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EXHIBIT 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of April 23, 2001, by and between XXXXXXX
ENTERTAINMENT COMPANY, a Delaware corporation having its corporate headquarters
at Xxx Xxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxx 00000 ("the Company") and XXXXX X.
XXXX, a resident of Las Vegas, Xxxxx County, Nevada ("Executive").
WITNESSETH:
WHEREAS, the Company desires to employ Executive as its President and
Chief Executive Officer, and Executive desires to serve in such capacity
pursuant to the terms of this Agreement;
NOW, THEREFORE, in consideration of the covenants and agreements
hereinafter set forth, the parties hereto agree as follows:
AGREEMENT
1. EMPLOYMENT; TERM; PLACE OF EMPLOYMENT. The Company hereby
employs Executive, and Executive hereby accepts employment with the Company upon
the terms and conditions contained in this Agreement. The term of Executive's
employment hereunder shall commence on April 23, 2001 (the "Effective Date") and
shall continue for a period of four (4) years from and after the Effective Date
(the "Employment Period"). For purposes of this Agreement, a "Contract Year"
shall mean a one year period commencing on the Effective Date or any anniversary
thereof. Executive shall render services at the offices established by the
Company in the greater Nashville metropolitan area; provided that Executive
agrees to travel on temporary trips to such other places as may be required to
perform Executive's duties hereunder.
2. DUTIES; TITLE.
(a) Description of Duties.
(i) During the Employment Period, Executive
shall serve the Company as its President and Chief Executive
Officer and report directly to the Board of Directors of
Directors (the "Board of Directors"). Executive shall
supervise the conduct of the business and affairs of the
Company, its subsidiaries and respective divisions and perform
such other duties as the Board of Directors shall determine.
(ii) Subject to approvals required by the
Delaware Business Corporation Act and the Company's
Certificate of Incorporation and Bylaws, Executive shall serve
as a member of the Board of Directors.
(iii) Executive shall faithfully perform the
duties required of his office. Subject to Section 2(b),
Executive shall devote all of his business time and effort to
the performance of his duties to the Company.
(b) Other Activities. Notwithstanding anything to the
contrary contained in Section 2(a), Executive shall be permitted to
engage in the following activities, provided that
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such activities do not materially interfere or conflict with
Executive's duties and responsibilities to the Company:
(i) Executive may serve on the governing boards
of, or otherwise participate in, a reasonable number of trade
associations and charitable organizations, whose purposes are
not inconsistent with the activities and the image of the
Company;
(ii) Executive may engage in a reasonable amount
of charitable activities and community affairs; and
(iii) Subject to the prior approval of the Board
of Directors, Executive may serve on the board of directors of
one or more business corporations, provided also that they do
not compete, directly or indirectly, with the Company.
(c) Other Policies. Executive shall be subject to and
shall comply with all codes of conduct, personnel policies and
procedures applicable to senior executives of the Company, including,
without limitation, policies regarding sexual harassment, conflicts of
interest and xxxxxxx xxxxxxx.
3. CASH COMPENSATION.
(a) Signing Bonus. The Company shall pay Executive a
signing bonus in the amount of $500,000 (the "Signing Bonus"). The
Signing Bonus shall be payable as follows: (i) an amount shall be paid
to Executive on or before May 7, 2001 equal to $500,000 less the
projected "applicable employee remuneration" as defined in Section
162(m)(4)o to be received by Executive during the calendar year ending
December 31, 2001; and (ii) the remainder of the Signing Bonus (the
"Deferred Signing Bonus") shall be a fully vested deferred obligation
of the Company which shall be payable, together with investment
earnings thereon, in accordance with Section 6 hereof. Payment of the
Deferred Signing Bonus shall be facilitated by the Company contributing
to the rabbi trust established pursuant to Section 6 (the "Rabbi
Trust") an amount of cash equal to the Deferred Signing Bonus, as set
forth in Section 6.
(b) Base Salary. During the initial Contract Year, the
Company shall pay to Executive an annual salary of $650,000.
Executive's annual salary shall be increased in each subsequent
Contract Year by a percentage equal to the annual percentage increase,
if any, generally granted to other senior executives, such percentage
to be determined from time to time by the Compensation Committee of the
Board of Directors (such annual salary, together with any increases
under this subsection (b), being herein referred to as the "Base
Salary").
(c) Annual Cash Bonus.
(i) 2001 Calendar Year Bonus. For the 2001
calendar year, Executive shall be entitled to receive a
guaranteed cash bonus of $200,000.00 (the "Guaranteed Cash
Bonus"). In addition to the Guaranteed Cash Bonus, Executive
shall be entitled to receive a bonus of up to $200,000.00
which shall be determined in accordance with
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- All section references are to the Internal Revenue Code of 1986, as amended,
unless otherwise specified.
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the following procedures (the "Additional 2001 Bonus"). On or
before June 30, 2001, Executive shall deliver to the Board of
Directors a proposed budget for the Company for July 1, 2001
through December 31, 2001 (the "2001 Interim Period") for the
Board's approval. Executive and the Board of Directors shall
mutually establish performance target(s) for the Company for
the 2001 Interim Period (which when so determined shall be
attached as Exhibit A hereto) (the "2001 Bonus Target"). If
the Company attains 85% of the 2001 Bonus Target (the "2001
Minimum Percentage"), Executive shall be entitled to receive a
bonus of $170,000.00. Executive shall be entitled to receive
an additional $2,000.00 for each percentage point increase
over the 2001 Minimum Percentage up to the attainment by the
Company of 100% of the Bonus Target. The Guaranteed Cash Bonus
and the Additional 2001 Bonus shall be paid to Executive in a
single lump sum on or before February 28, 2002.
(ii) 2002, 2003, 2004 and 2005 Calendar Year
Bonus. For the 2002, 2003 and 2004 calendar years, and for the
2005 partial year, Executive shall be eligible for an annual
cash bonus of up to 150% of the portion of Executive's Base
Salary to be paid to him in each calendar year and shall be
determined in accordance with the following procedures (the
"Year-End Bonus"). Executive shall deliver to the Board of
Directors a budget for the Company for each calendar year by
January 15 of such calendar year. Executive and the Board of
Directors shall mutually establish performance target(s) for
the Company for such calendar year (which when so determined
shall be attached as Exhibit A hereto) (the "Bonus Target").
If the Company attains 85% of the Bonus Target (the "Minimum
Percentage"), Executive shall be entitled to receive a bonus
of 50% of Base Salary. For each percentage point increase over
the Minimum Percentage, Executive shall be entitled to receive
an additional bonus of 3.3% of his Base Salary. For each
percentage point increase over 100% of the Bonus Target up to
a maximum of 150% of the Bonus Target, Executive shall be
entitled to receive an additional bonus of 1.0% of his Base
Salary. The Year End Bonus for each calendar year shall be
paid to Executive on or before the end of February 28th of the
immediately succeeding year.
(d) Withholding. The Base Salary, the Guaranteed Cash
Bonus, the Additional 2001 Bonus, and each Year-End Bonus shall be
subject to applicable withholding and shall be payable in accordance
with the Company's payroll practices.
4. EQUITY COMPENSATION.
(a) Stock Option Grant. Subject to the vesting schedule
provided herein, the Company hereby grants to Executive options to
purchase 500,000 shares of common stock of the Company ("Company Common
Stock") (the "Stock Options"). The Stock Options shall (i) be granted
pursuant to the Company's 1997 Stock Option and Incentive Plan as may
hereinafter be further amended (the "Omnibus Plan"); (ii) be subject to
the terms of a stock option agreement between the Company and Executive
in the form prescribed for Company executives generally and attached
hereto as Exhibit B; (iii) vest in 125,000 share increments on the
first through the fourth anniversaries of the Effective Date (each a
"Vesting Date"); provided, however, Executive must be employed by the
Company on each such anniversary date for such particular share
increment to vest; (iv) be exercisable at the closing price of the
Company Common Stock as reported in the Wall Street Journal for the
trading day
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immediately preceding the award of the option grant by the Board of
Directors (which award shall precede the execution of this Agreement);
and (v) have a term of ten years from the Effective Date (the "Stock
Option Term"). If Executive remains employed by Company until the
expiration of the Employment Period, he shall be entitled to exercise
the Stock Options at any time prior to the expiration date of the Stock
Option Term notwithstanding anything to the contrary contained in the
Company's Omnibus Plan.
(b) Restricted Stock Grant. The Company shall deliver to
the trustee of the Rabbi Trust 50,000 restricted shares of Company
Common Stock (the "Restricted Stock Grant") to be held in a separate
share known as "Account B." The restrictions on the Restricted Stock
Grant shares shall terminate (i.e., the shares will become available
for distribution to Executive) in 12,500 share increments on the first
through the fourth anniversaries of the Effective Date; provided,
however, Executive must be employed by the Company on each such
anniversary date for the restrictions on the particular share increment
to be terminated. The Restricted Stock Grant is hereby granted pursuant
to the Company's Omnibus Plan as may hereafter be further amended, and
shall otherwise be subject to the terms of a restricted stock grant
agreement between the Company and Executive in the form prescribed for
Company executives generally, which form is attached hereto as Exhibit
C. If a restriction terminates as to a 12,500 share increment, the
trustee of the Rabbi Trust shall deliver such shares to Executive
unless Section 6 herein requires that the distribution be deferred. If
distribution is deferred, the Restricted Stock Grant shall continue to
be held in Account B of the Rabbi Trust, until distribution is made in
accordance with Section 6(d) hereof. Nothing herein shall, however,
prevent the trustee of the Rabbi Trust upon the direction of the
Company, which shall be made only after consultation with Executive,
from selling unrestricted shares held in Account B and reinvesting the
proceeds in other investments selected by Company (in which event the
benefit under this paragraph (b) shall be determined by reference to
the value of such substituted assets). If Executive's employment is
terminated for any reason, any of the Restricted Stock Grant held in
the Rabbi Trust, the restrictions of which have not been eliminated,
will be forfeited by Executive and delivered to the Company.
5. BENEFITS; EXPENSES; ETC.
(a) Custom Non-Qualified Mid-Career Supplemental Employee
Retirement Plan. Executive shall be entitled to a nonqualified
supplemental executive retirement benefit (the "SERP"). Company agrees
to pay Executive a retirement benefit which will have a present value
of $2,500,000.00 upon the expiration of four (4) years from the
Effective Date (the "SERP Benefit"). The retirement benefit will accrue
25% for each complete year over a four (4) year period beginning with
the Effective Date (the "SERP Vesting Period") to a present value
amount after four (4) years of $2,500,000.00. Except as otherwise set
forth in this Agreement, and subject to deferral pursuant to Section 6,
the SERP Benefit shall be payable upon the fourth anniversary of the
Effective Date.
(b) Expenses. During the Employment Period, the Company
shall reimburse Executive, in accordance with the Company's policies
and procedures, for all reasonable expenses incurred by Executive,
including reimbursement for his reasonable first class travel expenses
and, on up to two occasions per year, those of his spouse, in
connection with the performance of his duties for the Company.
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(c) Vehicle Allowance. During the Employment Period,
Executive shall be entitled to receive from the Company a vehicle
allowance of $1,050 per month, subject to future increases as may be
granted to senior executives.
(d) Use of Company Aircraft. During the Employment Period
and subject to availability, the Company shall make available a jet
aircraft to Executive.
(e) Vacation. During the Employment Period, Executive
shall be entitled to four (4) weeks vacation during each Contract Year.
(f) Executive Financial Counseling. During the Employment
Period, the Company shall reimburse Executive for up to a maximum of
$15,000 of financial counseling expenses per year, upon submission of
documentation evidencing such expenses.
(g) Relocation Benefits. Executive will receive
relocation benefits under the Company's relocation policy for top level
executive officers. In addition, Executive shall receive a reasonable
temporary housing allowance for up to 90 days, and reimbursement for
all commissions paid in connection with the sale of Executive's
principal residence pursuant to the relocation.
(h) Attorney's Fees. Executive shall be entitled to
reimbursement for reasonable attorney's fees and expenses incurred by
Executive in the review and negotiation of this Agreement, upon
submission of documentation evidencing such fees and expenses.
(i) Company Plans. During the Employment Period,
Executive shall be entitled to participate in and enjoy the benefits of
(i) the Company Health Insurance Plan, (ii) the Company 401(k) Savings
Plan, (iii) the Company Supplemental Deferred Compensation ("SUDCOMP")
Plan, and (iv) any health, life, disability, retirement, pension, group
insurance, or other similar plan or plans which may be in effect or
instituted by the Company for the benefit of senior executives
generally, upon such terms as may be therein provided. A summary of
such benefits as in effect on the date hereof has been provided to
Executive, the receipt of which is hereby acknowledged.
6. DEFERRAL OF EXCESSIVE EMPLOYEE REMUNERATION.
(a) Deferral of Current Compensation. During any period
in which Executive is a "covered employee" within the meaning of
Section 162(m)(3), any "applicable employee remuneration" otherwise
payable to Executive in excess of the limit specified in Section
162(m)(1) or any successor provision of the Code (currently $1,000,000)
shall not be currently paid, but shall be a deferred payment obligation
of the Company governed by the provisions of this Section 6.
(b) Vesting of Deferred Compensation; Investment
Earnings. All such deferred payment obligations shall be fully vested
and shall be credited with investment earnings (or losses). The rate of
investment earnings (or losses) of such deferred amounts shall be equal
to the rate of investment earnings (or losses) of one or more mutual
funds selected by the Company after consultation with Executive and
identified to Executive as such, which mutual funds may be changed from
time to time by the Company after consultation with Executive. While
the Company shall make reasonable efforts to act prudently in the
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selection of such mutual funds, taking into account Executive's
investment preferences, the Company shall not be responsible for the
investment performance of any such fund(s).
(c) Deposit to Rabbi Trust. In order to facilitate the
payment of the Company's deferred payment obligation, at the time that
the Company would otherwise make a payment to Executive but for the
Code Section 162(m) limitations, the Company shall deposit an amount of
cash equal to the amount which is being deferred, into "Account A" of a
"rabbi trust" to be known as the Deferred Compensation Rabbi Trust (the
"Rabbi Trust") to be established by the Company with an independent
corporate trustee acceptable to the Company and Executive within thirty
(30) days from the Effective Date. The Rabbi Trust shall satisfy the
requirements of Section 7 hereof and shall be in substantially the form
attached hereto as Exhibit E.
(d) Distribution of Deferred Amounts. Amounts deferred
pursuant to this Section 6 and earnings thereon, shall be paid to
Executive at the earliest time possible without being nondeductible by
the Company under Code Section 162(m), but in all events not later than
ten (10) days following the termination of Executive's employment with
the Company (without regard to the reason of such termination), except
that if the Company believes, based on the written opinion of counsel,
that payment at such time will result in nondeductibility by the
Company under Section 162(m), payment may, at the election of Company
be further deferred but not beyond the end of the first full week
following the calendar year in which the termination of employment
occurs. Distributions from the Rabbi Trust shall to the extent feasible
be made from Account A prior to any distributions from Account B.
7. RABBI TRUST. It is understood and agreed by the parties that
(i) the Rabbi Trust shall remain subject to the claims of the Company's general
creditors; (ii) any income tax payable with respect to the Rabbi Trust shall be
the sole obligation and responsibility of the Company (and shall not reduce the
assets in the Rabbi Trust so long as the Rabbi Trust remains a "grantor trust"
for federal income tax purposes); and (iii) the establishment of the Rabbi Trust
shall not relieve the Company of its liability to pay amounts due under this
Agreement. The Rabbi Trust shall, however, relieve the Company of its liability
to pay amounts due under this Agreement to the extent that payments are made in
accordance with the terms of this Agreement and the Rabbi Trust.
8. TERMINATION. Executive's employment hereunder may be
terminated prior to the expiration of the Employment Period as follows:
(a) Termination by Death. Upon the death of Executive
("Death"), Executive's employment shall automatically terminate as of
the date of Death.
(b) Termination by Company for Permanent Disability. At
the option of the Company, Executive's employment may be terminated by
written notice to Executive or his personal representative in the event
of the Permanent Disability of Executive. As used herein, the term
"Permanent Disability" shall mean a physical or mental incapacity or
disability which renders Executive unable substantially to render the
services required hereunder for a period of ninety (90) consecutive
days or one hundred eighty (180) days during any twelve (12) month
period as determined in good faith by the Company.
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(c) Termination by Company for Cause. At the option of
the Company, Executive's employment may be terminated by written notice
to Executive upon the occurrence of any one or more of the following
events (each, a "Cause"):
(i) any action by Executive constituting fraud,
self-dealing, embezzlement, or dishonesty in the course of his
employment hereunder;
(ii) any conviction of Executive of a crime
involving moral turpitude;
(iii) failure of Executive after reasonable notice
promptly to comply with any valid and legal directive of the
Board of Directors ;
(iv) a material breach by Executive of any of his
obligations under this Agreement and failure to cure such
breach within ten (10) days of his receipt of written notice
thereof from the Company; or
(v) a failure by Executive to perform adequately
his responsibilities under this Agreement as demonstrated by
objective and verifiable evidence showing that the business
operations under Executive's control have been materially
harmed as a result of Executive's gross negligence or willful
misconduct.
(d) Termination by Executive for Good Reason. At the
option of Executive, Executive may terminate his employment by written
notice to Company given within a reasonable time after the occurrence
of the following circumstances ("Good Reason"), unless the Company
cures the same within thirty (30) days of such notice:
(i) Any adverse change by Company in the
Executive's position or title described in Section 2 hereof,
whether or not any such change has been approved by a majority
of the members of the Board;
(ii) The assignment to Executive, over his
reasonable objection, of any duties materially inconsistent
with his status as President and Chief Executive Officer or a
substantial adverse alteration in the nature of his
responsibilities;
(iii) A reduction by Company in his annual base
salary of $650,000 as the same may be increased from time to
time pursuant to Section 3(b) hereof;
(iv) Company's requiring Executive to be based
anywhere other than the Company's headquarters in Nashville,
Tennessee except for required travel on the Company's
business;
(v) The failure by Company, without Executive's
consent, to pay to him any portion of his current
compensation, except pursuant to this Agreement or pursuant to
a compensation deferral elected by Executive, or to pay to
Executive any portion of an installment of deferred
compensation under any deferred compensation program of
Company within thirty days of the date such compensation is
due;
(vi) Except as permitted by this Agreement, the
failure by Company to continue in effect any compensation plan
(or substitute or alternative plan) in which
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Executive is entitled to participate which is material to
Executive's total compensation, or the failure by the Company
to continue Executive's participation therein on a basis that
is materially as favorable both in terms of the amount of
benefits provided and the level of Executive's participation
relative to other participants at Executive's grade level; or
(vii) The failure by Company to continue to
provide Executive with benefits substantially similar to those
enjoyed by senior executives under the Company's pension and
deferred compensation plans, and the life insurance, medical,
health and accident, and disability plans in which Executive
is entitled to participate, except as required by law, or the
taking of any action by the Company which would directly or
indirectly materially reduce any of such benefits or deprive
Executive of any material fringe benefit enjoyed by Executive,
or the failure by the Company to provide Executive with the
number of paid vacation days to which Executive is entitled;
or
(viii) A material breach by the Company of any of
its obligations under this Agreement.
(e) Termination by Company Without Cause. At the option
of the Company Executive's employment may be terminated by written
notice to Executive at any time ("Without Cause").
9. EFFECT OF TERMINATION.
(a) Effect Generally. If Executive's employment is
terminated prior to the fourth anniversary of the Effective Date, the
Company shall not have any liability or obligation to Executive other
than as specifically set forth in Section 8, Section 9 and Section 10
hereof. Upon the termination of Executive's employment for any reason,
he shall, upon the request of the Company, resign from the Board of
Directors.
(b) Effect of Termination by Death. Upon the termination
of Executive's employment as a result of Death, Executive's estate
shall be entitled to receive an amount equal to: (i) accrued but unpaid
Base Salary through the date of termination; (ii) a pro rata portion of
Executive's Annual Bonus, if any, for the year in which termination
occurs, (iii) any unpaid portion of the Signing Bonus or Annual Bonuses
for prior calendar years, accrued and unpaid vacation pay, unreimbursed
expenses incurred pursuant to Section 5(b), (c), (f), (g) or (h), and
any other benefits owed to Executive pursuant to any written employee
benefit plan or policy of the Company, excluding benefits payable
pursuant to any plan beneficiary pursuant to a contractual beneficiary
designation by Executive, (iv) a pro-rata portion of the SERP Benefit
with the vested portion of the SERP Benefit equal to $2,500,000
multiplied by a fraction, the numerator of which is the total number of
months (including any fractional month) during which Executive was
employed hereunder, and the denominator of which is 48; (v) the portion
of the Restricted Stock Grant that is free from restrictions as of the
date of death and the acceleration and immediate release of all
restrictions from all Restricted Stock Grants that are subject to
restrictions as of the date of death, (vi) Executive's vested Stock
Options as of the date of death, the vesting and exercise of which is
governed by the Omnibus Plan; and (vii) all of Executive's Stock
Options, which pursuant to the Omnibus
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Plan are accelerated as of the termination date (date of death) and are
exercisable until the expiration of the Stock Option Term.
(c) Effect of Termination for Permanent Disability. Upon
the termination of Executive's employment hereunder as a result of
Permanent Disability, Executive shall be entitled to receive an amount
equal to: (i) accrued but unpaid Base Salary through the date of
termination; (ii) a pro rata portion of Executive's Annual Bonus, if
any, for the year in which termination occurs, (iii) any unpaid portion
of the Signing Bonus or an Annual Bonus for prior calendar years,
long-term disability benefits available to executives of the Company,
accrued and unpaid vacation pay, unreimbursed expenses incurred
pursuant to Section 5(b), (c), (f), (g) or (h), and any other benefits
owed to Executive pursuant to any written employee benefit plan or
policy of the Company; (iv) a pro rata portion of the SERP Benefit with
the vested portion of the SERP Benefit equal to $2,500,000 multiplied
by a fraction, the numerator of which is the total number of months
(including any fractional month) during which Executive was employed
hereunder, and the denominator of which is 48; (v) the portion of the
Restricted Stock Grant that is free from restrictions as of the
termination date; (vi) Executive's vested Stock Options as of the date
of termination, the vesting of which is governed by the Omnibus Plan;
and (vii) all of Executive's Stock Options, which pursuant to the
Omnibus Plan are accelerated as of the termination date and are
exercisable until the expiration of the Stock Option Term. Payments to
Executive hereunder shall be reduced by any payments received by
Executive under any worker's compensation or similar law.
(d) Effect of Termination by the Company for Cause or by
Executive Without Good Reason. Upon the termination of Executive's
employment by the Company for Cause or by Executive for any reason
other than Good Reason, Executive shall be entitled to receive an
amount equal to: (i) accrued but unpaid Base Salary through the date of
termination, (ii) any unpaid Annual Bonus for prior calendar years,
accrued but unpaid vacation pay, unreimbursed expenses incurred
pursuant to Section 5(b), (c), (f), (g) or (h), and any other benefits
owed to Executive pursuant to any written employee benefit plan or
policy of the Company; (iii) to the extent Executive's termination
occurs after the expiration of one (1) year from the Effective Date,
any unpaid portion of the Signing Bonus and (iv) the portion of the
Restricted Stock Grant that is free from restrictions as of the
termination date. All Stock Options, to the extent not theretofore
exercised, shall terminate on the date of termination of employment
under this Section 9(d). Executive shall also forfeit any vested or
unvested SERP Benefit and any right to an Annual Bonus for the calendar
year in which Executive's termination occurs. In addition, if such
termination occurs within one (1) year after the Effective Date,
Executive will forfeit any unpaid portion of his Signing Bonus and must
repay to the Company any portion of the Signing Bonus paid to
Executive. To satisfy Executive's obligation to repay the Signing
Bonus, the Company shall be entitled to offset any amounts owed to
Executive pursuant to this subparagraph.
(e) Effect of Termination by the Company Without Cause or
by Executive for Good Reason. Upon the termination of Executive's
employment hereunder by the Company Without Cause or by Executive for
Good Reason, Executive shall be entitled to: (i) the payment of two
times Executive's Base Salary for the year in which such termination
shall occur; (ii) payment of two times Executive's Annual Bonus for the
preceding year, (iii) any unpaid portion of the Signing Bonus or any
Annual Bonus for prior calendar years, accrued and unpaid vacation pay,
unreimbursed expenses incurred pursuant to Section 5(b), (c) (f), (g)
or (h), and any other benefits owed to Executive pursuant to any
written employee benefit
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plan or policy of the Company; (iv) any vested portion of the SERP
Benefit and the acceleration and immediate vesting of up to 1/2 of the
SERP Benefit ($1,250,000.00); (v) the portion of the Restricted Stock
Grant that is free from restrictions as of the date of termination and
the acceleration and immediate release of all restrictions from up to
25,000 shares of the Restricted Stock Grant that are subject to
restrictions as of the date of termination, and (vi) the vested portion
of Executive's Stock Options, and the acceleration and immediate
vesting of up to 250,000 of Executive's unvested Stock Options.
Executive shall have two (2) years from the date of such termination
Without Cause or by Executive for Good Reason to exercise all vested
Stock Options.
10. CHANGE OF CONTROL.
(a) Definition. A "Change of Control" shall be deemed to
have taken place if:
(i) any person or entity, including a "group" as
defined in Section 13(d)(3) of the Securities Exchange Act of
1934, other than the Company, a wholly-owned subsidiary
thereof, Xxxxxx X. Xxxxxxx or any member of his immediate
family or any trusts or other entities controlled by Xxxxxx X.
Xxxxxxx or any member of his immediate family, or any employee
benefit plan of the Company or any of its subsidiaries becomes
the beneficial owner of Company securities having 50% or more
of the combined voting power of the then outstanding
securities of the Company that may be cast for the election of
directors of the Company (other than as a result of the
issuance of securities initiated by the Company in the
ordinary course of business);
(ii) any person or entity, including a "group" as
defined in Section 13(d)(3) of the Securities Exchange Act of
1934, becomes the beneficial owner of Company securities
having greater voting power than the Company securities held
by Xxxxxx X. Xxxxxxx, any member of his immediate family, and
any trusts or other entities controlled by Xxxxxx X. Xxxxxxx
or any member of his immediate family.
(iii) as the result of, or in connection with, any
cash tender or exchange offer, merger or other business
combination, sale of assets or contested election, or any
combination of the foregoing transactions, the holders of all
the Company's securities entitled to vote generally in the
election of directors of the Company immediately prior to such
transaction constitute, following such transaction, less than
a majority of the combined voting power of the
then-outstanding securities of the Company or any successor
corporation or entity entitled to vote generally in the
election of the directors of the Company or such other
corporation or entity after such transactions; or
(iv) the Company sells all or substantially all
of the assets of the Company.
(b) Effect of Change of Control. In the event that within
one (1) year following a Change of Control, the Company terminates
Executive Without Cause or Executive terminates employment for Good
Reason, Executive shall be entitled to: (i) the payment of two times
Executive's Base Salary for the year in which such termination shall
occur; (ii) the payment of two times Executive's Annual Bonus for the
preceding year; (iii) any unpaid
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portion of the Signing Bonus or any Annual Bonus for prior calendar
years, accrued and unpaid vacation pay, unreimbursed expenses incurred
pursuant to Section 5(b), (c) (f), (g) or (h), and any other benefits
owed to Executive pursuant to any written employee benefit plan or
policy of the Company; (iv) any vested portion of the SERP Benefit and
the immediate vesting of any unvested portion of the SERP Benefit; (v)
the portion of the Restricted Stock Grant that is free from
restrictions as of the date of termination and the acceleration and
immediate release of all restrictions from all Restricted Stock Grants
that are subject to restrictions as of the date of termination; and
(vi) the vested portion of Executive's Stock Options and the
acceleration and immediate vesting of any unvested portion of
Executive's Stock Options. Executive shall have two (2) years from the
date of such termination to exercise all vested Stock Options.
(c) Going Private Transaction. Notwithstanding the
foregoing, if Xxxxxx X. Xxxxxxx or any member of his immediate family
or any trusts or other entities controlled by Xxxxxx X. Xxxxxxx or any
member of his immediate family initiates any Rule 13e-3 transaction, as
that term is defined in Rule 13e-3 promulgated under the Securities
Exchange Act of 1934 (the "Rule 13e-3 Transaction"), and all conditions
precedent to the Company's obligation to consummate the Rule 13e-3
Transaction shall have been satisfied, all unvested Stock Options shall
vest and all restrictions shall be removed from the Restricted Stock
Grant shares. Provided, however, that if the Rule 13e-3 Transaction is
not thereafter consummated, the acceleration of Stock Option vesting
and removal of Restricted Stock Grant restrictions shall be deemed to
be null and void.
11. EXCISE TAX REIMBURSEMENT. In connection with or arising out of
a Change in Control of the Company, in the event Executive shall be subject to
the tax imposed by Section 4999 of the Code (the "Excise Tax") in respect of any
payment or distribution by the Company or any other person or entity to or for
Executive's benefit, whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise, or whether prior to or
following any termination of Executive other than Termination for Cause or By
Executive without Good Reason (a "Payment"), the Company shall pay to Executive
an additional amount. The additional amount (the "Gross-Up Payment") shall be
equal to the Excise Tax, together with any federal, state and local income tax,
employment tax and any other taxes associated with this payment such that
Executive incurs no out-of-pocket expenses associated with the Excise Tax.
Provided, however, nothing in this Section shall obligate the Company to pay
Executive for any federal, state or local income taxes imposed upon Executive by
virtue of a Payment. For purposes of determining whether any of the Payments
will be subject to the Excise Tax and the amount of such Excise Tax the
following will apply:
(a) Determination of Parachute Payments. Any payments or
benefits received or to be received by Executive in connection with a
Change in Control of the Company or his termination of employment other
than by the Company for Cause or by Executive Without Good Reason shall
be treated as "parachute payments" within the meaning of Section
280G(b)(2) of the Code, and all "excess parachute payments" within the
meaning of Section 280G(b)(1) shall be treated as subject to the Excise
Tax, unless in the opinion of tax counsel selected by the Company's
independent auditors and acceptable to Executive such other payments or
benefits (in whole or in part) do not constitute parachute payments, or
such excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered within the
meaning of Section 280G(b)(3) of the Code, or are otherwise not subject
to the Excise Tax; and
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(b) Valuation of Benefits and Determination of Tax Rates.
The value of any non-cash benefits or any deferred payment or benefit
shall be determined by the Company's independent auditors in accordance
with proposed, temporary or final regulations under Section 280G(d)(3)
and (4) of the Code or, in the absence of such regulations, in
accordance with the principles of Section 280G(d)(3) and (4) of the
Code. For purposes of determining the amount of the Gross-Up Payment,
Executive shall be deemed to pay federal income taxes at the highest
marginal rate of federal income taxation in the calendar year in which
the Gross-Up Payment is to be made and state and local income taxes at
the highest marginal rate of taxation in the state and locality of
Executive's residence on the date of termination of his employment, net
of the applicable reduction in federal income taxes which could be
obtained from deduction of such state and local taxes.
(c) Repayment of Gross-Up by Executive and Possible
Additional Gross-Up by Company. In the event that the amount of Excise
Tax attributable to Payments is subsequently determined to be less than
the amount taken into account hereunder at the time of termination of
Executive's employment, he shall repay to the Company at the time that
the amount of such reduction in Excise Tax is finally determined the
portion of the Gross-Up Payment attributable to such reduction
(including the portion of the Gross-Up Payment attributable to the
Excise Tax, employment tax and federal (and state and local) income tax
imposed on the Gross-Up Payment being repaid by Executive if such
repayment results in a reduction in Excise Tax and/or a federal (and
state and local) income tax deduction) plus interest on the amount of
such repayment at the rate provided in section 1274(b)(2)(B) of the
Code. In the event that the Excise Tax attributable to Payments is
determined to exceed the amount taken into account hereunder at the
time of the termination of Executive's employment (including by reason
of any payment the existence or amount of which cannot be determined at
the time of the Gross-Up Payment), the Company shall make an additional
gross-up payment in respect of such excess (plus any interest and/or
penalties payable by Executive with respect to such excess) at the time
that the amount of such excess is finally determined.
12. EXECUTIVE COVENANTS.
(a) General. Executive and the Company understand and
agree that the purpose of the provisions of this Section 12 is to
protect legitimate business interests of the Company, as more fully
described below, and is not intended to impair or infringe upon
Executive's right to work, earn a living, or acquire and possess
property from the fruits of his labor. Executive hereby acknowledges
that the post-employment restrictions set forth in this Section 12 are
reasonable and that they do not, and will not, unduly impair his
ability to earn a living after the termination of his employment with
the Company. Therefore, subject to the limitations of reasonableness
imposed by law upon restrictions set forth herein, Executive shall be
subject to the restrictions set forth in this Section 12.
(b) Definitions. The following capitalized terms used in
this Section 12 shall have the meanings assigned to them below, which
definitions shall apply to both the singular and the plural forms of
such terms: "Confidential Information" means any confidential or
proprietary information possessed by the Company without limitation,
any confidential "know-how," customer lists, details of client and
consultant contracts, current and anticipated customer requirements,
pricing policies, price lists, market studies, business plans,
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operational methods, marketing plans or strategies, product development
techniques or plans, computer software programs (including object code
and source code), data and documentation, data base technologies,
systems, structures and architectures, inventions and ideas, past,
current and planned research and development, compilations, devices,
methods, techniques, processes, financial information and data,
business acquisition plans, new personnel acquisition plans and any
other information that would constitute a trade secret under the common
law or statutory law of the State of Tennessee.
"Person" means any individual or any corporation,
partnership, joint venture, association or other entity or
enterprise.
"Protected Employees" means employees of the Company
or its affiliated companies who are employed by the Company or
its affiliated companies at any time within six (6) months
prior to the date of termination of Executive for any reason
whatsoever or any earlier date (during the Restricted Period)
of an alleged breach of the Restrictive Covenants by
Executive.
"Restricted Period" means the period of Executive's
employment by the Company plus a period extending two (2)
years from the date of termination of employment; provided,
however, the Restricted Period shall be extended for a period
equal to the time during which Executive is in breach of his
obligations to the Company under this Section 12.
"Restrictive Covenants" means the restrictive
covenants contained in Section 12(c) hereof:
(c) Restrictive Covenants.
(i) Restriction on Disclosure and Use of
Confidential Information. Executive understands and agrees
that the Confidential Information constitutes a valuable asset
of the Company and its affiliated entities, and may not be
converted to Executive's own use or converted by Executive for
the use of any other Person. Accordingly, Executive hereby
agrees that Executive shall not, directly or indirectly, at
any time during the Restricted Period or thereafter, reveal,
divulge or disclose to any Person not expressly authorized by
the Company any Confidential Information, and Executive shall
not, at any time during the Restricted Period or thereafter,
directly or indirectly, use or make use of any Confidential
Information in connection with any business activity other
than that of the Company. The parties acknowledge and agree
that this Agreement is not intended to, and does not, alter
either the Company's rights or Executive's obligations under
any state or federal statutory or common law regarding trade
secrets and unfair trade practices,
(ii) Non-solicitation of Protected Employees.
Executive understands and agrees that the relationship between
the Company and each of its Protected Employees constitutes a
valuable asset of the Company and may not be converted to
Executive's own use or converted by Executive for the use of
any other Person. Accordingly, Executive hereby agrees that
during the Restricted Period Executive shall not directly or
indirectly on Executive's own behalf or on behalf of any
Person
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solicit any Protected Employee to terminate his or her
employment with the Company.
(iii) Non-interference with Company Opportunities.
Executive understands and agrees that all business
opportunities with which he is involved during his employment
with the Company constitute valuable assets of the Company and
its affiliated entities, and may not be converted to
Executive's own use or converted by Executive for the use of
any other Person. Accordingly, Executive hereby agrees that
during the Restricted Period or thereafter, Executive shall
not directly or indirectly on Executive's own behalf or on
behalf of any Person, interfere with, solicit, pursue, or in
any way make use of any such business opportunities.
(d) Exceptions from Disclosure Restrictions. Anything
herein to the contrary notwithstanding, Executive shall not be
restricted from disclosing or using Confidential Information that: (i)
is or becomes generally available to the public other than as a result
of an unauthorized disclosure by Executive or his agent; (ii) becomes
available to Executive in a manner that is not in contravention of
applicable law from a source (other than the Company or its affiliated
entities or one of its or their officers, employees, agents or
representatives) that is not known by Executive, after reasonable
investigation, to be bound by a confidential relationship with the
Company or its affiliated entities or by a confidentiality or other
similar agreement; or (iii) is required to be disclosed by law, court
order or other legal process; provided, however, that in the event
disclosure is required by law, court order or legal process, Executive
shall provide the Company with prompt notice of such requirement so
that the Company may seek an appropriate protective order prior to any
such required disclosure by Executive.
(e) Enforcement of the Restrictive Covenants.
(i) Rights and Remedies upon Breach. In the
event Executive breaches, or threatens to commit a breach of,
any of the provisions of the Restrictive Covenants, the
Company shall have the right and remedy to enjoin,
preliminarily and permanently, Executive from violating or
threatening to violate the Restrictive Covenants and to have
the Restrictive Covenants specifically enforced by any court
of competent jurisdiction, it being agreed that any breach or
threatened breach of the Restrictive Covenants would cause
irreparable injury to the Company and that money damages would
not provide an adequate remedy to the Company. The rights
referred to herein shall be independent of any others and
severally enforceable, and shall be in addition to, and not in
lieu of, any other rights and remedies available to the
Company at law or in equity.
(ii) Severability of Covenant. Executive
acknowledges and agrees that the Restrictive Covenants are
reasonable and valid in all respects. If any court determines
that any Restrictive Covenants, or any part thereof, is
invalid or unenforceable, the remainder of the Restrictive
Covenants shall not thereby be affected and shall be given
full effect, without regard to the invalid portions.
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13. COOPERATION IN FUTURE MATTERS. Executive hereby agrees that,
for a period of three (3) years following the date of his termination, he shall
cooperate with the Company's reasonable requests relating to matters that
pertain to Executive's employment by the Company, including, without limitation,
providing information of limited consultation as to such matters, participating
in legal proceedings, investigations or audits on behalf of the Company, or
otherwise making himself reasonably available to the Company for other related
purposes. Any such cooperation shall be performed at times scheduled taking into
consideration Executive's other commitments, and Executive shall be compensated
at a reasonable hourly or per diem rate to be agreed by the parties to the
extent such cooperation is required on more than an occasional and limited
basis. Executive shall also be reimbursed for all reasonable out of pocket
expenses. Executive shall not be required to perform such cooperation to the
extent it conflicts with any requirements of exclusivity of service for another
employer or otherwise, nor in any manner that in the good faith belief of
Executive would conflict with his rights under or ability to enforce this
Agreement.
14. INDEMNIFICATION. The Company shall indemnify Executive and
hold him harmless from and against any and all costs, expenses, losses, claims,
damages, obligations or liabilities (including actual attorneys fees and
expenses) arising out of any acts or failures to act by the Company, its
directors, employees or agents that occurred prior to the Effective Date, or
arising out of or relating to any acts, or omissions to act, made by Executive
on behalf of or in the course of performing services for the Company to the
fullest extent permitted by the Bylaws of the Company, or, if greater, as
permitted by applicable law, as the same shall be in effect from time to time.
If any claim, action, suit or proceeding is brought, or any claim relating
thereto is made, against Executive with respect to which indemnity may be sought
against the Company pursuant to this Section, Executive shall notify the Company
in writing thereof, and the Company shall have the right to participate in, and
to the extent that it shall wish, in its discretion, assume and control the
defense thereof, with counsel satisfactory to Executive.
15. EXECUTIVE'S REPRESENTATIONS AND WARRANTIES. Executive
represents and warrants that he is free to enter into this Agreement and, as of
the Effective Date, that he is not subject to any conflicting obligation or any
disability which shall prevent or hinder Executive's execution of this Agreement
or the performance of his obligations hereunder; that no lawsuits or claims are
pending or, to Executive's knowledge, threatened against Executive; and that he
has never been subject to bankruptcy, insolvency, or similar proceedings, has
never been convicted of a felony or a crime involving moral turpitude, and has
never been subject to an investigation or proceeding by or before the Securities
and Exchange Commission or any state securities commission. The Company shall
have the authority to conduct an independent investigation into the background
of Executive and Executive agrees to fully cooperate in any such investigation.
The Company shall notify Executive if it intends to conduct such an
investigation.
16. NOTICES. Any and all notices or other communications required
or permitted to be given under any of the provisions of this Agreement shall be
in writing and shall be deemed to have been duly given when personally delivered
or mailed by first class registered mail, return receipt requested, or by
commercial courier or delivery service, or by facsimile or electronic mail,
addressed to the parties at the addresses set forth below (or at such other
address as any party may specify by notice to all other parties given as
aforesaid):
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(a) if to the Company, to:
Xxxxxxx Entertainment Company
Xxx Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxx Xxxxxx
Facsimile Number: (000) 000-0000
E-Mail: xxxxxxx@xxxxxxxxxxxxxxxxxxxx.xxx
With a copy to:
Xxxxxx X. Xxxxxxxx, Esq.
Xxxxxxxx & Xxx, PLC
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
Facsimile Number: (000) 000-0000
E-Mail: XXxxxxxxx@xxxxxxxxxxx.xxx
(b) if to Executive, to:
Xxxxx X. Xxxx
c/o Gaylord Entertainment Company
Xxx Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
With a copy to:
Xxxxx X. Lake, Esq.
Xxxxx, Xxxxxx & Xxxxxxx PLLC
000 X Xxxxx Xxxxxx
Xxxxx Xxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Facsimile Number: (000) 000-0000
E-Mail: Xxxxx@xxxxxx.xxx
and/or to such other persons and addresses as any party shall have specified in
writing to the other by notice as aforesaid.
17. MISCELLANEOUS.
(a) Entire Agreement. This writing and the Exhibits
hereto constitute the entire agreement of the parties with respect to
the subject matter hereof and may not be modified, amended, or
terminated except by a written agreement signed by all of the parties
hereto. Nothing contained in this Agreement shall be construed to
impose any obligation on the Company to renew this Agreement and
neither the continuation of employment nor any other conduct shall be
deemed to imply a continuing obligation upon the expiration of this
Agreement.
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(b) Assignment; Binding Effect. This Agreement shall not
be assignable by Executive, but it shall be binding upon, and shall
inure to the benefit of, his heirs, executors, administrators, and
legal representatives. This Agreement shall be binding upon the Company
and inure to the benefit of the Company and its respective successors
and permitted assigns. This Agreement may only be assigned by the
Company to an entity controlling, controlled by, or under common
control with the Company; provided, however, that no such assignment
shall relieve the Company of any of its obligations hereunder.
(c) Waiver. No waiver of any breach or default hereunder
shall be considered valid unless in writing, and no such waiver shall
be deemed a waiver of any subsequent breach or default of the same or
similar nature.
(d) Enforceability. Subject to the terms of Section 12(e)
hereof, if any provision of this Agreement shall be held invalid or
unenforceable, such invalidity or unenforceability shall attach only to
such provision and shall not in any manner affect or render invalid or
unenforceable any other severable provision of this Agreement, and this
Agreement shall be carried out as if any such invalid or unenforceable
provision were not contained herein, unless the invalidity or
unenforceability of such provision substantially impairs the benefits
of the remaining portions of this Agreement.
(e) Headings. The section headings contained herein are
for the purposes of convenience only and are not intended to define or
limit the contents of the sections.
(f) Counterparts. This Agreement may be executed in two
or more counterparts, all of which taken together shall be deemed one
original.
(g) Confidentiality of Agreement. The parties agree that
the terms of this Agreement as they relate to compensation, benefits,
and termination shall, unless otherwise required by law (including, in
the Company's reasonable judgment, as required by federal and state
securities laws), be kept confidential; provided, however, that any
party hereto shall be permitted to disclose this Agreement or the terms
hereof with any of its legal, accounting, or financial advisors
provided that such party ensures that the recipient shall comply with
the provisions of this Section 17(g).
(h) Governing Law. This Agreement shall be deemed to be a
contract under the laws of the State of Tennessee and for all purposes
shall be construed and enforced in accordance with the internal laws of
said state.
(i) No Third Party Beneficiary. This Agreement shall not
confer any rights or remedies upon any person or entity other than the
parties hereto and their respective successors and permitted assigns.
(j) Arbitration. Any controversy or claim between or
among the parties hereto, including but not limited to those arising
out of or relating to this Agreement or any related agreements or
instruments, including any claim based on or arising from an alleged
tort, shall be determined by binding arbitration in accordance with the
Federal Arbitration Act (or if not applicable, the law of the state of
Tennessee), the Commercial Arbitration Rules of the American
Arbitration Association in effect as of the date hereof, and the
provisions set forth below. In the event of any inconsistency, the
provisions herein shall control. Judgment upon
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any arbitration award may be entered in any court having jurisdiction.
Any party to the Agreement may bring an action, including a summary or
expedited proceeding, to compel arbitration of any controversy or claim
to which this Agreement applies in any court having jurisdiction over
such action; provided, however, that all arbitration proceedings shall
take place in Nashville, Tennessee. The arbitration body shall set
forth its findings of fact and conclusions of law with citations to the
evidence presented and the applicable law, and shall render an award
based thereon. In making its determinations and award(s), the
arbitration body shall base its award on applicable law and precedent,
and shall not entertain arguments regarding punitive damages, nor shall
the arbitration body award punitive damages to any person. Each party
shall bear its own costs and expenses.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
XXXXXXX ENTERTAINMENT COMPANY
By: /s/ X. X. Xxxxxxx XX
---------------------------------------
X. X. Xxxxxxx XX, Chairman
Board of Directors
EXECUTIVE:
/s/ Xxxxx X. Xxxx
---------------------------------------
Xxxxx X. Xxxx
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EXHIBIT A
Bonus Plan Targets
20
EXHIBIT B
STOCK OPTION AGREEMENT
XXXXXXX ENTERTAINMENT COMPANY
1997 OMNIBUS STOCK OPTION AND INCENTIVE PLAN
This STOCK OPTION AGREEMENT (the "Agreement") is by and between Xxxxxxx
Entertainment Company, a Delaware corporation (the "Company"), and Xxxxx X. Xxxx
(the "Grantee"), under the Company's 1997 Omnibus Stock Option and Incentive
Plan, as amended (the "Plan").
Pursuant to the terms of that certain Executive Employment Agreement,
dated as of April 23, 2001, between the Company and Grantee (the "Employment
Agreement"), in order to provide an incentive to the Grantee to exert his utmost
efforts on behalf of the Company, the Grantee has been awarded a nonqualified
stock option (the "Option") to purchase certain shares of Common Stock of the
Company, par value $.01 per share ("Common Stock"), on the terms and conditions
set forth in the Plan and this Agreement.
SECTION 1. THE OPTION GRANT. The Grantee is hereby granted a
Nonqualified Stock Option to purchase 500,000 shares of Common Stock of the
Company at a purchase price of $25.25 per share. Said Nonqualified Stock Option
is subject to the terms set forth below.
SECTION 2. EXERCISE OF OPTION RIGHTS.
2.1 Times When the Option Can Be Exercised. The Option shall vest
and become exercisable pursuant to the terms of the Employment Agreement.
2.2 Term of Option. The term during which the Option may be
exercised shall terminate on April 22, 2011 subject to earlier termination as
provided for in Section 3 of this Agreement or in the Employment Agreement (the
"Option Term").
2.3 Notice of Exercise. If the Grantee wishes to exercise his
rights hereunder, the Grantee must give notice of exercise to the Company at the
Company's principal office. The Grantee must give the notice in writing in form
satisfactory to the Compensation Committee of the Board of Directors of the
Company (the "Committee"). The Grantee must include with the notice full payment
for any shares being purchased under the Option (unless, in accordance with the
Plan, the Committee shall have provided otherwise), and any taxes due under
Section 2.4.2 hereof.
2.4 Payment.
2.4.1 Payment for any Common Stock being purchased under
the Option must be made in cash, by certified or bank check, or by delivering to
the Company Common Stock of the Company which the Grantee already owns. If the
Grantee pays by delivering Common Stock of the Company, the Grantee must include
with the notice of exercise the certificates for the Common Stock duly endorsed
for transfer. The Company will value the Common Stock delivered by the Grantee
at its Fair Market Value as of the date of receipt as set forth in the Plan and,
if the value of
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the Common Stock delivered by the Grantee exceeds the amount required under this
Section 2.4.1, will return to the Grantee cash in an amount equal to the value,
so determined, of any fractional portion of a share of Common Stock exceeding
the amount required and will issue a certificate for any whole share of Common
Stock exceeding the amount required.
2.4.2 The Grantee cannot buy any Common Stock under the
Option unless, at the time the Grantee gives notice of exercise to the Company,
the Grantee includes with such notice payment in cash, by certified or bank
check, of all local, state, or federal withholding taxes due, if any, on account
of buying Common Stock under the Option or gives other assurance to the Company
satisfactory to the Committee of the payment of those withholding taxes.
2.5 Transfer.
2.5.1 The Company shall deliver certificates for Common
Stock bought under the Option as soon as practicable after receiving payment for
the Common Stock and for any taxes under Section 2.4.2 hereof, and all documents
required under the Plan and this Agreement. The certificates will be made out in
the name of the Grantee.
2.5.2 If the Plan or any law, regulation, or interpretation
requires the Company to take any action regarding the Common Stock before the
Company issues certificates for the Common Stock being purchased, the Company
may delay delivering the certificates for the Common Stock for the period
necessary to take that action.
SECTION 3. TERMINATION.
3.1 Generally. Except as otherwise provided in the Employment
Agreement, this Agreement and the Plan, the Option may not be exercised unless
the Grantee is then in the service or employ of the Company or a Parent or
Subsidiary (collectively for purposes of this Agreement, the "Company"), and
unless the Grantee has remained continuously so employed since the date of grant
of the Option. Unless otherwise set forth in the Employment Agreement or
determined by the Committee at or after the date of grant, in the event that the
employment of the Grantee terminates, any portion of the Option that is
exercisable at the time of such termination may be exercised by Grantee for a
period of 90 days from the date of such termination or until the expiration of
the stated term of the Option, whichever period is shorter. Provided, however,
if Grantee remains employed by Company until the expiration of the Employment
Period, Grantee shall have until the expiration of the Option Term to exercise
the Options.
3.2 Death or Disability. If the Grantee dies while employed by the
Company (or within the period of extended exercisability provided herein), or if
the Grantee's employment terminates by reason of Disability, the Option will
become fully vested and exercisable (notwithstanding the provisions of Section
2.1 hereof), and may be exercised by the Grantee, by the legal representative of
the Grantee's estate, or by the legatee under the Grantee's will at any time
until the expiration of the term of the Option provided in Section 2.2 hereof.
3.3 Retirement. If the Grantee's employment terminates by reason
of Retirement, any portion of the Option may be exercised by Grantee, to the
extent such portion was exercisable at the time of such Retirement or on such
accelerated basis as the Committee may determine at or after the date of grant
(but before the date of such Retirement) at any time until the expiration of the
term of the Option provided in Section 2.2 hereof.
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3.4 Cause or by Grantee Without Good Reason. If the Grantee's
employment is terminated by the Company for Cause or by Grantee Without Good
Reason, as determined by the Committee in its sole discretion, the Option, to
the extent not theretofore exercised, shall terminate on the date of such
termination.
3.5 Committee Discretion. Notwithstanding the provisions of
subsections 3.1 through 3.4 above, but subject to the provisions of Section 4
below, the Committee may, in its sole discretion, at or after the date of grant
(but before the date of termination), establish different terms and conditions
pertaining to the effect on any Option of termination of Grantee's employment,
to the extent permitted by applicable federal and state law.
SECTION 4. GOVERNING PROVISIONS. This Agreement is made under
and subject to the provisions of the Plan, and all of the provisions of the Plan
are also provisions of this Agreement. Capitalized terms used but not defined
herein shall have the same meanings ascribed to such terms in the Plan. If there
is a difference or conflict between the provisions of this Agreement and the
provisions of the Plan, the provisions of the Plan will govern. If there is a
difference or conflict between the provisions of this Agreement and/or the
provisions of the Plan and the provisions of the Employment Agreement, the
provisions of the Employment Agreement will govern. By signing this Agreement,
the Grantee confirms that he has received a copy of the Plan.
SECTION 5. MISCELLANEOUS.
5.1 Entire Agreement. This Agreement, the Employment Agreement and
the Plan contain all of the understandings between the Company and Grantee
concerning the Option and include any earlier negotiations and understandings.
The Company and Grantee have made no promises, agreements, conditions, or
understandings relating to the Option, either orally or in writing, that are not
included in this Agreement, the Employment Agreement or the Plan.
5.2 Employment. None of the provisions of this Agreement or the
Plan will interfere with or limit the right of the Company to end the Grantee's
employment pursuant to the terms of the Employment Agreement.
5.3 Captions. The captions and section numbers appearing in this
Agreement are inserted only as a matter of convenience. They do not define,
limit, construe, or describe the scope or intent of the provisions of this
Agreement.
5.4 Counterparts. This Agreement may be executed in counterparts,
each of which when signed by the Company and the Grantee will be deemed an
original and all of which together will be deemed the same agreement.
5.5 Notice. Any notice or communication having to do with this
Agreement must be given by personal delivery or by certified mail, return
receipt requested, addressed, if to the Company or the Committee, to the
principal office of the Company and, if to Grantee, to the Grantee's last known
address on the personnel records of the Company.
5.6 Amendment. This Agreement may be amended by the Company,
provided that unless the Grantee consents in writing, the Company cannot amend
this Agreement if the amendment
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will materially change or impair the Grantee's rights under this Agreement and
such change is not to the Grantee's benefit.
5.7 Succession and Transfer. Each and all of the provisions of
this Agreement are binding upon and inure to the benefit of the Company and the
Grantee and their heirs, successors and assigns; however, neither the Option nor
this Agreement is transferable, without the prior written consent of the
Committee, other than (i) by will or by the laws of descent and distribution,
(ii) by the Grantee to a member of his Immediate Family, or (iii) to a trust for
the benefit of the Grantee or a member of his Immediate Family.
5.8 Governing Law. This Agreement shall be governed and construed
exclusively in accordance with the law of the State of Delaware applicable to
agreements to be performed in the State of Delaware to the extent it may apply.
The Company and the Grantee have caused this Agreement to be signed and
delivered as of the __ day of ________________, 2001.
XXXXXXX ENTERTAINMENT COMPANY
By:
--------------------------------- --------------------------------------
Xxxxx X. Xxxx Xxx Xxxxxx, Senior Vice President and
Chief Administrative Officer
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EXHIBIT C
RESTRICTED STOCK AGREEMENT
XXXXXXX ENTERTAINMENT COMPANY
1997 OMNIBUS STOCK OPTION AND INCENTIVE PLAN
This RESTRICTED STOCK AGREEMENT (the "Agreement") is by and between
Xxxxxxx Entertainment Company, a Delaware corporation (the "Company"), and Xxxxx
X. Xxxx, (the "Grantee"), pursuant to the Company's 1997 Omnibus Stock Option
and Incentive Plan (the "Plan").
SECTION 1. RESTRICTED STOCK AWARD. Effective April 23, 2001 the
Grantee is hereby awarded the right to receive 50,000 shares (the "Restricted
Stock") of the Company's Common Stock, Par Value $ .01 per share (the "Common
Stock"), subject to the terms and conditions of this Agreement and the Plan.
SECTION 2. VESTING OF THE AWARD. The Grantee shall become vested
in the number of shares of Restricted Stock as provided in the Executive's
Employment Agreement between the Company and Grantee dated as of April 23, 2001,
(the "Employment Agreement") (such number of shares referred to herein as the
"Vested Stock") on the corresponding date set forth in the Employment Agreement
(such date referred to herein as the "Vested Date"); provided that, as of the
Vested Date, there has been no prior termination of Grantee's employment that,
under the terms of the Employment Agreement, would preclude vesting of all or
any part of the Restricted Stock.
SECTION 3. DISTRIBUTION OF VESTED STOCK. Subject to the terms of
the Employment Agreement, shares of Vested Stock will be distributed to the
Grantee as soon as practicable after the Vested Date.
SECTION 4. VOTING RIGHTS AND DIVIDENDS. Prior to the vesting of
the Restricted Stock, certificates representing shares of the Restricted Stock
will bear an appropriate legend in accordance with Section 10(b) of the Plan and
will be held by the trustee of the Rabbi Trust as provided in the Employment
Agreement. The trustee of the Rabbi Trust shall be entitled to vote the
Restricted Stock and receive dividends thereon. No voting or dividend rights
shall inure to the Grantee with respect to unvested shares of Restricted Stock
following a termination pursuant to the terms of the Employment Agreement.
SECTION 5. GOVERNING PROVISIONS. This Agreement is made under
and subject to the provisions of the Plan, and all of the provisions of the Plan
are also provisions of this Agreement. Capitalized terms used but not defined
herein shall have the same meanings ascribed to such terms in the Plan. If there
is a difference or conflict between the provisions of this Agreement and the
provisions of the Plan, the provisions of the Plan will govern. If there is a
difference or conflict between the provisions of this Agreement and/or the
provisions of the Plan and the provisions of the Employment Agreement, the
provisions of the Employment Agreement will govern. By signing this Agreement,
the Grantee confirms that he has received a copy of the Plan.
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SECTION 6. MISCELLANEOUS.
6.1 Entire Agreement. This Agreement, the Employment
Agreement, and the Plan contain the entire understanding and agreement
between the Company and the Grantee concerning the Restricted Stock
granted hereby and supersede any prior or contemporaneous negotiations
and understandings. The Company and the Grantee have made no promises,
agreements, conditions, or understandings relating to the Restricted
Stock, either orally or in writing, that are not included in this
Agreement, the Plan, or the Employment Agreement.
6.2 Employment. None of the provisions of this Agreement
or the Plan will interfere with or limit the right of the Company to
terminate the Grantee's employment pursuant to the terms of the
Employment Agreement.
6.3 Captions. The captions and section numbers appearing
in this Agreement are inserted only as a matter of convenience. They do
not define, limit, construe, or describe the scope or intent of the
provisions of this Agreement.
6.4 Counterparts. This Agreement may be executed in
counterparts, each of which when signed by the Company and the Grantee
will be deemed an original and all of which together will be deemed the
same agreement.
6.5 Notice. Any notice or communication having to do with
this Agreement must be given by personal delivery or by certified mail,
return receipt requested, addressed, if to the Company, to the
principal office of the Company and, if to the Grantee, to the
Grantee's last known address on the personnel records of the Company.
6.6 Amendment. This Agreement may be amended by the
Company, provided that unless the Grantee consents in writing, the
Company cannot amend this Agreement if the amendment will materially
change or impair the Grantee's rights under this Agreement and such
change is not to the Grantee's benefit. Nevertheless, the Committee
shall have the authority to cancel all or any portion of any
outstanding restrictions prior to the Vested Date with respect to any
or all of the shares of the Restricted Stock awarded on such terms and
conditions as the Committee shall deem appropriate.
6.7 Succession and Transfer. Each and all of the
provisions of this Agreement are binding upon and inure to the benefit
of the Company and the Grantee and their heirs, successors, and
assigns. However, neither the Restricted Stock nor this Agreement is
transferable prior to the Vested Date other than by will or by the laws
of descent and distribution.
6.8 Governing Law. This Agreement shall be governed and
construed exclusively in accordance with the law of the State of
Delaware applicable to agreements to be performed in the State of
Delaware to the extent it may apply.
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IN WITNESS WHEREOF, the Company and the Grantee have executed
this Agreement to be effective as of _____________, 2001.
GRANTEE: XXXXXXX ENTERTAINMENT COMPANY
By:
------------------------------- ----------------------------------------
Xxxxx X. Xxxx Xxx Xxxxxx, Senior Vice President and
Chief Administrative Officer
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EXHIBIT D
DEFERRED COMPENSATION RABBI TRUST
FOR THE BENEFIT OF XXXXX X. XXXX
This Agreement made as of this 23rd day of April, 2001, by and between
XXXXXXX ENTERTAINMENT COMPANY (the "Company") and SunTrust Bank, Nashville, N.A.
(Trustee);
WHEREAS, Xxxxx X. Xxxx ("Executive") is employed as President and Chief
Executive Officer of Company; and
WHEREAS, Company and Executive have entered into that certain Executive
Employment Agreement (the "Employment Agreement") dated as of April 23, 2001,
wherein Company has obligated itself to make certain deferred compensation
payments to Executive; and
WHEREAS, all capitalized terms not defined herein shall have the same
meaning given to those terms in the Employment Agreement; and
WHEREAS, Company in accordance with the Employment Agreement, desires
to establish a trust (hereinafter called "Trust") and to contribute to the Trust
assets that shall be held therein, invested and reinvested as the case may be,
subject to the claims of Company's creditors in the event of Company's
Insolvency, as herein defined, until paid to Executive or his beneficiaries in
such manner and at such times as specified in the Employment Agreement or under
certain limited circumstances returned to Company; and
WHEREAS, it is the intention of the parties that this Trust shall
constitute an unfunded arrangement maintained for the purpose of providing
deferred compensation for a member of a select group of management or highly
compensated employees for purposes of Title I of the Employee Retirement Income
Security Act of 1974;
WHEREAS, it is the intention of Company to make contributions to the
Trust to provide itself with a source of funds to assist it in the meeting of
its liabilities under the Employment Agreement;
NOW, THEREFORE, the parties do hereby establish the Trust and agree
that the Trust shall be comprised, held and disposed of as follows:
SECTION 1. ESTABLISHMENT OF TRUST; SEPARATE SHARES.
(a) Account A. Company has deposited with Trustee, an amount equal
to the deferred portion of Executive's Signing Bonus, as provided in Section
3(a) of the Employment Agreement. Company shall deposit with Trustee on or
before the dates specified in the Employment Agreement (i) an amount of cash
equal to the deferred portion, if any, of his Guaranteed Bonus as provided in
Section 3(c)(i) of the Employment Agreement, and (ii) any other compensation
that is deferred pursuant to the provisions of Section 6 of the Employment
Agreement.
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(b) Account B. Within five (5) days of the date hereof, Company
shall deposit with Trustee Fifty Thousand (50,000) restricted shares of
Company's common stock, to be held, administered and disposed of by Trustee as
provided in this Trust Agreement, pursuant to Section 4(b) of the Employment
Agreement.
(c) Subject to the provisions of Section 12(a), the Trust hereby
established shall be irrevocable.
(d) The Trust is intended to be a grantor trust, of which Company
is the grantor, within the meaning of subpart E, part I, subchapter J, chapter
1, subtitle A of the Internal Revenue Code of 1986, as amended, and shall be
construed accordingly.
(e) Accounts A and B shall be administered separately and separate
books and records shall be kept for each Account.
(f) The principal of the Trust, and any earnings thereon shall be
held separate and apart from other funds of Company and shall be used
exclusively for the uses and purposes of Executive and general creditors as
herein set forth. Executive and his beneficiaries shall have no preferred claim
on, or any beneficial ownership interest in, any assets of the Trust. Any rights
created under the Employment Agreement and this Trust Agreement shall be mere
unsecured contractual rights of Executive and his beneficiaries against Company.
Any assets held by the Trust will be subject to the claims of Company's general
creditors under federal and state law in the event of Insolvency, as defined in
Section 3(a) herein.
(g) Company, in its sole discretion, may at any time, or from time
to time, make additional deposits of cash or other property in trust with
Trustee to augment the principal of one or more of the Accounts established
herein, to be held, administered and disposed of by Trustee as provided in this
Trust Agreement. Neither Trustee, Executive nor any beneficiary shall have any
right to compel such additional deposits.
SECTION 2. PAYMENT TO EXECUTIVE OR HIS BENEFICIARIES.
(a) Company shall deliver to Trustee a schedule (the "Payment
Schedule") that provides the amounts payable to Executive (and/or his
beneficiaries), a formula or other instructions acceptable to Trustee for
determining the amount so payable, the Account of the Trust from which such
amount is payable, the form in which such amount is to be paid (as provided for
or available under the Employment Agreement), and the time of commencement for
payment of such amounts. Except as otherwise provided herein, Trustee shall make
payments to Executive and his beneficiaries in accordance with such Payment
Schedule. Trustee shall make provision for the reporting and withholding of any
federal, state or local taxes that may be required to be withheld with respect
to the payment of benefits pursuant to the terms of the Employment Agreement and
shall pay amounts withheld to the appropriate taxing authorities or determine
that such amounts have been reported, withheld and paid by Company.
(b) The entitlement of Executive or his beneficiaries to benefits
under the Employment Agreement shall be determined by Company, and any claim for
such benefits shall be considered and reviewed under the procedures set out in
that Agreement.
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(c) Company may make payment of benefits directly to Executive or
his beneficiaries as they become due under the terms of the Employment
Agreement. Company shall notify Trustee of its decision to make payment of
benefits directly prior to the time amounts are payable to Executive or his
beneficiaries.
SECTION 3. TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST
BENEFICIARY WHEN COMPANY IS INSOLVENT.
(a) Trustee shall cease payment of benefits to Executive or his
beneficiaries if Company is Insolvent. Company shall be considered "Insolvent"
for purposes of this Trust Agreement if (i) Company is unable to pay its debts
as they become due, or (ii) Company is subject to a pending proceeding as a
debtor under the United States Bankruptcy Code.
(b) At all times during the continuance of this Trust, as provided
in Section 1(f) hereof, the principal and income of the Trust shall be subject
to claims of general creditors of Company under federal and state law as set
forth below.
(i) The Board of Directors of Company or the Chief
Executive Officer shall have the duty to inform Trustee and Executive
in writing of Company's Insolvency. If a person claiming to be a
creditor of Company alleges in writing to Trustee that Company has
become Insolvent, Trustee shall determine whether Company is Insolvent
and, pending such determination, Trustee shall discontinue payment of
benefits to Executive or his beneficiaries.
(ii) Unless Trustee has actual knowledge of Company's
Insolvency, or has received notice from Company or a person claiming to
be a creditor alleging that Company is Insolvent, Trustee shall have no
duty to inquire whether Company is Insolvent. Trustee may in all events
rely on such evidence concerning Company's solvency as may be furnished
to trustee and that provides Trustee with a reasonable basis for making
a determination concerning Company's solvency.
(iii) If at any time Trustee has determined that Company is
Insolvent, Trustee shall discontinue payments to Executive or his
beneficiaries and shall hold the assets of the Trust for the benefit of
Company's general creditors. Nothing in this Trust Agreement shall in
any way diminish any rights of Executive or his beneficiaries to pursue
their rights as general creditors of Company with respect to benefits
due under the Employment Agreement or otherwise.
(iv) Trustee shall resume the payment of benefits to
Executive or his beneficiaries in accordance with Section 2 of this
Trust Agreement only after Trustee has determined that Company is not
Insolvent (or is no longer Insolvent).
(c) Provided that there are sufficient assets, if Trustee
discontinues the payment of benefits from the Trust pursuant to Section 3(b)
hereof and subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments due to
Executive or his beneficiaries under the terms of the Employment Agreement for
the period of such discontinuance, less the aggregate amount of any payments
made to Executive or his beneficiaries by Company in lieu of the payments
provided for hereunder during such period of discontinuance.
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SECTION 4. PAYMENTS TO COMPANY. Except as provided in Section 3
hereof, Company shall have no right or power to direct Trustee to return to
Company or to direct to others any of the trust assets before all payments of
benefits have been made to Executive and his beneficiaries pursuant to the terms
of the Employment Agreement.
SECTION 5. INVESTMENT AUTHORITY.
(a) All rights associated with assets of the Trust shall be
exercised by Trustee or the person designated by Trustee, and shall in no event
be exercisable by or rest with Executive. Company may direct Trustee to invest
the assets of the Trust, and shall be held harmless from acting in such manner.
(b) Trustee is authorized to invest cash contributed to the Trust
in Account A in one or more mutual funds, without the requirement of
diversification, and pursuant to the terms of the Employment Agreement.
(c) Trustee is authorized to hold Company common stock contributed
to the Trust in Account B as Company stock, provided that Trustee shall be
authorized, pursuant to the terms of the Employment Agreement, at the direction
of Company, to sell any shares which become unrestricted in each calendar year
beginning in the year 2002 and to invest the proceeds in one or more mutual
funds.
(d) Unless Company instructs Trustee otherwise, Trustee is
authorized and directed to reinvest dividends in any of the Accounts in the same
investment as the investment giving rise to the dividend.
(e) Company shall not bear any risk associated with the investment
of the assets of the Trust in accordance with the terms of the Employment
Agreement.
SECTION 6. DISPOSITION OF INCOME; ALLOCATION OF EXPENSES.
(a) During the term of this Trust, all income received by the
Trust, net of expenses, shall be accumulated and reinvested in such manner as
Trustee deems appropriate.
(b) While this Trust remains a grantor trust with respect to
Company, Company shall bear all taxes attributable to income earned by Trust
assets.
(c) Transaction and investment expenses, other than Trustee fees
and administrative expenses, shall be allocated to and borne by Trust assets.
SECTION 7. ACCOUNTING BY TRUSTEE. Trustee shall keep accurate
and detailed records of all investments, receipts, disbursements, and all other
transactions required to be made, including such specific records as shall be
agreed upon in writing between Company and Trustee. Within 60 days following the
close of each calendar quarter and within 30 days after the removal or
resignation of Trustee, Trustee shall deliver to Company and Executive a written
account of its administration of the Trust during such calendar quarter or
during the period from the close of the last preceding calendar quarter to the
date of such removal or resignation, setting forth all investments, receipts,
disbursements and other transactions effected by it, including a description of
all securities and
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investments purchased and sold with the cost or net proceeds of such purchases
or sales (accrued interest paid or receivable being shown separately), and
showing all cash, securities and other property held in the Trust at the end of
such calendar quarter or as of the date of such removal or resignation, as the
case may be.
SECTION 8. RESPONSIBILITY OF TRUSTEE.
(a) Trustee shall act with the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent person acting in like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims, provided, however, that
Trustee shall incur no liability to any person for any action taken pursuant to
direction, request or approval given by Company which is contemplated by, and in
conformity with, the terms of the Employment Agreement or this Trust and is
given in writing by Company. In the event of a dispute between Company and a
party, Trustee may apply to a court of competent jurisdiction to resolve the
dispute.
(b) If Trustee undertakes or defends any litigation arising in
connection with this Trust, Company agrees to indemnify Trustee against
Trustee's costs, expenses and liabilities (including, without limitation,
attorneys' fees and expenses) relating thereto and to be primarily liable for
such payments. If Company does not pay such costs, expenses and liabilities in a
reasonably timely manner, Trustee may obtain payment from the Trust.
(c) Trustee may consult with legal counsel (who may also be
counsel for Company generally) with respect to any of its duties or obligations
hereunder.
(d) Trustee may hire agents, accountants, actuaries, investment
advisors, financial consultants or other professionals to assist it in
performing any of its duties or obligations hereunder.
(e) Trustee shall have, without exclusion, all powers conferred on
Trustees by Tennessee Code Annotated, ss. 00-00-000 and other applicable law,
unless expressly provided otherwise herein, provided, however, that if an
insurance policy is held as an asset of the Trust, Trustee shall have no power
to name a beneficiary of the policy other than the Trust, to assign the policy
(as distinct from conversion of the policy to a different form) other than to a
successor Trustee, or to loan to any person the proceeds of any borrowing
against such policy.
(f) Notwithstanding any powers granted to Trustee pursuant to this
Trust Agreement or to applicable law, Trustee shall not have any power that
could give this Trust the objective of carrying on a business and dividing the
gains therefrom, within the meaning of section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Internal Revenue Code.
SECTION 9. COMPENSATION AND EXPENSES OF TRUSTEE. Company shall
pay all administrative and Trustee's fees and expenses.
SECTION 10. RESIGNATION AND REMOVAL OF TRUSTEE.
(a) Trustee may resign at any time by written notice to Company
and Executive, which shall be effective 30 days after receipt of such notice
unless Company, Executive and Trustee agree otherwise.
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(b) Trustee may be removed by Company on 30 days notice or upon
shorter notice accepted by Trustee. A copy of any such notice shall be provided
to Executive on the same date as such notice is provided to Trustee.
(c) Upon resignation or removal of Trustee and appointment of a
successor Trustee, all assets shall subsequently be transferred to the successor
Trustee. The transfer shall be completed within 30 days after receipt of notice
of resignation, removal or transfer, unless Company extends the time limit.
(d) If Trustee resigns or is removed, a successor shall be
appointed, in accordance with Section 11 hereof, by the effective date of
resignation or removal under paragraphs (a) or (b) of this section. If no such
appointment has been made, Trustee may apply to a court of competent
jurisdiction for appointment of a successor or for instructions. All expenses of
Trustee in connection with the proceeding shall be allowed as administrative
expenses of the Trust.
SECTION 11. APPOINTMENT OF SUCCESSOR.
(a) If Trustee resigns or is removed in accordance with Section
10(a) or (b) hereof, Company may, with the consent of Executive, appoint any
third party, such as a bank trust department or other party that may be granted
corporate trustee powers under state law, as a successor to replace Trustee upon
resignation or removal. The appointment shall be effective when accepted in
writing by the new Trustee, who shall have all of the rights and powers of the
former Trustee, including ownership rights in the Trust assets. The former
Trustee shall execute any instrument necessary or reasonably requested by
Company or the successor Trustee to evidence the transfer.
(b) The successor Trustee need not examine the records and acts of
any prior Trustee and may retain or dispose of existing Trust assets, subject to
Sections 7 and 8 hereof. The successor Trustee shall not be responsible for and
Company shall indemnify and defend the successor Trustee from any claim or
liability resulting from any action or inaction of any prior Trustee or from any
other past event, or any condition existing at the time it becomes successor
Trustee.
SECTION 12. AMENDMENT OR TERMINATION.
(a) This Trust Agreement may be amended by a written instrument
executed by Trustee and Company, subject to the consent of Executive.
Notwithstanding the foregoing, no such amendment shall conflict with the terms
of the Employment Agreement or shall make the Trust revocable.
(b) The Trust shall not terminate until the date on which
Executive and his beneficiaries are no longer entitled to benefits pursuant to
the terms of the Employment Agreement. Upon termination of the Trust any assets
remaining in the Trust shall be returned to Company.
(c) Upon written approval of Executive or beneficiaries entitled
to payment of benefits pursuant to the terms of the Employment Agreement,
Company may terminate this Trust prior to the time all benefit payments under
the Employment Agreement have been made. All assets in the Trust at termination
shall be returned to Company.
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SECTION 13. MISCELLANEOUS.
(a) Any provision of this Trust Agreement prohibited by law shall
be ineffective to the extent of any such prohibition, without invalidating the
remaining provisions hereof.
(b) Benefits payable to Executive or his beneficiaries under this
Trust Agreement may not be anticipated, assigned (either at law or in equity),
alienated, pledged, encumbered or subjected to attachment, garnishment, levy,
execution or other legal or equitable process.
(c) This Trust Agreement shall be governed by and construed in
accordance with the laws of Tennessee.
SECTION 14. EFFECTIVE DATE. The effective date of this Trust
Agreement shall be April ______, 2001.
IN WITNESS WHEREOF, the parties, by their respective duly authorized
representatives, have executed this Agreement as of the date first recited
above.
XXXXXXX ENTERTAINMENT COMPANY
By:
-----------------------------------------
Xxx Xxxxxx, Chief Administrative Officer
Attest:
-------------------------
TRUSTEE:
SUNTRUST BANK, NASHVILLE, N.A.
By:
----------------------------------------
Attest:
-------------------------
Its:
----------------------------------------
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