EMPLOYMENT AGREEMENT
BETWEEN
FAC REALTY, INC.
AND
XXXXXXX X. XXXXXXXX
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is entered into as of the 1st day of March, 1997
between FAC REALTY, INC., a Delaware corporation (the "Company"), and XXXXXXX X.
XXXXXXXX (the "Executive") for employment commencing on the Effective Date (as
hereinafter defined).
WITNESSETH:
WHEREAS, the Executive has been employed by the Company as Executive Vice
President and Chief Financial Officer under that certain Employment Agreement
between FAC Realty, Inc. and dated August 26, 1996 (the "Original Employment
Agreement"); and
WHEREAS, the Company desires to employ the Executive as its Executive Vice
President and Chief Financial Officer and to terminate the Original Employment
Agreement, and the Executive desires to be so employed on the terms and subject
to the conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises herein contained,
the parties agree as follows:
1. Employment
(a) The Company hereby employs the Executive as Executive Vice
President and Chief Financial Officer and the Executive hereby accepts such
employment, on the terms and subject to the conditions hereinafter set
forth. The Original Employment Agreement is hereby terminated
(b) During the term of his employment under this Employment Agreement
and any extension hereof (all references herein to the term of this
Employment Agreement shall include any extension hereof), the Executive
shall be and have the title of Executive Vice President and Chief financial
Officer and shall devote his entire business time and all reasonable
efforts to his employment and perform diligently such duties as are
customarily performed by presidents and chief executive officers of
companies similar in size to the Company, together with such other duties
as may be reasonably requested from time to time by the Board of Directors
of the Company (the "Board"), which duties shall be consistent with his
title and position as set forth above and as provided in Paragraph 2;
provided, however, that business activities by the Executive with respect
to passive investments, so long as such activities do not, alone or in the
aggregate, materially interfere with the Executive's performance of his
duties as described in this Paragraph 1(b). will not be deemed inconsistent
with the requirements of this Paragraph 1(b).
2. Term and Positions.
(a) Subject to the provisions for extension or termination hereinafter
stated, the term of this Employment Agreement shall begin as of March 1,
1997 (the "Effective Date") and shall continue through February 29, 2000
(the "Expiration Date"). As of the March 1, 1998 and each
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successive anniversary thereof, such term automatically shall be extended
for one (1) additional year, unless: (i) this Employment Agreement is
terminated as provided in Paragraph 5 or (ii) either the Company or the
Executive shall give written notice to the other at least thirty (30) days
before the first anniversary of the Effective Date or any subsequent annual
anniversary thereof, that this Employment Agreement shall not be so
extended but shall terminate upon the expiration of the then-existing term
(for example, unless such written notice of non-extension is given on Or
prior to January 28, 1998, the term of this Employment Agreement
automatically will be extended, effective March 1, 1998, until February 28,
2001). In the event of a "change of control" (as hereinafter defined) the
term of this Employment Agreement shall automatically be extended for a
term of two (2) years from the then existing Termination Date.
(b) The Executive shall be entitled to serve as Executive Vice
President and Chief Financial Officer of the Company. For service as a
director, officer and employee of the Company, the Executive shall be
entitled to the full protection of the applicable indemnification
provisions of the Restated Certificate of Incorporation and Bylaws of the
Company, as the same may be amended from time to time, which
indemnifications shall remain effective after termination of this
Employment Agreement with respect to Executive's actions and inactions
during the term hereof. Without limiting the generality of any of the
foregoing, except as hereafter expressly agreed in writing by the
Executive, during and throughout the term of his employment under this
Employment Agreement: (i) all employees of the Company shall report
directly or indirectly to the Executive; and (ii) unless the Board of
Directors shall otherwise direct, the Executive shall have the authority to
make operating decisions regarding day-to-day operation of the business.
(c) If:
(i) the Company materially changes the Executive's duties and
responsibilities as set forth in Paragraphs 1(b) and 2(b) without his
consent;
(ii) the Executive's place of employment or the principal
executive offices of the Company are located more than fifty (50)
miles from the geographical center of Cary, North Carolina;
(iii) there occurs a material breach by the Company of any of its
obligations under this Employment Agreement, which breach has not been
cured in all material respects within ten (10) days after the
Executive gives notice thereof to the Company;
(iv) there occurs a "change in control" (as hereinafter defined)
of the Company during the term of this employment Agreement; or
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(v) after the Effective Date, the Executive is not at all times
during his employment hereunder a member of the Board of Directors,
or, if the Board of Directors constitutes an Executive Committee, the
Executive is not at all times during his employment hereunder a member
of such Executive Committee;
then in any such event the Executive shall have the right to terminate his
employment with the Company, but such termination shall not be considered a
voluntary resignation or termination of such employment or of this
Employment Agreement by the Executive but rather a discharge of the
Executive by the Company "without cause" (as defined in Paragraph 5 (a)).
The Executive may exercise such right of termination at any time within
three (3) months following the occurrence of the applicable event described
in (i) and (iii) of this Paragraph 2(c), and within six (6) months
following the occurrence of the applicable event described in (ii), (iv)
and (v) of this Paragraph 2(c).
(d) The Executive shall be deemed not to have consented to any written
proposal calling for a material change in his duties and responsibilities
unless he shall give written notice of his consent thereto to the Board of
the Company within fifteen (15) days after receipt of such written
proposal. If the Executive shall not have given such consent, the Company
shall have the opportunity to withdraw such proposed material change by
written notice to the Executive given within ten (10) days after the end of
said fifteen (15) day period.
(e) The term "change in control" means the first to occur of the
following events:
(i) any person or group of commonly controlled persons owns or
controls, directly or indirectly, fifty percent (50%) or more
(directly or indirectly, including convertible shares or convertible
partnership units) of the voting control or value of the capital stock
of the Company following the Effective Date;
(ii) any person or group of commonly controlled persons owning
less than five percent (5%) of the voting control or value of the
capital stock of the Company within 30 days following the Effective
Date owns or controls, directly or indirectly, more than twenty
percent (20%) (directly or indirectly, including convertible shares or
convertible partnership units) of the voting control or value of the
capital stock of the Company; or
(iii) following the Effective Date, the stockholders of the
Company approve an agreement to merge or consolidate with another
corporation or other entity resulting (whether separately or in
connection with a series of transactions) in a change in ownership of
twenty percent (20%) or more (directly or indirectly, including
convertible shares or convertible partnership units) of the voting
control or value of the capital stock of the Company, or an agreement
to sell or otherwise dispose of all or substantially all of the
Company's assets (including without limitation, a plan of liquidation
or dissolution), or otherwise approve of a fundamental alteration in
the nature of the Company's business; provided, however, a pledge,
hypothecation or other similar disposition for the purpose of
providing collateral security made at the time the Company enters into
a bona fide financing
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transaction with a party which at the time of such transaction is not
an affiliate of the Company would not constitute a change in control.
Notwithstanding the foregoing provisions of this Paragraph 2, the ownership or
acquisition of capital stock by the Executive, J. Xxxxx Xxxxxxx, Xx., Xxxxxxx X.
Xxxxxxxx, Xxxxxxxxxxx X. Xxxxxxxx, Xxxxxxx X. Xxxxxxxxx and/or their respective
affiliates, shall not be deemed to result in a "change in control" of the
Company.
3. Compensation.
During the term of his employment under this Employment Agreement the
Company shall pay or provide, as the case may be, to the Executive the
compensation and other benefits and rights set forth in this Paragraph 3. All
restricted stock given as compensation shall be subject to the Company's 1996
Restricted Stock Plan.
(a) The Company shall pay to the Executive a base salary payable in
accordance with the Company's usual pay practices (and in any event no less
frequently than monthly) of (i) cash payments of Two Hundred Twenty-Five
Thousand and No/100 Dollars ($225,000.00) per annum; (ii) Common Stock of
the Company equivalent to $100,000 based on the market price of the Common
Stock on March 1, 1997 and each subsequent annual anniversary, rounded down
to the nearest 1,000 shares (for example, $100,000 divided by $6.625 per
share would result in 15,000 shares issued), which shares shall
automatically vest on the subsequent annual anniversary (for example, March
1, 1998 for shares issued March 1. 1997) unless the Executive voluntarily
terminates his employment prior to such anniversary date or his employment
is terminated for "cause" (see Paragraph 5 (a) (iii)); (iii) Common Stock
of the Company equivalent to $18,750 based on the market price of the
Common Stock on March 1, 1997 and each subsequent annual anniversary
rounded up to the nearest 1,000 shares plus 50% (for example, $18,750
divided by $6.625 per share would result in 3,000 shares issued plus 50%,
or a total of 4,500 shares), which shares shall automatically vest on the
third anniversary of the date of issuance (for example, March 1, 2000 for
shares issued March 1, 1997) unless the Executive voluntarily terminates
his employment prior to such anniversary date or his employment is
terminated for "cause" (see Paragraph 5 (a) (iii)); and (iv) such increases
(but not decreases) from time to time (based upon the performance of the
Company and the Executive) as determined by the Board or the Company's
Executive Compensation Committee payable in the form of Common Stock of the
Company similar to (iii) above,
(b) The Company may pay to the Executive bonus compensation on a
calendar year basis pursuant to the terms of the incentive compensation
plan established by the board from time to time, not later than March 1
following each calendar year. Such bonus compensation may be payable in the
form of cash or Common Stock of the Company. In the event such bonus is
paid in the form of Common Stock, the determination of shares issued may be
based on the cash equivalent divided by the market price of the Common
Stock on or about the date of determination of the bonus compensation by
the Board. Such Shares will be increased by 50% and shall automatically
vest on the third anniversary of the date of
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issuance (for example, March 1, 2001 for shares issued March 1, 1998)
unless the Executive voluntarily terminates his employment prior to such
anniversary date or his employment is terminated for "cause" (see Paragraph
5 (a) (iii)).
(c) The Company shall provide to the Executive such medical,
hospitalization and dental insurance for himself, his spouse and eligible
family members, as may be available to other officers of the Company and
term life insurance in the amount of not less than $1,000,000.
(d) The Executive shall participate in all retirement and other
benefit plans of the Company generally available from time to time to
officers of the Company and for which the Executive qualifies under the
terms thereof (and nothing in this Employment Agreement shall or shall be
deemed to in any way affect the Executive's rights and benefits thereunder
except as expressly provided herein).
(e) The Executive shall be entitled to such periods of vacation and
sick leave allowance each year as are determined by the Company's Executive
Compensation Committee for officers generally; provided that Executive
shall be entitled to not less than four weeks (twenty days) of vacation
each year.
(f) The Executive shall be entitled to participate in any equity or
other employee benefit plan that is generally available to senior executive
officers, as distinguished from general management, of the Company. The
Executive's participation in and benefits under any such plan shall be on
the terms and subject to the conditions specified in the governing document
of the particular plan.
(g) The Company shall reimburse the Executive or provide him with an
expense allowance during the term of this Employment Agreement for travel,
entertainment and other expenses reasonably and necessarily incurred by the
Executive in connection with the Company's business. The Executive shall
furnish such documentation with respect to reimbursement to be paid
hereunder as the Company shall reasonably request.
(h) The Company shall (i) pay to the Executive an annual automobile
allowance of $8,000 payable on a pro rata monthly basis; (ii) pay or
reimburse the Executive for country club initiation fees of up to $10,000
plus periodic dues; and (iii) pay or reimburse the Executive up to $2,500
annually for expenses of financial, estate or tax planning.
4 Payment in the Event of Death or Permanent Disability.
(a) In the event of the Executive's death or "permanent disability"
(as hereinafter defined) during the term of his employment under this
Employment Agreement, the Company shall pay to the Executive (or his
personal representatives, heirs, successors and assigns in the event of his
death) an amount equal to two (2) times the Executive's then effective
annual base salary, as determined under Paragraph 3(a), plus a pro rata
portion of the bonus applicable to the calendar year in which such death or
permanent disability occurs,
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as such bonus is determined under Paragraph 3(b).
(b) The pro rata portion of the bonus described in Paragraph 4(a)
shall be paid when and as provided in Paragraph 3(b). The remainder of the
benefit to be paid pursuant to Paragraph 4(a) shall be paid within ninety
(90) days after the date of death or permanent disability, as the case may
be.
(c) Except as otherwise provided in Paragraphs 2(b), 3(d), 4(a) and
4(b), in the event of the Executive's death or permanent disability, the
Executive's employment hereunder shall terminate and the Executive shall be
entitled to no further compensation or other benefits under this Employment
Agreement, except as to that portion of any unpaid salary and other
benefits accrued and earned by him hereunder up to and including the date
of such death or permanent disability, as the case may be.
(d) For purposes of this Employment Agreement, the Executive's
"permanent disability" shall be deemed to have occurred after one hundred
twenty (120) days in the aggregate during any consecutive twelve (12) month
period, or after ninety (90) consecutive days, during which one hundred
twenty (120) or ninety (90) days, as the case may be, the Executive, by
reason of his physical or mental disability or illness, shall have been
unable to discharge his duties under this Employment Agreement. The date of
permanent disability shall be such one hundred twentieth (120th) or
ninetieth (90th) day, as the case may be. In the event either the Company
or the Executive, after receipt of notice of the Executive's permanent
disability from the other, dispute that the Executive's permanent
disability shall have occurred, the Executive shall promptly submit to a
physical examination by the chief of medicine of any major accredited
hospital in the Raleigh, North Carolina, area and, unless such physician
shall issue his written statement to the effect that in his opinion, based
on his diagnosis, the Executive is capable of resuming his employment and
devoting his full time and energy to discharging his duties within thirty
(30) days after the date of such statement, such permanent disability shall
be deemed to have occurred.
5. Termination
(a) The Employment of the Executive under this Employment Agreement,
and the term hereof, may be terminated by the Company:
(i) on the death or permanent disability (as defined above) of
the Executive;
(ii) for "cause" at any time by action of the Board; or
(iii) "without cause" at any time by action of the Board.
For purposes hereof, the term "cause" shall mean:
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(A) The Executive's fraud, commission of a felony,
commission of an act or series of repeated acts of dishonesty
which fraud, felony or dishonesty is materially inimical to the
best interests of the Company, or which results in material
injury to the business reputation of the Company, or the
Executive's willful and repeated failure to perform his duties
under this Employment Agreement, which failure has not been cured
within fifteen (15) days after the Company gives notice thereof
to the Executive; or
(B) The Executive's material breach of any material
provision of this Employment Agreement, which breach has not been
cured in all substantial respects within ten (10) days after the
Company gives notice thereof to the Executive.
For purposes hereof, the term "without cause" shall mean any reason
other than those set forth in subparagraphs (a)(i) and (a)(ii) of this
Paragraph 5.
The exercise by the Company of its rights of termination under this
Paragraph 5 shall be the Company's sole remedy in the event of the
occurrence of the event as a result of which such right to terminate
arises. Upon any termination of this Employment Agreement, the Executive
shall be deemed to have resigned from all offices and directorships held by
the Executive in the Company.
(b) In the event of a termination claimed by the Company to be for
"cause" pursuant to Paragraph 5(a)(ii), the Executive shall have the right
to have the justification for said termination determined by arbitration in
Raleigh, North Carolina. In order to exercise such right, the Executive
shall serve on the Company within thirty (30) days after termination a
written request for arbitration. The Company immediately shall request the
appointment of a single arbitraitor by the American Arbitration Association
and thereafter the question of "cause" shall be determined under the rules
of the American Arbitration Association, and the decision of the arbitrator
shall be final and binding on both parties. The parties shall use all
reasonable efforts to facilitate and expedite the arbitration and shall act
to cause the arbitration to be completed as promptly as possible. During
the pendency of the arbitration, the Executive shall continue to receive
all compensation and benefits to which he is entitled hereunder, and if at
any time during the pendency of such arbitration the Company fails to pay
and provide all compensation and benefits to the Executive in a timely
manner the Company shall be deemed to have automatically waived whatever
rights it then may have had to terminate the Executive's employment for
cause. Expenses of the arbitration shall be borne equally by the parties.
(c) In the event of termination pursuant to subparagraph (a)(i) or
(a)(ii) of this Paragraph 5, except as otherwise provided in Paragraphs
2(b), 3(d), 4(a) and 4(b), as applicable, the Executive shall be entitled
to no further compensation or other benefits under this Employment
Agreement, except as to that portion of any unpaid salary and other
benefits accrued and earned by him hereunder up to and including the
effective date of such termination.
(d) In the event of termination pursuant to Paragraph 2(c), or
subparagraph (a)(iii) of this paragraph 5, the Executive shall be entitled
to
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(i) severance pay payable within five (5) days of such
termination in a lump sum equal to the sum of (A) the greater of (x)
the total amount of unpaid base salary for the then-unexpired portion
of the term of this Employment Agreement, including any extended term
as provided by Section 2(a) hereof at the then-effective annual rate
of salary, as determined under Paragraph 3(a) and (y) the amount of
one year's base salary at the then-effective annual rate of salary,
and (B) the product of the number of years (including fractions)
representing the unexpired term of this Employment Agreement (but not
less than one) times an amount equal to the average of the annual
bonuses payable to the Executive under Paragraph 3(b) for the three
(3) full calendar years immediately prior to termination of this
Employment Agreement in which a bonus was payable or such lesser
number of full calendar years during which the Executive was employed
hereunder in which a bonus was payable,
(ii) during a period equal to the greater of one (1) year or the
unexpired term of this Employment Agreement, all other benefits to
which the Executive would have been entitled during the term of this
Employment Agreement had the Executive's employment not been
terminated.
(iii) during a period equal to the greater of one (1) year or the
unexpired term of this Employment Agreement, the continuing use of a
secretary and office space to be provided by the Company, and
(iv) other benefits accrued and earned by him hereunder up to and
including the effective date of such termination.
(e) In the event of the termination of his employment pursuant to
Paragraph 2(c) or Paragraph 5(a)(iii), the Executive shall have the option
to be released from his obligations under Paragraph 6(a)(i) for the one (1)
year period following the termination of his employment, by releasing the
Company from its obligations under Paragraph 5(d) hereof (other than those
provided in Paragraph 5(d)(iv)) Such option may be exercised by the
Executive giving the Company notice thereof within five (5) days of such
termination.
(f) In no event shall the Executive have or be deemed to have any duty
to seek employment or otherwise mitigate damages with respect to any
amounts or benefits due to him upon termination of this Employment
Agreement as provided in this Paragraph 5, nor shall any such amount or
benefits be reduced by reason of any other compensation or benefits which
the Executive may earn following termination of this Employment Agreement.
6. Covenants and Confidential Information.
(a) The Executive acknowledges the Company's reliance and expectation
of the Executive's continued commitment to performance of his duties and
responsibilities during the time when he is employed under this Employment
Agreement. In light of such reliance and expectation on the part of the
Company (but subject to Paragraph 5(d), 5(e) and 5(f) above), during the
time when he is employed under this Employment Agreement and for a period
of one (1) year after the
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termination of such employment for any reason other than the expiration of
the term hereof in accordance with Paragraph 2(a)(ii) hereof (and, as to
clause (ii) of this subparagraph (a), at any time during and after the term
of this Employment Agreement), the Executive shall not, directly or
indirectly, do either of the following:
(i) Own, manage, control or participate in the ownership,
management, or control of, or be employed or engaged by or otherwise
affiliated or associated as a consultant, independent contractor or
otherwise with, any other corporation, partnership, proprietorship,
firm, association or other business entity engaged in the business of,
or otherwise engage in the business of, acquiring, owning, developing
or managing factory outlet shopping centers; provided, however, that
the ownership of not more than one percent (1%) of any class of
publicly traded securities of any entity; or
(ii) Disclose, divulge, discuss, copy or otherwise use or suffer
to be used in any manner, in competition with, or contrary to the
interests of, the Company, any confidential information relating to
the Company's operations, properties or otherwise to its particular
business or other trade secrets of the Company, it being acknowledged
by the Executive that all such information regarding the business of
the Company compiled or obtained by, or furnished to, the Executive
while the Executive shall have been employed by or associated with the
Company is confidential information and the Company's exclusive
property; provided, however, that the foregoing restrictions shall not
apply to the extent that such information (A) is obtainable in the
public domain or known in the industry generally, (B) becomes
obtainable in the public domain or known in the industry generally,
except by reason of the breach by the Executive of the terms hereof,
(C) was not acquired by the Executive in connection with his
employment or affiliation with the Company, (D) was not acquired by
the Executive from the Company or its representatives, or (E) is
required, to be disclosed by rule of law or by order of a court or
governmental body or agency.
(b) The Executive agrees and understands that the remedy at law for
any breach by him of this Paragraph 6 may be inadequate and that the
damages flowing such breach are not readily susceptible to being measured
in monetary terms. Accordingly, it is acknowledged that, upon adequate
proof of the Executives violation of any legally enforceable provision of
this Paragraph 6, the Company may be entitled to immediate injunctive
relief and may obtain a temporary order restraining any threatened or
further breach. Nothing in this Paragraph 6 shall be deemed to limit the
Company's remedies at law or in equity for any breach by the Executive of
any of the provisions of this Paragraph 6 which may be pursued or availed
of by the Company.
(c) The Executive has carefully considered the nature and extent of
the restrictions upon him and the rights and remedies conferred upon the
Company under this Paragraph 6, and hereby acknowledges and agrees that the
same are reasonable in time and territory, are designed to eliminate
competition which otherwise would be unfair to the Company, do not stifle
the inherent skill and experience of the Executive, would not operate as a
bar to the Executive's sole means of support, are fully required to protect
the legitimate interests of the Company and do not confer a benefit upon
the Company disproportionate to the detriment to the Executive.
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7. Stock Options. The Executive shall receive stock options under the
Company's 1993 Employee Stock Incentive Plan as amended as more fully described
in that certain Nonqualified Stock Option Agreement and that certain Incentive
Stock Option Agreement dated February 14, 1996 the terms and conditions of which
are incorporated herein by reference.
8. Restricted Stock. The Executive shall receive a grant of 120,000 shares
(the "Restricted Shares") of restricted common stock of the Company ("Common
Stock") granted under the Company's 1996 Restricted Stock Plan. Prior to
vesting, the Restricted Shares will be registered under the Securities Act on
Form S-8, will be listed on the NYSE and following vesting thereof will be
freely tradable subject to applicable provisions of Rule 144 promulgated under
the Securities Act. With respect to said grant, the Company and the Executive
shall enter into a Restricted Stock Agreement in a form mutually agreed upon by
the Company and the Executive providing that (i) the Restricted Shares shall
vest in ten (10) equal installments of ten percent (10%) per year (provided as
to each installment that the Executive continues to be employed by the Company),
commencing on the Effective Date and thereafter on the first through ninth
anniversaries of the Effective Date provided (ii) all unvested Restricted Shares
shall immediately vest upon the Executive's death or permanent disability (as
defined in Paragraph 4(d)) during his employment by the Company; or termination
of the Executive's employment by the Company due to the Company's election not
to extend this Employment Agreement as permitted in Paragraph 2(a); or pursuant
to Paragraph 5(a)(iii) if such termination occurs within three (3) months prior
to, at the time of, or within one (1) year following a "change of control's (as
defined in Section 2(e) hereof) or provided that such change is effected, the
execution of a definitive agreement therefor (notwithstanding the requirement of
continued employment in subparagraph (i) above, upon such termination of
employment). The Executive shall be entitled to dividends on any those
Restricted Shares which have vested as of the record date of any dividend
payment.
9. Tax Adjustment Payments. If all or any portion of the amounts payable to
the Executive under this Employment Agreement (together with all other payments
of cash or property, whether pursuant to this Employment Agreement or otherwise,
including, without limitation, the issuance of common stock of the Company, or
the granting, exercise or termination of options therefor) constitutes "excess
parachute payments" within the meaning of Section 280G of the Code that are
subject to the excise tax imposed by Section 4999 of the Code (or any similar
tax or assessment), the amounts payable hereunder shall be increased (in the
same manner, to the extent applicable, without duplication, as provided in (i),
(ii) and (iii) below) to the extent necessary to place the Executive in the same
after-tax position as he would have been in had no such tax assessment been
imposed on any such payment paid or payable to the Executive under this
Employment Agreement or any other payment that the Executive may receive in
connection therewith. The determination of the amount of any such tax or
assessment and the incremental payment required hereby in connection therewith
shall be made by the accounting firm employed by the Executive within thirty
(30) calendar days after such payment and said incremental payment shall be made
within five (5) calendar days after such determination has been made. If, after
the date upon which the payment required by this Paragraph 8 has been made, it
is determined (pursuant to final regulations or published rulings of the
Internal Revenue Service, final judgment of a court of competent jurisdiction,
Internal Revenue Service audit assessment, or otherwise) that the amount of
excise or other similar taxes or assessments payable by the Executive is greater
than the amount
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initially so determined, then the Company shall pay the Executive an amount
equal to the sum of: (i) such additional excise or other taxes, plus (ii) any
interest, fines and penalties resulting from such underpayment, plus (iii) an
amount necessary to reimburse the Executive for any income, excise or other tax
assessment payable by the Executive with respect to the amounts specified in (i)
and (ii) above, and the reimbursement provided by this clause (iii), in the
manner described above in this Paragraph 8. Payment thereof shall be made within
five (5) calendar days after the date upon which such subsequent determination
is made.
10. Representations and Warranties of the Company.
(a) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and has all
requisite corporate power and authority to enter into, execute and deliver
this Employment Agreement, fulfill its obligations hereunder and consummate
the transactions contemplated hereby.
(b) The execution and delivery of, performance of obligations under,
and consummation of the transactions contemplated by, this Employment
Agreement have been duly authorized and approved by all requisite corporate
action by or in respect of the Company, and this Employment Agreement
constitutes the legally valid and binding obligation of the Company,
enforceable by the Executive in accordance with its terms.
(c) No provision of the Company's governing documents or any agreement
to which it is a party or by which it is bound or of any material law or
regulation of the kind usually applicable and binding upon the Company
prohibits or limits its ability to enter into, execute and deliver this
Employment Agreement, fulfill its respective obligations hereunder and
consummate the transactions contemplated hereby.
11. Miscellaneous.
(a) The Executive represents and warrants that he is not a party to
any agreement, contract or understanding, whether employment or otherwise,
which would restrict or prohibit him from undertaking or performing
employment in accordance with the terms and conditions of this Employment
Agreement.
(b) The provisions of this Employment Agreement are severable and if
any one or more provisions may be determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions and any
partially unenforceable provision to the extent enforceable nevertheless
shall be binding and enforceable.
(c) The rights and obligations of the Company under this Employment
Agreement shall inure to the benefit of, and shall be binding on, the
Company and its successors and assigns, and the rights and obligations of
the Executive under this Employment Agreement shall inure to the benefit
of, and shall be binding upon, the Executive (other than obligations to
perform services and to refrain from competition and disclosure of
confidential information) and his heirs, personal representatives and
assigns.
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(d) Any controversy or claim arising out of or relating to this
Employment Agreement, or the breach thereof, shall be settled by
arbitration in accordance with the Rules of the American Arbitration
Association then pertaining in the City of Raleigh, North Carolina, and
judgment upon the award rendered by the arbitrator or arbitrators may be
entered in any court having jurisdiction thereof. The arbitrator or
arbitrators shall be deemed to possess the powers to issue mandatory orders
and restraining orders in connection with such arbitration; provided,
however, that nothing in this Paragraph 11(d) shall be construed so as to
deny the Company the right and power to seek and obtain injunctive relief
in a court of equity for any breach or threatened breach by the Executive
of any of his covenants contained in Paragraph 6 hereof.
(e) Any notice to be given under this Employment Agreement shall be
personally delivered in writing or shall have been deemed duly given when
received after it is posted in the United States mail, postage prepaid,
registered or certified return receipt requested, and if mailed to the
Company, shall be addressed to its principal place of business, attention:
Chairman, and if mailed to the Executive, shall be addressed to him at his
home address last known on the records of the Company, or at such other
address or addresses as either the Company or the Executive may hereafter
designate in writing to the other. All notices provided for hereunder to
the parties shall be accompanied by simultaneous copy of such notice sent
to the attorneys for such parties, as follows:
If to the Executive;
If to the Company;
FAG Realty, Inc.
00000 Xxxxxxx Xxxxxxx.
Xxxxx Xxxxx Xxxx Xxxxx
Xxxx, Xxxxx Xxxxxxxx 00000
Attention: General Counsel
Notices sent by Federal Express or similar overnight delivery service or by
facsimile transmissions shall also constitute due notice under this
paragraph 11(e), effective upon receipt thereof.
(f) The failure of either party to enforce any provision or provisions
of this Employment Agreement shall not in any way be construed as a waiver
of any such provision or provisions as to any future violations thereof,
for prevent that party thereafter front enforcing each and every other
provision of this Employment Agreement. The rights granted the parties
herein are cumulative and the waiver of any single remedy shall not
constitute a waiver of such party's right to assert all other legal
remedies available to it under the circumstances.
(g) This Employment Agreement supersedes all prior agreements and
understandings between the parties made prior to the date hereof and may
not be modified or terminated orally. No modification, termination or
attempted waiver shall be valid unless in writing and signed by the party
against whom the same is sought to be enforced.
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(h) This Employment Agreement shall be governed by and construed
according to the laws of the State of North Carolina.
(i) Captions and paragraph headings used herein are for convenience
and are not a part of this Employment Agreement and shall not be used in
construing it.
(j) Where necessary or appropriate to the mean hereof, the singular
and plural shall be deemed to include each other, and the masculine,
feminine and neuter shall be deemed to Include each other.
(k) This Employment Agreement may be executed in multiple
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument. This Employment
Agreement may be executed by facsimile signature.
IN WITNESS WHEREOF, the parties have executed this Employment Agreement on
the day and year first set forth above.
FAC REALTY, INC., a Delaware corporation
By: /s/ C. CARNMACK XXXXXX
-----------------------------------
C. Carnmack Xxxxxx
President
Chief Executive Officer
By: /s/ XXXXXXXX X. XXXXXXX, XX.
-----------------------------------
Xxxxxxxx X. Xxxxxxx, Xx.
Chairman of Executive Compensation
Committee
/s/ XXXXXXX X. XXXXXXXX (SEAL)
----------------------------------------
Xxxxxxx X. Xxxxxxxx
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