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EXHIBIT (10k)
RETIREMENT AGREEMENT BETWEEN XXXXX X. XXXXXX
AND THE COMPANY DATED AS OF APRIL 1, 1998
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RETIREMENT AGREEMENT
This RETIREMENT AGREEMENT is made and entered into as of the 30th day
of April, 1998, by and between XXXXX X. XXXXXX, an individual ("Retiree"), and
XXXXXXX CORPORATION, an Alabama corporation (the "Corporation").
WITNESSETH:
WHEREAS, the Corporation is engaged in the design, manufacture and
marketing of athletic and leisure clothing and fabrics, with its principal place
of business located in Alexander City, Alabama; and
WHEREAS, Retiree has been employed by the Corporation for in excess of
27 years in various executive positions, most recently serving as its Executive
Vice President and Chief Financial Officer; and
WHEREAS, the Corporation requested that Retiree retire, and Retiree
agreed to retire, from active employment by the Corporation upon the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the terms, conditions, covenants
and premises herein contained, it is mutually agreed by and between Retiree and
the Corporation as follows:
1. Retirement. Effective April 30, 1998, Retiree retired from
active employment by the Corporation.
2. Compensation and Benefits.
(a) Retirement Compensation.
(1) Commencing on May 1, 1998 and continuing
through April 30, 2000, Retiree shall be paid
retirement compensation of $27,666.67 per calendar
month (the "Retirement Compensation"), to be paid at
the times and in the manner specified in the
Corporation's general policies regarding the payment
of employment compensation as established from time
to time. The initial six monthly payments hereunder
shall be in full satisfaction of all amounts which
may be due Retiree under the Corporation's Salaried
Employees Severance Pay Plan. The Corporation further
agrees that (i) Retiree's 1998 bonus under the
Short-Term Incentive Plan component of the
Corporation's Executive Incentive Program shall be
computed and paid in accordance with the terms of the
Plan, prorated for the portion of fiscal year 1998
for which Retiree was employed by the Company. For
federal, state and local tax purposes, said
compensation shall be treated as "wages" and the
Corporation shall withhold
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all appropriate taxes therefrom and shall remit such
taxes, together with the taxes imposed by ss. 3111 of
the Internal Revenue Code of 1986 on the Corporation,
to the applicable taxing authorities; provided that
subject to the Corporation's obligation to withhold
and remit income tax on said compensation to the
applicable taxing authorities, Retiree shall be
responsible for and pay any additional income tax due
and owing thereon.
(2) In addition, the Corporation shall cause
Retiree to accrue benefits under the Corporation's
Revised Pension Plan and Supplemental Retirement
Benefit Plan during the period commencing May 1, 1998
and ending on April 30, 2000, as if Retiree were
employed by the Corporation and received a monthly
salary equal to the monthly amount of the Retirement
Compensation during said period. If Retiree is
prohibited from participating in, or accruing such
benefit under, any such plans, the Corporation shall
provide Retiree comparable benefits outside such
plans. Retiree shall be responsible for and pay any
income taxes due or owing by Retiree as the result of
the Corporation's providing (i) participation and
coverage for Retiree, and where applicable, his
spouse, under such retirement plans, and (ii)
comparable benefits outside such retirement plans in
the event Retiree is prohibited from participating in
any such plans to the extent provided in this
subparagraph (2) of this Section 2(a).
(b) Continuation of Retirement Compensation upon Death of
Retiree Prior to April 30, 2000. If Retiree dies on or before
April 30, 2000, the Corporation shall continue to pay to
Retiree's spouse Xxxxx X. Xxxxxx, if she is living and was
married to Retiree at the time of Retiree's death, or if
Retiree's spouse Xxxxx X. Xxxxxx (i) is not living at the time
of Retiree's death or was not married to Retiree at the time
of Retiree's death, or (ii) Retiree's spouse Xxxxx X. Xxxxxx
should subsequently die, to Retiree's estate, amounts equal to
the remaining unpaid Retirement Compensation to be paid or
provided to Retiree under Paragraph (a)(1) of this Section 2,
which would have been paid to Retiree had he not died, with
said amounts to be paid as and when they would have been paid
to Retiree had he not died.
3. Employee Benefits.
(a) Medical Plans. Until the end of the calendar month in
which Retiree's 65th birthday occurs, Retiree shall, in the
same manner and at the same cost to him as would be applicable
to executives of the Corporation holding positions similar to
the position which Retiree held on the date of his retirement,
continue participation and coverage for himself and, where
applicable, his spouse under the following employee and fringe
benefit plans and policies of the Corporation in which he
participated at the time of his retirement, as, and to the
extent, such plans or policies may hereafter from time to time
be in effect: i.e., the Corporation's (i) Group Health Plan,
(ii) Cancer
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Expense Protection Plan, and (iii) Dental Insurance Plan;
provided that if prior to the end of the calendar month in
which his 65th birthday occurs, Retiree is employed by another
entity offering a group health insurance plan in which Retiree
employees of such employer, the Corporation shall no longer be
obligated to permit Retiree, and his spouse, if applicable, to
participate in any of the foregoing plans of the Corporation,
except as otherwise provided in paragraph (b) of this Section
3. If Retiree is prohibited from participating in any such
plan or policy under the terms of such policy or applicable
law, the Corporation shall provide Retiree comparable benefits
outside such plan or policy.
(b) Retiree Fringe Benefit Plans. Retiree shall, in the
same manner and cost to him as is applicable to other retirees
of the Corporation who are retired on the date hereof
("Existing Retirees"), be permitted to participate and obtain
coverage for himself and, where applicable, his spouse under
such employee and fringe benefit plans and policies of the
Corporation as Existing Retirees of the Corporation are
permitted to participate, as, and to the extent, such plans or
policies may hereafter from time to time be in effect with
respect to the Existing Retirees.
(c) Taxes. Retiree shall be responsible for and pay any
income taxes due or owning by Retiree as the result of the
Corporation's providing (i) participation and coverage for
Retiree, and where applicable, his spouse, under the plans and
policies designated in this Section 3 and (ii) comparable
benefits outside such plans and policies in the event Retiree
is prohibited from participating in any such plans or
policies.
4. Pension Benefits.
(a) Retiree shall be entitled to receive, and this
Agreement shall not affect, Retiree's benefits payable under
the Corporation's Revised Pension Plan, 401(k) Retirement
Savings Plan and Supplemental Retirement Benefit Plan, which
benefits shall be paid at the times and in the manner as
Retiree has or may hereafter elect under the terms of said
plans. Notwithstanding the preceding sentence, Retiree may
elect to commence receiving benefits under said Plans
beginning on the 1st day of the calendar month following the
calendar month in which Retiree's 62nd birthday occurs, and
receive benefits under such plans determined as if Retiree
(and Retiree's spouse, if applicable) were the ages on such
beginning benefit date that Retiree (and Retiree's spouse, if
applicable) would have been at the end of the calendar month
in which Retiree's 65th birthday will occur. If the
Corporation is prohibited from paying benefits in such amounts
under any such plans, the Corporation shall provide Retiree
comparable benefit payments or supplemental payments outside
such Plans.
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(b) To the extent the provisions of Section 2(a)(2) and Section 4
of this Agreement constitute an "employee benefit plan" under
the Employee Retirement Income Security Act of 1974, as
amended, the claims procedure for such "employee benefit plan"
shall be the claims procedure under the Corporation's
Supplemental Executive Retirement Plan.
5. Exercise of Stock Options. Effective upon Retiree's retirement
from the active employment by the Corporation, all options granted by
the Corporation to Retiree for the purchase of the Corporation's stock
pursuant to the Corporation's 1993 Executive Long-Term Incentive Plan
(the "1993 Plan"), or any predecessor stock option plan sponsored by
the Corporation, were immediately vested and non-cancelable, and may be
exercised by Retiree at any time on or before April 30, 2001 in the
manner specified in the 1993 Plan or predecessor stock option plan. The
Corporation acknowledges that Retiree possesses the following options
to purchase shares of the Corporation's common stock:
[Correct dates, amounts and prices to be inserted or
verified - I have obtained this information from
proxy statements and the numbers tie to the year end
1997 tables in the 1998 Proxy Statement]
(1) Option dated July 24, 1991, to purchase
[10,000] shares of the Corporation's common stock at
a price of $26.375 per share.
(2) Option dated July 28, 1993, to purchase
[6,400] shares of the Corporation's common stock at a
price of $27.50 per share.
(3) Option dated January 26, 1994, to purchase
[6,800] shares of the Corporation's common stock at a
price of $27.4375 per share.
(4) Option dated January 25, 1995, to purchase
[6,600] shares of the Corporation's common stock at a
price of $30.00 per share.
(5) Option dated January 24, 1996, to purchase
[7,200] shares of the Corporation's common stock at a
price of $27.25 per share.
(6) Option dated January 22, 1997, to purchase
[6,900] shares of the Corporation's common stock at a
price of $30.875 per share.
(7) Option dated January 28, 1998, to purchase
[8,900] shares of the Corporation's common stock at a
price of $24.375 per share.
6. Covenant Not to Compete. Commencing upon the execution of this
Agreement and continuing through April 30, 2000, Retiree shall not,
directly or indirectly, individually or as a partner, corporate
employee, member, stockholder (other than as a shareholder of less than
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1% of a corporation whose shares are listed on a national or regional
securities exchange or have been registered under Section 12(g) of the
Securities Exchange Act of 1934), officer, director, consultant or
advisor, work for or lend assistance to a competitor of the Corporation
engaged in manufacturing, marketing, selling or distributing
activewear, athletic uniforms, knit shirts, socks, uniform fabrics or
licensed sports apparel, or solicit any business from any customer of
the Corporation for or on behalf of any such competitor of the
Corporation. It is further agreed that due to the irreparable injury
and damage to the Corporation resulting from Retiree's violation of
this covenant, the Corporation will be entitled to injunctive relief
against the violation by Retiree of this covenant in addition to all
other remedies otherwise available to the Corporation. If any court of
competent jurisdiction should hold that the restrictions contained in
this Section 7 are unreasonable, said restrictions shall be deemed to
be reduced, but only to the extent necessary, in the opinion of said
court, to make them reasonable.
7. Confidential Information. Retiree agrees that all confidential
information that comes into his possession by reason of his employment
by the Corporation is the property of the Corporation. Retiree shall
not, during the term of this Agreement or thereafter, disclose or
acknowledge the content of any confidential information to any person
other than an employee of the Corporation who is authorized to possess
such confidential information or Retiree's advisors, such as
accountants or attorneys. For the purposes of this Section 8,
"confidential information" shall include all information relating to
the operations of the Corporation which has not been specifically
designated for release to the public by an authorized representative of
the Corporation, including, without limitation, trade secrets, plans,
pricing information, customer lists and other information developed by
or originated by the Corporation for its own use.
8. Offers to Personnel. Retiree acknowledges that the employees
of the Corporation have been and will be trained at great expense by
the Corporation, and the Corporation has a compelling interest in
maintaining its contractual relationship and expectation of future
contractual relationship with its employees. In addition, if the
employees of the Corporation were to terminate their relationship with
the Corporation and render services to Retiree, Retiree would be
unfairly benefitted without adequate compensation to the Corporation,
by the investment of the Corporation. Accordingly, Retiree covenants
that he shall not from the date hereof through April 30, 2000, directly
or indirectly, impair or initiate any attempt to impair the
relationship or expectancy of a continuing relationship which exists or
will exist between the Corporation and its employees or make offers or
contracts of employment or offers or contracts for services with such
employees or with any partnership, corporation or association through
which such employees may render services or employment to Retiree.
9. Resignation as Director and Trustee. Retiree hereby resigns,
effective immediately, as a director of the Corporation and as a
trustee under the Corporation's Revised Pension Plan and under all
other employee benefit plans or trusts, if any, of which he serves as
trustee or other fiduciary.
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10. Release and Indemnification. The Corporation, on its own
behalf and on behalf of its subsidiaries, affiliates, successors and
assigns, (i) releases, acquits and forever discharges Retiree, his
successors, assigns and personal representatives, for any and all
claims, actions, causes of actions, demands, damages, costs and
expenses whatsoever, which the Corporation, or anyone acting by it or
on its behalf, has, may have or which may hereafter accrue, and (ii)
agrees to defend and indemnify Retiree, his successors, assigns and
personal representatives, against and hold them harmless from any and
all claims, actions, causes of action, demands, costs and expenses
whatsoever, which in any way arise out of or relate to Retiree's
service as a trustee of any employee benefit or retirement plan
sponsored by the Corporation.
11. Notices. Any notice required or permitted to be given under
this Agreement shall be in writing and placed in the United States
Certified Mail, addressed to the party entitled to receive said notice,
at the following addresses:
(a) If to Retiree:
Xxxxx X. Xxxxxx
0000 Xxxxxxxx
Xxxxxxxxx Xxxx, Xxxxxxx 00000
(b) If to the Corporation:
Xxxxxxx Corporation
000 Xxx Xxxxxx
P. O. Xxx 000
Xxxxxxxxx Xxxx, Xxxxxxx 00000-0000
or at such other address as may be specified from time to time in notices given
in accordance with the provisions of this Section 12.
12. Assignment. Neither this Agreement, nor the rights or
obligations of any party hereunder, may be assigned without the prior
written consent of the other party; provided that in the event the
Corporation is merged into another corporation or all or substantially
all of the Corporation's assets are transferred to another corporation,
such other corporation shall assume all of the obligations of the
Corporation hereunder, and such transaction shall not require the
consent of Retiree for the rights of the Corporation hereunder to be
assigned to such other corporation.
13. Waiver of Breach. The waiver by any party hereto of a breach
of any provision of this Agreement shall not operate or be construed as
a waiver of any subsequent breach by any party.
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14. Section Headings. The headings of the sections of this
Agreement are solely for the purpose of convenience and are not a part
hereof, and shall not be used in the construction or interpretation of
any provision.
15. Modifications. This Agreement may not be changed or modified,
nor may any provision hereof be waived, except by an agreement in
writing executed by the party against whom enforcement of the change,
modification or waiver is asserted.
16. Succession. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their heirs, personal
representatives, successors and assigns.
17. Governing Law. To the extent not preempted by federal law,
this Agreement shall be construed and interpreted under, and the rights
and obligations of the parties hereunder shall be controlled and
governed by, the laws of the State of Alabama.
18. Execution of Release; Effect on Agreement. Concurrently with
the execution and delivery of this Agreement by the parties hereto, and
in consideration of the Corporation's delivery hereof, the Retiree is
executing and delivering in favor of the Corporation a Release as to
certain matters. This Agreement shall not become effective until ten
days following the date of execution and delivery of said Release. In
the event of the revocation of said Release by the Retiree in
accordance with the provisions thereof, this Agreement shall be null
and void and shall be of no further force and effect.
19. Severability. Should any court of competent jurisdiction
decide, hold, adjudge or decree that any provision, paragraph, clause
or term of this Agreement is void or unenforceable in whole or as
applied in a particular situation, such determination shall not effect
any other provision of this Agreement, and all other provisions of this
Agreement shall remain in full force and effect in such situation, and
all provisions of this Agreement shall remain in full force and effect
in any and all other situations.
IN WITNESS WHEREOF, Retiree and the Corporation have executed, or
caused to be executed, this Agreement on December 7, 1998, but as of
the date herein first above written.
"RETIREE"
/s/ Xxxxx X. Xxxxxxxx /s/ Xxxxx X. Xxxxxx
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Witness Xxxxx X. Xxxxxx
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"EMPLOYER"
ATTEST: XXXXXXX CORPORATION, AN ALABAMA
CORPORATION
By /s/ Xxxxx X. Xxxxxxxx By /s/ Xxxx X. Xxxx
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Its Secretary Its Chairman, President & CEO
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