidance of doubt, termination by
the Executive for Good Reason is conditioned on the Executive's delivery of a
written notice of resignation delivered to the Company not less than thirty
(30) days prior to the effective date of such resignation, as set forth in
Section 6.
8. Change In Control.
(a) Within twelve (12) months after a Change in Control (as
defined in paragraph (b) of this Section 8), the Company may, on ninety (90)
business days' prior notice to the Executive, terminate the Employment Term.
In such circumstances, except where the Company has previously issued a notice
of termination for Cause pursuant to Section 7 or the Employment Term is
terminated by reason of the Executive's death or disability, the Company
shall: (i) pay to the Executive an amount equal to two hundred ninety-nine
percent (299%) of the Executive's last year's base salary and annual incentive
bonus as in effect on the date of the Executive's termination of employment
(payable, at the Company's option, in a lump-sum or ratably over the longer of
the Employment Term otherwise remaining or one year following the date of the
Executive's termination, as applicable). The payments set forth in this
Section 8 are hereinafter referred to as the "Change in Control Severance."
Payment of the Change in Control Severance shall be subject to the following
conditions: (i) as a condition precedent to any such Change in Control
Severance, the Executive agrees to execute, deliver and not revoke (within the
time period permitted by applicable law) a general release of the Company and
its subsidiaries and affiliates and their respective officers, directors,
employees and owners in the form of Exhibit A hereto.
(b) For purposes of this Agreement, "Change in Control"
shall mean: (i) the acquisition by any person or group of persons (as such
term is defined in Rule 13d-5(b)(1) promulgated under the Securities Exchange
Act of 1934, as amended to date) of shares carrying more than fifty percent
(50%) of the voting rights at general meetings of the Company, (ii) the
shareholders of the Company approve a merger or consolidation of the Company
with any other company, other than (x) a merger or consolidation which
actually results in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than fifty percent (50%) of the combined voting power of the
voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or (y) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no person or group of persons acquires more than
fifty percent (50%) of the combined voting power of the Company's then
outstanding securities, or (iii) the shareholders of the Company approve a
plan of complete liquidation of the Company or an arrangement for the sale or
disposition of the Company or all or substantially all of the Company's
overall assets or any transaction having a similar effect; provided, that no
Change of Control shall be deemed to result from any corporate changes to the
Company's certificate of incorporation or by-laws at the Company not resulting
from one of the events specified above or from any change in the relative
rights and powers of one or more classes of the Company's capital stock
whether effected by contract or otherwise, in each case to the extent that
they result from or are related to the settlement of any criminal or civil
litigation or do not result in the occurrence of any of the events specified
in clauses (i) through (iii) of this definition. For the avoidance of doubt,
the consummation of a Plan of Reorganization and the transactions contemplated
thereby (including, without limitation, changes in ownership and voting
rights) shall not be deemed a Change in Control for purposes of this
Agreement.
(c) The amounts payable pursuant to this Section 8 shall be
in lieu of any other severance payments (including, but not limited to that
provided for in Section 7 above) to which the Executive may be entitled on
termination of the Employment Term, and the Executive acknowledges that he
shall not, thereupon, be entitled to payment of severance pursuant to the
Company's severance plans, policies or practices in effect on the date of this
Agreement or in effect from time to time. Notwithstanding the foregoing, all
unvested options shall vest and any restrictions on restricted stock, if
applicable, shall lapse upon a Change of Control.
(d) To the extent that the amount of any payments under this
Section 8, or any other payment in the nature of compensation (within the
meaning of Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended
(the "Code")), to or for the benefit of the Executive, whether paid or payable
pursuant to this Agreement or otherwise by the Company (the "Payments"), are
subject to the excise tax provisions of Section 4999 of the Code, the Company
shall pay the Executive a tax equalization payment ("Tax Equalization
Payment") in accordance with this Section 8(d), in addition to the payments
otherwise payable under this Section 8. The Tax Equalization Payment shall be
in an amount that when added to the Payments will place the Executive in the
same after-tax (including, without limitation, income taxes, excise taxes, and
any interest and penalties imposed with respect thereto) position as if the
excise tax penalty of Section 4999 of the Code, did not apply to any of the
Payments. The amount of this Tax Equalization Payment shall be determined by
the Company's independent accountants and shall be remitted to the applicable
United States federal, state and local tax jurisdictions. All fees of the
accounting firm for such determination shall be borne by the Company. The
Executive shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by the Company
of a Tax Equalization Payment (as an additional Tax Equalization Payment). The
Executive shall cooperate with the Company to determine whether, and how, to
contest such claim. The Company shall bear and pay directly all costs and
expenses (including additional taxes, interest and penalties) incurred in
connection with such claim and/or contest and shall indemnify and hold the
Executive harmless, on an after-tax basis, for excise tax or income tax
(including interest and penalties with respect thereto) imposed as a result of
such claim and/or contest and payment of costs and expenses.
9. Notice. Any notices required or permitted hereunder shall be in
writing and shall be deemed to have been given when personally delivered or
when mailed, certified or registered mail, or sent by reputable overnight
courier, postage prepaid, to the addresses set forth as follows:
If to the Company: Xxxxxxxx'x Inc.
000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: Chairman of the Board
With copies (which shall
Not constitute notice) to: White & Case LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: X. Xxxx Xxxxxxxxx, Esq.
If to the Executive: Xxxxxx Xxxxxx
c/x Xxxxxxxx'x Inc.
000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxx 00000
With copies (which shall
not constitute notice) to: Bass, Xxxxx & Xxxx PLC
000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx III
Xxxxxx X. Xxxxx III
or to such other address as shall be furnished in writing by either party to
the other party; provided that such notice or change in address shall be
effective only when actually received by the other party.
10. General.
(a) Governing Law. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws
of the State of New York applicable to contracts executed and to be performed
entirely within said State.
(b) Jurisdiction. Any judicial proceeding brought against
the Executive regarding any dispute arising out of this Agreement or any
matter related hereto may be brought in the courts of the State of Georgia, or
in any United States District Court sitting in Georgia, and, by execution and
delivery of this Agreement, the Executive accepts the exclusive jurisdiction
of such courts. The Executive hereby agrees that service of any process,
summons, notice or document by U.S. registered mail addressed to the Executive
shall be effective service of process for any action, suit or proceeding
brought against the Executive in any such court. The Executive hereby
irrevocably and unconditionally waives any objection to the laying of venue of
any such suit, action or proceeding brought in any such court and any claim
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum. The Executive agrees that a final judgment
in any such suit, action or proceeding brought in any such court shall be
conclusive and binding upon the Executive and may be enforced in any other
courts to whose jurisdiction the Executive is or may be subject, by suit upon
such judgment.
(c) Construction and Severability. If any provision of this
Agreement shall be held invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired, and the parties
undertake to implement all efforts which are necessary, desirable and
sufficient to amend, supplement or substitute all and any such invalid,
illegal or unenforceable provisions with enforceable and valid provisions
which would produce as nearly as may be possible the result previously
intended by the parties without renegotiation of any material terms and
conditions stipulated herein.
(d) Assignability. The Executive may not assign his interest
in or delegate his duties under this Agreement. This Agreement is for the
employment of the Executive, personally, and the services to be rendered by
him under this Agreement must be rendered by him and no other person. This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the Company and its successors and assigns. Without limiting the foregoing
and notwithstanding anything else in this Agreement to the contrary, the
Company may assign this Agreement to, and all rights hereunder shall inure to
the benefit of, any subsidiary of the Company or any person, firm or
corporation resulting from the reorganization of the Company or succeeding to
the business or assets of the Company by purchase, merger, consolidation or
otherwise.
(e) Warranty by the Executive. The Executive represents and
warrants to the Company that the Executive is not subject to any contract,
agreement, judgment, order or decree of any kind, or any restrictive agreement
of any character, that restricts the Executive's ability to perform his
obligations under this Agreement or that would be breached by the Executive
upon his performance of his duties pursuant to this Agreement.
(f) Compliance with Rules and Policies. The Executive shall
perform all services in accordance with the policies, procedures and rules
established by the Company and the Board. In addition, the Executive shall
comply with all laws, rules and regulations that are generally applicable to
the Company or its subsidiaries and their respective employees, directors and
officers.
(g) Withholding Taxes. All amounts payable hereunder shall
be subject to the withholding of all applicable taxes and deductions required
by any applicable law.
(h) Entire Agreement; Modification. This Agreement, together
with the KECP which is incorporated herein by reference, constitute the entire
agreement of the parties hereto with respect to the subject matter hereof,
supersedes all prior agreements and undertakings, both written and oral, and
may not be modified or amended in any way except in writing by the parties
hereto.
(i) Duration. Notwithstanding the Employment Term hereunder,
this Agreement shall continue for so long as any obligations remain under this
Agreement.
(j) Survival. The covenants set forth in Section 5 of this
Agreement shall survive and shall continue to be binding upon the Executive
notwithstanding the termination of this Agreement for any reason whatsoever.
(k) Waiver. No waiver by either party hereto of any of the
requirements imposed by this Agreement on, or any breach of any condition or
provision of this Agreement to be performed by, the other party shall be
deemed a waiver of a similar or dissimilar requirement, provision or condition
of this Agreement at the same or any prior or subsequent time. Any such waiver
shall be express and in writing, and there shall be no waiver by conduct.
Pursuit by either party of any available remedy, either in law or equity, or
any action of any kind, does not constitute waiver of any other remedy or
action. Such remedies are cumulative and not exclusive.
(l) Counterparts. This Agreement may be executed in two or
more counterparts, all of which taken together shall constitute one
instrument.
(m) Section References. The words Section and paragraph
herein shall refer to provisions of this Agreement unless expressly indicated
otherwise.
* * *
IN WITNESS WHEREOF, the parties hereto, intending to be
legally bound, have hereunto executed this Agreement as of the day and year
first written above.
XXXXXXXX'X INC.
Date: April __, 2005 By:
----------------------------- --------------------------------
Name: Xxxxx Xxxxxxx
Title: Chairman
Date: April __, 2005 By:
----------------------------- --------------------------------
Xxx Xxxxxx
Exhibit A
GENERAL RELEASE
I, XXX XXXXXX, for myself, my successors, administrators,
heirs and assigns, hereby fully release, waive and forever discharge
XXXXXXXX'X INC. and each of its predecessors, successors, subsidiaries and
affiliated and parent companies (collectively, the "Company"), and, in such
capacities, all of the shareholders, directors, officers, attorneys,
employees, assigns and owners, whether past, present or future, respectively,
of, and any other person or entity connected with, any of the foregoing (the
"Released Parties") from any and all administrative claims, actions, suits,
debts, demands, damages, claims, judgments, and/or liabilities of any nature,
including costs, attorneys' fees and expenses, whether known or unknown,
arising out of my employment with or separation from the Company, such as (by
way of example only) any claims for compensation, bonus, severance, or other
benefits, claims for breach of contract, wrongful discharge, workers'
compensation benefits, tort claims (e.g., infliction of emotional distress,
defamation, negligence, privacy, fraud, misrepresentation), claims under
federal, state, and local wage and hour laws and wage payment laws, claims for
reimbursements; and/or claims under the following, in each case as amended:
(1) Title VII of the Civil Rights Act of 1964 (race, color, religion, sex and
national origin discrimination); (2) 42 U.S.C. ss. 1981 (discrimination); (3)
29 U.S.C. ss. 206(d)(1) (equal pay); (4) Executive Order 11246 (race, color,
religion, sex and national origin discrimination); (5) Age Discrimination in
Employment Act ("ADEA") and Executive Order 11141 (age discrimination); (6)
the Americans with Disabilities Act of 1990, 42 U.S.C. ss. 12101, et seq.; (7)
the Family and Medical Leave Act; (8) the Immigration Reform and Control Act;
(9) the Employee Retirement Income Security Act of 1974, 29 U.S.C. ss. 1001 et
seq.; (10) the Vietnam Era Veterans Readjustment Assistance Act; (11) xx.xx.
503-504 of the Rehabilitation Act of 1973 (handicap discrimination); and/or
(12) any other claims under any other state, federal, local, non-U.S. law,
statute, regulation, or common law or claims at equity relating to conduct or
events occurring prior to the date on which this General Release is fully
executed, with regard to my employment with the Company and the termination
thereof.
This General Release shall not extend to or include any
matter, occurrence or event occurring after the execution of this General
Release or the following: (a) any rights or obligations under applicable law
which cannot be waived or released pursuant to an agreement, (b) any rights to
payments or benefits under Sections 7 and 8 of the Employment Agreement, dated
as of June [_], 2004, by and between the Company and myself (as amended or
supplemented through the date hereof, the "Agreement") to which I am entitled,
(c) my rights of indemnification and directors and officers liability
insurance coverage to which I may be entitled with regard to my service as an
officer or director of the Company, including, without limitation, as set
forth in Section 4(g) of the Agreement and in my Indemnification Agreement
with the Company; (d) my rights with regard to accrued benefits under any
employee benefit plan, policy or arrangement maintained by the Company or
under COBRA; (e) my rights under the provisions of the Agreement that are
intended to survive my termination of employment; and (f) my rights as a
stockholder. I represent and warrant that, as of the date of my execution of
this General Release, I have not assigned or transferred any claims of any
nature I would otherwise have against the Company, its successors or assigns.
By signing this General Release, I acknowledge that:
(i) I have read and fully understand the terms of this
General Release and have had the opportunity to negotiate its terms;
(ii) I have been advised and urged to consult with my
attorneys concerning the terms of this General Release, and that I have done
so to the extent I deem necessary;
(iii) I have agreed to this General Release knowingly and
voluntarily;
(iv) I have been given twenty-one (21) days to consider this
General Release, and acknowledge that in the event that I execute this General
Release prior to the expiration of the twenty-one (21) day period, I hereby
waive the balance of said period;
(v) I will have seven (7) days following the execution of
this General Release to revoke this General Release and this General Release
shall not become effective or enforceable until the revocation period has
expired. Any revocation within this seven (7) day period must be submitted in
writing and personally delivered, or mailed to [Name, Address] and postmarked,
within seven (7) days of my execution of this General Release. No payments or
benefits provided for in Sections 7 and 8 of the Agreement shall be paid or
provided until after the seven (7) day period has expired and the General
Release has become effective. If this General Release is revoked by me then I
shall forfeit the payments and benefits set forth in Sections 7 and 8 of the
Agreement, and the Company shall not be required to provide any such payment
or other consideration; and
(vi) I have agreed that no provision of this General Release
may be modified, changed, waived or discharged unless such waiver,
modification, change or discharge is agreed to in writing and signed by the
Company and me.
-----------------------------------
XXX XXXXXX
Dated:
-----------------------------------
Sworn to before me this
day of , 20 .
-----------------------------
Notary Public
