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EXHIBIT 10.15
AGREEMENT REGARDING RETIREMENT
This Agreement is entered into effective on this 31st day of July, 2000, by
and between C.A. Xxxxxxx, Jr. ("Xxxxxxx"), an individual resident in the State
of Texas, and NCI Buildings Systems, Inc. ("NCI"), a Delaware corporation with
its principal office in the State of Texas.
WITNESSETH:
WHEREAS, Xxxxxxx has served NCI as an employee, officer and director of
NCI, including its Chairman of the Board, since 1989; and
WHEREAS, effective this date, Xxxxxxx has resigned as an employee, officer
and director of NCI and all of its subsidiary entities, including the position
of Chairman of the Board, in accordance with his long-expressed desire to retire
coupled with recent discovery of a health problem that requires his attention;
and
WHEREAS, NCI and Xxxxxxx desire by this Agreement to set forth their
covenants and promises regarding the terms and provisions of his retirement,
NOW, THEREFORE, the parties hereto, in consideration of the mutual
covenants and promises set forth and intending to be legally bound, hereby
covenant and agree as follows:
1. Salary and Bonus Plan.
Until October 31, 2000, Xxxxxxx will continue to receive his base
salary at the current rate to be paid, less appropriate federal taxes and
withholding, on the regular payroll dates of NCI.
For fiscal year 2000, Xxxxxxx will remain eligible for and will be paid
the full cash bonus, if any, to which he otherwise would have been entitled
under NCI's Cash Bonus Plan for Level I employees; i.e., his cash bonus will be
calculated under the Cash Bonus Plan based on the full fiscal year results and
without regard to his mid-year resignation or that his employment terminated
prior to the date of payment. The cash bonus will be paid concurrently with the
cash bonus payments to other employees of NCI in December 2000, less appropriate
federal taxes and withholding.
NCI also will pay to Xxxxxxx a $6,250 office subsidy for the third and
fourth quarters of fiscal 2000, which are the last of four installments for
fiscal 2000 intended to reimburse him for office expenses attributable to his
work on behalf of NCI. The subsidy payment will be made at the regularly
scheduled date for payment, in accordance with past payment practices.
2. Retirement and Non-Competition Payment.
In an effort to recognize Xxxxxxx'x past services to NCI, and in
consideration of the covenant not to compete by Xxxxxxx set forth in section 7
below, NCI agrees to pay to Xxxxxxx the total cash sum of $412,500. Payment will
be made to Xxxxxxx promptly after execution of this Agreement, less applicable
withholding.
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3. Group Health and Welfare Plans.
NCI will continue to provide all group health, medical, dental,
disability and other health benefit programs to Xxxxxxx on the same basis as now
provided until October 31, 2000, at which time his participation in those
benefit programs will terminate except: (a) the right to payment or
reimbursement of covered claims arising during the coverage period; and (b)
Xxxxxxx'x right to continue his health and medical insurance coverage at his own
expense pursuant to and in accordance with COBRA requirements. Xxxxxxx will be
separately notified of his COBRA rights by NCI's human relations director.
4. 401(k) and SERP Plans.
On October 31, 2000 and by virtue of his having reached retirement age
under the terms of the 401(k) plan, NCI acknowledges that all theretofore
unvested company contributions to that plan for the account of Xxxxxxx shall
become vested as provided in that plan. To the extent permitted by law and the
terms of that plan, Xxxxxxx shall either rollover his account to an XXX of his
choosing or select one of the alternative methods provided in that plan for
distribution of vested benefits.
The Supplemental Employee Retirement Plan provided by NCI for the
benefit of Xxxxxxx provides for him (assuming 10 years of service beginning in
1992) to receive an annual retirement benefit of $50,000 a year for 10 years
beginning at age 70, and NCI has acquired life insurance policies on Xxxxxxx'x
life to fund its obligations under Xxxxxxx'x SERP that has had premiums paid
through April 2001. The SERP provides for vesting on a calendar year basis at
the rate of 10% a year beginning with calendar year 1992. Xxxxxxx'x vesting
credit for each year of service depends upon whether Xxxxxxx spent 1000 hours on
NCI matters in a given year, counting from April 1 in the 1992 year and until
July 31 in the 2000 year. NCI acknowledges and agrees that Xxxxxxx has spent at
least 1000 hours of service for NCI after April 1 in calendar 1992, in each of
the calendar years 1992 through 1999, and in calendar year 2000 through July 31.
Accordingly, NCI and Xxxxxxx agree that, as of his employment termination date,
Xxxxxxx is 90% vested in the SERP benefit and, after attaining the age of 70, he
and/or his designated beneficiary will be entitled to receive $45,000 a year for
the next 10 years.
NCI and Xxxxxxx intend to discuss mutually acceptable alternatives to
the benefits provided to Xxxxxxx by the SERP, which may include transfer of the
life insurance policies and related cash surrender value to Xxxxxxx, purchase of
annuities or other programs. The parties agree to negotiate the same in good
faith, to use their reasonable best efforts to amicably conclude the
negotiations, and to implement any alternatives to the SERP benefit as soon as
practicable, but not later than the end of January 2001.
5. Stock Options.
Xxxxxxx and NCI hereby agree that all options granted to him pursuant
to the Stock Option Plan of NCI that are currently outstanding, whether vested
or unvested, are cancelled immediately and are and shall be of no further force
or effect and shall no longer entitle Xxxxxxx to exercise any portion or to
purchase any shares of NCI common stock pursuant to those options. The options
being cancelled include, without limitation: (a) options granted in
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December 1996 to purchase 50,000 shares of NCI common stock at $14.50 a share;
(b) options granted in April 1998 to purchase 40,000 shares of NCI common stock
at $22.813 a share; and (c) options granted in December 1999 to purchase 15,000
shares of NCI common stock at $15.75 a share.
6. Stock Purchase. As part of its stock repurchase program, NCI agrees on
August 1, 2000 to purchase and Xxxxxxx agrees on that date to sell a total of
150,000 shares of NCI common stock owned by him, his XXX account and his
foundation, for a price per share of $18.875, the closing sale price as reported
by the New York Stock Exchange on July 31, 2000. Payment will be made promptly
upon receipt by NCI of stock certificates representing the 150,000 shares.
7. Non-Competition Covenant. In consideration of the mutual agreements set
forth herein, Xxxxxxx covenants and agrees that, prior to August 1, 2002, he
will not directly or indirectly, through an intermediary or otherwise, either on
his own behalf or on behalf of any other person or entity, own, manage, operate,
control, participate in or be financially or economically connected or
interested in, or be employed by, serve as a director or officer of, or provide
services, advice or other financial or operational assistance to, any person or
entity that is engaged anywhere in the United States of America in the business
of manufacturing, marketing or distribution of metal building systems or
components or the business of coating and painting of steel coils. It is
understood that this covenant shall not prevent Xxxxxxx from owning shares
constituting less than 2% of the voting stock of a publicly-owned company
engaged in those businesses, and shall not prevent him from erecting, owning and
operating self-storage facilities.
8. Miscellaneous.
This Agreement shall be governed by the laws of the State of Texas.
Notices under this Agreement shall be in writing delivered either by
mail, facsimile or personal delivery to NCI at its home office in Houston, Texas
and to Xxxxxxx at his personal office in Dallas, Texas.
Any amendments or modifications of this Agreement, and any agreements
entered into pursuant to sections 2 and 4 above, must be evidenced by written
instruments executed by both parties to be binding.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the date
set forth above.
/s/ C.A. Xxxxxxx, Jr.
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C.A. XXXXXXX, JR.
NCI BUILDING SYSTEMS, INC.
By: /s/ A.R. Xxxx
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Name: A.R. Xxxx
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Title: Chairman
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