Exhibit 10.2
XXXXXXXX CORPORATION
EMPLOYMENT AGREEMENT
This agreement (this "Agreement") has been entered into this 15th
day of November, 2005, by and between Xxxxxxxx Corporation, a Missouri
corporation (the "Company"), and Xxxxxxx X. Xxxxxxxx, an individual (the
"Employee").
WHEREAS, the Board of Directors of the Company has determined that
it is in the best interests of the Company and its stockholders to retain
the Employee in the employ of the Company as Vice President, Financial
Analysis of the Company's Textile Services business operations as of the
Effective Date (as defined below); and
WHEREAS, this Agreement contains the terms and conditions that have
been negotiated by the Company and the Employee as an inducement to the
Employee to continue in the employment of the Company and as an incentive to
reinforce and encourage the continued attention and dedication of the
Employee to the Company and its business throughout the Employment Period
(as defined below), even in the face of a potential Change in Control;
NOW THEREFORE, in consideration of the mutual promises herein
contained, the parties hereby agree as follows:
SECTION 1: DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. For purposes of this Agreement, the following
words and phrases, whether or not capitalized, shall have the meanings
specified below, unless the context plainly requires a different meaning.
1.1(a) "ACCRUED OBLIGATIONS" has the meaning set forth
in Section 4.1(a) of this Agreement.
1.1(b) "ANNUAL BONUS" has the meaning set forth in
Section 2.4(b) of this Agreement.
1.1(c) "ANNUAL BASE SALARY" has the meaning set forth in
Section 2.4(a) of this Agreement.
1.1(d) "BOARD" means the Board of Directors of the
Company.
1.1(e) "CAUSE" has the meaning set forth in Section 3.3
of this Agreement.
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1.1(f) "CHANGE IN CONTROL" means:
(i) The acquisition by any individual, entity or
group, or a Person (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act) of
ownership of 25% or more of either (a) the then
outstanding shares of common stock of the Company
(the "Outstanding Company Common Stock") or (b)
the combined voting power of the then outstanding
voting securities of the Company entitled to vote
generally in the election of directors (the
"Outstanding Company Voting Securities"); or
(ii) Individuals who, as of the date hereof,
constitute the Board (the "Incumbent Board")
cease for any reason to constitute at least a
majority of the Board; provided, however, that
any individual becoming a director subsequent to
the date hereof whose election, or nomination for
election, by the Company's stockholders was
approved by a vote of at least a majority of the
directors then comprising the Incumbent Board
shall be considered as though such individual
were a member of the Incumbent Board, but
excluding, as a member of the Incumbent Board,
any such individual whose initial assumption of
office occurs as a result of either an actual or
threatened election contest (as such terms are
used in Rule l4a-11 of Regulation l4A promulgated
under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board; or
(iii) Approval by the stockholders of the Company
of a reorganization, merger or consolidation, in
each case, unless, following such reorganization,
merger or consolidation, (1) more than 50% of,
respectively, the then outstanding shares of
common stock of the corporation resulting from
such reorganization, merger or consolidation and
the combined voting power of the then outstanding
voting securities of such corporation entitled to
vote generally in the election of directors is
then beneficially owned, directly or indirectly,
by all or substantially all of the individuals
and entities who were the beneficial owners,
respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities
immediately prior to such reorganization, merger
or consolidation in substantially the same
proportions as their ownership, immediately prior
to such reorganization, merger or consolidation,
of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the
case may be, (2) no Person beneficially owns,
directly or indirectly, 25% or more of,
respectively, the then outstanding shares of
common stock of the corporation resulting from
such reorganization, merger or consolidation or
the combined voting power of the then outstanding
voting securities of such corporation, entitled
to vote generally in the election of directors,
and (3) at least a majority of the members of the
board of directors of
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the corporation resulting from such reorganization,
merger or consolidation were members of the
Incumbent Board at the time of the execution of
the initial agreement providing for such
reorganization, merger or consolidation; or
(iv) Approval by the stockholders of the Company
of (a) a complete liquidation or dissolution of
the Company or (b) the sale or other disposition
of all or substantially all of the assets of the
Company, other than to a corporation, with
respect to which following such sale or other
disposition, (1) more than 50% of, respectively,
the then outstanding shares of common stock of
such corporation and the combined voting power of
the then outstanding voting securities of such
corporation entitled to vote generally in the
election of directors is then beneficially owned,
directly or indirectly, by all or substantially
all of the individuals and entities who were the
beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to
such sale or other disposition in substantially
the same proportion as their ownership,
immediately prior to such sale or other
disposition, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities,
as the case may be, (2) no Person beneficially
owns, directly or indirectly, 25% or more of,
respectively, the then outstanding shares of
common stock of such corporation and the combined
voting power of the then outstanding voting
securities of such corporation entitled to vote
generally in the election of directors and (3) at
least a majority of the members of the board of
directors of such corporation were members of the
Incumbent Board at the time of the execution of
the initial agreement or action of the Board
providing for such sale or other disposition of
assets of the Company.
1.1(g) "CHANGE IN CONTROL DATE" means the date that a
Change in Control first occurs.
1.1(h) "COMPANY" has the meaning set forth in the first
paragraph of this Agreement and, with regard to
successors, in Section 6.2 of this Agreement.
1.1(i) "DATE OF TERMINATION" has the meaning set forth
in Section 3.8 of this Agreement.
1.1(j) "DISABILITY" has the meaning set forth in Section
3.2 of this Agreement.
1.1(k) "DISABILITY EFFECTIVE DATE" has the meaning set
forth in Section 3.2 of this Agreement.
1.1(l) "EFFECTIVE DATE" means the date of this Agreement.
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1.1(m) "EMPLOYMENT PERIOD" means the period beginning on
the Effective Date and ending on the Date of Termination.
1.1(n) "EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended.
1.1(o) "GOOD REASON" has the meaning set forth in
Section 3.4 of this Agreement.
1.1(p) "INCUMBENT BOARD" has the meaning set forth in
Section 1.1(f)(ii) of this Agreement.
1.1(q) "NOTICE OF TERMINATION" has the meaning set forth
in Section 3.7 of this Agreement.
1.1(r) "OTHER BENEFITS" has the meaning set forth in
Section 4.3 of this Agreement.
1.1(s) "OUTSTANDING COMPANY COMMON STOCK" has the meaning
set forth in Section 1.1(f)(i) of this Agreement.
1.1(t) "OUTSTANDING COMPANY VOTING SECURITIES" has the
meaning set forth in Section 1.1(f)(i) of this Agreement.
1.1(u) "PERSON" means any "person" within the meaning of
Sections 13(d) and 14(d) of the Exchange Act.
1.2 GENDER AND NUMBER. When appropriate, pronouns in this
Agreement used in the masculine gender include the feminine gender, words in
the singular include the plural, and words in the plural include the
singular.
1.3 HEADINGS. All headings in this Agreement are included solely
for ease of reference and do not bear on the interpretation of the text.
Accordingly, as used in this Agreement, the terms "Article" and "Section"
mean the text that accompanies the specified Article or Section of the
Agreement.
1.4 APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Missouri, without
reference to its conflict of law principles.
SECTION 2: TERMS AND CONDITIONS OF EMPLOYMENT.
2.1 PERIOD OF EMPLOYMENT; TERM OF AGREEMENT. The Employee shall
remain in the employ of the Company throughout the Employment Period in
accordance with the terms and provisions of this Agreement. Either party to
this Agreement may terminate the Employment Period (and the Employee's
employment with the Company) at any time by giving the other party a Notice
of
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Termination, subject only to the obligation of the Company to pay the
benefits to the Employee as specified in Section 4 of this Agreement. The
term of this Agreement shall begin as of the Effective Date and shall end on
the Date of Termination.
2.2 POSITIONS AND DUTIES.
2.2(a) Throughout the Employment Period, the Employee
shall serve as Vice President, Financial Analysis of the
Company's Textile Services business, subject to the
reasonable directions of the principal executive officer
of the Textile Services business and the principal
executive officer and the principal financial officer of
the Company. The Employee shall have such authority and
shall perform such duties as shall be specified by the
principal executive officer of the Textile Services
business and the principal executive officer and the
principal financial officer of the Company from time to
time.
2.2(b) Throughout the Employment Period (but excluding any
periods of vacation and sick leave to which the Employee
is entitled), the Employee shall devote reasonable
attention and time during normal business hours to the
business and affairs of the Company and shall use his
reasonable best efforts to perform faithfully and
efficiently such responsibilities as are assigned to him
under or in accordance with this Agreement; provided that,
it shall not be a violation of this Section 2.2(b) for the
Employee to (i) serve on corporate, civic or charitable
boards or committees, (ii) deliver lectures or fulfill
speaking engagements, or (iii) manage personal
investments, so long as such activities do not
significantly interfere with the performance of the
Employee's responsibilities as an employee of the Company
in accordance with this Agreement or violate the Company's
conflict of interest policy as is in effect at such times.
2.3 SITUS OF EMPLOYMENT. Throughout the Employment Period, the
Employee's services shall be performed at the Company's divisional
headquarters offices located in the greater Atlanta, Georgia metropolitan
area.
2.4 COMPENSATION.
2.4(a) ANNUAL BASE SALARY. The Employee will initially
receive an annual base salary ("Annual Base Salary") of
One Hundred Sixty Thousand Dollars ($160,000.00), which
shall be paid in equal or substantially equal semi-monthly
installments. During the Employment Period, the Annual
Base Salary payable to the Employee shall be reviewed at
least once annually and shall be increased at the
discretion of the Company but shall not be reduced without
the consent of the Employee.
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2.4(b) ANNUAL INCENTIVE BONUSES. In addition to Annual
Base Salary, the Employee will be entitled to earn an
incentive bonus on an annual basis (the "Annual Bonus")
during the Employment Period. The Board will set, on or
before the 90th day of such fiscal year, the criteria
which will be required to be achieved by the Employee
during the fiscal year to earn all or a specified
percentage of his Annual Bonus. The maximum Annual Bonus
that the Employee may earn is 60%, and the target bonus is
30%, of the Employee's salary paid during the fiscal year.
If a Change in Control occurs, the Employee will receive a
lump-sum payment on or before the Change in Control Date
equal to the Employee's maximum Annual Bonus, prorated
with the numerator being the number of months in the
fiscal year to the Change in Control Date (including the
month in which the Change in Control occurs as a full
month) and the denominator being 12. This payment will be
in lieu of any right of the Employee to receive an Annual
Bonus for the fiscal year in which the Change in Control
occurs.
2.4(c) LONG-TERM INCENTIVE PLAN AWARDS. The Employee will
be entitled to earn long-term incentive bonus awards
payable in accordance with a plan established by the Board
or the Compensation and Organization Committee (the
"Long-Term Bonus"). The Employee will be eligible to earn
a Long-Term Bonus during the Employment Period on the
basis of the achievement of performance goals during a
three-year performance period. The Board will set, on or
before the 90th day of such fiscal year, the performance
goals to be achieved during the performance period that is
then commencing in order for the Employee to earn all or a
specified portion of his Long-Term Bonus. The Long-Term
Bonus amount that may be earned by the Employee will be
set at 35% of the Employee's then-current Annual Base
Salary.
2.4(d) SAVINGS AND DEFERRED COMPENSATION PLANS. Throughout
the Employment Period, the Employee shall be entitled to
participate in all savings, deferred compensation and
retirement plans generally available to other peer
officers of the Company, including the Company's 401(k)
Plan.
2.4(e) WELFARE BENEFIT PLANS. Throughout the Employment
Period, the Employee and/or the Employee's family, as the
case may be, shall be eligible for participation in and
shall receive all benefits under welfare benefit plans,
practices, policies and programs provided by the Company
(including, without limitation, medical, prescription,
dental, disability, salary continuance, employee life,
group life, accidental death and travel accident insurance
plans and programs) to the extent generally available to
other peer employees of the Company.
2.4(f) BUSINESS EXPENSES. Throughout the Employment
Period, the Employee shall be entitled to receive prompt
reimbursement for all reasonable business expenses
incurred by the Employee in the conduct of the business of
the Company (including travel and entertainment expenses)
in accordance with the policies, practices and
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procedures generally applicable within the Company.
2.4(g) OFFICE AND FURNISHINGS. Throughout the Employment
Period, the Employee shall be entitled to an office or
offices of a size and with furnishings and other
appointments commensurate with his office, duties and
responsibilities with the Company.
2.4(h) VACATION. Throughout the Employment Period, the
Employee shall be entitled to paid vacation equal to three
(3) weeks per year.
SECTION 3: TERMINATION OF EMPLOYMENT.
3.1 DEATH. The Employee's employment shall terminate
automatically upon the Employee's death during the Employment Period.
3.2 DISABILITY. If the Company determines in good faith that the
Disability of the Employee has occurred during the Employment Period
(pursuant to the definition of Disability set forth below), the Company may
give to the Employee written notice in accordance with Section 7.2 of its
intention to terminate the Employee's employment. In such event, the
Employee's employment with the Company shall terminate effective on the
thirtieth (30th) day after receipt of such notice by the Employee (the
"Disability Effective Date"), provided that, within the thirty (30) days
after such receipt, the Employee shall not have returned to full-time
performance of the Employee's duties. For purposes of this Agreement,
"Disability" shall mean that the Employee has been unable to perform the
services required of the Employee under this Agreement on a full-time basis
for a period of one hundred eighty (180) consecutive regular business days
by reason of a physical and/or mental condition. "Disability" shall be
deemed to exist when certified by a physician selected by the Company and
acceptable to the Employee or the Employee's legal representative (such
agreement as to acceptability not to be withheld unreasonably). The Employee
will submit to such medical or psychiatric examinations and tests as such
physician deems necessary to make any such Disability determination.
3.3 TERMINATION FOR CAUSE. The Company may terminate the
Employee's employment during the Employment Period for "Cause," which shall
mean termination based upon: (a) the Employee's willful and continued
failure to substantially perform his duties with the Company (other than as
a result of incapacity due to physical or mental condition), after a written
demand for substantial performance is delivered to the Employee by the
Company, which specifically identifies the manner in which the Employee has
not substantially performed his duties, (b) the Employee's commission of an
act constituting a criminal offense involving moral turpitude, dishonesty,
or breach of trust, or (c) the Employee's material breach of any provision
of this Agreement. For purposes of this Section 3.3, no act or failure to
act on the Employee's part shall be considered "willful" unless done or
omitted to be done without good faith on the part of the Employee and
without the Employee's reasonable belief that the act or omission was in the
best interest of the Company.
3.4 GOOD REASON. The Employee may terminate his employment
with the Company during
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the Employment Period for "Good Reason," which shall mean:
3.4(a) the assignment to the Employee of any duties
inconsistent in any respect with the Employee's position
(including status, offices, titles and reporting
requirements), authority, duties or responsibilities as
contemplated by Section 2.2(a) or any other action by the
Company which results in a diminution in such position,
authority, duties or responsibilities, excluding for this
purpose any action not taken in bad faith by the Company
and which the Company remedies promptly after receipt of
notice thereof given by the Employee;
3.4(b) (i) the failure by the Company to continue in
effect any benefit or compensation plan, stock ownership
plan, life insurance plan, health and accident plan or
disability plan to which the Employee is entitled as
specified in Section 2.4, provided that the Company may
amend, modify or replace any such plan or plans as long as
the Employee is entitled to benefits under the amended,
modified or replaced plan or plans that are substantially
similar to those of the plan or plans so amended, modified
or replaced, (ii) the taking of any action by the Company
which would adversely affect the Employee's participation
in, or materially reduce the Employee's benefits under,
any plans described in Section 2.4, or deprive the
Employee of any benefits enjoyed by the Employee as
described in Section 2.4(f) and (g), or (iii) the failure
by the Company to provide the Employee with paid vacation
to which the Employee is entitled as described in Section
2.4(h);
3.4(c) the Company's requiring the Employee to be based at
any office or location other than that described in
Section 2.3;
3.4(d) a material breach by the Company of any provision
of this Agreement;
3.4(e) any purported termination by the Company of the
Employee's employment otherwise than as expressly
permitted by this Agreement; or
3.4(f) in connection with a Change in Control, the failure
of a successor of the Company to expressly assume and
agree to perform this Agreement pursuant to the provisions
of Section 6.2 of this Agreement prior to the Change in
Control Date; provided, however, that a termination of
employment by the Employee: (A) subsequent to an express
assumption and agreement to perform this Agreement by such
successor on or after the Change in Control Date, or (B)
subsequent to a date that is two years after a Change in
Control Date, shall not be deemed to be for "Good Reason"
under this subsection.
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For purposes of this Section, any good faith determination of "Good
Reason" made by the Employee shall be conclusive unless and until such
determination is overturned by a court of competent jurisdiction.
3.5 VOLUNTARY TERMINATION BY THE EMPLOYEE. The Employee may
voluntarily terminate his employment with the Company for any reason or for
no reason at any time during the Employment Period.
3.6 TERMINATION BY THE COMPANY WITHOUT CAUSE. The Company may
terminate the Employee's employment with the Company for any reason or for
no reason, without citing Cause, at any time during the Employment Period,
subject to the provisions of Section 4 of this Agreement.
3.7 NOTICE OF TERMINATION. Any termination by the Company or by
the Employee shall be communicated by Notice of Termination given in
accordance with Section 7.2 to the other party. For purposes of this
Agreement, a "Notice of Termination" means a written notice which (i)
indicates the specific termination provision in this Agreement relied upon,
(ii) to the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Employee's
employment under the provision so indicated, and (iii) if the Date of
Termination (as defined in Section 3.8 hereof) is other than the date of
receipt of such notice, specifies the Date of Termination. The failure by
the Employee or the Company to set forth in the Notice of Termination any
fact or circumstance which contributes to a showing of Good Reason or Cause
shall not waive any right of the Employee or the Company hereunder or
preclude the Employee or the Company from asserting such fact or
circumstance in enforcing the Employee's or the Company's rights hereunder.
3.8 DATE OF TERMINATION. "Date of Termination" means (i) if the
Employee's employment is terminated by the Company for Cause or any other
reason, the date of receipt by the Employee of the Notice of Termination or
any later date specified therein, as the case may be, (ii) if the Employee's
employment is terminated by reason of death or Disability, the date of death
of the Employee or the Disability Effective Date, as the case may be, or
(iii) if the Employee's employment is terminated by the Employee for Good
Reason, the date specified in the Notice of Termination which date shall not
be more than thirty (30) or less than fifteen (15) days after the receipt of
such notice; or (iv) if the Employee's employment is terminated by the
Employee voluntarily (either prior to or after a Change in Control Date),
the date that is specified in the Notice of Termination.
SECTION 4: CERTAIN BENEFITS UPON TERMINATION.
4.1 TERMINATION WITHOUT CAUSE OR FOR GOOD REASON NOT IN
CONNECTION WITH A CHANGE IN CONTROL. If, prior to a Change in Control Date
during the Employment Period (except in the event that one of the following
terminations of employment occurs within the six-month period prior to the
earlier of (a) a Change in Control Date or (b) the execution of a definitive
agreement or contract that eventually results in a Change in Control, which
shall result in the payment of severance benefits set forth in Section 4.2
of this Agreement), (i) the Company shall terminate the Employee's
employment without
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Cause, or (ii) the Employee shall terminate his employment for Good Reason,
the Employee shall be entitled to the payment of the benefits provided
below:
4.1(a) ACCRUED OBLIGATIONS. Within thirty (30) days after
the Date of Termination, the Company shall pay to the
Employee the sum of (i) the Employee's Annual Base Salary
through the Date of Termination to the extent not
previously paid, (ii) the accrued benefit payable to the
Employee under any compensation plan, program or
arrangement in which the Employee is a participant subject
to the computation of benefits provisions of such plan,
program or arrangement, and (iii) any accrued vacation
pay; in each case to the extent not previously paid (the
"Accrued Obligations").
4.1(b) ANNUAL BASE SALARY CONTINUATION. For a period of
twelve (12) months beginning in the month immediately
subsequent to the month in which the Date of Termination
occurs, the Company shall pay to the Employee, on a
semi-monthly basis consistent with its then-existing
payroll practices, an amount equal to one/twenty-fourth
(1/24th) of the Employee's then-current Annual Base
Salary; provided, however, that during months seven (7)
through twelve (12) of such period, the amount of such
payments shall be reduced by the amounts, if any, earned
by the Employee during such months as a result of
self-employment and/or employment with another employer.
As a condition of payment during months seven through
twelve, the Employee agrees to provide the Company with
verification, reasonably acceptable to the Company,
substantiating the amounts of any such earnings or the
Employee's lack of other employment, as the case may be.
The Company at any time may elect to pay the balance of
such payments then remaining in a lump sum, without
discount.
4.2 BENEFITS UPON TERMINATION WITHOUT CAUSE OR FOR GOOD REASON
IN CONNECTION WITH A CHANGE IN CONTROL. If (a) a Change in Control occurs
during the Employment Period and within two (2) years after the Change in
Control Date (i) the Company shall terminate the Employee's employment
without Cause, or (ii) the Employee shall terminate employment with the
Company for Good Reason, OR, alternatively, (b) if one of the
above-described terminations of employment occurs within the six-month
period prior to the earlier of (i) a Change in Control Date or (ii) the
execution of a definitive agreement or contract that eventually results in a
Change in Control, then the Employee shall become entitled to the payment of
the benefits as provided below as of either (y) the Date of Termination, in
the case where the sequence of the requisite events is as set forth in
subsection (a) above or (z) the Change in Control Date, in the case where
the sequence of the requisite events occurred as set forth in subsection (b)
above (the relevant date for purposes of entitlement to the benefits as set
forth in this Section 4.2 is hereinafter referred to as the "Entitlement
Date"):
4.2(a) ACCRUED OBLIGATIONS. Within thirty (30) days after
the Entitlement Date, the Company shall pay to the
Employee the Accrued Obligations.
4.2(b) SEVERANCE AMOUNT. Within thirty (30) days after the
Entitlement Date, the Company shall pay to the Employee as
severance pay in a lump sum, in cash, an amount
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equal to one (1) times an amount equal to the Employee's
then-current Annual Base Salary.
4.2(c) STOCK OPTIONS AND RESTRICTED STOCK. To the extent
not otherwise provided for under the terms of the
Company's stock-based compensation plans or the Employee's
award or grant agreements, all stock options and
restricted stock held by the Employee that have not
expired in accordance with their respective terms shall
fully vest as of the Entitlement Date.
4.3 DEATH. If the Employee's employment is terminated by reason
of the Employee's death during the Employment Period (either prior or
subsequent to the Change in Control Date), this Agreement shall terminate
without further obligations to the Employee's legal representatives under
this Agreement, other than for (i) payment of Accrued Obligations (which
shall be paid to the Employee's estate or beneficiary, as applicable, in a
lump sum in cash within thirty (30) days of the Date of Termination) and
(ii) the timely payment or provision of such other benefits required to be
paid or provided by the Company to the Employee or the Employee's family
under any plan, program, policy, practice, contract or agreement of the
Company generally provided to other peer employees and their families
("Other Benefits"), including all such benefits payable in the event of
death.
4.4 DISABILITY. If the Employee's employment is terminated by
reason of the Employee's Disability during the Employment Period (either
prior or subsequent to a Change in Control), this Agreement shall terminate
without further obligations to the Employee, other than for (i) payment of
Accrued Obligations (which shall be paid to the Employee in a lump sum in
cash within thirty (30) days of the Date of Termination) and (ii) the timely
payment or provision of Other Benefits including all such benefits payable
in the event of Disability.
4.5 TERMINATION FOR ANY OTHER REASONS. If the Employee's
employment shall be terminated for Cause or by the Employee voluntarily
(either prior or subsequent to a Change in Control Date), this Agreement
shall terminate without further obligations to the Employee other than the
obligation to pay to the Employee the Accrued Obligations. In such case, all
of the Employee's Accrued Obligations shall be paid to the Employee in a
lump sum in cash within thirty (30) days of the Date of Termination.
4.6 ENTIRE AGREEMENT; PRIOR AGREEMENTS AND BENEFITS UNDER OTHER
PLANS SUPERCEDED. This Agreement is the entire agreement of the parties on
the subject matter contained herein and shall supercede all prior
agreements, arrangements and understandings that the Employee and the
Company may have had with respect to the Employee's employment with the
Company and the payment of benefits by the Company to the Employee in the
event of a termination of the Employee's employment, either prior to or in
conjunction with a Change in Control, including that certain Employment
Agreement dated the 30th day of September, 2004. The benefits payable
pursuant to this Agreement are in lieu of and in substitution for any
termination benefits payable by the Company in conjunction with any other
plan, program, policy, practice, contract or agreement that the Company may
have had either in the past, currently or in the future.
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4.7 FULL SETTLEMENT. The parties agree that the Company's
obligation to make the payments provided for in this Agreement and otherwise
to perform its obligations hereunder are intended to be in full settlement
of all claims that the Employee may have against the Company with respect to
the termination of the Employee's employment with the Company and the
Employee may be required to execute and deliver an agreement to this effect
prior to receipt of any payments under this Agreement. The payments to be
made by the Company or any other obligation that the Company is required to
perform pursuant to this Agreement shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action which the
Company may have against the Employee or others. In no event shall the
Employee be obligated to seek other employment or take any other action by
way of mitigation of the amounts payable to the Employee under any of the
provisions of this Agreement and, except as provided in Section 4.1(b), such
amounts shall not be reduced whether or not the Employee obtains other
employment. To the extent the Employee prevails in any contest with respect
to the validity or enforceability of, or liability under, any provision of
this Agreement or any guarantee of performance thereof (including as a
result of any contest by the Employee regarding the amount of any payment
pursuant to this Agreement), the Company agrees to pay promptly, to the full
extent permitted by law, all legal fees and expenses which the Employee may
reasonably incur as a result of any such contest, plus in each case interest
on any delayed payment at the applicable Federal rate provided for in Code
Section 7872(f)(2)(A).
4.8 RESOLUTION OF DISPUTES. If there shall be any dispute between
the Company and the Employee (i) as to whether any termination of the
Employee's employment was for Cause, or (ii) as to whether any termination
of the Employee's employment for Good Reason was made in good faith, then,
unless and until there is a final, non-appealable judgment by a court of
competent jurisdiction declaring that such termination was for Cause or that
the determination by the Employee of the existence of Good Reason was not
made in good faith, the Company shall pay all amounts, and provide all
benefits, to the Employee and/or the Employee's family or other
beneficiaries, as the case may be, that the Company would be required to pay
or provide pursuant to Section 4.1 or 4.2 as though such termination was
without Cause or for Good Reason, as the case may be; provided, however,
that the Company shall not be required to pay any disputed amounts pursuant
to this Section 4.8 except upon receipt of an undertaking by or on behalf of
the Employee to repay all such amounts to which the Employee is ultimately
adjudged by such court not to be entitled.
SECTION 5: NON-COMPETITION.
5.1 NON-COMPETE AGREEMENT.
5.1(a) During the period beginning on the Date of
Termination and ending one (1) year thereafter, the
Employee shall not, without prior written approval of the
principal executive officer of the Company, become a
partner, officer, director, stockholder, advisor,
employee, consultant, agent, salesman or otherwise of any
business enterprise in substantial direct competition (as
defined in Section 5.1(b)) with the Company or any of its
subsidiaries in the United States or in any other country
in which the Company does
12
business on the Date of Termination; provided that, if the
Employee's employment is terminated for Good Reason, then
the Employee will not be subject to the restrictions of
this Section 5.1(a). This restriction will not limit the
Employee's right to invest in five percent (5%) or less of
the outstanding capital stock or other equity securities
of any corporation, the stock or securities of which are
publicly traded on a national stock exchange.
5.1(b) For purposes of Section 5.1, a business enterprise
with which the Employee becomes associated shall be
considered in substantial direct competition, if such
entity competes with the Company or its subsidiaries in
any business in which the Company or any of its
subsidiaries is engaged and is within the Company's or the
subsidiary's market area as of the Date of Termination.
5.1(c) During the period beginning on the date the
Employment Period terminates and ending one (1) year
thereafter, the Employee shall not directly or indirectly
solicit the employment of, recruit, employ, hire, cause to
be employed or hired, entice away or establish a business
relationship with, (i) any then current employee of the
Company or any of its subsidiaries or (ii) any person who
was employed by the Company or any of its subsidiaries
during the six (6) months immediately prior to the date
that the Employee first solicits such person.
5.2 CONFIDENTIAL INFORMATION. The Employee shall hold in a
fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any of its
affiliated companies, and their respective businesses, which shall have been
obtained by the Employee during the Employee's employment by the Company and
which shall not be or become public knowledge (other than by acts by the
Employee or representatives of the Employee in violation of this Agreement).
After termination of the Employee's employment with the Company, the
Employee shall not, without the prior written consent of the Company, or as
may otherwise be required by law or legal process, communicate or divulge
any such information, knowledge or data to anyone other than the Company and
those designated by it. In no event shall an asserted violation of the
provisions of this Section constitute a basis for deferring or withholding
any amounts otherwise payable to the Employee under this Agreement.
SECTION 6: SUCCESSORS.
6.1 SUCCESSORS OF EMPLOYEE. This Agreement is personal to the
Employee and, without the prior written consent of the Company, the rights
(but not the obligations) shall not be assignable by the Employee otherwise
than by will or the laws of descent and distribution. This Agreement shall
inure to the benefit of and be enforceable by the Employee's legal
representatives.
6.2 SUCCESSORS OF COMPANY. The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to assume expressly and agree to perform this Agreement in the same
manner and
13
to the same extent that the Company would be required to perform it if no
such succession had taken place. Failure of the Company to obtain such
agreement prior to the effectiveness of any such succession shall be a
breach of this Agreement and shall entitle the Employee to terminate this
Agreement at his option on or after the Change in Control Date for Good
Reason. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets which
assumes and agrees to perform this Agreement by operation of law, or
otherwise.
SECTION 7: MISCELLANEOUS.
7.1 OTHER AGREEMENTS. The Board may, from time to time in the
future, provide other incentive programs and bonus arrangements to the
Employee with respect to the occurrence of a Change in Control that will be
in addition to the benefits required to be paid in the designated
circumstances in connection with the occurrence of a Change in Control. Such
additional incentive programs and/or bonus arrangements will affect or
abrogate the benefits to be paid under this Agreement only in the manner and
to the extent explicitly agreed to by the Employee in any such subsequent
program or arrangement.
7.2 NOTICE. For purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall
be deemed to have been duly given when delivered or mailed by certified or
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses as set forth below; provided that all notices to the
Company shall be directed to such other address as one party may have
furnished to the other in writing in accordance herewith, except that notice
of change of address shall be effective only upon receipt.
Notice to Employee:
Xxxxxxx X. Xxxxxxxx
c/o Xxxxxxxx Textile Services, Inc.
0000 Xxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Notice to Company:
Xxxxxxxx Corporation
000 Xxxxx Xxxxx Xxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: General Counsel
7.3 VALIDITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement.
14
7.4 WITHHOLDING. The Company may withhold from any amounts
payable under this Agreement such Federal, state or local taxes as shall be
required to be withheld pursuant to any applicable law or regulation.
7.5 WAIVER. The Employee's or the Company's failure to insist
upon strict compliance with any provision hereof or any other provision of
this Agreement or the failure to assert any right the Employee or the
Company may have hereunder, including, without limitation, the right of the
Employee to terminate employment for Good Reason pursuant to Section 3.4
shall not be deemed to be a waiver of such provision or right or any other
provision or right of this Agreement.
IN WITNESS WHEREOF, the Employee and, the Company, pursuant to the
authorization from its Board, have caused this Agreement to be executed in
its name on its behalf, all as of the day and year first above written.
"Employee"
/s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------
Xxxxxxx X. Xxxxxxxx
"Company"
XXXXXXXX CORPORATION
By: /s/ Xxxxxxx X. X'Xxxx
----------------------------------
Name: Xxxxxxx X. X'Xxxx
Title: CEO
15
