EMPLOYMENT AGREEMENT
This Employment Agreement is made and entered into on August 1,
1996 (the "Effective Date") by and between Action Industries, Inc., a
Virginia corporation ("Action") and Xxxxxxx X. Xxxxxxxx, Xx.
("Executive").
WHEREAS, Executive is now and has been employed by Action in
senior management executive positions and is broadly experienced in
all facets of Action's operations; and
WHEREAS, it is in the best interests of Action to assure that it
will have the continued dedication of Executive;
NOW THEREFORE, for good and valuable consideration and in order
to induce Executive to remain in the employ of Action, the parties
covenant and agree as follows:
1. Definitions. The following terms shall have the following
meanings for purposes of this Agreement.
a. "Cause" means (i) an act or acts of personal dishonesty
taken by Executive and intended to result in substantial personal
enrichment of Executive at the expense of Action, (ii) violations
by Executive of this Agreement or Executive's employment
obligations to Action which are demonstrably willful on
Executive's part and which are not remedied within a reasonable
period of time after receipt of written notice from Action, or
(iii) the conviction of Executive of a felony involving moral
turpitude.
b. "Disability" means the incapacity to attend to and
perform effectively one's duties and responsibilities which
continues for at least 26 weeks after its commencement, as
determined by a physician selected by Action.
c. "Employment Period" that period beginning on the
Effective Date and ending upon Executive's retirement or earlier
termination of employment.
2. Employment. Action agrees to employ Executive, and
Executive agrees to serve Action in an executive, managerial and
supervisory capacity, subject to the direction and control of the
Board of Directors of Action, all upon the terms and conditions
hereinafter set forth. During the Employment Period:
a. Executive's position (including, without limitation,
status, offices, titles and reporting requirements), authority,
duties and responsibilities shall be at least commensurate in all
material respects with the most significant of those held,
exercised and assigned at any time during the 90-day period
immediately preceding the Effective Date,
b. Excutive's services shall be performed at the location
where the Executive is employed on the Effective Date, or at any
office or location not more than thirty-five (35) miles from
such location,
c. Executive shall continue to receive an annual base salary
at least equal to the annual base salary payable to the
Executive by Action on the Effective Date ("Base Salary"),
d. Executive shall continue to have an annual cash bonus
potential, either pursuant to the Action Executive Incentive
Plan in effect on the Effective Date or pursuant to a similar
incentive compensation plan of Action, at least equal to the
level in existence on the Effective Date ("Annual Bonus"), and
e. Executive shall be entitled to participate in all
incentive, savings and retirement plans, practices, policies and
programs applicable to other key executive employees of Action
("Benefit Plans").
The failure of Action, without Executive's consent, to comply with the
terms and conditions of employment as set forth in this Section 2
shall constitute "Good Reason" for Executive's termination of his
employment with Action.
3. Best Efforts. Executive agrees during the Employment
Period to devote his best efforts and substantially all of his
business time and attention to the business of Action, it being agreed
that the Executive will have complied with this obligation if he
devotes to the business of Action his same best efforts and the same
time and attention to the business of Action that he has devoted to
the business of Action during the twelve months next preceding the
Effective Date. Executive agrees that he will perform such other
executive duties for Action and for Action's subsidiaries relating to
its business as the Board of Directors of Action may reasonably
direct.
4. Term. Subject to the provisions of Sections 4 and 5 of
this Agreement, either party shall have the right to terminate the
Employment Period at any time. If Executive's employment with Action
is terminated by Action, other than for Cause or as a result of his
death or Disability, or if Executive terminates his employment with
Action for Good Reason, then Action will, for the greater of (a) the
period ending three years after the Effective Date or (b) a period of
one year after the termination date (or, if shorter, until Executive
reaches "Normal Retirement Age" (as such concept is used in the
primary retirement plan in which Executive is a participant on the
Effective Date)), (i) pay to Executive as and when normally payable
his Base Salary as in effect on the date of termination and an amount
equal to the average Annual Bonus received by such Executive for the
past three years prior to termination (or a pro-rated portion of such
average Annual Bonus) and (ii) subject to program eligibility
requirements and continuation of programs by Action, continue his
participation in the Benefit Plans in which he was participating on
the date of termination of employment.
5. Split Dollar Insurance Policy. If Executive's employment
with Action is terminated by Action other than for Cause or as a
result of his death or Disability, or if during such period Executive
terminates his employment with Action for Good Reason, then Action
will continue to make premium payments for so long as Action is making
payments to Executive under Section 4 hereof under any and all split
dollar life insurance programs in effect on the life of the Executive
as of the Effective Date, after which the Executive will be entitled
to ownership of the policy and Action will be entitled to premium
retrieval, all in accordance with the terms of the program, but only
to the extent of the cash value of the policy, and without recourse to
the Executive for the balance of any such premium retrieval.
6. Non-Competition. During the three-year period commencing
on the Effective Date and, if longer, while employed by Action, and
for a period of one year after termination of employment, Executive
shall not, without the prior written consent of Action, directly or
indirectly, own, control, finance, manage, operate, join or
participate in the ownership, control, financing, management or
operation of, or be connected as an employee, consultant or in any
other capacity with, any business engaged in the manufacture or
distribution of residential furniture in the United States. Nothing
in this Section 6 shall, however, restrict Executive from making
investments in other ventures which are not competitive with Action,
or restrict Executive from owning less than one percent (1%) of the
outstanding securities of companies listed on a national stock
exchange or actively traded in the "over-the-counter" market. In
addition, if the Employment Period is terminated by Action (other than
for Cause) and the Executive elects to forego the payments called for
in Sections 4 and 5 hereof, the provisions of this Section 6 shall not
apply. Should any of the terms of this Section 6 be found to be
unenforceable because they are over-broad in any respects then they
shall be deemed amended to the extent, and only to the extent,
necessary to render them enforceable. Both parties stipulate that
money damages would be inadequate to compensate for any breaches of
the terms of this Section 6, and that such terms shall be enforceable
through appropriate equitable relief, without the necessity of proving
actual damages and to an equitable accounting of all earnings,
profits, and other benefits arising from such violation, which rights
shall be cumulative and in addition to any other rights and remedies
to which Action may be entitled.
7. Confidentiality. During the Employment Period and at all
times thereafter, Executive shall maintain the confidentiality of, and
shall not disclose to any person (except as his duties as an employee
of Action may require) any non-public information concerning Action or
its business.
8 Miscellaneous. This Employment Agreement shall be binding
upon and shall inure to the benefit of Executive's heirs, executors,
administrators and legal representatives, and shall be binding upon
and inure to the benefit of Action and its successors and assigns.
This Agreement shall supersede and stand in place of any and all other
agreements between Executive and Action regarding severance pay and/or
any and all severance pay benefits pursuant to any plan or practice of
Action. This Employment Agreement shall take effect as of the day and
year first above set forth, and its validity, interpretation,
construction and performance shall be governed by the laws of the
State of Mississippi.
9. Indemnification. In the event that either party hereto
is required to pursue litigation against the other party to enforce
his or its rights hereunder, the prevailing party in any such
litigation shall be entitled to reimbursement of the costs and
expenses of such litigation, including attorney's fees.
10. Waivers. In consideration of the undertakings of Action
set forth in this Agreement, Executive hereby irrevocably waives and
forever releases any and all claims and causes of action of any nature
whatsoever that Executive has or may have against Action or any of its
officers, directors, employees or agents arising out of the
negotiation, execution, delivery or terms of this Agreement,
including, without limitation, any claims arising under the Age
Discrimination in Employment Act, 29 U.S.C. Section 21 et seq., and
any state or local law relating to age discrimination.
11. Entire Agreement. This Agreement contains the entire
agreement of the parties with respect to its subject matter, and no
waiver, modification or change of any of its provisions shall be valid
unless in writing and signed by the party against whom such claimed
waiver, modification or change is sought to be enforced.
IN WITNESS WHEREOF, the parties hereto have each executed this
Agreement the date set forth below.
ACTION INDUSTRIES, INC.
By: Xxxxx X. Xxxxxx
-----------------------------
Vice-President
Agreed to and Approved:
FURNITURE BRANDS XXXXXXX X. XXXXXXXX
INTERNATIONAL, INC.
By: X.X. Xxxxx By: Xxxxxxx X. Xxxxxxxx
------------------------ ----------------------------_
Chairman of the Board
