<PAGE>
Page 1 of 16
Page 14 - Exhibit Index
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from_____to_____
Commission file number 0-2912
DIBRELL BROTHERS, INCORPORATED
(Exact name of registrant as specified in its
charter)
VIRGINIA 54-0192440
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
512 Bridge Street
Danville, Virginia 24541
(Address of principal executive (Zip Code)
offices)
(804) 792-7511
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal
year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12
months, and (2) has been subject to such filing requirements for the
past 90 days.
Yes [X] No [ ]
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
Outstanding at
Class of Common Stock February 6, 1995
$1.00 par value 13,303,489
<PAGE>
<TABLE>
<CAPTION>
DIBRELL BROTHERS, INCORPORATED
INDEX
PAGE NO.
<S> <C>
Part I. Financial Information:
Consolidated Balance Sheet - December 31, 1994
and June 30, 1994 . . . . . . . . . . . . . . . . . 3 - 4
Statement of Consolidated Income - Three Months
and Six Months Ended December 31, 1994
and 1993 . . . . . . . . . . . . . . . . . . . . . . 5
Statement of Consolidated Cash Flows - Six
Months Ended December 31, 1994 and 1993 . . . . . . 6
Notes to Consolidated Financial Statements . . . . . . 7 - 8
Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . 8 - 12
Part II. Other Information . . . . . . . . . . . . . . 12 - 13
</TABLE>
- 2 -
<PAGE>
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION
Dibrell Brothers, Incorporated and Subsidiaries
CONSOLIDATED BALANCE SHEET
(Unaudited)
December 31 June 30
1994 1994
____________ ____________
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents . . . . . . . . . . . . $ 13,499,550 $ 6,478,787
Notes receivable . . . . . . . . . . . . . . . . . 1,290,841 16,500,988
Trade receivables, net of allowances . . . . . . . 146,010,856 104,191,495
Inventories:
Tobacco . . . . . . . . . . . . . . . . . . . . 268,142,733 218,232,958
Other . . . . . . . . . . . . . . . . . . . . . 8,022,280 13,807,917
Advances on purchases of tobacco . . . . . . . . . 17,179,953 29,901,995
Recoverable income taxes . . . . . . . . . . . . . 2,096,692 1,847,936
Prepaid expenses . . . . . . . . . . . . . . . . . 7,677,828 9,223,602
______________ _____________
Total current assets 463,920,733 400,185,678
______________ _____________
Investments and other assets
Equity in net assets of investee companies . . . . 19,930,914 18,252,794
Other investments . . . . . . . . . . . . . . . . 11,239,560 14,335,925
Notes receivable . . . . . . . . . . . . . . . . . 13,180,217 12,616,424
Other . . . . . . . . . . . . . . . . . . . . . . 6,675,071 3,596,480
______________ _____________
51,025,762 48,801,623
______________ _____________
Intangible assets
Excess of cost over related net assets of
business acquired . . . . . . . . . . . . . . . 12,298,261 11,898,364
Production and supply contracts . . . . . . . . . 39,946,668 42,339,999
Pension asset . . . . . . . . . . . . . . . . . . 2,457,899 2,457,899
______________ ____________
54,702,828 56,696,262
______________ _____________
Property, plant, and equipment
Land . . . . . . . . . . . . . . . . . . . . . . . 16,242,445 16,048,571
Buildings . . . . . . . . . . . . . . . . . . . . 89,424,785 87,907,205
Machinery and equipment . . . . . . . . . . . . . 91,536,659 89,169,882
Allowances for depreciation (deduction) . . . . . (61,247,175) (54,962,145)
______________ _____________
135,956,714 138,163,513
______________ _____________
Deferred charges and taxes . . . . . . . . . . . . . 7,605,619 7,609,944
______________ _____________
$713,211,656 $651,457,020
============== =============
</TABLE>
- 3 -
<PAGE>
<TABLE>
<CAPTION>
Dibrell Brothers, Incorporated and Subsidiaries
CONSOLIDATED BALANCE SHEET
(Unaudited)
December 31 June 30
1994 1994
_____________ _____________
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Notes payable to banks . . . . . . . . . . . . . . $162,607,569 $142,369,166
Accounts payable:
Trade . . . . . . . . . . . . . . . . . . . . . 39,230,523 52,206,240
Officers and employees . . . . . . . . . . . . . 18,262,934 18,072,950
Other . . . . . . . . . . . . . . . . . . . . . 6,460,376 6,757,329
Advances from customers . . . . . . . . . . . . . 88,875,973 23,998,753
Accrued expenses . . . . . . . . . . . . . . . . . 16,106,776 23,681,668
Income taxes . . . . . . . . . . . . . . . . . . . 8,127,357 5,788,346
Long-term debt current . . . . . . . . . . . . . . 6,422,488 4,261,601
_____________ _____________
Total current liabilities 346,093,996 277,136,053
_____________ _____________
Long-term debt
Revolving Credit Notes and Other . . . . . . . . . 154,580,376 155,161,454
Convertible Subordinated Debentures . . . . . . . 56,475,000 56,475,000
_____________ _____________
211,055,376 211,636,454
_____________ _____________
Deferred credits:
Income taxes . . . . . . . . . . . . . . . . . . . 3,720,944 5,675,298
Compensation and other benefits . . . . . . . . . 24,207,542 23,424,455
_____________ _____________
27,928,486 29,099,753
_____________ _____________
Minority interest in subsidiaries . . . . . . . . . . 944,900 1,226,687
_____________ _____________
Stockholders' equity
Serial Preferred Stock--without par value:
<S> <C> <C> <C> <C>
Dec. 31 Jun. 30
Authorized shares 1,000,000 1,000,000
Issued shares -0- -0-
Common Stock--par value $1 per share
Dec. 31 Jun. 30
Authorized shares 50,000,000 50,000,000
Issued shares 13,303,489 13,303,089 . . 13,303,489 13,303,089
<S> <C> <C>
Additional capital . . . . . . . . . . . . . . . . 18,599,006 18,590,756
Retained earnings . . . . . . . . . . . . . . . . 99,792,703 103,057,649
Equity-currency conversions . . . . . . . . . . . (993,304) (960,183)
Additional minimum pension liability . . . . . . . (2,139,060) (1,373,936)
Unrealized loss on investments (1,373,936) (259,302)
_____________ _____________
127,188,898 132,358,073
_____________ _____________
$713,211,656 $651,457,020
============= =============
</TABLE>
- 4 -
<PAGE>
<TABLE>
<CAPTION>
Dibrell Brothers, Incorporated and Subsidiaries
STATEMENT OF CONSOLIDATED INCOME
Three Months and Six Months Ended December 31, 1994 and 1993
(Unaudited)
1995 1994 1995 1994
Second Second First Six First Six
Quarter Quarter Months Months
____________ ____________ ____________ ____________
<S> <C> <C> <C> <C>
Net sales of goods and services . . . . . . . . . . . $306,274,472 $266,217,494 $486,057,758 $439,948,171
Cost of goods and services sold . . . . . . . . . . . 274,439,976 239,190,209 433,031,894 384,367,496
____________ ____________ ____________ ____________
31,834,496 27,027,285 53,025,864 55,580,675
Selling, administrative and general expenses . . . . 21,557,232 19,460,729 41,370,646 38,062,013
____________ ____________ ____________ ____________
Operating Income . . . . 10,277,264 7,566,556 11,655,218 17,518,662
Other income:
Interest . . . . . . . . . . . . . . . . . . . . . 1,978,990 570,648 3,565,136 1,549,733
Sundry . . . . . . . . . . . . . . . . . . . . . . 632,183 803,600 1,081,981 1,696,520
____________ ____________ ____________ ____________
2,611,173 1,374,248 4,647,117 3,246,253
Other deductions:
Interest . . . . . . . . . . . . . . . . . . . . . 7,140,252 5,616,663 13,155,560 10,516,817
Sundry . . . . . . . . . . . . . . . . . . . . . . 168,885 6,709 380,915 174,995
____________ ____________ ____________ ____________
7,309,137 5,623,372 13,536,475 10,691,812
Income before income taxes, minority
interest, and equity in net income of
investee companies. . . . . . . . . . . . . . . . . 5,579,300 3,317,432 2,765,860 10,073,103
Income taxes . . . . . . . . . . . . . . . . . . . . 2,828,033 1,038,744 1,572,296 3,727,501
____________ ____________ ____________ ____________
Income before minority interest and
equity in net income of investee
companies . . . . . . . . . . . . . . . . . . . . 2,751,267 2,278,688 1,193,564 6,345,602
Income applicable to minority interest . . . . . . . 122,203 193,062 123,278 216,375
Equity in net income of investee companies,
net of income taxes . . . . . . . . . . . . . . . 694,049 122,716 986,105 405,432
____________ ____________ ____________ ____________
NET INCOME . . . . . . . . . . . . . . . . . . . . . $ 3,323,113 $ 2,208,342 $ 2,056,391 $ 6,534,659
Earnings Per Share, primary
NET INCOME . . . . . . . . . . . . . . . . . . . . $.25 $.17 $.15 $.49
Earnings Per Share, assuming full dilution:
NET INCOME . . . . . . . . . . . . . . . . . . . . $.25 $ * $ * $.49
Average number of shares outstanding:
Primary . . . . . . . . . . . . . . . . . . . . 13,321,018 13,335,423 13,312,103 13,328,828
Assuming full dilution . . . . . . . . . . . . . . 16,123,052 16,137,457 16,122,920 16,137,078
Cash dividends per share . . . . . . . . . . . . . . $.20 $.18 $.40 $.36
</TABLE>
[FN]* Computation of earnings per share is anti-dilutive for the second quarter
of fiscal year 1994 and the first six months of fiscal year 1995.
- 5 -
<PAGE>
<TABLE>
<CAPTION>
Dibrell Brothers, Incorporated and Subsidiaries
STATEMENT OF CONSOLIDATED CASH FLOWS
Six Months Ended December 31, 1994 and 1993
(Unaudited)
December 31 December 31
1994 1993
_____________ _____________
<S> <C> <C>
Operating activities
Net Income . . . . . . . . . . . . . . . . . . . . . . $ 2,056,391 $ 6,534,659
Adjustments to reconcile net income to
net cash provided (used) by operating activities:
Depreciation and amortization . . . . . . . . . . . 10,764,716 8,893,715
Deferred items . . . . . . . . . . . . . . . . . . . (32,098) (235,204)
Loss (gain) on foreign currency transactions . . . . 65,331 (372,847)
Gain on disposition of fixed assets . . . . . . . . (358,947) (691,080)
Undistributed earnings of investees . . . . . . . . (986,105) (405,432)
Dividends from investee . . . . . . . . . . . . . . - 496,950
Income applicable to minority interest . . . . . . . 123,278 216,375
Bad debt expense . . . . . . . . . . . . . . . . . . 854,841 497,494
Decrease (increase) in accounts receivable . . . . . (40,386,427) 34,993,152
Increase in inventories and advances on
purchases of tobacco . . . . . . . . . . . . . . . (35,305,647) (80,360,903)
Decrease (increase) in recoverable taxes . . . . . . (223,711) 548,172
Decrease (increase) in prepaid expenses . . . . . . 1,567,942 (559,245)
Decrease in accounts payable and accrued
expenses . . . . . . . . . . . . . . . . . . . . . (21,878,968) (19,482,947)
Increase in advances from customers . . . . . . . . 64,444,575 38,889,505
Increase in income taxes . . . . . . . . . . . . . . 1,896,911 403,329
Other . . . . . . . . . . . . . . . . . . . . . . . (319) (5,439)
_____________ _____________
Net cash used by operating activities . . . . . . (17,398,237) (10,639,746)
_____________ _____________
Investing activities
Purchase of property and equipment . . . . . . . . . . (5,825,594) (10,945,405)
Proceeds from sale of property and equipment . . . . . 1,007,755 2,451,785
Payments on notes receivable and
receivable from investees . . . . . . . . . . . . . 17,037,714 2,739,466
Increase in notes receivable and receivable
from investees . . . . . . . . . . . . . . . . . . . (2,057,782) (15,470,050)
Increase other investments and other assets . . . . . (37,731) (5,756,971)
Purchase of minority interest in subsidiaries . . . . (389,119) (193,751)
Increase in excess of cost over net assets of
business acquired . . . . . . . . . . . . . . . . . (857,315) -0-
_____________ _____________
Net cash provided (used) by investing
activities . . . . . . . . . . . . . . . . . . . 8,877,928 (27,174,926)
_____________ _____________
Financing activities
Repayment of debt . . . . . . . . . . . . . . . . . . (67,041,017) (92,461,168)
Proceeds from debt . . . . . . . . . . . . . . . . . . 88,033,309 155,019,658
Cash dividends paid to Dibrell Brothers,
Inc. stockholders . . . . . . . . . . . . . . . . . (5,159,190) (4,788,877)
Cash dividends paid to minority stockholders . . . . . (162,126) (208,522)
Proceeds from issuance of common stock . . . . . . . . 8,650 28,112
______________ _____________
Net cash provided by financing activities . . . . 15,679,626 57,589,203
Effect of exchange rate changes on cash . . . . . . . . . (138,554) (381,737)
______________ _____________
Increase in cash and cash equivalents . . . . . . . . . . 7,020,763 19,392,794
Cash and cash equivalents at beginning of year . . . . . 6,478,787 12,304,626
______________ _____________
Cash and cash equivalents at end of period . . . . $ 13,499,550 $ 31,697,420
============== =============
</TABLE>
- 6 -
<PAGE>
DIBRELL BROTHERS, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Primary earnings per share are computed by dividing
earnings by the weighted average number of shares
outstanding plus any common stock equivalents during each
period. The fully diluted earnings per share calculation
assumes that all of the Convertible Subordinated Debentures
were converted into Common Stock at the beginning of the
reporting period thereby increasing the weighted average
number of shares considered outstanding during each period.
The weighted average number of shares outstanding is
further increased by common stock equivalents on employee
stock options. Also, all interest expense on the
debentures for the period is added to pretax income and the
hypothetical additional income tax expense is deducted.
2. The accompanying unaudited consolidated financial
statements have been prepared in accordance with the
instructions to Form 10-Q and do not include all of the
information and footnotes required by generally accepted
accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting
of normal recurring accruals and the non-recurring items
referred to in Note 3) considered necessary for a
fair presentation have been included.
3. On July 1, 1994, the Company adopted Statements of
Financial Accounting Standards No. 112 "Employers'
Accounting for Postemployment Benefits" and No. 115
"Accounting for Certain Investments in Debt and Equity
Securities." There was no material impact on the Company's
operations or financial position.
4. On October 23, 1994, Dibrell Brothers, Incorporated and
Monk-Austin, Inc. announced a definitive Agreement and Plan
of Reorganization pursuant to which the businesses of
Dibrell and Monk-Austin will be combined. Completion of
the transaction will be subject to shareholder approval and
other customary conditions. The parties expect the
reorganization to be consummated during the second calendar
quarter of 1995. As a result of the reorganization,
Dibrell and Monk-Austin will be wholly-owned subsidiaries
of DiMon Incorporated (DiMon). DiMon's corporate
headquarters will be located in Danville, Virginia; the
combined tobacco operations will be headquartered in
Farmville, North Carolina; and headquarters for flower
operations will remain in Nuremberg, Germany.
-7-
<PAGE>
DIBRELL BROTHERS, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
5. The results of operations for the three months and six
months ended December 31, 1994 and 1993 are not necessarily
indicative of the results to be expected for the full year
and should not be relied on as a basis for projecting year
end results. The Company's operations are seasonal and
quarterly comparisons are of little value.
6. For additional information regarding accounting principles
and other financial data, see Notes to Consolidated
Financial Statements in the Annual Report on Form 10-K for
the fiscal year ended June 30, 1994.
7. Certain accounts of the prior periods have been
reclassified for conformity with the financial statements
of the current period.
-8-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Recent Development:
On October 22, 1994, Dibrell entered into an Agreement and Plan of
Reorganization with Monk-Austin, Inc. ("Monk-Austin"), pursuant to
which the businesses of Dibrell and Monk-Austin will be combined.
The Agreement provides that the shareholders of Dibrell will receive
1.5 shares of stock of DiMon, Inc., a new holding company formed for
purposes of the combination ("DiMon"), for each share of Dibrell
stock and that the shareholders of Monk-Austin will receive one
share of DiMon stock for each share of Monk-Austin stock. The
transaction is subject to approval by the shareholders of Dibrell
and Monk-Austin and is expected to be consummated in early April,
1995.
Results of Operations:
Three Months Ended December 31, 1994 Compared to Three Months Ended
December 31, 1993:
Net sales increased $40,056,978 (15.0%) for the three months ended
December 31, 1994 from the same period in 1993. Tobacco sales
increased $34,729,523 (20.6%) this year versus last year due to
higher average prices of U.S. and foreign grown tobacco with
increased quantities sold of foreign grown tobacco, partially offset
by decreased quantities sold of U.S. tobacco, primarily by-products.
The increased quantities of foreign grown tobacco were primarily
from Brazil and Zimbabwe. Flower sales increased $5,327,455 (5.4%)
due primarily to the effects of applying U.S. dollar exchange rates
to the European operations, partially offset by decreased sales in
the North American operations.
Cost of sales and expenses increased $37,346,270 (14.4%) for the
period ended December 31, 1994 from the same period in 1993. Cost
of sales and expenses of the tobacco operations increased
$29,103,681 (18.0%) primarily due to increased sales. The gross
margin for the tobacco operations increased $5,910,767 (36.6%)
primarily due to increased sales from the operations in Brazil and
Africa. The gross margin as a percentage of net sales of goods and
services for the tobacco operations increased from 9.6% to 10.9%.
Improvement occurred in tobacco margins during the second quarter
as the supply and demand of tobacco in the world market became more
balanced. Cost of sales and expenses for the flower operations
increased $7,894,030 (8.2%) primarily due to the effect of applying
U.S. dollar exchange rates to the European operations and increased
legal and professional fees. The gross margin for the flower
operations decreased $1,103,556 (10.2%). The gross margin
percentage for the flower operation decreased from 11.1% to 9.5% due
primarily to decreased profitability in the Baardse operations and
-9-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
the North American portion of the Florimex operations. Corporate
expenses increased $348,559 (22.1%) due primarily to increased
personnel costs.
Other income, Interest and Sundry, increased $1,236,925 (90.0%) for
the period ended December 31, 1994 from the same period in 1993.
Interest income increased $1,408,342 while Sundry income decreased
$171,417 from the same period in 1993. The increase in Interest
income is primarily due to increased average short-term investments
in Brazil.
Other deductions, primarily Interest expense, increased $1,685,765
(30.0%) for the period ended December 31, 1994. Interest expense
increased $1,523,589 primarily due to higher average interest rates.
Sundry expense decreased $162,176.
The effective tax rate increased from 31.3% in 1993 to 50.7% in 1994
based on estimates of taxable income projected for each year.
The income applicable to minority interest decreased $70,859 from
the same period last year.
Equity in net income of the tobacco investee companies increased
$571,333 from the same period last year due to increased profits
from the Company's investees in Malawi and Greece.
Six Months Ended December 31, 1994 Compared to Six Months Ended
December 31, 1993:
Net sales increased $46,109,587 (10.5%) for the six months ended
December 31, 1994 from the same period in 1993. The increase in
tobacco sales of $40,205,943 (14.9%) is due to higher average prices
on decreased quantities sold of U.S. grown tobacco and increased
quantities sold of foreign grown tobacco at lower average prices.
The increased quantities of foreign tobacco were from Brazil and
Zimbabwe. The decreased quantities of U.S. tobacco relates
primarily to by-products. The increase in flower sales of
$5,903,644 (3.5%) is due primarily to the effect of applying U.S.
dollar exchange rates to the European operations.
Cost of sales and expenses increased $51,973,031 (12.3%) for the
period ended December 31, 1994 from the same period in 1993. Cost
of sales and expenses of the tobacco operations increased
$41,363,922 (16.5%) primarily due to increased sales. The gross
margin for the tobacco operations decreased $1,115,946 (2.9%)
primarily due to decreased margins on sales of Brazilian and Turkish
tobacco. The gross margin as a percentage of net sales of goods and
services for the tobacco operations decreased from 14.1% to 12.0%
due to decreased cost recoveries in Brazil and Turkey. Cost of
sales and expenses for the flower operations increased $9,650,671
(5.7%) primarily due to increased sales. The gross margin for the
flower operations decreased $1,438,865 (8.3%) and the gross margin
percentage for the flower operation decreased from 10.2% to 9.1%,
-10-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
both due primarily to decreased profitability in the Baardse
operations and the North American portion of the Florimex
operations. Corporate expenses increased $958,438 (31.0%) due
primarily to increased personnel cost and consulting expenses.
Other income, Interest and Sundry, increased $1,400,864 (43.2%) for
the period ended December 31, 1994 from the same period in 1993.
Interest income increased $2,015,403 while Sundry decreased
$614,539. The increase in Interest income is primarily due to
increased average short-term investments in Brazil. The decrease
in Sundry Income is primarily due to sales of fixed assets in fiscal
year 1994 and exchange gains unrelated to operating activities in
fiscal year 1994, both of which did not repeat in fiscal year 1995.
Other deductions, primarily Interest expense, increased $2,844,663
(26.6%) for the period ended December 31, 1994. Interest expense
increased $2,638,743 primarily due to higher average interest rates
and to a lesser extent increased average short-term borrowings.
Sundry expense increased $205,920.
The effective tax rate increased from 37.0% in 1993 to 56.8% in 1994
based on estimates of taxable income projected for each year.
The income applicable to minority interest decreased $93,097 from
the same period last year.
Equity in net income of the tobacco investee companies increased
$580,673 (143.2%) from the same period last year. The increase is
primarily due to increased profits from the Company's investees in
Greece and Malawi.
Financial Condition:
Dibrell's working capital decreased from $123.0 million at June 30,
1994 to $117.8 million at December 31, 1994. The current ratio of
1.4 to 1 at June 30, 1994 decreased to 1.3 to 1 at December 31,
1994. The larger increases and decreases in the individual
components of current assets and current liabilities relate to the
tobacco operations. Current assets increased primarily due to the
increase in tobacco inventories of $49.9 million and the increase
in Trade receivables of $41.8 million, partially offset by decreased
Notes receivable of $15.2 million and the decrease in Advances on
purchases of tobacco of $12.7 million. Current liabilities
increased primarily due to the increase in Advances from customers
of $64.9 million. The increase in tobacco inventories is due
primarily to the seasonal increase in inventories for the U.S.,
partially offset by the decrease in inventories for Brazil due to
increased sales. The increase in Trade receivables is due to
increased sales by the tobacco operations. The increase in Advances
from customers is due to the seasonal increase in the U.S. tobacco
-11-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
operations. As a result of the Company's efforts, the amount of
uncommitted tobacco inventory decreased at the end of the second
quarter to $39.0 million compared to $100.7 million at June 30, 1994
and $106.3 million at December 31, 1993.
Cash and cash equivalents increased to $13.5 million at December
31, 1994. Dibrell's cash flow for the six months ended December
31, 1994, was primarily affected by the tobacco operations'
increased cash from financing activities and investing activities,
partially offset by decreased cash from its operating activities.
At December 31, 1994, Dibrell had lines of credit of $533 million,
including the long-term credit agreement. At December 31, 1994, the
unused lines of credit amounted to $309 million. Total maximum
outstanding short-term borrowings during the six months ended
December 31, 1994, were $427 million.
Dibrell's management believes that Dibrell's capital resources are
adequate to meet its capital needs through June 30, 1995.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 10.1 - Employment Agreement dated as of
December 21, 1994, effective as of
November 1, 1994, by and between
Dibrell Brothers, Incorporated and
Claude B. Owen, Jr. (filed herewith).
Exhibit 10.2 - Employment Agreement dated as of
January 13, 1995, effective as of
November 1, 1994, by and between
Dibrell Brothers, Incorporated and
T. H. Faucett (filed herewith).
Exhibit 10.3 - Employment Agreement dated as of
January 13, 1995, effective as of
November 1, 1994, by and between
Dibrell Brothers, Incorporated and
T. W. Oakes (filed herewith).
Exhibit 10.4 - Employment Agreement dated as of
January 16, 1995, effective as of
November 1, 1994, by and between
Dibrell Brothers, Incorporated and
L. N. Dibrell, III (filed herewith).
Exhibit 10.5 - Employment Agreement dated as of
January 13, 1995, effective as of
November 1, 1994, by and between
Dibrell Brothers, Incorporated and
H. P. Green, III (filed herewith).
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Item 6. Exhibits and Reports on Form 8-K (Continued)
Exhibit 10.6 - Form of Interpretive Letter, dated
January 11, 1995, under the Dibrell
1993 Omnibus Stock Incentive Plan
delivered by the Company to Claude B.
Owen, Jr., T. H. Faucett, T. W. Oakes,
L. N. Dibrell, III, and H. P. Green,
III (filed herewith).
Exhibit 11 - Computation of Earnings Per Common
Share (filed herewith).
Exhibit 27 - Financial Data Schedule
(filed herewith).
(b) Reports on Form 8-K: On October 23, 1994, the Company filed
a Form 8-K reporting, under Item 5 and Item 7 thereof, that the
Company had entered into an Agreement and Plan of Reorganization
with Monk-Austin, Inc., pursuant to which the businesses of the
Company and Monk-Austin, Inc. will be combined. A press release was
filed as an exhibit.
On October 28, 1994, the Company filed Form 8-K/A1, amending the
Form 8-K, to include the Agreement and Plan of Reorganization, dated
as of October 22, 1994, by and among DiMon, Inc., Dibrell Brothers,
Incorporated and Monk-Austin, Inc. as an exhibit.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
DIBRELL BROTHERS, INCORPORATED
Date February 9, 1995 /s/ Claude B. Owen, Jr.
-----------------------------
Claude B. Owen, Jr.
Chairman, President and
Chief Executive Officer
Date February 9, 1995 /s/ Jerry L. Parker
-----------------------------
Jerry L. Parker
Vice President -
Controller
(Principal Accounting
Officer)
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DIBRELL BROTHERS, INCORPORATED
EXHIBIT INDEX
Description Page No.
10.1 - Employment Agreement with Claude B. Owen, Jr. 16 - 34
10.2 - Employment Agreement with T. H. Faucett 35 - 53
10.3 - Employment Agreement with T. W. Oakes 54 - 72
10.4 - Employment Agreement with L. N. Dibrell, III 73 - 91
10.5 - Employment Agreement with H. P. Green, III 92 - 110
10.6 - Form of Interpretive Letter 111
11 - Computation of Earnings (Loss) 112
Per Common Share
27 - Financial Data Schedule 113
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Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), made and entered into
on the 21st day of December, 1994, to be effective as of the 1st day of
November, 1994, by and between DIBRELL BROTHERS, INCORPORATED (the "Company"),
a corporation organized and existing under the laws of the Commonwealth of
Virginia and having its principal office at Danville, Virginia, and CLAUDE B.
OWEN, JR. (the "Executive"), an individual residing at Danville, Virginia.
R E C I T A L S:
The Company is engaged in the business of purchasing and
processing leaf tobacco and selling processed tobacco to manufacturers of
cigarettes and other consumer tobacco products. The Executive is experienced
in, and knowledgeable concerning, all aspects of the business of the Company.
The Executive has heretofore been employed by the Company as its Chairman and
Chief Executive Officer. The Company desires to continue to employ the
Executive as Chairman and Chief Executive Officer of the Company, and the
Executive desires to continue to be employed by the Company in that capacity.
Furthermore, the Company desires to provide for the Executive certain
disability, death, severance and supplemental retirement benefits in addition
to those provided by the employee benefit plans of the Company. The Company
and the Executive desire to reduce to writing the terms of their understanding
and to provide for the Executive's continued employment by the Company
pursuant to the terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations herein and the compensation the Company agrees herein to pay the
Executive, and of other good and valuable consideration, the receipt of which
is hereby acknowledged, the Company and the Executive agree as follows:
ARTICLE 1. EMPLOYMENT OF EXECUTIVE. Subject to the terms and
conditions set forth in this Agreement, the Company hereby employs the
Executive and the Executive hereby accepts such employment for the period
stated in ARTICLE 3 of this Agreement.
ARTICLE 2. POSITION, RESPONSIBILITIES AND DUTIES.
2.1 Position and Responsibilities. The Executive shall serve as
Chairman and Chief Executive Officer of the Company on the conditions
herein provided. The Executive shall provide such executive services in
the management of the Company's business not inconsistent with his
position and the provisions of Section 2.2 as shall be assigned to him
from time to time by the Board of Directors of the Company (the "Board").
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2.2 Duties. In addition to having the responsibilities
described in Section 2.1, the Executive shall also serve, if elected, as
an officer and director of the Company or of any subsidiary or affiliate
of the Company. Except for illness, reasonable vacation periods, and
reasonable leaves of absence, the Executive shall devote his full business
time, attention, skill, energies and efforts to the faithful performance
of his duties hereunder and to the business and affairs of the Company and
any subsidiary or affiliate of the Company and shall not during his
employment by the Company be employed in any other business activity,
whether or not such activity is pursued for gain, profit or other
pecuniary advantage; provided however, that (i) the Executive may continue
to serve on the board of directors of American National Bankshares, Inc.
and Richfood Holdings, Inc.; (ii) with the approval of the Board, the
Executive may serve, or continue to serve, on the board of directors of,
and hold any other offices or positions in, other companies or
organizations, which, in the Board's judgment, will not present any
conflict of interest with the Company or any of its subsidiaries or
affiliates or divisions, or materially affect the performance of the
Executive's duties pursuant to this Agreement and (iii) the Executive
shall not be prevented from investing his personal assets in any business
which does not competewith the Company or with any subsidiary or affiliate
of the Company, where the form or manner of such investment will not
require substantial services on the part of the Executive in the operation
of business in which such investment is made. Notwithstanding the
foregoing, the duties of the Executive (i) shall not be expanded
without the Executive's prior approval and (ii) shall not require him to
relocate his residence from Danville, Virginia, and shall not make it
impractical for him to continue to reside there or cause him to reside
away from there for extended periods of time.
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ARTICLE 3. TERM.
3.1 Term of Employment. The term of the Executive's employment
under this Agreement shall be effective as of November 1, 1994, and
shall continue until the earliest to occur of the following (the
"Termination Date"): (i) October 31, 1999 (except as otherwise provided
in this Section 3.1); (ii) the last day of the Employment Year (as defined
in this Section 3.1) in which the Executive attains the age of sixty-five
(65); (iii) the date of death of the Executive; (iv) the date coinciding
with the end of one hundred eighty (180) days of continuous "Total
Disability" of the Executive (as defined in ARTICLE 7); (v) the specified
date of termination under the Notice Exception (as defined in Section
3.2); (vi) the date of termination under the Cause Exception (as defined
in Section 3.3); or (vii) the date the Executive terminates his employment
for Good Reason (as defined in Section 3.4). In the event that the
Initial Term (as defined in this Section 3.1) shall expire for the
terminating event described in subparagraph (i) of this Section 3.1,
then, notwithstanding the provisions of subparagraph (i) of this Section
3.1, the term of this Agreement shall be extended automatically, without
any further action by the Company or the Executive, for successive
one-year periods (each, an "Extension Period") following the expiration
of the Initial Term (as defined in this Section 3.1) (by reason of the
terminating event described in subparagraph (i) of this Section 3.1) or
any succeeding one-year Extension Period (except as otherwise provided in
this Section 3.1). If either party hereto desires for the Term to expire
at the end of the Initial Term or at the end of any succeeding one-year
Extension Period, such party shall give written notice of such desire to
the other party no later than September 1 of the Employment Year (as
defined in this Section 3.1) in which the Initial Term (as defined in this
Section 3.1) will expire or September 1 of any succeeding one-year
Extension Period. The "Initial Term" is the period beginning on November
1, 1994, and ending on October 31, 1999. All references herein to the
term of the Executive's employment (the "Term") shall refer to the Initial
Term and shall include any Extension Period. Each twelve-month period
beginning November 1 during the Term is referred to herein as an
"Employment Year."
3.2 Termination of Giving Notice. If either party hereto
desires to terminate the Executive's employment prior to the expiration
of the Term, such party shall give not less than sixty (60) days written
notice of such desire to the other party specifying the date of
termination (the "Notice Exception"). Notwithstanding the foregoing, the
Notice Exception shall not be effected by the Company while the Executive
is Totally Disabled as provided in ARTICLE 7.
3.3 Termination for Cause; Automatic Termination. The Company
shall at all times have the right to discharge the Executive for Cause.
For purposes of this Agreement, Cause shall be limited to one or more of
the following: (i) habitual intoxication by the Executive while
performing his duties under this Agreement; (ii) theft or embezzlement;
(iii) alcoholism; (iv) drug addiction; (v) conviction of a felony; or (vi)
willful, flagrant, deliberate and repeated infractions of material
published policies and regulations of the Company of which the Executive
has actual knowledge (the "Cause Exception"). If the Company desires to
discharge the Executive under the Cause Exception, it shall give notice
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to the Executive as provided in Section 3.5 and the Executive shall have
thirty (30) days after notice has been given to him in which to cure the
reason for the Company's exercise of the Cause Exception. If the reason
for the Company's exercise of the Cause Exception is timely cured by the
Executive, the Company's notice shall become null and void. For purpose
of this Agreement, Cause shall not include the Executive's Total
Disability (as defined in Section 7.4).
3.4 Good Reason. In addition to termination under the Notice
Exception, the Executive may terminate his employment at any time for Good
Reason (as defined in this Section 3.4). If the Executive desires to
terminate his employment for Good Reason, he shall give notice to the
Company as provided in Section 3.5. For purposes of this Section 3.4,
"Good Reason" shall mean any of the following:
(a) The Executive's resignation from the Company's
employment on account of the failure by the Board to reelect the
executive to a responsible executive position in the Company and the
Executive then elects to leave the Company's employment within six
(6) months of such failure to so reelect or reappoint the Executive;
(b) The Executive's resignation from the Company's
employment on account of a material modification by the Board of the
duties, functions and responsibilities of the Executive as the
Company's Chairman and Chief Executive Officer without his consent
within six (6) months of such modification; or
(c) The Executive's resignation from the Company's
employment on account of any material breach of a provision of this
Agreement by the Company, which breach is not cured within thirty
(30) days after notice has been given to the Company by the
Executive. Without limiting the generality of the foregoing
sentence, the Company shall be in material breach of its obligations
hereunder if, for example, the Company shall not permit the Executive
to exercise such responsibilities as are consistent with the
Executive's position and are of such a nature as are usually
associated with such offices of a corporation engaged in
substantially the same business as the Company, or the Executive
shall at any time be required to report to anyone other than directly
to the Board, or the Company causes the Executive to relocate his
residence from Danville, Virginia or makes it impractical for
him to continue to reside there or causes him to reside away from
there for extended periods of time, or the Company shall fail to make
a payment when due to the Executive.
3.5 Notice of Termination. Any termination by the Company under
the Cause Exception or by the Executive for Good Reason shall be
communicated by Notice of Termination to the other party hereto. For
purposes of Sections 3.3 and 3.4, a "Notice of Termination" means a
written notice which (i) indicates the specific termination provision in
this Agreement relied upon, (ii) sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated and (iii) if the
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termination date is other than the date of receipt of such notice,
specifies the effective date of termination (with respect to the events
described in Sections 3.4(a) and (b), such date shall be not more than 30
days after the giving of such notice).
3.6 Rights of Executive Upon Termination of Employment.
(a) Following a Termination Date that occurs on account
of one of the terminating events described in subparagraphs (i), (ii),
(v) or (vii) of Section 3.1, the rights of the Executive shall be as
provided in ARTICLES 4, 5, 6, 9, 10, 12, 13, 14, 15, 16, 18 and 26.
(b) Following a Termination Date that occurs on account
of the Executive's death as provided in subparagraph (iii) of Section
3.1, the rights of the Executive's personal representative and
designated beneficiary (as determined pursuant to ARTICLE 16) shall
be as provided in ARTICLES 4, 5, 8, 10, 12, 14, 15, 16, 18 and 26.
(c) Following a Termination Date that occurs on account
of the Executive's Total Disability as provided in subparagraph (iv) of
Section 3.1, the rights of the Executive shall be as provided in
ARTICLES 4, 5, 7, 9, 10, 12, 13, 14, 15, 16, 18 and 26.
(d) Following a Termination Date that occurs because the
Executive is terminated for Cause as provided in subparagraph (vi) of
Section 3.1, the rights of the Executive shall be as provided in
ARTICLES 4, 5, 9, 10, 12, 13, 14, 15, 16, 18 and 26.
ARTICLE 4. COMPENSATION. For all services rendered by the
Executive during the Term and prior to a Termination Date, including without
limitation, services as an executive, officer, director (except fees and
reimbursements to which all members of the Board, or a subsidiary or affiliate
of the Company, are generally entitled) or member of any committee of the
Company or of any subsidiary, affiliate, or division thereof, the Company
shall pay the Executive as compensation the following:
4.1 Base Salary. The Executive shall be paid for his services
during the Term and prior to a Termination Date a base annual salary of
$391,800 (the "Base Salary"), payable in appropriate installments to
conform with regular payroll dates for salaried personnel of the Company.
The Executive's Base Salary shall be automatically increased on November
1 of each Employment Year to reflect increases in the cost of living (as
hereinafter described). In no event, however, shall the Executive's Base
Salary under this Agreement ever be less than $391,800. In addition to
any cost of living increase in the Executive's Base Salary, the Board or
its Compensation Committee may, in its sole discretion, increase the
Executive's Base Salary based on his performance. The amount of any
annual automatic cost of living increase in the Executive's Base Salary
shall be determined by multiplying the most recent Base Salary times a
fraction whose numerator shall be the Consumer Price Index (the "CPI")
[All Urban Consumers, South Region Average (1982-84 = 100); All Items,
Bureau of Labor Statistics of The United States Department of Labor], for
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the month of September next preceding the November 1 of the current
Employment Year, and whose denominator shall be the CPI for the month
of September next preceding the November 1 of the Employment Year
immediately prior to the current Employment Year. If the quotient
obtained in the foregoing fraction shall be a number less than one (1),
the Base Salary shall be equal to the Base Salary of the Employment Year
just completed. In the event (i) the CPI ceases to use the 1982-84
average of 100 as the base of calculation, or (ii) a substantial change
is made in the quality or quantity of the items utilized in determining
the CPI, or (iii) the publishing of the CPI shall be discontinued for any
reason, the United States Department of Labor shall be requested to
furnish a new index comparable to the CPI, together with the information
which will make possible the conversion of such new index to replace the
CPI for the purposes of computing the Base Salary as provided for herein.
If for any reason the United States Department of Labor does not furnish
such an index and information, the parties hereto shall thereafter accept
and use, as determined by the Board, such other index or comparable
statistics to measure the cost of living as shall be computed and
published by (i) an agency of the United States Government, (ii) a
reasonable financial periodical or (iii) a recognized authority mutually
selected by the Company and the Executive.
4.2 Cash Bonus Plan. In addition to the Base Salary provided
for in Section 4.1, during the Term and prior to a Termination Date the
Executive shall be eligible to participate in the Company's Cash Bonus
Plan (or any successor plan or arrangement) and to receive bonuses in
accordance with the terms of such plan. Any such bonus shall be payable
in the manner provided in the Company's Cash Bonus Plan (or any successor
plan or arrangement).
ARTICLE 5. REIMBURSEMENT OF EXPENSES, OFFICE AND SECRETARIAL
ASSISTANCE. The Company recognizes that the Executive will incur, from time
to time, expenses for the benefit of the Company and in furtherance of the
Company's business, including, but not limited to, expenses for entertainment,
travel and other business expenses consistent with the Company's past
practices. During (i) the Term and prior to a Termination Date and (ii) any
Compensation Continuance Period (as defined in ARTICLE 12), the Executive will
be reimbursed for his reasonable expenses incurred for the benefit of the
Company in accordance with the general policy of the Company as adopted from
time to time by the Board. To receive such reimbursement, the Executive must
present to the Company an itemized accounting of such expenses, in such detail
as the Company may reasonably request. The Company further agrees to furnish
the Executive during (i) the Term and prior to any Termination Date, (ii) any
Compensation Continuance Period (as defined in ARTICLE 12) with an office and
such secretarial assistance as shall be suitable to the character of the
Executive's position with the Company and adequate for the performance of his
duties hereunder. In the event of the termination of the Executive's
employment for any reason, the Company shall reimburse the Executive (or in
the event of death, his personal representative) for expenses incurred by the
Executive on behalf of the Company prior to the Termination Date to the extent
such expenses have not been previously reimbursed by the Company.
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ARTICLE 6. SPECIAL SUPPLEMENTAL RETIREMENT BENEFIT; SPECIAL
HEALTH CARE BENEFIT.
6.1 Special Supplemental Retirement Benefit. Upon a Termination
Date (other than for one of the terminating events described in
subparagraphs (iii), (iv) or (vi) of Section 3.1), whether voluntary or
involuntary on the part of the Executive, the Executive shall be entitled
to receive a special supplemental annual retirement benefit (the "Deferred
Benefit") equal to fifty percent (50%) of his Average Base Salary (as
defined in this Section 6.1) reduced (but not below zero), by the amount
of any "Basic Benefit" (as defined in the Company's Pension Equalization
Plan) payable to the Executive under the Company's Pension Equalization
Plan. If the Executive is eligible to receive the Severance Benefit (as
defined in ARTICLE 12), the Deferred Benefit shall be payable for nine (9)
years in approximately equal monthly installments commencing on the first
day of the month next following the end of the Severance Period (as
defined in ARTICLE 12) and continuing for one hundred seven (107)
consecutive calendar months thereafter. If the Executive is not eligible
to receive the Severance Benefit, the Deferred Benefit shall be payable
for ten (10) years in approximately equal installments commencing on the
first day of the month next following the end of the Employment Year in
which the Term expires and continuing for one hundred nineteen (119)
consecutive calendar months thereafter. The Deferred Benefit payments
shall be paid in accordance with the payroll schedule for salaried
personnel of the Company. For purposes of this Agreement, the "Average
Base Salary" of the Executive shall mean the average of his annual Base
Salary for the five (5) consecutive calendar years of employment pursuant
to this Agreement (or, in the event the Executive does not have five (5)
consecutive calendar years of employment pursuant to this Agreement, his
annual salary for calendar years of employment prior to the date of this
Agreement) ending coincident with or next preceding the Termination Date.
If the Executive shall not have five (5) consecutive calendar years of
employment, his Average Base Salary shall be equal to the Base Salary (or
annual salary, as the case may be) for the calendar year of employment
next preceding the Termination Date. Notwithstanding the foregoing, for
purposes of this Section 6.1, the Executive's Average Base Salary shall
in no event be less than $391,800. The Deferred Benefit payable under
this Section 6.1 shall not affect the Executive's rights under the
Company's Pension Equalization Plan.
6.2 Special Health Care Benefit. In addition to the other
benefits provided for in this Agreement, upon a Termination Date (other
than for one of the terminating events described in subparagraph (iii) or
(vi) of Section 3.1), the Executive shall be entitled for the period
commencing on the Termination Date and ending on the date of the
Executive's death (the "Coverage Period") to participate in any group
health plan or program (whether insured or self-insured, or any
combination thereof) provided by the Company for the benefit of its active
employees or former employees (the "Company Plan"). The Company,
consistent with sound business practices, shall use its best efforts to
provide the Executive with coverage for the Executive and his spouse under
the Company Plan during the Coverage Period (and any period thereafter to
the extent required by applicable state and federal law), including, if
necessary, amending the applicable provisions of the Company Plan and
negotiating the addition of any necessary riders to any group health
insurance contract. If the amount of the premium charged for coverage of
the Executive and his spouse under the Company Plan shall exceed the
amount of the premium charged an active employee participating in the
Company Plan with respect to coverage under the Company Plan for the
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active employee and his spouse (or, the active employee and his family,
in the event the Company Plan does not offer employee and spouse only
coverage) (the "Maximum Premium Charge"), the amount of the premium
charged for coverage of the Executive and his spouse under the Company
Plan in excess of the Maximum Premium Charge shall be paid by the Company.
In addition, the Company shall pay all or any portion of the Maximum
Premium Charge with respect to the coverage of the Executive and his
spouse to the extent of the highest premium paid by the Company for other
retired executives of the Company. The portion of the Maximum Premium
Charge not paid by the Company, if any, shall be paid by the Executive.
If the amount of the premium charged to active employees participating in
the Company Plan with respect to coverage under the Company Plan for such
active employees and their spouses (or families, as the case may be)
varies for each active employee, the Maximum Premium Charge shall be the
average of the premium charged to all active employees participating in
the Company Plan with respect to coverage under the Company Plan for such
active employees and their spouses (or families, as the case may be). In
the event the Company is unable for whatever reason to provide the
Executive with coverage under the Company Plan, the Company, consistent
with sound business practices, shall use its best efforts to provide the
Executive with an individual policy of health insurance providing coverage
for the Executive and his spouse (the "Individual Policy") during the
Coverage Period. If the amount of the premium charged for the Individual
Policy shall exceed the Maximum Premium Charge, the amount of the premium
charged for the Individual Policy in excess of the Maximum Premium Charge
shall be paid by the Company. In addition, the Company shall pay all or
any portion of the Maximum Premium Charge with respect to the Individual
Policy to the extent of the highest premium paid by the Company for other
retired executives under the Company Plan or any individual plan or
policy. The portion of the Maximum Premium Charge with respect to the
Individual Policy not paid by the Company, if any, shall be paid by the
Executive. The coverage to be provided to the Executive pursuant to this
Section 6.2 (whether under the Company Plan or the Individual Policy)
shall consist of coverage which, as of the time the coverage is being
provided, is identical (or, with respect to an Individual Policy,
substantially identical) to the coverage provided under the Company Plan
to active employees and their dependents. Notwithstanding the foregoing,
the Company shall coordinate coverage for the Executive under this Section
6.2 with any applicable federal or state government programs (e.g.,
Medicare or Medicaid) when the Executive is eligible to begin receiving
benefits under such program. Any premiums required to be paid for coverage
of the Executive under such government programs shall be paid by the
Executive.
ARTICLE 7. DISABILITY BENEFITS.
7.1 Commencement of Total Disability. If the Executive suffers
a "Total Disability" (as defined in Section 7.4), he shall be deemed
totally disabled ("Totally Disabled") for purposes of this Agreement as
of the date such Total Disability commenced.
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7.2 Benefits Payable Upon Total Disability. In the event of the
Total Disability of the Executive, the Executive shall be entitled to
benefits that are not less than the benefits payable under the Company's
Long-Term Disability Plan and the supplemental disability benefit as in
effect on November 1, 1994. In the event that the Executive's Total
Disability continues for a period of one hundred eighty (180) days
(measured from the date the Executive became Totally Disabled), a
Termination Date shall automatically occur, as provided in subparagraph
(iv) of Section 3.1, at the end of such one hundred eighty day period (the
"Disability Period"). The disability benefits payable under this Section
7.2 shall be paid in accordance with the terms of the Company's Long-Term
Disability Plan and the terms of the supplemental disability benefit, both
as in effect on November 1, 1994.
7.3 Cessation of Disability. Notwithstanding the provisions of
Section 7.2, if prior to the end of the Disability Period, the Executive's
Total Disability shall have ceased under the definition of Total
Disability set forth in Section 7.4 and he shall have resumed his regular
duties hereunder, the following special provisions shall apply: (i) this
Agreement shall continue in full force and effect (except as otherwise
provided in ARTICLE 3); and (ii) the Executive shall be entitled to resume
his employment under this Agreement and to receive thereafter compensation
in accordance with ARTICLE 4 as though he had not been Totally Disabled;
provided, however, that unless the Executive shall perform his regular
duties hereunder for a continuous period of at least sixty (60) days
following a period of Total Disability before he again becomes Totally
Disabled, he shall not be entitled to start a new Disability Period, but
instead must continue under the remaining portion of the original
Disability Period. In this event, the resumption of the original
Disability Period shall commence on the date such Total Disability
resumed.
7.4 Definition of Total Disability. For purposes of this
Agreement, "Total Disability" shall mean a physical or mental infirmity,
or both, that entitles the Executive to a benefit under the Company's
Long-Term Disability Plan as in effect on November 1, 1994.
ARTICLE 8. DEATH BENEFIT. Upon the Termination Date that occurs
on account of the Executive's death (as provided in subparagraph (iii) of
Section 3.1), the Company shall pay to the Executive's designated beneficiary
(as determined pursuant to ARTICLE 16) an annual death benefit (the "Death
Benefit") equal to twenty-five percent (25%) of the Executive's Average Base
Salary (as defined in Section 6.1). The Death Benefit shall be payable to the
Executive's designated beneficiary for five (5) years in approximately equal
monthly installments on the first day of each calendar month commencing with
the calendar month next following the month in which occurs the Executive's
death and continuing for fifty-nine (59) consecutive calendar months
thereafter.
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ARTICLE 9. DEATH FOLLOWING COMMENCEMENT OF PAYMENTS. Upon a
Termination Date on account of an event entitling the Executive to receive
payments pursuant to Section 6.1 or ARTICLES 7 or 12, and if he shall die
prior to receiving any or all of the monthly installments to which he is due
hereunder, then such remaining monthly installments shall be payable to his
designated beneficiary (as determined pursuant to ARTICLE 16).
ARTICLE 10. OTHER EMPLOYEE BENEFITS. In addition to the benefits
provided under this Agreement, the Executive shall be entitled to participate
in any and all retirement, health, disability, life insurance, nonqualified
deferred compensation and tax-qualified retirement plans or any other plans
or benefits offered by the Company to its executives generally, if and to the
extent the Executive is eligible to participate in accordance with the terms
and provisions of any such plan or benefit program. Nothing in this ARTICLE
10 is intended, or shall be construed, to require the Company to institute any
particular plan, program or benefit. Benefits payable pursuant to this
Agreement shall be in addition to benefits payable to the Executive under all
other employee benefit plans or programs of the Company.
ARTICLE 11. VACATION AND SICK LEAVE. The Executive shall be
entitled to reasonable periods of vacation and sick leave during each
Employment Year, commensurate with his position and in accordance with
established Company policy. The Executive shall continue to receive his Base
Salary during the time of his vacation and sick leave. Vacation and sick
leave not taken during the applicable Employment Year cannot be accumulated
and taken during a subsequent Employment Year nor will the Executive be paid
for vacation and sick leave not taken.
ARTICLE 12. TERMINATION COMPENSATION.
12.1 Monthly Compensation. Upon a Termination Date that occurs
for any reason, the Executive shall be entitled to continue to receive his
Base Salary through the last day of the month in which the Termination
Date occurs (the "Termination Month").
12.2 Compensation Continuance. In addition to the compensation
provided for in Section 12.1, upon the termination of the Executive's
employment by the Company's exercise of the Notice Exception or by the
Executive for Good Reason, the Executive (or in the event of his
subsequent death, his designated beneficiary) shall be entitled to
continue to receive during the remainder of the Term following the last
day of the Termination Month (the "Compensation Continuance Period"), the
Base Salary (as increased each year to reflect increases in the cost of
living) that he would have received pursuant to Section 4.1 during the
Compensation Continuance Period if the Termination Date had not occurred
and bonuses equal to the bonuses that would have been payable to the
Executive under the Company's Cash Bonus Plan (or any successor plan or
arrangement) based on the terms of such plan and the Executive's
participation level immediately before the Termination Date. During the
Compensation Continuance Period, the Executive shall (i) subject to the
provisions of Section 6.2, continue to participate in all employee benefit
plans or programs of the Company (as described in ARTICLE 10), and (ii)
be available at reasonable times to provide consulting services to the
Company.
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12.3 Special Severance Benefit. In addition to the compensation
provided for in Sections 12.1 and 12.2, upon the termination of the
Executive's employment by the Company's exercise of the Notice Exception,
or by the Executive for Good Reason, or by the Company's giving notice
which would cause the Term to expire at the end of the Initial Term or at
the end of any succeeding Extension Period, the Executive (or in the event
of his subsequent death, his designated beneficiary) shall be entitled to
a special severance benefit (the "Severance Benefit") equal to his Base
Salary and bonus under the Cash Bonus Plan (or any successor plan or
arrangement) for the Employment Year just completed, which Severance
Benefit shall be payable for one (1) year in approximately equal monthly
installments commencing on the first day of the month next following the
expiration of the Compensation Continuance Period (or the last day of the
Termination Month, as the case may be), and continuing for eleven (11)
consecutive calendar months thereafter (the "Severance Period"). The
Severance Benefit payments shall be paid in
accordance with the payroll schedule for salaried personnel of the
Company.
See Section 6.1 for additional benefits the Executive may be entitled to
receive following receipt of the compensation provided for in this ARTICLE 12.
ARTICLE 13. POST-TERMINATION OBLIGATIONS. All payments and
benefits to the Executive under this Agreement shall be subject to the
Executive's compliance with the following provisions during the Term and
following the termination of the Executive's employment:
13.1 Assistance in Litigation. The Executive shall, upon
reasonable notice, furnish such information and assistance to the Company
as may reasonably be required by the Company in connection with any
litigation in which it is, or may become, a party, and which arises out
of facts and circumstances known to the Executive. The Company shall
promptly reimburse the Executive for his out-of-pocket expenses incurred
in connection with the fulfillment of his obligations under this Section
13.1.
13.2 Confidential Information. The Executive shall not disclose
or reveal to any unauthorized person any trade secret or other
confidential information relating to the Company, its subsidiaries or
affiliates, or to any businesses operated by them, and the Executive
confirms that such information constitutes the exclusive property of the
Company; provided, however, that the foregoing shall not prohibit the
Executive from disclosing such information to the extent necessary or
desirable in connection with obtaining financing for the Company (or
furnishing such information under any agreements, documents or instruments
under which such financing may have been obtained) or otherwise disclosing
such information to third parties or governmental agencies in furtherance
of the interests of the Company; or as may be required by law.
13.3 Noncompetition. The Executive shall not: (i) prior to a
Termination Date and for the one-year period following a Termination Date,
without the prior written consent of the Company, engage directly or
indirectly, as a licensee, owner, manager, consultant, officer, employee,
director, investor or otherwise, in any business in competition with the
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Company; or (ii) usurp for his own benefit any corporate opportunity under
consideration by the Company during his employment, unless the Company
shall have finally decided not to take advantage of such corporate
opportunity. The restrictions of part (i) of this Section 13.3 shall not
apply if the employment of the Executive is terminated by the Company's
exercise of the Notice Exception or by the Executive for Good Reason, and
shall further not apply to a passive investment by the Executive
constituting ownership of less than five percent (5%) of the equity of any
entity engaged in any business described in part (i) of this Section 13.3.
The amount, if any, payable to the Executive after a Termination Date but
prior to the end of the Term shall be reduced, but not below zero, by the
amount of any remuneration for personal services earned by or payable to
the Executive by a business that is in competition with the Company. The
Executive acknowledges that the possible restrictions on his activities
which may occur as a result of his performance of his obligations under
this Section 13.3 are required for the reasonable protection of the
Company.
13.4 Failure to Comply. In the event that the Executive shall
fail to comply with any provision of this ARTICLE 13, and such failure
shall continue for ten (10) days following delivery of notice thereof by
the Company to the Executive, all rights hereunder of the Executive and
any person claiming under or through him shall thereupon terminate and no
person shall be entitled thereafter to receive any payments or benefits
hereunder (except for benefits under employee benefit plans or programs
as provided in ARTICLE 10 which have been earned or otherwise fixed or
determined to be payable prior to such termination). In addition to the
foregoing, in the event of a breach or threatened breach by the Executive
of the provisions of this ARTICLE 13, the Company shall have and may
exercise any and all other rights and remedies available to the Company
at law or otherwise, including but not limited to obtaining an injunction
from a court of competent jurisdiction enjoining and restraining the
Executive from committing such violation, and the Executive hereby
consents to the issuance of such injunction.
ARTICLE 14. ADDITIONAL PAYMENTS BY COMPANY. In the event that
any amount required to be paid or distributed to the Executive pursuant to
this Agreement shall constitute a parachute payment within the meaning of
Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"),
and the aggregate of such parachute payments and any other amounts otherwise
required to be paid or distributed to the Executive by the Company shall cause
the Executive to be subject to the excise tax on excess parachute payments
under Section 4999 of the Code (the "Excise Tax"), or any successor or similar
provision thereof, the Company shall pay to the Executive an additional amount
(the "Gross-Up Payment") such that the net amount the Executive shall receive
after the payment of any Excise Tax, shall equal the amount which he would
have received if the Excise Tax had not been imposed. The Gross-Up Payment
shall be the sum of the following:
(a) The rate of the Excise Tax multiplied by the amount of the
excess parachute payments;
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(b) Any federal income tax, social security tax, unemployment
tax or Excise Tax imposed upon the Executive as a result of the Gross-Up
Payment required to be made under this ARTICLE 14; and
(c) Any state income or other tax imposed upon the Executive as
a result of the Gross-Up Payment required to be made under this ARTICLE
14.
For purposes of determining the amount of the Gross-Up Payment,
the Executive shall be deemed to pay federal income taxes at the highest
marginal rate of federal income taxation for individuals in the calendar year
in which the Excise Tax is required to be paid. In addition, the Executive
shall be deemed to pay state income taxes at a rate determined in accordance
with the following formula:
(1 - (highest marginal rate of federal income taxation for
individuals)) x (highest marginal rate of Virginia income taxes for
individuals in the calendar year in which the Excise Tax is required to
be paid).
In the event the Executive is subject to the provisions of Section 68 of the
Code, the combined federal and state income tax rate determined above shall
be adjusted to reflect any loss in the federal deduction for state income
taxes on the Gross-Up Payment.
The Gross-Up Payment shall be made not later than the fifth (5th)
day, or as soon thereafter as the Company deems practicable, following the
date the Executive becomes subject to payment of the Excise Tax; provided,
however, that if the amount of such payment cannot be finally determined on
or before such day, the Company shall pay to the Executive on such day an
estimate, as determined in good faith by the Company, of the minimum amount
of such payment and shall pay the remainder of such payment (together with
interest at the rate provided under Section 1274(b)(2)(B) of the Code) as soon
as the amount can be determined but no later than the thirtieth (30th) day
after the date the Executive becomes subject to the payment of the Excise Tax.
In the event the amount of the estimated payment exceeds the amount
subsequently determined to have been due, such excess shall constitute a loan
by the Company to the Executive, payable on the fifth (5th) day after demand
by the Company (together with interest at the rate provided in Section
1274(b)(2)(B) of the Code).
In the event that the Excise Tax is subsequently determined to be
less than the amount taken into account hereunder at the time the Gross-Up
Payment is made, the Executive 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 (plus the portion of the
Gross-Up Payment attributable to the Excise Tax, federal and state taxes
imposed on the Gross-Up Payment being repaid by the Executive, if such
repayment results in a reduction in Excise Tax and/or a federal or state tax
deduction) plus interest on the amount of such repayment at the rate provided
in Section 1274(b)(2)(B) of the Code. The Executive shall not be required to
make the payment described in the preceding sentence if he paid the Excise Tax
to the Internal Revenue Service and the period for requesting a refund for all
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or part of such Excise Tax payment has expired. In the event that the Excise
Tax is determined to exceed the amount taken into account hereunder at the
time the Gross-Up Payment is made (including by reason of any payment the
existence or amount of which cannot be determined at that time of the Gross-Up
Payment), the Company shall make an additional Gross-Up Payment in respect of
such excess (plus any interest payable with respect to such excess) at the
time that the amount of such excess is finally determined. The Company shall
not be required to make the payment described in the preceding sentence if the
period in which the Internal Revenue Service may assess additional Excise Tax
against the Executive has expired.
ARTICLE 15. ATTORNEYS' FEES. In the event that the Executive
incurs any attorneys' fees in protecting or enforcing his rights under this
Agreement or under any employee benefit plans or programs sponsored by the
Company in which the Executive is a participant, the Company shall reimburse
the Executive for such reasonable attorneys' fees and for any other reasonable
expenses related thereto. Such reimbursement shall be made within thirty (30)
days following final resolution of the dispute or occurrence giving rise to
such fees and expenses.
ARTICLE 16. BENEFICIARY. The Executive shall name one or more
primary beneficiaries and one or more contingent beneficiaries, who shall be
entitled to receive any death benefit payable under ARTICLE 8 or any benefits
payable under ARTICLE 9 due to the Executive's death following commencement
of payments under Section 6.1 or ARTICLES 7 or 12, which beneficiary or
beneficiaries shall be subject to change from time to time by notice in
writing to the Board. A beneficiary may be a trust, an individual or the
Executive's estate. If the Executive fails to designate a beneficiary,
primary or contingent, then and in such event, such benefit shall be paid to
the surviving spouse of the Executive or, if he shall leave no surviving
spouse, then to the Executive's estate. If a named beneficiary entitled to
receive any death benefit is not living or in existence at the death of the
Executive or dies prior to asserting a written claim for any such death
benefit, then and in any such event, such death benefit shall be paid to the
other primary beneficiary or beneficiaries named by the Executive who shall
then be living or in existence, if any, otherwise to the contingent
beneficiary or beneficiaries named by the Executive who shall then be living
or in existence, if any; but if there are no primary or contingent
beneficiaries then living or in existence, such benefit shall be paid to the
surviving spouse of the Executive or, if he shall leave no surviving spouse,
then to the Executive's estate. If a named beneficiary is receiving or is
entitled to receive payments of any such death benefit and dies before
receiving all of the payments due him, any remaining benefits shall be paid
to the other primary beneficiary or beneficiaries named by the Executive who
shall then be living or in existence, if any, otherwise to the contingent
beneficiary or beneficiaries named by the Executive who shall then be living
or in existence, if any; but if there are no primary or contingent
beneficiaries then living or in existence, the balance shall be paid to the
estate of the beneficiary who was last receiving the payments.
ARTICLE 17. DECISIONS BY COMPANY; FACILITY OF PAYMENT. Any
powers granted to the Board hereunder may be exercised by a committee,
appointed by the Board, and such committee, if appointed, shall have general
responsibility for the administration and interpretation of this Agreement.
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Subject to and to the extent not inconsistent with the provisions of ARTICLE
16, if the Board or the committee shall find that any person to whom any
amount is or was payable hereunder is unable to care for his affairs because
of illness or accident, or is a minor, or has died, then the Board or the
committee, if it so elects, may direct that any payment due him or his estate
(unless a prior claim therefore has been made by a duly appointed legal
representative) or any part thereof be paid or applied for the benefit of such
person or to or for the benefit of his spouse, children or other dependents,
an institution maintaining or having custody of such person, any other person
deemed by the Board or committee to be a proper recipient on behalf of such
person otherwise entitled to payment, or any of them, in such manner and
proportion as the Board or committee may deem proper. Any such payment shall
be in complete discharge of the liability of the Company therefor.
ARTICLE 18. INDEMNIFICATION. The Company shall indemnify the
Executive during his employment and thereafter to the maximum extent permitted
by applicable law for any and all liability of the Executive arising out of,
or in connection with, his employment by the Company or membership on the
Board; provided, that in no event shall such indemnity of the Executive at any
time during the period of his employment by the Company be less than the
maximum indemnity provided by the Company at any time during such period to
any other officer or director under and indemnification insurance policy or
the bylaws or charter of the Company or by agreement.
ARTICLE 19. SOURCE OF PAYMENTS; NO TRUST. The obligations of the
Company to make payments hereunder shall constitute a liability of the
Company to the Executive. Such payments shall be from the general funds of
the Company, and the Company shall not be required to establish or maintain
any special or separate fund, or otherwise to segregate assets to assure that
such payments shall be made, and neither the Executive nor his designated
beneficiary shall have any interest in any particular asset of the Company by
reason of its obligations hereunder. Nothing contained in this Agreement
shall create or be construed as creating a trust of any kind or any other
fiduciary relationship between the Company and the Executive or any other
person. To the extent that any person acquires a right to receive payments
from the Company hereunder, such right shall be no greater than the right of
an unsecured creditor of the Company.
ARTICLE 20. SEVERABILITY. All agreements and covenants contained
herein are severable, and in the event any of them shall be held to be invalid
by any competent court, this Agreement shall be interpreted as if such invalid
agreements or covenants were not contained herein.
ARTICLE 21. ASSIGNMENT PROHIBITED. This Agreement is personal to
each of the parties hereto, and neither party may assign nor delegate any of
his or its rights or obligations hereunder without first obtaining the written
consent of the other party; provided, however, that nothing in this ARTICLE
21 shall preclude (i) the Executive from designating a beneficiary to receive
any benefit payable under this Agreement upon his death or (ii) the executors,
administrators, or other legal representatives of the Executive or his estate
from assigning any rights under this Agreement to the person or persons
entitled thereto.
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ARTICLE 22. NO ATTACHMENT. Except as otherwise provided in this
Agreement or required by applicable law, no right to receive payments under
this Agreement shall be subject to anticipation, commutation, alienation,
sale, assignment, encumbrance, charge, pledge or hypothecation or to
execution, attachment, levy, or similar process or assignment by operation of
law and any attempt, voluntary or involuntary, to effect any such action shall
be null, void and of no effect.
ARTICLE 23. HEADINGS. The headings of articles, paragraphs and
sections herein are included solely for convenience of reference and shall not
control the meaning or interpretation of any of the provisions of this
Agreement.
ARTICLE 24. GOVERNING LAW. The parties intend that this
Agreement and the performance hereunder and all suits and special proceedings
hereunder shall be construed in accordance with and under and pursuant to the
laws of the Commonwealth of Virginia and that in any action, special
proceeding or other proceeding that may be brought arising out of, in
connection with, or by reason of this Agreement, the laws of the Commonwealth
of Virginia shall be applicable and shall govern to the exclusion of the law
of any other forum, without regard to the jurisdiction in which any action or
special proceeding may be instituted.
ARTICLE 25. BINDING EFFECT. This Agreement shall be binding
upon, and inure to the benefit of, the Executive and his heirs, executors,
administrators and legal representatives and the Company and its permitted
successors and assigns.
ARTICLE 26. MERGER OR CONSOLIDATION. The Company will not
consolidate or merge into or with another corporation, or transfer all or
substantially all of its assets to another corporation (the "Successor
Corporation") unless the Successor Corporation shall assume this Agreement,
and upon such assumption, the Executive and the Successor Corporation shall
become obligated to perform the terms and conditions of this Agreement.
ARTICLE 27. COUNTERPARTS. This Agreement may be executed
simultaneously in one or more counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same
instrument.
ARTICLE 28. ENTIRE AGREEMENT. This Agreement expresses the whole
and entire agreement between the parties with reference to the employment of
the Executive and, as of the effective date hereof, supersedes and replaces
any prior employment agreement, understanding or arrangement (whether written
or oral) between the Company and the Executive. Each of the parties hereto
has relied on his or its own judgment in entering into this Agreement.
ARTICLE 29. NOTICES. All notices, requests and other
communications to any party under this Agreement shall be in writing
(including telefacsimile transmission or similar writing) and shall be given
to such party at its address or telefacsimile number set forth below or such
other address or telefacsimile number as such party may hereafter specify for
the purpose by notice to the other party:
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(a) If to the Executive:
Claude B. Owen, Jr.
512 Bridge Street
Danville, VA 24541
(b) If to the Company:
Dibrell Brothers, Incorporated
512 Bridge Street
P.O. Box 681
Danville, Virginia 24541-0681
Fax Number: (804) 791-0180
Each such notice, request or other communication shall be effective (i) if
given by mail, 72 hours after such communication is deposited in the mails
with first class postage prepaid, addressed as aforesaid or (ii) if given by
any other means, when delivered at the address specified in this ARTICLE 29.
ARTICLE 30. PEP. The Company agrees that its Pension
Equalization Plan shall be amended (i) to provide that the greater of (x) the
Executive's actual age and service or (y) the Executive's projected age and
service at the end of the Initial Term shall be used in determining whether
the Executive is entitled to a benefit under the Company's Pension
Equalization Plan and (ii) to provide that the Executive will be entitled to
a benefit under the Company's Pension Equalization Plan if, prior to his
separation from service (x) the sum of the Executive's age and service
(pursuant to the amendment described in (i) above) is at least 82, (y) the
Executive attains age 54 or more and (z) the Executive completes at least 24
years of service; provided, however, that such amendments shall not apply if
the Executive's employment is terminated during the Initial Term for Cause or
the Executive resigns during the Initial Term without Good Reason. The
Company further agrees that except as provided in the preceding sentence,
during the Term the Company's Pension Equalization Plan shall not be amended
without the Executive's consent.
ARTICLE 31. MODIFICATION OF AGREEMENT. No waiver or modification
of this Agreement or of any covenant, condition, or limitation herein
contained shall be valid unless in writing and duly executed by the party to
be charged therewith. No evidence of any waiver or modification shall be
offered or received in evidence at any proceeding, arbitration, or litigation
between the parties hereto arising out of or affecting this Agreement, or the
rights or obligations of the parties hereunder, unless such waiver or
modification is in writing, duly executed as aforesaid. The parties further
agree that the provisions of this ARTICLE 30 may not be waived except as
herein set forth.
ARTICLE 32. TAXES. To the extent required by applicable law, the
Company shall deduct and withhold all necessary Social Security taxes and all
necessary federal and state withholding taxes and any other similar sums
required by law to be withheld from any payments made pursuant to the terms
of this Agreement.
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ARTICLE 33. EFFECTIVENESS. This Agreement shall have no effect,
and shall be null and void ab initio, if the Company and Monk-Austin, Inc. do
not consummate the transaction described in Agreement and Plan of
Reorganization, dated as of October 22, 1994, on or before June 30, 1995 (or
as of any extension of such deadline as may be approved by the Company's Board
of Directors or if the Company and Standard Commercial Corporation do not
consummate a merger, combination or similar reorganization on or before June
30, 1995.
ARTICLE 34. RECITALS. The Recitals to this Agreement are
incorporated herein and shall constitute an integral part of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement on
the day and year first above written.
EXECUTIVE:
/s/ Claude B. Owen, Jr.
_______________________________(SEAL)
CLAUDE B. OWEN, JR.
WITNESS:
/s/ Susan P. Herndon
_______________________________
SUSAN P. HERNDON
DIBRELL BROTHERS, INCORPORATED:
John O. Hunnicutt
By:____________________________________
Vice President
JOHN O. HUNNICUTT
Attest:
_______________________________
Secretary/Asst. Secretary
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Exhibit 10.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), made and entered into
on the 13th day of January, 1995, to be effective as of the 1st day of
November, 1994, by and between DIBRELL BROTHERS, INCORPORATED (the
"Company"), a corporation organized and existing under the laws of the
Commonwealth of Virginia and having its principal office at Danville,
Virginia, and T. H. FAUCETT (the "Executive"), an individual residing at
Danville, Virginia.
R E C I T A L S:
The Company is engaged in the business of purchasing and
processing leaf tobacco and selling processed tobacco to manufacturers of
cigarettes and other consumer tobacco products. The Executive is
experienced in, and knowledgeable concerning, all aspects of the business
of the Company. The Executive has heretofore been employed by the Company
as its Senior Vice President and Chief Financial Officer. The Company
desires to continue to employ the Executive as Senior Vice President and
Chief Financial Officer of the Company, and the Executive desires to
continue to be employed by the Company in that capacity. Furthermore, the
Company desires to provide for the Executive certain disability, death,
severance and supplemental retirement benefits in addition to those
provided by the employee benefit plans of the Company. The Company and
the Executive desire to reduce to writing the terms of their understanding
and to provide for the Executive's continued employment by the Company
pursuant to the terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations herein and the compensation the Company agrees herein to pay
the Executive, and of other good and valuable consideration, the receipt
of which is hereby acknowledged, the Company and the Executive agree as
follows:
ARTICLE 1. EMPLOYMENT OF EXECUTIVE. Subject to the terms
and conditions set forth in this Agreement, the Company hereby employs the
Executive and the Executive hereby accepts such employment for the period
stated in ARTICLE 3 of this Agreement.
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ARTICLE 2. POSITION, RESPONSIBILITIES AND DUTIES.
2.1 Position and Responsibilities. The Executive shall
serve as Senior Vice President and Chief Financial Officer of the
Company on the conditions herein provided. The Executive shall
provide such executive services in the management of the Company's
business not inconsistent with his position and the provisions of
Section 2.2 as shall be assigned to him from time to time by the
Board of Directors of the Company (the "Board") or by such
officers of the Company as may be senior in authority to the
Executive.
2.2 Duties. In addition to having the responsibilities
described in Section 2.1, the Executive shall also serve, if
elected, as an officer and director of the Company or of any
subsidiary or affiliate of the Company. Except for illness,
reasonable vacation periods, and reasonable leaves of absence, the
Executive shall devote his full business time, attention, skill,
energies and efforts to the faithful performance of his duties
hereunder and to the business and affairs of the Company and any
subsidiary or affiliate of the Company and shall not during his
employment by the Company be employed in any other business
activity, whether or not such activity is pursued for gain, profit
or other pecuniary advantage; provided however, that (i) with the
approval of the Board, the Executive may serve, or continue to
serve, on the board of directors of, and hold any other offices or
positions in, other companies or organizations, which, in the
Board's judgment, will not present any conflict of interest with
the Company or any of its subsidiaries or affiliates or divisions,
or materially affect the performance of the Executive's duties
pursuant to this Agreement and (ii) the Executive shall not be
prevented from investing his personal assets in any business which
does not compete with the Company or with any subsidiary or
affiliate of the Company, where the form or manner of such
investment will not require substantial services on the part of
the Executive in the operation of business in which such
investment is made. Notwithstanding the foregoing, the duties of
the Executive (i) shall not be expanded without the Executive's
prior approval and (ii) shall not require him to relocate his
residence from Danville, Virginia, and shall not make it
impractical for him to continue to reside there or cause him to
reside away from there for extended periods of time.
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ARTICLE 3. TERM.
3.1 Term of Employment. The term of the Executive's
employment under this Agreement shall be effective as of
November 1, 1994, and shall continue until the earliest to occur
of the following (the "Termination Date"): (i) October 31, 1999
(except as otherwise provided in this Section 3.1); (ii) the last
day of the Employment Year (as defined in this Section 3.1) in
which the Executive attains the age of sixty-five (65); (iii) the
date of death of the Executive; (iv) the date coinciding with the
end of one hundred eighty (180) days of continuous "Total
Disability" of the Executive (as defined in ARTICLE 7); (v) the
specified date of termination under the Notice Exception (as
defined in Section 3.2); (vi) the date of termination under the
Cause Exception (as defined in Section 3.3); or (vii) the date the
Executive terminates his employment for Good Reason (as defined in
Section 3.4). In the event that the Initial Term (as defined in
this Section 3.1) shall expire for the terminating event described
in subparagraph (i) of this Section 3.1, then, notwithstanding the
provisions of subparagraph (i) of this Section 3.1, the term of
this Agreement shall be extended automatically, without any
further action by the Company or the Executive, for successive
one-year periods (each, an "Extension Period") following the
expiration of the Initial Term (as defined in this Section 3.1)
(by reason of the terminating event described in subparagraph (i)
of this Section 3.1) or any succeeding one-year Extension Period
(except as otherwise provided in this Section 3.1). If either
party hereto desires for the Term to expire at the end of the
Initial Term or at the end of any succeeding one-year Extension
Period, such party shall give written notice of such desire to the
other party no later than September 1 of the Employment Year (as
defined in this Section 3.1) in which the Initial Term (as defined
in this Section 3.1) will expire or September 1 of any succeeding
one-year Extension Period. The "Initial Term" is the period
beginning on November 1, 1994, and ending on October 31, 1999.
All references herein to the term of the Executive's employment
(the "Term") shall refer to the Initial Term and shall include any
Extension Period. Each twelve-month period beginning November 1
during the Term is referred to herein as an "Employment Year."
3.2 Termination of Giving Notice. If either party hereto
desires to terminate the Executive's employment prior to the
expiration of the Term, such party shall give not less than sixty
(60) days written notice of such desire to the other party
specifying the date of termination (the "Notice Exception").
Notwithstanding the foregoing, the Notice Exception shall not be
effected by the Company while the Executive is Totally Disabled as
provided in ARTICLE 7.
3.3 Termination for Cause; Automatic Termination. The
Company shall at all times have the right to discharge the
Executive for Cause. For purposes of this Agreement, Cause shall
be limited to one or more of the following: (i) habitual
intoxication by the Executive while performing his duties under
this Agreement; (ii) theft or embezzlement; (iii) alcoholism; (iv)
drug addiction; (v) conviction of a felony; or (vi) willful,
flagrant, deliberate and repeated infractions of material
published policies and regulations of the Company of which the
Executive has actual knowledge (the "Cause Exception"). If the
Company desires to discharge the Executive under the Cause
Exception, it shall give notice to the Executive as provided in
Section 3.5 and the Executive shall have thirty (30) days after
notice has been given to him in which to cure the reason for the
Company's exercise of the Cause Exception. If the reason for the
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Company's exercise of the Cause Exception is timely cured by the
Executive, the Company's notice shall become null and void. For
purpose of this Agreement, Cause shall not include the Executive's
Total Disability (as defined in Section 7.4).
3.4 Good Reason. In addition to termination under the
Notice Exception, the Executive may terminate his employment at
any time for Good Reason (as defined in this Section 3.4). If the
Executive desires to terminate his employment for Good Reason, he
shall give notice to the Company as provided in Section 3.5. For
purposes of this Section 3.4, "Good Reason" shall mean any of the
following:
(a) The Executive's resignation from the Company's
employment on account of the failure by the Board to reelect
the Executive to a responsible executive position in the
Company and the Executive then elects to leave the Company's
employment within six (6) months of such failure to so
reelect or reappoint the Executive;
(b) The Executive's resignation from the Company's
employment on account of a material modification by the
Board or any officer of the Company as may be senior in
authority to the Executive of the duties, functions and
responsibilities of the Executive as the Company's
Senior Vice President and Chief Financial Officer without
his consent within six (6) months of such modification; or
(c) The Executive's resignation from the Company's
employment on account of any material breach of a provision
of this Agreement by the Company, which breach is not cured
within thirty (30) days after notice has been given to the
Company by the Executive. Without limiting the generality
of the foregoing sentence, the Company shall be in material
breach of its obligations hereunder if, for example, the
Company shall not permit the Executive to exercise such
responsibilities as are consistent with the Executive's
position and are of such a nature as are usually associated
with such offices of a corporation engaged in substantially
the same business as the Company, or the Executive shall at
any time be required to report to anyone other than directly
to the Board or any officer of the Company as may be senior
in authority to the Executive, or the Company causes the
Executive to relocate his residence from Danville, Virginia
or makes it impractical for him to continue to reside there
or causes him to reside away from there for extended periods
of time, or the Company shall fail to make a payment when
due to the Executive.
3.5 Notice of Termination. Any termination by the Company
under the Cause Exception or by the Executive for Good Reason
shall be communicated by Notice of Termination to the other party
hereto. For purposes of Sections 3.3 and 3.4, a "Notice of
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Termination" means a written notice which (i) indicates the
specific termination provision in this Agreement relied upon, (ii)
sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's
employment under the provision so indicated and (iii) if the
termination date is other than the date of receipt of such notice,
specifies the effective date of termination (with respect to the
events described in Sections 3.4(a) and (b), such date shall be
not more than 30 days after the giving of such notice).
3.6 Rights of Executive Upon Termination of Employment.
(a) Following a Termination Date that occurs on account of
one of the terminating events described in subparagraphs (i), (ii),
(v) or (vii) of Section 3.1, the rights of the Executive shall be as
provided in ARTICLES 4, 5, 6, 9, 10, 12, 13, 14, 15, 16, 18 and
26.
(b) Following a Termination Date that occurs on account of
the Executive's death as provided in subparagraph (iii) of
Section 3.1, the rights of the Executive's personal representative
and designated beneficiary (as determined pursuant to ARTICLE 16)
shall be as provided in ARTICLES 4, 5, 8, 10, 12, 14, 15, 16, 18
and 26.
(c) Following a Termination Date that occurs on account of
the Executive's Total Disability as provided in subparagraph
(iv) of Section 3.1, the rights of the Executive shall be as
provided in ARTICLES 4, 5, 7, 9, 10, 12, 13, 14, 15, 16, 18 and
26.
(d) Following a Termination Date that occurs because the
Executive is terminated for Cause as provided in subparagraph (vi)
of Section 3.1, the rights of the Executive shall be as provided
in ARTICLES 4, 5, 9, 10, 12, 13, 14, 15, 16, 18 and 26.
ARTICLE 4. COMPENSATION. For all services rendered by the
Executive during the Term and prior to a Termination Date, including
without limitation, services as an executive, officer, director (except
fees and reimbursements to which all members of the Board, or a subsidiary
or affiliate of the Company, are generally entitled) or member of any
committee of the Company or of any subsidiary, affiliate, or division
thereof, the Company shall pay the Executive as compensation the
following:
4.1 Base Salary. The Executive shall be paid for his
services during the Term and prior to a Termination Date a base
annual salary of $163,000 (the "Base Salary"), payable in
appropriate installments to conform with regular payroll dates for
salaried personnel of the Company. The Executive's Base Salary
shall be automatically increased on November 1 of each Employment
Year to reflect increases in the cost of living (as hereinafter
described). In no event, however, shall the Executive's Base
Salary under this Agreement ever be less than $163,000. In
addition to any cost of living increase in the Executive's Base
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Salary, the Board or its Compensation Committee may, in its sole
discretion, increase the Executive's Base Salary based on his
performance. The amount of any annual automatic cost of living
increase in the Executive's Base Salary shall be determined by
multiplying the most recent Base Salary times a fraction whose
numerator shall be the Consumer Price Index (the "CPI") [All Urban
Consumers, South Region Average (1982-84 = 100); All Items, Bureau
of Labor Statistics of The United States Department of Labor], for
the month of September next preceding the November 1 of the
current Employment Year, and whose denominator shall be the CPI
for the month of September next preceding the November 1 of the
Employment Year immediately prior to the current Employment Year.
If the quotient obtained in the foregoing fraction shall be a
number less than one (1), the Base Salary shall be equal to the
Base Salary of the Employment Year just completed. In the event
(i) the CPI ceases to use the 1982-84 average of 100 as the base
of calculation, or (ii) a substantial change is made in the
quality or quantity of the items utilized in determining the CPI,
or (iii) the publishing of the CPI shall be discontinued for any
reason, the United States Department of Labor shall be requested
to furnish a new index comparable to the CPI, together with the
information which will make possible the conversion of such new
index to replace the CPI for the purposes of computing the Base
Salary as provided for herein. If for any reason the United
States Department of Labor does not furnish such an index and
information, the parties hereto shall thereafter accept and use,
as determined by the Board, such other index or comparable
statistics to measure the cost of living as shall be computed and
published by (i) an agency of the United States Government, (ii) a
reasonable financial periodical or (iii) a recognized authority
mutually selected by the Company and the Executive.
4.2 Cash Bonus Plan. In addition to the Base Salary
provided for in Section 4.1, during the Term and prior to a
Termination Date the Executive shall be eligible to participate in
the Company's Cash Bonus Plan (or any successor plan or
arrangement) and to receive bonuses in accordance with the terms
of such plan. Any such bonus shall be payable in the manner
provided in the Company's Cash Bonus Plan (or any successor plan
or arrangement).
ARTICLE 5. REIMBURSEMENT OF EXPENSES, OFFICE AND
SECRETARIAL ASSISTANCE. The Company recognizes that the Executive will
incur, from time to time, expenses for the benefit of the Company and in
furtherance of the Company's business, including, but not limited to,
expenses for entertainment, travel and other business expenses consistent
with the Company's past practices. During (i) the Term and prior to a
Termination Date and (ii) any Compensation Continuance Period (as defined
in ARTICLE 12), the Executive will be reimbursed for his reasonable
expenses incurred for the benefit of the Company in accordance with the
general policy of the Company as adopted from time to time by the Board.
To receive such reimbursement, the Executive must present to the Company
an itemized accounting of such expenses, in such detail as the Company may
reasonably request. The Company further agrees to furnish the Executive
during (i) the Term and prior to any Termination Date, (ii) any
Compensation Continuance Period (as defined in ARTICLE 12) with an office
and such secretarial assistance as shall be suitable to the character of
the Executive's position with the Company and adequate for the performance
of his duties hereunder. In the event of the termination of the
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Executive's employment for any reason, the Company shall reimburse the
Executive (or in the event of death, his personal representative) for
expenses incurred by the Executive on behalf of the Company prior to the
Termination Date to the extent such expenses have not been previously
reimbursed by the Company.
ARTICLE 6. SPECIAL SUPPLEMENTAL RETIREMENT BENEFIT; SPECIAL
HEALTH CARE BENEFIT.
6.1 Special Supplemental Retirement Benefit. Upon a
Termination Date (other than for one of the terminating events
described in subparagraphs (iii), (iv) or (vi) of Section 3.1),
whether voluntary or involuntary on the part of the Executive, the
Executive shall be entitled to receive a special supplemental
annual retirement benefit (the "Deferred Benefit") equal to fifty
percent (50%) of his Average Base Salary (as defined in this
Section 6.1) reduced (but not below zero), by the amount of any
"Basic Benefit" (as defined in the Company's Pension Equalization
Plan) payable to the Executive under the Company's Pension
Equalization Plan. If the Executive is eligible to receive the
Severance Benefit (as defined in ARTICLE 12), the Deferred Benefit
shall be payable for nine (9) years in approximately equal monthly
installments commencing on the first day of the month next
following the end of the Severance Period (as defined in ARTICLE
12) and continuing for one hundred seven (107) consecutive
calendar months thereafter. If the Executive is not eligible to
receive the Severance Benefit, the Deferred Benefit shall be
payable for ten (10) years in approximately equal installments
commencing on the first day of the month next following the end of
the Employment Year in which the Term expires and continuing for
one hundred nineteen (119) consecutive calendar months thereafter.
The Deferred Benefit payments shall be paid in accordance with the
payroll schedule for salaried personnel of the Company. For
purposes of this Agreement, the "Average Base Salary" of the
Executive shall mean the average of his annual Base Salary for the
five (5) consecutive calendar years of employment pursuant to this
Agreement (or, in the event the Executive does not have five (5)
consecutive calendar years of employment pursuant to this
Agreement, his annual salary for calendar years of employment
prior to the date of this Agreement) ending coincident with or
next preceding the Termination Date. If the Executive shall not
have five (5) consecutive calendar years of employment, his
Average Base Salary shall be equal to the Base Salary (or annual
salary, as the case may be) for the calendar year of employment
next preceding the Termination Date. Notwithstanding the
foregoing, for purposes of this Section 6.1, the Executive's
Average Base Salary shall in no event be less than $163,000. The
Deferred Benefit payable under this Section 6.1 shall not affect
the Executive's rights under the Company's Pension Equalization
Plan.
6.2 Special Health Care Benefit. In addition to the other
benefits provided for in this Agreement, upon a Termination Date
(other than for one of the terminating events described in
subparagraph (iii) or (vi) of Section 3.1), the Executive shall be
entitled for the period commencing on the Termination Date and
ending on the date of the Executive's death (the "Coverage
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Period") to participate in any group health plan or program
(whether insured or self-insured, or any combination thereof)
provided by the Company for the benefit of its active employees or
former employees (the "Company Plan"). The Company, consistent
with sound business practices, shall use its best efforts to
provide the Executive with coverage for the Executive and his
spouse under the Company Plan during the Coverage Period (and any
period thereafter to the extent required by applicable state and
federal law), including, if necessary, amending the applicable
provisions of the Company Plan and negotiating the addition of any
necessary riders to any group health insurance contract. If the
amount of the premium charged for coverage of the Executive and
his spouse under the Company Plan shall exceed the amount of the
premium charged an active employee participating in the Company
Plan with respect to coverage under the Company Plan for the
active employee and his spouse (or, the active employee and his
family, in the event the Company Plan does not offer employee and
spouse only coverage) (the "Maximum Premium Charge"), the amount
of the premium charged for coverage of the Executive and his
spouse under the Company Plan in excess of the Maximum Premium
Charge shall be paid by the Company. In addition, the Company
shall pay all or any portion of the Maximum Premium Charge with
respect to the coverage of the Executive and his spouse to the
extent of the highest premium paid by the Company for other
retired executives of the Company. The portion of the Maximum
Premium Charge not paid by the Company, if any, shall be paid by
the Executive. If the amount of the premium charged to active
employees participating in the Company Plan with respect to
coverage under the Company Plan for such active employees and
their spouses (or families, as the case may b to be paid for
coverage of the Executive under such government programs shall be
paid by the Executive.
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ARTICLE 7. DISABILITY BENEFITS.
7.1 Commencement of Total Disability. If the Executive
suffers a "Total Disability" (as defined in Section 7.4), he shall
be deemed totally disabled ("Totally Disabled") for purposes of
this Agreement as of the date such Total Disability commenced.
7.2 Benefits Payable Upon Total Disability. In the event
of the Total Disability of the Executive, the Executive shall be
entitled to benefits that are not less than the benefits payable
under the Company's Long-Term Disability Plan as in effect on
November 1, 1994. In the event that the Executive's Total
Disability continues for a period of one hundred eighty (180) days
(measured from the date the Executive became Totally Disabled), a
Termination Date shall automatically occur, as provided in
subparagraph (iv) of Section 3.1, at the end of such one hundred
eighty day period (the "Disability Period"). The disability
benefits payable under this Section 7.2 shall be paid in
accordance with the terms of the Company's Long-Term Disability
Plan as in effect on November 1, 1994.
7.3 Cessation of Disability. Notwithstanding the
provisions of Section 7.2, if prior to the end of the Disability
Period, the Executive's Total Disability shall have ceased under
the definition of Total Disability set forth in Section 7.4 and he
shall have resumed his regular duties hereunder, the following
special provisions shall apply: (i) this Agreement shall continue
in full force and effect (except as otherwise provided in
ARTICLE 3); and (ii) the Executive shall be entitled to resume his
employment under this Agreement and to receive thereafter
compensation in accordance with ARTICLE 4 as though he had not
been Totally Disabled; provided, however, that unless the
Executive shall perform his regular duties hereunder for a
continuous period of at least sixty (60) days following a period
of Total Disability before he again becomes Totally Disabled, he
shall not be entitled to start a new Disability Period, but
instead must continue under the remaining portion of the original
Disability Period. In this event, the resumption of the original
Disability Period shall commence on the date such Total Disability
resumed.
7.4 Definition of Total Disability. For purposes of this
Agreement, "Total Disability" shall mean a physical or mental
infirmity, or both, that entitles the Executive to a benefit under
the Company's Long-Term Disability Plan as in effect on July 1,
1994.
ARTICLE 8. DEATH BENEFIT. Upon the Termination Date that
occurs on account of the Executive's death (as provided in subparagraph
(iii) of Section 3.1), the Company shall pay to the Executive's designated
beneficiary (as determined pursuant to ARTICLE 16) an annual death benefit
(the "Death Benefit") equal to twenty-five percent (25%) of the
Executive's Average Base Salary (as defined in Section 6.1). The Death
Benefit shall be payable to the Executive's designated beneficiary for
five (5) years in approximately equal monthly installments on the first
day of each calendar month commencing with the calendar month next
following the month in which occurs the Executive's death and continuing
for fifty-nine (59) consecutive calendar months thereafter.
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ARTICLE 9. DEATH FOLLOWING COMMENCEMENT OF PAYMENTS. Upon
a Termination Date on account of an event entitling the Executive to
receive payments pursuant to Section 6.1 or ARTICLES 7 or 12, and if he
shall die prior to receiving any or all of the monthly installments to
which he is due hereunder, then such remaining monthly installments shall
be payable to his designated beneficiary (as determined pursuant to
ARTICLE 16).
ARTICLE 10. OTHER EMPLOYEE BENEFITS. In addition to the
benefits provided under this Agreement, the Executive shall be entitled to
participate in any and all retirement, health, disability, life insurance,
nonqualified deferred compensation and tax-qualified retirement plans or
any other plans or benefits offered by the Company to its executives
generally, if and to the extent the Executive is eligible to participate
in accordance with the terms and provisions of any such plan or benefit
program. Nothing in this ARTICLE 10 is intended, or shall be construed,
to require the Company to institute any particular plan, program or
benefit. Benefits payable pursuant to this Agreement shall be in addition
to benefits payable to the Executive under all other employee benefit
plans or programs of the Company.
ARTICLE 11. VACATION AND SICK LEAVE. The Executive shall
be entitled to reasonable periods of vacation and sick leave during each
Employment Year, commensurate with his position and in accordance with
established Company policy. The Executive shall continue to receive his
Base Salary during the time of his vacation and sick leave. Vacation and
sick leave not taken during the applicable Employment Year cannot be
accumulated and taken during a subsequent Employment Year nor will the
Executive be paid for vacation and sick leave not taken.
ARTICLE 12. TERMINATION COMPENSATION.
12.1 Monthly Compensation. Upon a Termination Date that
occurs for any reason, the Executive shall be entitled to continue
to receive his Base Salary through the last day of the month in
which the Termination Date occurs (the "Termination Month").
12.2 Compensation Continuance. In addition to the
compensation provided for in Section 12.1, upon the termination of
the Executive's employment by the Company's exercise of the Notice
Exception or by the Executive for Good Reason, the Executive (or
in the event of his subsequent death, his designated beneficiary)
shall be entitled to continue to receive during the remainder of
the Term following the last day of the Termination Month (the
"Compensation Continuance Period"), the Base Salary (as increased
each year to reflect increases in the cost of living) that he
would have received pursuant to Section 4.1 during the
Compensation Continuance Period if the Termination Date had not
occurred and bonuses equal to the bonuses that would have been
payable to the Executive under the Company's Cash Bonus Plan (or
any successor plan or arrangement) based on the terms of such plan
and the Executive's participation level immediately before the
Termination Date. During the Compensation Continuance Period, the
Executive shall (i) subject to the provisions of Section 6.2,
continue to participate in all employee benefit plans or programs
of the Company (as described in ARTICLE 10), and (ii) be available
at reasonable times to provide consulting services to the Company.
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12.3 Special Severance Benefit. In addition to the
compensation provided for in Sections 12.1 and 12.2, upon the
termination of the Executive's employment by the Company's
exercise of the Notice Exception, or by the Executive for Good
Reason, or by the Company's giving notice which would cause the
Term to expire at the end of the Initial Term or at the end of any
succeeding Extension Period, the Executive (or in the event of his
subsequent death, his designated beneficiary) shall be entitled to
a special severance benefit (the "Severance Benefit") equal to his
Base Salary and bonus under the Cash Bonus Plan (or any successor
plan or arrangement) for the Employment Year just completed, which
Severance Benefit shall be payable for one (1) year in
approximately equal monthly installments commencing on the first
day of the month next following the expiration of the Compensation
Continuance Period (or the last day of the Termination Month, as
the case may be), and continuing for eleven (11) consecutive
calendar months thereafter (the "Severance Period"). The
Severance Benefit payments shall be paid in accordance with the
payroll schedule for salaried personnel of the Company.
See Section 6.1 for additional benefits the Executive may be entitled to
receive following receipt of the compensation provided for in this ARTICLE
12.
ARTICLE 13. POST-TERMINATION OBLIGATIONS. All payments and
benefits to the Executive under this Agreement shall be subject to the
Executive's compliance with the following provisions during the Term and
following the termination of the Executive's employment:
13.1 Assistance in Litigation. The Executive shall, upon
reasonable notice, furnish such information and assistance to the
Company as may reasonably be required by the Company in connection
with any litigation in which it is, or may become, a party, and
which arises out of facts and circumstances known to the
Executive. The Company shall promptly reimburse the Executive for
his out-of-pocket expenses incurred in connection with the
fulfillment of his obligations under this Section 13.1.
13.2 Confidential Information. The Executive shall not
disclose or reveal to any unauthorized person any trade secret or
other confidential information relating to the Company, its
subsidiaries or affiliates, or to any businesses operated by them,
and the Executive confirms that such information constitutes the
exclusive property of the Company; provided, however, that the
foregoing shall not prohibit the Executive from disclosing such
information to the extent necessary or desirable in connection
with obtaining financing for the Company (or furnishing such
information under any agreements, documents or instruments under
which such financing may have been obtained) or otherwise
disclosing such information to third parties or governmental
agencies in furtherance of the interests of the Company; or as may
be required by law.
13.3 Noncompetition. The Executive shall not: (i) prior
to a Termination Date and for the one-year period following a
Termination Date, without the prior written consent of the
Company, engage directly or indirectly, as a licensee, owner,
manager, consultant, officer, employee, director, investor or
otherwise, in any business in competition with the Company; or
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(ii) usurp for his own benefit any corporate opportunity under
consideration by the Company during his employment, unless the
Company shall have finally decided not to take advantage of such
corporate opportunity. The restrictions of part (i) of this
Section 13.3 shall not apply if the employment of the Executive is
terminated by the Company's exercise of the Notice Exception or by
the Executive for Good Reason, and shall further not apply to a
passive investment by the Executive constituting ownership of less
than five percent (5%) of the equity of any entity engaged in any
business described in part (i) of this Section 13.3. The amount,
if any, payable to the Executive after a Termination Date but
prior to the end of the Term shall be reduced, but not below zero,
by the amount of any remuneration for personal services earned by
or payable to the Executive by a business that is in competition
with the Company. The Executive acknowledges that the possible
restrictions on his activities which may occur as a result of his
performance of his obligations under this Section 13.3 are
required for the reasonable protection of the Company.
13.4 Failure to Comply. In the event that the Executive
shall fail to comply with any provision of this ARTICLE 13, and
such failure shall continue for ten (10) days following delivery
of notice thereof by the Company to the Executive, all rights
hereunder of the Executive and any person claiming under or
through him shall thereupon terminate and no person shall be
entitled thereafter to receive any payments or benefits hereunder
(except for benefits under employee benefit plans or programs as
provided in ARTICLE 10 which have been earned or otherwise fixed
or determined to be payable prior to such termination). In
addition to the foregoing, in the event of a breach or threatened
breach by the Executive of the provisions of this ARTICLE 13, the
Company shall have and may exercise any and all other rights and
remedies available to the Company at law or otherwise, including
but not limited to obtaining an injunction from a court of
competent jurisdiction enjoining and restraining the Executive
from committing such violation, and the Executive hereby consents
to the issuance of such injunction.
ARTICLE 14. ADDITIONAL PAYMENTS BY COMPANY. In the event
that any amount required to be paid or distributed to the Executive
pursuant to this Agreement shall constitute a parachute payment within the
meaning of Section 280G of the Internal Revenue Code of 1986, as amended
(the "Code"), and the aggregate of such parachute payments and any other
amounts otherwise required to be paid or distributed to the Executive by
the Company shall cause the Executive to be subject to the excise tax on
excess parachute payments under Section 4999 of the Code (the "Excise
Tax"), or any successor or similar provision thereof, the Company shall
pay to the Executive an additional amount (the "Gross-Up Payment") such
that the net amount the Executive shall receive after the payment of any
Excise Tax, shall equal the amount which he would have received if the
Excise Tax had not been imposed. The Gross-Up Payment shall be the sum of
the following:
(a) The rate of the Excise Tax multiplied by the amount of
the excess parachute payments;
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(b) Any federal income tax, social security tax,
unemployment tax or Excise Tax imposed upon the Executive as a
result of the Gross-Up Payment required to be made under this
ARTICLE 14; and
(c) Any state income or other tax imposed upon the
Executive as a result of the Gross-Up Payment required to be made
under this ARTICLE 14.
For purposes of determining the amount of the Gross-Up
Payment, the Executive shall be deemed to pay federal income taxes at the
highest marginal rate of federal income taxation for individuals in the
calendar year in which the Excise Tax is required to be paid. In
addition, the Executive shall be deemed to pay state income taxes at a
rate determined in accordance with the following formula:
(1 - (highest marginal rate of federal income taxation for
individuals)) x (highest marginal rate of Virginia income taxes
for individuals in the calendar year in which the Excise Tax is
required to be paid).
In the event the Executive is subject to the provisions of Section 68 of
the Code, the combined federal and state income tax rate determined above
shall be adjusted to reflect any loss in the federal deduction for state
income taxes on the Gross-Up Payment.
The Gross-Up Payment shall be made not later than the fifth
(5th) day, or as soon thereafter as the Company deems practicable,
following the date the Executive becomes subject to payment of the Excise
Tax; provided, however, that if the amount of such payment cannot be
finally determined on or before such day, the Company shall pay to the
Executive on such day an estimate, as determined in good faith by the
Company, of the minimum amount of such payment and shall pay the remainder
of such payment (together with interest at the rate provided under
Section 1274(b)(2)(B) of the Code) as soon as the amount can be determined
but no later than the thirtieth (30th) day after the date the Executive
becomes subject to the payment of the Excise Tax. In the event the amount
of the estimated payment exceeds the amount subsequently determined to
have been due, such excess shall constitute a loan by the Company to the
Executive, payable on the fifth (5th) day after demand by the Company
(together with interest at the rate provided in Section 1274(b)(2)(B) of
the Code).
In the event that the Excise Tax is subsequently determined
to be less than the amount taken into account hereunder at the time the
Gross-Up Payment is made, the Executive 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 (plus the portion of the Gross-Up Payment attributable to the
Excise Tax, federal and state taxes imposed on the Gross-Up Payment being
repaid by the Executive, if such repayment results in a reduction in
Excise Tax and/or a federal or state tax deduction) plus interest on the
amount of such repayment at the rate provided in Section 1274(b)(2)(B) of
the Code. The Executive shall not be required to make the payment
described in the preceding sentence if he paid the Excise Tax to the
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Internal Revenue Service and the period for requesting a refund for all or
part of such Excise Tax payment has expired. In the event that the Excise
Tax is determined to exceed the amount taken into account hereunder at the
time the Gross-Up Payment is made (including by reason of any payment the
existence or amount of which cannot be determined at that time of the
Gross-Up Payment), the Company shall make an additional Gross-Up Payment
in respect of such excess (plus any interest payable with respect to such
excess) at the time that the amount of such excess is finally determined.
The Company shall not be required to make the payment described in the
preceding sentence if the period in which the Internal Revenue Service may
assess additional Excise Tax against the Executive has expired.
ARTICLE 15. ATTORNEYS' FEES. In the event that the
Executive incurs any attorneys' fees in protecting or enforcing his rights
under this Agreement or under any employee benefit plans or programs
sponsored by the Company in which the Executive is a participant, the
Company shall reimburse the Executive for such reasonable attorneys' fees
and for any other reasonable expenses related thereto. Such reimbursement
shall be made within thirty (30) days following final resolution of the
dispute or occurrence giving rise to such fees and expenses.
ARTICLE 16. BENEFICIARY. The Executive shall name one or
more primary beneficiaries and one or more contingent beneficiaries, who
shall be entitled to receive any death benefit payable under ARTICLE 8 or
any benefits payable under ARTICLE 9 due to the Executive's death
following commencement of payments under Section 6.1 or ARTICLES 7 or 12,
which beneficiary or beneficiaries shall be subject to change from time to
time by notice in writing to the Board. A beneficiary may be a trust, an
individual or the Executive's estate. If the Executive fails to designate
a beneficiary, primary or contingent, then and in such event, such benefit
shall be paid to the surviving spouse of the Executive or, if he shall
leave no surviving spouse, then to the Executive's estate. If a named
beneficiary entitled to receive any death benefit is not living or in
existence at the death of the Executive or dies prior to asserting a
written claim for any such death benefit, then and in any such event, such
death benefit shall be paid to the other primary beneficiary or
beneficiaries named by the Executive who shall then be living or in
existence, if any, otherwise to the contingent beneficiary or
beneficiaries named by the Executive who shall then be living or in
existence, if any; but if there are no primary or contingent beneficiaries
then living or in existence, such benefit shall be paid to the surviving
spouse of the Executive or, if he shall leave no surviving spouse, then to
the Executive's estate. If a named beneficiary is receiving or is
entitled to receive payments of any such death benefit and dies before
receiving all of the payments due him, any remaining benefits shall be
paid to the other primary beneficiary or beneficiaries named by the
Executive who shall then be living or in existence, if any, otherwise to
the contingent beneficiary or beneficiaries named by the Executive who
shall then be living or in existence, if any; but if there are no primary
or contingent beneficiaries then living or in existence, the balance shall
be paid to the estate of the beneficiary who was last receiving the
payments.
ARTICLE 17. DECISIONS BY COMPANY; FACILITY OF PAYMENT. Any
powers granted to the Board hereunder may be exercised by a committee,
appointed by the Board, and such committee, if appointed, shall have
general responsibility for the administration and interpretation of this
Agreement. Subject to and to the extent not inconsistent with the
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provisions of ARTICLE 16, if the Board or the committee shall find that
any person to whom any amount is or was payable hereunder is unable to
care for his affairs because of illness or accident, or is a minor, or has
died, then the Board or the committee, if it so elects, may direct that
any payment due him or his estate (unless a prior claim therefore has been
made by a duly appointed legal representative) or any part thereof be paid
or applied for the benefit of such person or to or for the benefit of his
spouse, children or other dependents, an institution maintaining or having
custody of such person, any other person deemed by the Board or committee
to be a proper recipient on behalf of such person otherwise entitled to
payment, or any of them, in such manner and proportion as the Board or
committee may deem proper. Any such payment shall be in complete
discharge of the liability of the Company therefor.
ARTICLE 18. INDEMNIFICATION. The Company shall indemnify
the Executive during his employment and thereafter to the maximum extent
permitted by applicable law for any and all liability of the Executive
arising out of, or in connection with, his employment by the Company or
membership on the Board; provided, that in no event shall such indemnity
of the Executive at any time during the period of his employment by the
Company be less than the maximum indemnity provided by the Company at any
time during such period to any other officer or director under and
indemnification insurance policy or the bylaws or charter of the Company
or by agreement.
ARTICLE 19. SOURCE OF PAYMENTS; NO TRUST. The obligations
of the Company to make payments hereunder shall constitute a liability of
the Company to the Executive. Such payments shall be from the general
funds of the Company, and the Company shall not be required to establish
or maintain any special or separate fund, or otherwise to segregate assets
to assure that such payments shall be made, and neither the Executive nor
his designated beneficiary shall have any interest in any particular asset
of the Company by reason of its obligations hereunder. Nothing contained
in this Agreement shall create or be construed as creating a trust of any
kind or any other fiduciary relationship between the Company and the
Executive or any other person. To the extent that any person acquires a
right to receive payments from the Company hereunder, such right shall be
no greater than the right of an unsecured creditor of the Company.
ARTICLE 20. SEVERABILITY. All agreements and covenants
contained herein are severable, and in the event any of them shall be held
to be invalid by any competent court, this Agreement shall be interpreted
as if such invalid agreements or covenants were not contained herein.
ARTICLE 21. ASSIGNMENT PROHIBITED. This Agreement is
personal to each of the parties hereto, and neither party may assign nor
delegate any of his or its rights or obligations hereunder without first
obtaining the written consent of the other party; provided, however, that
nothing in this ARTICLE 21 shall preclude (i) the Executive from
designating a beneficiary to receive any benefit payable under this
Agreement upon his death or (ii) the executors, administrators, or other
legal representatives of the Executive or his estate from assigning any
rights under this Agreement to the person or persons entitled thereto.
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ARTICLE 22. NO ATTACHMENT. Except as otherwise provided in
this Agreement or required by applicable law, no right to receive payments
under this Agreement shall be subject to anticipation, commutation,
alienation, sale, assignment, encumbrance, charge, pledge or hypothecation
or to execution, attachment, levy, or similar process or assignment by
operation of law and any attempt, voluntary or involuntary, to effect any
such action shall be null, void and of no effect.
ARTICLE 23. HEADINGS. The headings of articles, paragraphs
and sections herein are included solely for convenience of reference and
shall not control the meaning or interpretation of any of the provisions
of this Agreement.
ARTICLE 24. GOVERNING LAW. The parties intend that this
Agreement and the performance hereunder and all suits and special
proceedings hereunder shall be construed in accordance with and under and
pursuant to the laws of the Commonwealth of Virginia and that in any
action, special proceeding or other proceeding that may be brought arising
out of, in connection with, or by reason of this Agreement, the laws of
the Commonwealth of Virginia shall be applicable and shall govern to the
exclusion of the law of any other forum, without regard to the
jurisdiction in which any action or special proceeding may be instituted.
ARTICLE 25. BINDING EFFECT. This Agreement shall be
binding upon, and inure to the benefit of, the Executive and his heirs,
executors, administrators and legal representatives and the Company and
its permitted successors and assigns.
ARTICLE 26. MERGER OR CONSOLIDATION. The Company will not
consolidate or merge into or with another corporation, or transfer all or
substantially all of its assets to another corporation (the "Successor
Corporation") unless the Successor Corporation shall assume this
Agreement, and upon such assumption, the Executive and the Successor
Corporation shall become obligated to perform the terms and conditions of
this Agreement.
ARTICLE 27. COUNTERPARTS. This Agreement may be executed
simultaneously in one or more counterparts, each of which shall be deemed
an original but all of which together shall constitute one and the same
instrument.
ARTICLE 28. ENTIRE AGREEMENT. This Agreement expresses the
whole and entire agreement between the parties with reference to the
employment of the Executive and, as of the effective date hereof,
supersedes and replaces any prior employment agreement, understanding or
arrangement (whether written or oral) between the Company and the
Executive. Each of the parties hereto has relied on his or its own
judgment in entering into this Agreement.
ARTICLE 29. NOTICES. All notices, requests and other
communications to any party under this Agreement shall be in writing
(including telefacsimile transmission or similar writing) and shall be
given to such party at its address or telefacsimile number set forth below
or such other address or telefacsimile number as such party may hereafter
specify for the purpose by notice to the other party:
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(a) If to the Executive:
T. H. Faucett
512 Bridge Street
Danville, VA 24541
(b) If to the Company:
Dibrell Brothers, Incorporated
512 Bridge Street
P.O. Box 681
Danville, Virginia 24541-0681
Fax Number: (804) 791-0180
Each such notice, request or other communication shall be effective (i) if
given by mail, 72 hours after such communication is deposited in the mails
with first class postage prepaid, addressed as aforesaid or (ii) if given
by any other means, when delivered at the address specified in this
ARTICLE 29.
ARTICLE 30. PEP. The Company agrees that its Pension
Equalization Plan shall be amended (i) to provide that the greater of (x)
the Executive's actual age and service or (y) the Executive's projected
age and service at the end of the Initial Term shall be used in
determining whether the Executive is entitled to a benefit under the
Company's Pension Equalization Plan and (ii) to provide that the Executive
will be entitled to a benefit under the Company's Pension Equalization
Plan if, prior to his separation from service (x) the sum of the
Executive's age and service (pursuant to the amendment described in (i)
above) is at least 82, (y) the Executive attains age 54 or more and (z)
the Executive completes at least 24 years of service; provided, however,
that such amendments shall not apply if the Executive's employment is
terminated during the Initial Term for Cause or the Executive resigns
during the Initial Term without Good Reason. The Company further agrees
that except as provided in the preceding sentence, during the Term the
Company's Pension Equalization Plan shall not be amended without the
Executive's consent.
ARTICLE 31. MODIFICATION OF AGREEMENT. No waiver or
modification of this Agreement or of any covenant, condition, or
limitation herein contained shall be valid unless in writing and duly
executed by the party to be charged therewith. No evidence of any waiver
or modification shall be offered or received in evidence at any
proceeding, arbitration, or litigation between the parties hereto arising
out of or affecting this Agreement, or the rights or obligations of the
parties hereunder, unless such waiver or modification is in writing, duly
executed as aforesaid. The parties further agree that the provisions of
this ARTICLE 30 may not be waived except as herein set forth.
ARTICLE 32. TAXES. To the extent required by applicable
law, the Company shall deduct and withhold all necessary Social Security
taxes and all necessary federal and state withholding taxes and any other
similar sums required by law to be withheld from any payments made
pursuant to the terms of this Agreement.
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ARTICLE 33. EFFECTIVENESS. This Agreement shall have no
effect, and shall be null and void ab initio, if the Company and Monk-
Austin, Inc. do not consummate the transaction described in Agreement and
Plan of Reorganization, dated as of October 22, 1994, on or before
June 30, 1995 (or as of any extension of such deadline as may be approved
by the Company's Board of Directors or if the Company and Standard
Commercial Corporation do not consummate a merger, combination or similar
reorganization on or before June 30, 1995.
ARTICLE 34. RECITALS. The Recitals to this Agreement are
incorporated herein and shall constitute an integral part of this
Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement on
the day and year first above written.
EXECUTIVE:
/s/ T. H. Faucett
_______________________________(SEAL)
T. H. FAUCETT
WITNESS:
/s/ Heather M. Brotherton
_______________________________
HEATHER M. BROTHERTON
DIBRELL BROTHERS, INCORPORATED:
John O. Hunnicutt
By:____________________________________
Vice President
JOHN O. HUNNICUTT
Attest:
Debra H. Slaughter
_______________________________
Asst. Secretary
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Exhibit 10.3
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), made and entered into
on the 13th day of January, 1995, to be effective as of the 1st day of
November, 1994, by and between DIBRELL BROTHERS, INCORPORATED (the
"Company"), a corporation organized and existing under the laws of the
Commonwealth of Virginia and having its principal office at Danville,
Virginia, and T. W. OAKES (the "Executive"), an individual residing at
Danville, Virginia.
R E C I T A L S:
The Company is engaged in the business of purchasing and
processing leaf tobacco and selling processed tobacco to manufacturers of
cigarettes and other consumer tobacco products. The Executive is
experienced in, and knowledgeable concerning, all aspects of the business
of the Company. The Executive has heretofore been employed by the Company
as its Senior Vice President. The Company desires to continue to employ
the Executive as Senior Vice President of the Company, and the Executive
desires to continue to be employed by the Company in that capacity.
Furthermore, the Company desires to provide for the Executive certain
disability, death, severance and supplemental retirement benefits in
addition to those provided by the employee benefit plans of the Company.
The Company and the Executive desire to reduce to writing the terms of
their understanding and to provide for the Executive's continued
employment by the Company pursuant to the terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations herein and the compensation the Company agrees herein to pay
the Executive, and of other good and valuable consideration, the receipt
of which is hereby acknowledged, the Company and the Executive agree as
follows:
ARTICLE 1. EMPLOYMENT OF EXECUTIVE. Subject to the terms
and conditions set forth in this Agreement, the Company hereby employs the
Executive and the Executive hereby accepts such employment for the period
stated in ARTICLE 3 of this Agreement.
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ARTICLE 2. POSITION, RESPONSIBILITIES AND DUTIES.
2.1 Position and Responsibilities. The Executive shall
serve as Senior Vice President of the Company on the conditions
herein provided. The Executive shall provide such executive
services in the management of the Company's business not
inconsistent with his position and the provisions of Section 2.2
as shall be assigned to him from time to time by the Board of
Directors of the Company (the "Board") or by such officers of the
Company as may be senior in authority to the Executive.
2.2 Duties. In addition to having the responsibilities
described in Section 2.1, the Executive shall also serve, if
elected, as an officer and director of the Company or of any
subsidiary or affiliate of the Company. Except for illness,
reasonable vacation periods, and reasonable leaves of absence, the
Executive shall devote his full business time, attention, skill,
energies and efforts to the faithful performance of his duties
hereunder and to the business and affairs of the Company and any
subsidiary or affiliate of the Company and shall not during his
employment by the Company be employed in any other business
activity, whether or not such activity is pursued for gain, profit
or other pecuniary advantage; provided however, that (i) with the
approval of the Board, the Executive may serve, or continue to
serve, on the board of directors of, and hold any other offices or
positions in, other companies or organizations, which, in the
Board's judgment, will not present any conflict of interest with
the Company or any of its subsidiaries or affiliates or divisions,
or materially affect the performance of the Executive's duties
pursuant to this Agreement and (ii) the Executive shall not be
prevented from investing his personal assets in any business which
does not compete with the Company or with any subsidiary or
affiliate of the Company, where the form or manner of such
investment will not require substantial services on the part of
the Executive in the operation of business in which such
investment is made. Notwithstanding the foregoing, the duties of
the Executive (i) shall not be expanded without the Executive's
prior approval and (ii) shall not require him to relocate his
residence from Danville, Virginia, and shall not make it
impractical for him to continue to reside there or cause him to
reside away from there for extended periods of time.
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ARTICLE 3. TERM.
3.1 Term of Employment. The term of the Executive's
employment under this Agreement shall be effective as of
November 1, 1994, and shall continue until the earliest to occur
of the following (the "Termination Date"): (i) October 31, 1999
(except as otherwise provided in this Section 3.1); (ii) the last
day of the Employment Year (as defined in this Section 3.1) in
which the Executive attains the age of sixty-five (65); (iii) the
date of death of the Executive; (iv) the date coinciding with the
end of one hundred eighty (180) days of continuous "Total
Disability" of the Executive (as defined in ARTICLE 7); (v) the
specified date of termination under the Notice Exception (as
defined in Section 3.2); (vi) the date of termination under the
Cause Exception (as defined in Section 3.3); or (vii) the date the
Executive terminates his employment for Good Reason (as defined in
Section 3.4). In the event that the Initial Term (as defined in
this Section 3.1) shall expire for the terminating event described
in subparagraph (i) of this Section 3.1, then, notwithstanding the
provisions of subparagraph (i) of this Section 3.1, the term of
this Agreement shall be extended automatically, without any
further action by the Company or the Executive, for successive
one-year periods (each, an "Extension Period") following the
expiration of the Initial Term (as defined in this Section 3.1)
(by reason of the terminating event described in subparagraph (i)
of this Section 3.1) or any succeeding one-year Extension Period
(except as otherwise provided in this Section 3.1). If either
party hereto desires for the Term to expire at the end of the
Initial Term or at the end of any succeeding one-year Extension
Period, such party shall give written notice of such desire to the
other party no later than September 1 of the Employment Year (as
defined in this Section 3.1) in which the Initial Term (as defined
in this Section 3.1) will expire or September 1 of any succeeding
one-year Extension Period. The "Initial Term" is the period
beginning on November 1, 1994, and ending on October 31, 1999.
All references herein to the term of the Executive's employment
(the "Term") shall refer to the Initial Term and shall include any
Extension Period. Each twelve-month period beginning November 1
during the Term is referred to herein as an "Employment Year."
3.2 Termination of Giving Notice. If either party hereto
desires to terminate the Executive's employment prior to the
expiration of the Term, such party shall give not less than sixty
(60) days written notice of such desire to the other party
specifying the date of termination (the "Notice Exception").
Notwithstanding the foregoing, the Notice Exception shall not be
effected by the Company while the Executive is Totally Disabled as
provided in ARTICLE 7.
3.3 Termination for Cause; Automatic Termination. The
Company shall at all times have the right to discharge the
Executive for Cause. For purposes of this Agreement, Cause shall
be limited to one or more of the following: (i) habitual
intoxication by the Executive while performing his duties under
this Agreement; (ii) theft or embezzlement; (iii) alcoholism; (iv)
drug addiction; (v) conviction of a felony; or (vi) willful,
flagrant, deliberate and repeated infractions of material
published policies and regulations of the Company of which the
Executive has actual knowledge (the "Cause Exception"). If the
Company desires to discharge the Executive under the Cause
Exception, it shall give notice to the Executive as provided in
Section 3.5 and the Executive shall have thirty (30) days after
notice has been given to him in which to cure the reason for the
Company's exercise of the Cause Exception. If the reason for the
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Company's exercise of the Cause Exception is timely cured by the
Executive, the Company's notice shall become null and void. For
purpose of this Agreement, Cause shall not include the Executive's
Total Disability (as defined in Section 7.4).
3.4 Good Reason. In addition to termination under the
Notice Exception, the Executive may terminate his employment at
any time for Good Reason (as defined in this Section 3.4). If the
Executive desires to terminate his employment for Good Reason, he
shall give notice to the Company as provided in Section 3.5. For
purposes of this Section 3.4, "Good Reason" shall mean any of the
following:
(a) The Executive's resignation from the Company's
employment on account of the failure by the Board to reelect
the Executive to a responsible executive position in the
Company and the Executive then elects to leave the Company's
employment within six (6) months of such failure to so
reelect or reappoint the Executive;
(b) The Executive's resignation from the Company's
employment on account of a material modification by the
Board or any officer of the Company as may be senior in
authority to the Executive of the duties, functions and
responsibilities of the Executive as the Company's
Senior Vice President without his consent within six (6)
months of such modification; or
(c) The Executive's resignation from the Company's
employment on account of any material breach of a provision
of this Agreement by the Company, which breach is not cured
within thirty (30) days after notice has been given to the
Company by the Executive. Without limiting the generality
of the foregoing sentence, the Company shall be in material
breach of its obligations hereunder if, for example, the
Company shall not permit the Executive to exercise such
responsibilities as are consistent with the Executive's
position and are of such a nature as are usually associated
with such offices of a corporation engaged in substantially
the same business as the Company, or the Executive shall at
any time be required to report to anyone other than directly
to the Board or any officer of the Company as may be senior
in authority to the Executive, or the Company causes the
Executive to relocate his residence from Danville, Virginia
or makes it impractical for him to continue to reside there
or causes him to reside away from there for extended periods
of time, or the Company shall fail to make a payment when
due to the Executive.
3.5 Notice of Termination. Any termination by the Company
under the Cause Exception or by the Executive for Good Reason
shall be communicated by Notice of Termination to the other party
hereto. For purposes of Sections 3.3 and 3.4, a "Notice of
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Termination" means a written notice which (i) indicates the
specific termination provision in this Agreement relied upon, (ii)
sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's
employment under the provision so indicated and (iii) if the
termination date is other than the date of receipt of such notice,
specifies the effective date of termination (with respect to the
events described in Sections 3.4(a) and (b), such date shall be
not more than 30 days after the giving of such notice).
3.6 Rights of Executive Upon Termination of Employment.
(a) Following a Termination Date that occurs on account of
one of the terminating events described in subparagraphs (i), (ii),
(v) or (vii) of Section 3.1, the rights of the Executive shall be as
provided in ARTICLES 4, 5, 6, 9, 10, 12, 13, 14, 15, 16, 18 and
26.
(b) Following a Termination Date that occurs on account of
the Executive's death as provided in subparagraph (iii) of
Section 3.1, the rights of the Executive's personal representative
and designated beneficiary (as determined pursuant to ARTICLE 16)
shall be as provided in ARTICLES 4, 5, 8, 10, 12, 14, 15, 16, 18
and 26.
(c) Following a Termination Date that occurs on account of
the Executive's Total Disability as provided in subparagraph
(iv) of Section 3.1, the rights of the Executive shall be as
provided in ARTICLES 4, 5, 7, 9, 10, 12, 13, 14, 15, 16, 18 and
26.
(d) Following a Termination Date that occurs because the
Executive is terminated for Cause as provided in subparagraph (vi)
of Section 3.1, the rights of the Executive shall be as provided
in ARTICLES 4, 5, 9, 10, 12, 13, 14, 15, 16, 18 and 26.
ARTICLE 4. COMPENSATION. For all services rendered by the
Executive during the Term and prior to a Termination Date, including
without limitation, services as an executive, officer, director (except
fees and reimbursements to which all members of the Board, or a subsidiary
or affiliate of the Company, are generally entitled) or member of any
committee of the Company or of any subsidiary, affiliate, or division
thereof, the Company shall pay the Executive as compensation the
following:
4.1 Base Salary. The Executive shall be paid for his
services during the Term and prior to a Termination Date a base
annual salary of $155,000 (the "Base Salary"), payable in
appropriate installments to conform with regular payroll dates for
salaried personnel of the Company. The Executive's Base Salary
shall be automatically increased on November 1 of each Employment
Year to reflect increases in the cost of living (as hereinafter
described). In no event, however, shall the Executive's Base
Salary under this Agreement ever be less than $163,000. In
addition to any cost of living increase in the Executive's Base
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Salary, the Board or its Compensation Committee may, in its sole
discretion, increase the Executive's Base Salary based on his
performance. The amount of any annual automatic cost of living
increase in the Executive's Base Salary shall be determined by
multiplying the most recent Base Salary times a fraction whose
numerator shall be the Consumer Price Index (the "CPI") [All Urban
Consumers, South Region Average (1982-84 = 100); All Items, Bureau
of Labor Statistics of The United States Department of Labor], for
the month of September next preceding the November 1 of the
current Employment Year, and whose denominator shall be the CPI
for the month of September next preceding the November 1 of the
Employment Year immediately prior to the current Employment Year.
If the quotient obtained in the foregoing fraction shall be a
number less than one (1), the Base Salary shall be equal to the
Base Salary of the Employment Year just completed. In the event
(i) the CPI ceases to use the 1982-84 average of 100 as the base
of calculation, or (ii) a substantial change is made in the
quality or quantity of the items utilized in determining the CPI,
or (iii) the publishing of the CPI shall be discontinued for any
reason, the United States Department of Labor shall be requested
to furnish a new index comparable to the CPI, together with the
information which will make possible the conversion of such new
index to replace the CPI for the purposes of computing the Base
Salary as provided for herein. If for any reason the United
States Department of Labor does not furnish such an index and
information, the parties hereto shall thereafter accept and use,
as determined by the Board, such other index or comparable
statistics to measure the cost of living as shall be computed and
published by (i) an agency of the United States Government, (ii) a
reasonable financial periodical or (iii) a recognized authority
mutually selected by the Company and the Executive.
4.2 Cash Bonus Plan. In addition to the Base Salary
provided for in Section 4.1, during the Term and prior to a
Termination Date the Executive shall be eligible to participate in
the Company's Cash Bonus Plan (or any successor plan or
arrangement) and to receive bonuses in accordance with the terms
of such plan. Any such bonus shall be payable in the manner
provided in the Company's Cash Bonus Plan (or any successor plan
or arrangement).
ARTICLE 5. REIMBURSEMENT OF EXPENSES, OFFICE AND
SECRETARIAL ASSISTANCE. The Company recognizes that the Executive will
incur, from time to time, expenses for the benefit of the Company and in
furtherance of the Company's business, including, but not limited to,
expenses for entertainment, travel and other business expenses consistent
with the Company's past practices. During (i) the Term and prior to a
Termination Date and (ii) any Compensation Continuance Period (as defined
in ARTICLE 12), the Executive will be reimbursed for his reasonable
expenses incurred for the benefit of the Company in accordance with the
general policy of the Company as adopted from time to time by the Board.
To receive such reimbursement, the Executive must present to the Company
an itemized accounting of such expenses, in such detail as the Company may
reasonably request. The Company further agrees to furnish the Executive
during (i) the Term and prior to any Termination Date, (ii) any
Compensation Continuance Period (as defined in ARTICLE 12) with an office
and such secretarial assistance as shall be suitable to the character of
the Executive's position with the Company and adequate for the performance
of his duties hereunder. In the event of the termination of the
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Executive's employment for any reason, the Company shall reimburse the
Executive (or in the event of death, his personal representative) for
expenses incurred by the Executive on behalf of the Company prior to the
Termination Date to the extent such expenses have not been previously
reimbursed by the Company.
ARTICLE 6. SPECIAL SUPPLEMENTAL RETIREMENT BENEFIT; SPECIAL
HEALTH CARE BENEFIT.
6.1 Special Supplemental Retirement Benefit. Upon a
Termination Date (other than for one of the terminating events
described in subparagraphs (iii), (iv) or (vi) of Section 3.1),
whether voluntary or involuntary on the part of the Executive, the
Executive shall be entitled to receive a special supplemental
annual retirement benefit (the "Deferred Benefit") equal to fifty
percent (50%) of his Average Base Salary (as defined in this
Section 6.1) reduced (but not below zero), by the amount of any
"Basic Benefit" (as defined in the Company's Pension Equalization
Plan) payable to the Executive under the Company's Pension
Equalization Plan. If the Executive is eligible to receive the
Severance Benefit (as defined in ARTICLE 12), the Deferred Benefit
shall be payable for nine (9) years in approximately equal monthly
installments commencing on the first day of the month next
following the end of the Severance Period (as defined in ARTICLE
12) and continuing for one hundred seven (107) consecutive
calendar months thereafter. If the Executive is not eligible to
receive the Severance Benefit, the Deferred Benefit shall be
payable for ten (10) years in approximately equal installments
commencing on the first day of the month next following the end of
the Employment Year in which the Term expires and continuing for
one hundred nineteen (119) consecutive calendar months thereafter.
The Deferred Benefit payments shall be paid in accordance with the
payroll schedule for salaried personnel of the Company. For
purposes of this Agreement, the "Average Base Salary" of the
Executive shall mean the average of his annual Base Salary for the
five (5) consecutive calendar years of employment pursuant to this
Agreement (or, in the event the Executive does not have five (5)
consecutive calendar years of employment pursuant to this
Agreement, his annual salary for calendar years of employment
prior to the date of this Agreement) ending coincident with or
next preceding the Termination Date. If the Executive shall not
have five (5) consecutive calendar years of employment, his
Average Base Salary shall be equal to the Base Salary (or annual
salary, as the case may be) for the calendar year of employment
next preceding the Termination Date. Notwithstanding the
foregoing, for purposes of this Section 6.1, the Executive's
Average Base Salary shall in no event be less than $163,000. The
Deferred Benefit payable under this Section 6.1 shall not affect
the Executive's rights under the Company's Pension Equalization
Plan.
6.2 Special Health Care Benefit. In addition to the other
benefits provided for in this Agreement, upon a Termination Date
(other than for one of the terminating events described in
subparagraph (iii) or (vi) of Section 3.1), the Executive shall be
entitled for the period commencing on the Termination Date and
ending on the date of the Executive's death (the "Coverage
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Period") to participate in any group health plan or program
(whether insured or self-insured, or any combination thereof)
provided by the Company for the benefit of its active employees or
former employees (the "Company Plan"). The Company, consistent
with sound business practices, shall use its best efforts to
provide the Executive with coverage for the Executive and his
spouse under the Company Plan during the Coverage Period (and any
period thereafter to the extent required by applicable state and
federal law), including, if necessary, amending the applicable
provisions of the Company Plan and negotiating the addition of any
necessary riders to any group health insurance contract. If the
amount of the premium charged for coverage of the Executive and
his spouse under the Company Plan shall exceed the amount of the
premium charged an active employee participating in the Company
Plan with respect to coverage under the Company Plan for the
active employee and his spouse (or, the active employee and his
family, in the event the Company Plan does not offer employee and
spouse only coverage) (the "Maximum Premium Charge"), the amount
of the premium charged for coverage of the Executive and his
spouse under the Company Plan in excess of the Maximum Premium
Charge shall be paid by the Company. In addition, the Company
shall pay all or any portion of the Maximum Premium Charge with
respect to the coverage of the Executive and his spouse to the
extent of the highest premium paid by the Company for other
retired executives of the Company. The portion of the Maximum
Premium Charge not paid by the Company, if any, shall be paid by
the Executive. If the amount of the premium charged to active
employees participating in the Company Plan with respect to
coverage under the Company Plan for such active employees and
their spouses (or families, as the case may b to be paid for
coverage of the Executive under such government programs shall be
paid by the Executive.
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ARTICLE 7. DISABILITY BENEFITS.
7.1 Commencement of Total Disability. If the Executive
suffers a "Total Disability" (as defined in Section 7.4), he shall
be deemed totally disabled ("Totally Disabled") for purposes of
this Agreement as of the date such Total Disability commenced.
7.2 Benefits Payable Upon Total Disability. In the event
of the Total Disability of the Executive, the Executive shall be
entitled to benefits that are not less than the benefits payable
under the Company's Long-Term Disability Plan as in effect on
November 1, 1994. In the event that the Executive's Total
Disability continues for a period of one hundred eighty (180) days
(measured from the date the Executive became Totally Disabled), a
Termination Date shall automatically occur, as provided in
subparagraph (iv) of Section 3.1, at the end of such one hundred
eighty day period (the "Disability Period"). The disability
benefits payable under this Section 7.2 shall be paid in
accordance with the terms of the Company's Long-Term Disability
Plan as in effect on November 1, 1994.
7.3 Cessation of Disability. Notwithstanding the
provisions of Section 7.2, if prior to the end of the Disability
Period, the Executive's Total Disability shall have ceased under
the definition of Total Disability set forth in Section 7.4 and he
shall have resumed his regular duties hereunder, the following
special provisions shall apply: (i) this Agreement shall continue
in full force and effect (except as otherwise provided in
ARTICLE 3); and (ii) the Executive shall be entitled to resume his
employment under this Agreement and to receive thereafter
compensation in accordance with ARTICLE 4 as though he had not
been Totally Disabled; provided, however, that unless the
Executive shall perform his regular duties hereunder for a
continuous period of at least sixty (60) days following a period
of Total Disability before he again becomes Totally Disabled, he
shall not be entitled to start a new Disability Period, but
instead must continue under the remaining portion of the original
Disability Period. In this event, the resumption of the original
Disability Period shall commence on the date such Total Disability
resumed.
7.4 Definition of Total Disability. For purposes of this
Agreement, "Total Disability" shall mean a physical or mental
infirmity, or both, that entitles the Executive to a benefit under
the Company's Long-Term Disability Plan as in effect on July 1,
1994.
ARTICLE 8. DEATH BENEFIT. Upon the Termination Date that
occurs on account of the Executive's death (as provided in subparagraph
(iii) of Section 3.1), the Company shall pay to the Executive's designated
beneficiary (as determined pursuant to ARTICLE 16) an annual death benefit
(the "Death Benefit") equal to twenty-five percent (25%) of the
Executive's Average Base Salary (as defined in Section 6.1). The Death
Benefit shall be payable to the Executive's designated beneficiary for
five (5) years in approximately equal monthly installments on the first
day of each calendar month commencing with the calendar month next
following the month in which occurs the Executive's death and continuing
for fifty-nine (59) consecutive calendar months thereafter.
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ARTICLE 9. DEATH FOLLOWING COMMENCEMENT OF PAYMENTS. Upon
a Termination Date on account of an event entitling the Executive to
receive payments pursuant to Section 6.1 or ARTICLES 7 or 12, and if he
shall die prior to receiving any or all of the monthly installments to
which he is due hereunder, then such remaining monthly installments shall
be payable to his designated beneficiary (as determined pursuant to
ARTICLE 16).
ARTICLE 10. OTHER EMPLOYEE BENEFITS. In addition to the
benefits provided under this Agreement, the Executive shall be entitled to
participate in any and all retirement, health, disability, life insurance,
nonqualified deferred compensation and tax-qualified retirement plans or
any other plans or benefits offered by the Company to its executives
generally, if and to the extent the Executive is eligible to participate
in accordance with the terms and provisions of any such plan or benefit
program. Nothing in this ARTICLE 10 is intended, or shall be construed,
to require the Company to institute any particular plan, program or
benefit. Benefits payable pursuant to this Agreement shall be in addition
to benefits payable to the Executive under all other employee benefit
plans or programs of the Company.
ARTICLE 11. VACATION AND SICK LEAVE. The Executive shall
be entitled to reasonable periods of vacation and sick leave during each
Employment Year, commensurate with his position and in accordance with
established Company policy. The Executive shall continue to receive his
Base Salary during the time of his vacation and sick leave. Vacation and
sick leave not taken during the applicable Employment Year cannot be
accumulated and taken during a subsequent Employment Year nor will the
Executive be paid for vacation and sick leave not taken.
ARTICLE 12. TERMINATION COMPENSATION.
12.1 Monthly Compensation. Upon a Termination Date that
occurs for any reason, the Executive shall be entitled to continue
to receive his Base Salary through the last day of the month in
which the Termination Date occurs (the "Termination Month").
12.2 Compensation Continuance. In addition to the
compensation provided for in Section 12.1, upon the termination of
the Executive's employment by the Company's exercise of the Notice
Exception or by the Executive for Good Reason, the Executive (or
in the event of his subsequent death, his designated beneficiary)
shall be entitled to continue to receive during the remainder of
the Term following the last day of the Termination Month (the
"Compensation Continuance Period"), the Base Salary (as increased
each year to reflect increases in the cost of living) that he
would have received pursuant to Section 4.1 during the
Compensation Continuance Period if the Termination Date had not
occurred and bonuses equal to the bonuses that would have been
payable to the Executive under the Company's Cash Bonus Plan (or
any successor plan or arrangement) based on the terms of such plan
and the Executive's participation level immediately before the
Termination Date. During the Compensation Continuance Period, the
Executive shall (i) subject to the provisions of Section 6.2,
continue to participate in all employee benefit plans or programs
of the Company (as described in ARTICLE 10), and (ii) be available
at reasonable times to provide consulting services to the Company.
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12.3 Special Severance Benefit. In addition to the
compensation provided for in Sections 12.1 and 12.2, upon the
termination of the Executive's employment by the Company's
exercise of the Notice Exception, or by the Executive for Good
Reason, or by the Company's giving notice which would cause the
Term to expire at the end of the Initial Term or at the end of any
succeeding Extension Period, the Executive (or in the event of his
subsequent death, his designated beneficiary) shall be entitled to
a special severance benefit (the "Severance Benefit") equal to his
Base Salary and bonus under the Cash Bonus Plan (or any successor
plan or arrangement) for the Employment Year just completed, which
Severance Benefit shall be payable for one (1) year in
approximately equal monthly installments commencing on the first
day of the month next following the expiration of the Compensation
Continuance Period (or the last day of the Termination Month, as
the case may be), and continuing for eleven (11) consecutive
calendar months thereafter (the "Severance Period"). The
Severance Benefit payments shall be paid in accordance with the
payroll schedule for salaried personnel of the Company.
See Section 6.1 for additional benefits the Executive may be entitled to
receive following receipt of the compensation provided for in this ARTICLE
12.
ARTICLE 13. POST-TERMINATION OBLIGATIONS. All payments and
benefits to the Executive under this Agreement shall be subject to the
Executive's compliance with the following provisions during the Term and
following the termination of the Executive's employment:
13.1 Assistance in Litigation. The Executive shall, upon
reasonable notice, furnish such information and assistance to the
Company as may reasonably be required by the Company in connection
with any litigation in which it is, or may become, a party, and
which arises out of facts and circumstances known to the
Executive. The Company shall promptly reimburse the Executive for
his out-of-pocket expenses incurred in connection with the
fulfillment of his obligations under this Section 13.1.
13.2 Confidential Information. The Executive shall not
disclose or reveal to any unauthorized person any trade secret or
other confidential information relating to the Company, its
subsidiaries or affiliates, or to any businesses operated by them,
and the Executive confirms that such information constitutes the
exclusive property of the Company; provided, however, that the
foregoing shall not prohibit the Executive from disclosing such
information to the extent necessary or desirable in connection
with obtaining financing for the Company (or furnishing such
information under any agreements, documents or instruments under
which such financing may have been obtained) or otherwise
disclosing such information to third parties or governmental
agencies in furtherance of the interests of the Company; or as may
be required by law.
13.3 Noncompetition. The Executive shall not: (i) prior
to a Termination Date and for the one-year period following a
Termination Date, without the prior written consent of the
Company, engage directly or indirectly, as a licensee, owner,
manager, consultant, officer, employee, director, investor or
otherwise, in any business in competition with the Company; or
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(ii) usurp for his own benefit any corporate opportunity under
consideration by the Company during his employment, unless the
Company shall have finally decided not to take advantage of such
corporate opportunity. The restrictions of part (i) of this
Section 13.3 shall not apply if the employment of the Executive is
terminated by the Company's exercise of the Notice Exception or by
the Executive for Good Reason, and shall further not apply to a
passive investment by the Executive constituting ownership of less
than five percent (5%) of the equity of any entity engaged in any
business described in part (i) of this Section 13.3. The amount,
if any, payable to the Executive after a Termination Date but
prior to the end of the Term shall be reduced, but not below zero,
by the amount of any remuneration for personal services earned by
or payable to the Executive by a business that is in competition
with the Company. The Executive acknowledges that the possible
restrictions on his activities which may occur as a result of his
performance of his obligations under this Section 13.3 are
required for the reasonable protection of the Company.
13.4 Failure to Comply. In the event that the Executive
shall fail to comply with any provision of this ARTICLE 13, and
such failure shall continue for ten (10) days following delivery
of notice thereof by the Company to the Executive, all rights
hereunder of the Executive and any person claiming under or
through him shall thereupon terminate and no person shall be
entitled thereafter to receive any payments or benefits hereunder
(except for benefits under employee benefit plans or programs as
provided in ARTICLE 10 which have been earned or otherwise fixed
or determined to be payable prior to such termination). In
addition to the foregoing, in the event of a breach or threatened
breach by the Executive of the provisions of this ARTICLE 13, the
Company shall have and may exercise any and all other rights and
remedies available to the Company at law or otherwise, including
but not limited to obtaining an injunction from a court of
competent jurisdiction enjoining and restraining the Executive
from committing such violation, and the Executive hereby consents
to the issuance of such injunction.
ARTICLE 14. ADDITIONAL PAYMENTS BY COMPANY. In the event
that any amount required to be paid or distributed to the Executive
pursuant to this Agreement shall constitute a parachute payment within the
meaning of Section 280G of the Internal Revenue Code of 1986, as amended
(the "Code"), and the aggregate of such parachute payments and any other
amounts otherwise required to be paid or distributed to the Executive by
the Company shall cause the Executive to be subject to the excise tax on
excess parachute payments under Section 4999 of the Code (the "Excise
Tax"), or any successor or similar provision thereof, the Company shall
pay to the Executive an additional amount (the "Gross-Up Payment") such
that the net amount the Executive shall receive after the payment of any
Excise Tax, shall equal the amount which he would have received if the
Excise Tax had not been imposed. The Gross-Up Payment shall be the sum of
the following:
(a) The rate of the Excise Tax multiplied by the amount of
the excess parachute payments;
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(b) Any federal income tax, social security tax,
unemployment tax or Excise Tax imposed upon the Executive as a
result of the Gross-Up Payment required to be made under this
ARTICLE 14; and
(c) Any state income or other tax imposed upon the
Executive as a result of the Gross-Up Payment required to be made
under this ARTICLE 14.
For purposes of determining the amount of the Gross-Up
Payment, the Executive shall be deemed to pay federal income taxes at the
highest marginal rate of federal income taxation for individuals in the
calendar year in which the Excise Tax is required to be paid. In
addition, the Executive shall be deemed to pay state income taxes at a
rate determined in accordance with the following formula:
(1 - (highest marginal rate of federal income taxation for
individuals)) x (highest marginal rate of Virginia income taxes
for individuals in the calendar year in which the Excise Tax is
required to be paid).
In the event the Executive is subject to the provisions of Section 68 of
the Code, the combined federal and state income tax rate determined above
shall be adjusted to reflect any loss in the federal deduction for state
income taxes on the Gross-Up Payment.
The Gross-Up Payment shall be made not later than the fifth
(5th) day, or as soon thereafter as the Company deems practicable,
following the date the Executive becomes subject to payment of the Excise
Tax; provided, however, that if the amount of such payment cannot be
finally determined on or before such day, the Company shall pay to the
Executive on such day an estimate, as determined in good faith by the
Company, of the minimum amount of such payment and shall pay the remainder
of such payment (together with interest at the rate provided under
Section 1274(b)(2)(B) of the Code) as soon as the amount can be determined
but no later than the thirtieth (30th) day after the date the Executive
becomes subject to the payment of the Excise Tax. In the event the amount
of the estimated payment exceeds the amount subsequently determined to
have been due, such excess shall constitute a loan by the Company to the
Executive, payable on the fifth (5th) day after demand by the Company
(together with interest at the rate provided in Section 1274(b)(2)(B) of
the Code).
In the event that the Excise Tax is subsequently determined
to be less than the amount taken into account hereunder at the time the
Gross-Up Payment is made, the Executive 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 (plus the portion of the Gross-Up Payment attributable to the
Excise Tax, federal and state taxes imposed on the Gross-Up Payment being
repaid by the Executive, if such repayment results in a reduction in
Excise Tax and/or a federal or state tax deduction) plus interest on the
amount of such repayment at the rate provided in Section 1274(b)(2)(B) of
the Code. The Executive shall not be required to make the payment
described in the preceding sentence if he paid the Excise Tax to the
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Internal Revenue Service and the period for requesting a refund for all or
part of such Excise Tax payment has expired. In the event that the Excise
Tax is determined to exceed the amount taken into account hereunder at the
time the Gross-Up Payment is made (including by reason of any payment the
existence or amount of which cannot be determined at that time of the
Gross-Up Payment), the Company shall make an additional Gross-Up Payment
in respect of such excess (plus any interest payable with respect to such
excess) at the time that the amount of such excess is finally determined.
The Company shall not be required to make the payment described in the
preceding sentence if the period in which the Internal Revenue Service may
assess additional Excise Tax against the Executive has expired.
ARTICLE 15. ATTORNEYS' FEES. In the event that the
Executive incurs any attorneys' fees in protecting or enforcing his rights
under this Agreement or under any employee benefit plans or programs
sponsored by the Company in which the Executive is a participant, the
Company shall reimburse the Executive for such reasonable attorneys' fees
and for any other reasonable expenses related thereto. Such reimbursement
shall be made within thirty (30) days following final resolution of the
dispute or occurrence giving rise to such fees and expenses.
ARTICLE 16. BENEFICIARY. The Executive shall name one or
more primary beneficiaries and one or more contingent beneficiaries, who
shall be entitled to receive any death benefit payable under ARTICLE 8 or
any benefits payable under ARTICLE 9 due to the Executive's death
following commencement of payments under Section 6.1 or ARTICLES 7 or 12,
which beneficiary or beneficiaries shall be subject to change from time to
time by notice in writing to the Board. A beneficiary may be a trust, an
individual or the Executive's estate. If the Executive fails to designate
a beneficiary, primary or contingent, then and in such event, such benefit
shall be paid to the surviving spouse of the Executive or, if he shall
leave no surviving spouse, then to the Executive's estate. If a named
beneficiary entitled to receive any death benefit is not living or in
existence at the death of the Executive or dies prior to asserting a
written claim for any such death benefit, then and in any such event, such
death benefit shall be paid to the other primary beneficiary or
beneficiaries named by the Executive who shall then be living or in
existence, if any, otherwise to the contingent beneficiary or
beneficiaries named by the Executive who shall then be living or in
existence, if any; but if there are no primary or contingent beneficiaries
then living or in existence, such benefit shall be paid to the surviving
spouse of the Executive or, if he shall leave no surviving spouse, then to
the Executive's estate. If a named beneficiary is receiving or is
entitled to receive payments of any such death benefit and dies before
receiving all of the payments due him, any remaining benefits shall be
paid to the other primary beneficiary or beneficiaries named by the
Executive who shall then be living or in existence, if any, otherwise to
the contingent beneficiary or beneficiaries named by the Executive who
shall then be living or in existence, if any; but if there are no primary
or contingent beneficiaries then living or in existence, the balance shall
be paid to the estate of the beneficiary who was last receiving the
payments.
ARTICLE 17. DECISIONS BY COMPANY; FACILITY OF PAYMENT. Any
powers granted to the Board hereunder may be exercised by a committee,
appointed by the Board, and such committee, if appointed, shall have
general responsibility for the administration and interpretation of this
Agreement. Subject to and to the extent not inconsistent with the
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provisions of ARTICLE 16, if the Board or the committee shall find that
any person to whom any amount is or was payable hereunder is unable to
care for his affairs because of illness or accident, or is a minor, or has
died, then the Board or the committee, if it so elects, may direct that
any payment due him or his estate (unless a prior claim therefore has been
made by a duly appointed legal representative) or any part thereof be paid
or applied for the benefit of such person or to or for the benefit of his
spouse, children or other dependents, an institution maintaining or having
custody of such person, any other person deemed by the Board or committee
to be a proper recipient on behalf of such person otherwise entitled to
payment, or any of them, in such manner and proportion as the Board or
committee may deem proper. Any such payment shall be in complete
discharge of the liability of the Company therefor.
ARTICLE 18. INDEMNIFICATION. The Company shall indemnify
the Executive during his employment and thereafter to the maximum extent
permitted by applicable law for any and all liability of the Executive
arising out of, or in connection with, his employment by the Company or
membership on the Board; provided, that in no event shall such indemnity
of the Executive at any time during the period of his employment by the
Company be less than the maximum indemnity provided by the Company at any
time during such period to any other officer or director under and
indemnification insurance policy or the bylaws or charter of the Company
or by agreement.
ARTICLE 19. SOURCE OF PAYMENTS; NO TRUST. The obligations
of the Company to make payments hereunder shall constitute a liability of
the Company to the Executive. Such payments shall be from the general
funds of the Company, and the Company shall not be required to establish
or maintain any special or separate fund, or otherwise to segregate assets
to assure that such payments shall be made, and neither the Executive nor
his designated beneficiary shall have any interest in any particular asset
of the Company by reason of its obligations hereunder. Nothing contained
in this Agreement shall create or be construed as creating a trust of any
kind or any other fiduciary relationship between the Company and the
Executive or any other person. To the extent that any person acquires a
right to receive payments from the Company hereunder, such right shall be
no greater than the right of an unsecured creditor of the Company.
ARTICLE 20. SEVERABILITY. All agreements and covenants
contained herein are severable, and in the event any of them shall be held
to be invalid by any competent court, this Agreement shall be interpreted
as if such invalid agreements or covenants were not contained herein.
ARTICLE 21. ASSIGNMENT PROHIBITED. This Agreement is
personal to each of the parties hereto, and neither party may assign nor
delegate any of his or its rights or obligations hereunder without first
obtaining the written consent of the other party; provided, however, that
nothing in this ARTICLE 21 shall preclude (i) the Executive from
designating a beneficiary to receive any benefit payable under this
Agreement upon his death or (ii) the executors, administrators, or other
legal representatives of the Executive or his estate from assigning any
rights under this Agreement to the person or persons entitled thereto.
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ARTICLE 22. NO ATTACHMENT. Except as otherwise provided in
this Agreement or required by applicable law, no right to receive payments
under this Agreement shall be subject to anticipation, commutation,
alienation, sale, assignment, encumbrance, charge, pledge or hypothecation
or to execution, attachment, levy, or similar process or assignment by
operation of law and any attempt, voluntary or involuntary, to effect any
such action shall be null, void and of no effect.
ARTICLE 23. HEADINGS. The headings of articles, paragraphs
and sections herein are included solely for convenience of reference and
shall not control the meaning or interpretation of any of the provisions
of this Agreement.
ARTICLE 24. GOVERNING LAW. The parties intend that this
Agreement and the performance hereunder and all suits and special
proceedings hereunder shall be construed in accordance with and under and
pursuant to the laws of the Commonwealth of Virginia and that in any
action, special proceeding or other proceeding that may be brought arising
out of, in connection with, or by reason of this Agreement, the laws of
the Commonwealth of Virginia shall be applicable and shall govern to the
exclusion of the law of any other forum, without regard to the
jurisdiction in which any action or special proceeding may be instituted.
ARTICLE 25. BINDING EFFECT. This Agreement shall be
binding upon, and inure to the benefit of, the Executive and his heirs,
executors, administrators and legal representatives and the Company and
its permitted successors and assigns.
ARTICLE 26. MERGER OR CONSOLIDATION. The Company will not
consolidate or merge into or with another corporation, or transfer all or
substantially all of its assets to another corporation (the "Successor
Corporation") unless the Successor Corporation shall assume this
Agreement, and upon such assumption, the Executive and the Successor
Corporation shall become obligated to perform the terms and conditions of
this Agreement.
ARTICLE 27. COUNTERPARTS. This Agreement may be executed
simultaneously in one or more counterparts, each of which shall be deemed
an original but all of which together shall constitute one and the same
instrument.
ARTICLE 28. ENTIRE AGREEMENT. This Agreement expresses the
whole and entire agreement between the parties with reference to the
employment of the Executive and, as of the effective date hereof,
supersedes and replaces any prior employment agreement, understanding or
arrangement (whether written or oral) between the Company and the
Executive. Each of the parties hereto has relied on his or its own
judgment in entering into this Agreement.
ARTICLE 29. NOTICES. All notices, requests and other
communications to any party under this Agreement shall be in writing
(including telefacsimile transmission or similar writing) and shall be
given to such party at its address or telefacsimile number set forth below
or such other address or telefacsimile number as such party may hereafter
specify for the purpose by notice to the other party:
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(a) If to the Executive:
T. H. Faucett
512 Bridge Street
Danville, VA 24541
(b) If to the Company:
Dibrell Brothers, Incorporated
512 Bridge Street
P.O. Box 681
Danville, Virginia 24541-0681
Fax Number: (804) 791-0180
Each such notice, request or other communication shall be effective (i) if
given by mail, 72 hours after such communication is deposited in the mails
with first class postage prepaid, addressed as aforesaid or (ii) if given
by any other means, when delivered at the address specified in this
ARTICLE 29.
ARTICLE 30. PEP. The Company agrees that its Pension
Equalization Plan shall be amended (i) to provide that the greater of (x)
the Executive's actual age and service or (y) the Executive's projected
age and service at the end of the Initial Term shall be used in
determining whether the Executive is entitled to a benefit under the
Company's Pension Equalization Plan and (ii) to provide that the Executive
will be entitled to a benefit under the Company's Pension Equalization
Plan if, prior to his separation from service (x) the sum of the
Executive's age and service (pursuant to the amendment described in (i)
above) is at least 82, (y) the Executive attains age 54 or more and (z)
the Executive completes at least 24 years of service; provided, however,
that such amendments shall not apply if the Executive's employment is
terminated during the Initial Term for Cause or the Executive resigns
during the Initial Term without Good Reason. The Company further agrees
that except as provided in the preceding sentence, during the Term the
Company's Pension Equalization Plan shall not be amended without the
Executive's consent.
ARTICLE 31. MODIFICATION OF AGREEMENT. No waiver or
modification of this Agreement or of any covenant, condition, or
limitation herein contained shall be valid unless in writing and duly
executed by the party to be charged therewith. No evidence of any waiver
or modification shall be offered or received in evidence at any
proceeding, arbitration, or litigation between the parties hereto arising
out of or affecting this Agreement, or the rights or obligations of the
parties hereunder, unless such waiver or modification is in writing, duly
executed as aforesaid. The parties further agree that the provisions of
this ARTICLE 30 may not be waived except as herein set forth.
ARTICLE 32. TAXES. To the extent required by applicable
law, the Company shall deduct and withhold all necessary Social Security
taxes and all necessary federal and state withholding taxes and any other
similar sums required by law to be withheld from any payments made
pursuant to the terms of this Agreement.
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ARTICLE 33. EFFECTIVENESS. This Agreement shall have no
effect, and shall be null and void ab initio, if the Company and Monk-
Austin, Inc. do not consummate the transaction described in Agreement and
Plan of Reorganization, dated as of October 22, 1994, on or before
June 30, 1995 (or as of any extension of such deadline as may be approved
by the Company's Board of Directors or if the Company and Standard
Commercial Corporation do not consummate a merger, combination or similar
reorganization on or before June 30, 1995.
ARTICLE 34. RECITALS. The Recitals to this Agreement are
incorporated herein and shall constitute an integral part of this
Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement on
the day and year first above written.
EXECUTIVE:
/s/ T. W. Oakes
_______________________________(SEAL)
T. W. OAKES
WITNESS:
/s/ Paul W. Ashworth
_______________________________
PAUL W. ASHWORTH
DIBRELL BROTHERS, INCORPORATED:
John O. Hunnicutt
By:____________________________________
Vice President
JOHN O. HUNNICUTT
Attest:
Debra H. Slaughter
_______________________________
Asst. Secretary
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Exhibit 10.4
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), made and entered into
on the 16th day of January, 1995, to be effective as of the 1st day of
November, 1994, by and between DIBRELL BROTHERS, INCORPORATED (the
"Company"), a corporation organized and existing under the laws of the
Commonwealth of Virginia and having its principal office at Danville,
Virginia, and L. N. DIBRELL, III (the "Executive"), an individual residing at
Danville, Virginia.
R E C I T A L S:
The Company is engaged in the business of purchasing and
processing leaf tobacco and selling processed tobacco to manufacturers of
cigarettes and other consumer tobacco products. The Executive is
experienced in, and knowledgeable concerning, all aspects of the business
of the Company. The Executive has heretofore been employed by the Company
as its Senior Vice President. The Company desires to continue to employ
the Executive as Senior Vice President of the Company, and the Executive
desires to continue to be employed by the Company in that capacity.
Furthermore, the Company desires to provide for the Executive certain
disability, death, severance and supplemental retirement benefits in
addition to those provided by the employee benefit plans of the Company.
The Company and the Executive desire to reduce to writing the terms of
their understanding and to provide for the Executive's continued
employment by the Company pursuant to the terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations herein and the compensation the Company agrees herein to pay
the Executive, and of other good and valuable consideration, the receipt
of which is hereby acknowledged, the Company and the Executive agree as
follows:
ARTICLE 1. EMPLOYMENT OF EXECUTIVE. Subject to the terms
and conditions set forth in this Agreement, the Company hereby employs the
Executive and the Executive hereby accepts such employment for the period
stated in ARTICLE 3 of this Agreement.
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ARTICLE 2. POSITION, RESPONSIBILITIES AND DUTIES.
2.1 Position and Responsibilities. The Executive shall
serve as Senior Vice President of the Company on the conditions
herein provided. The Executive shall provide such executive
services in the management of the Company's business not
inconsistent with his position and the provisions of Section 2.2
as shall be assigned to him from time to time by the Board of
Directors of the Company (the "Board") or by such officers of the
Company as may be senior in authority to the Executive.
2.2 Duties. In addition to having the responsibilities
described in Section 2.1, the Executive shall also serve, if
elected, as an officer and director of the Company or of any
subsidiary or affiliate of the Company. Except for illness,
reasonable vacation periods, and reasonable leaves of absence, the
Executive shall devote his full business time, attention, skill,
energies and efforts to the faithful performance of his duties
hereunder and to the business and affairs of the Company and any
subsidiary or affiliate of the Company and shall not during his
employment by the Company be employed in any other business
activity, whether or not such activity is pursued for gain, profit
or other pecuniary advantage; provided however, that (i) with the
approval of the Board, the Executive may serve, or continue to
serve, on the board of directors of, and hold any other offices or
positions in, other companies or organizations, which, in the
Board's judgment, will not present any conflict of interest with
the Company or any of its subsidiaries or affiliates or divisions,
or materially affect the performance of the Executive's duties
pursuant to this Agreement and (ii) the Executive shall not be
prevented from investing his personal assets in any business which
does not compete with the Company or with any subsidiary or
affiliate of the Company, where the form or manner of such
investment will not require substantial services on the part of
the Executive in the operation of business in which such
investment is made. Notwithstanding the foregoing, the duties of
the Executive (i) shall not be expanded without the Executive's
prior approval and (ii) shall not require him to relocate his
residence from Danville, Virginia, and shall not make it
impractical for him to continue to reside there or cause him to
reside away from there for extended periods of time.
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ARTICLE 3. TERM.
3.1 Term of Employment. The term of the Executive's
employment under this Agreement shall be effective as of
November 1, 1994, and shall continue until the earliest to occur
of the following (the "Termination Date"): (i) October 31, 1999
(except as otherwise provided in this Section 3.1); (ii) the last
day of the Employment Year (as defined in this Section 3.1) in
which the Executive attains the age of sixty-five (65); (iii) the
date of death of the Executive; (iv) the date coinciding with the
end of one hundred eighty (180) days of continuous "Total
Disability" of the Executive (as defined in ARTICLE 7); (v) the
specified date of termination under the Notice Exception (as
defined in Section 3.2); (vi) the date of termination under the
Cause Exception (as defined in Section 3.3); or (vii) the date the
Executive terminates his employment for Good Reason (as defined in
Section 3.4). In the event that the Initial Term (as defined in
this Section 3.1) shall expire for the terminating event described
in subparagraph (i) of this Section 3.1, then, notwithstanding the
provisions of subparagraph (i) of this Section 3.1, the term of
this Agreement shall be extended automatically, without any
further action by the Company or the Executive, for successive
one-year periods (each, an "Extension Period") following the
expiration of the Initial Term (as defined in this Section 3.1)
(by reason of the terminating event described in subparagraph (i)
of this Section 3.1) or any succeeding one-year Extension Period
(except as otherwise provided in this Section 3.1). If either
party hereto desires for the Term to expire at the end of the
Initial Term or at the end of any succeeding one-year Extension
Period, such party shall give written notice of such desire to the
other party no later than September 1 of the Employment Year (as
defined in this Section 3.1) in which the Initial Term (as defined
in this Section 3.1) will expire or September 1 of any succeeding
one-year Extension Period. The "Initial Term" is the period
beginning on November 1, 1994, and ending on October 31, 1999.
All references herein to the term of the Executive's employment
(the "Term") shall refer to the Initial Term and shall include any
Extension Period. Each twelve-month period beginning November 1
during the Term is referred to herein as an "Employment Year."
3.2 Termination of Giving Notice. If either party hereto
desires to terminate the Executive's employment prior to the
expiration of the Term, such party shall give not less than sixty
(60) days written notice of such desire to the other party
specifying the date of termination (the "Notice Exception").
Notwithstanding the foregoing, the Notice Exception shall not be
effected by the Company while the Executive is Totally Disabled as
provided in ARTICLE 7.
3.3 Termination for Cause; Automatic Termination. The
Company shall at all times have the right to discharge the
Executive for Cause. For purposes of this Agreement, Cause shall
be limited to one or more of the following: (i) habitual
intoxication by the Executive while performing his duties under
this Agreement; (ii) theft or embezzlement; (iii) alcoholism; (iv)
drug addiction; (v) conviction of a felony; or (vi) willful,
flagrant, deliberate and repeated infractions of material
published policies and regulations of the Company of which the
Executive has actual knowledge (the "Cause Exception"). If the
Company desires to discharge the Executive under the Cause
Exception, it shall give notice to the Executive as provided in
Section 3.5 and the Executive shall have thirty (30) days after
notice has been given to him in which to cure the reason for the
Company's exercise of the Cause Exception. If the reason for the
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Company's exercise of the Cause Exception is timely cured by the
Executive, the Company's notice shall become null and void. For
purpose of this Agreement, Cause shall not include the Executive's
Total Disability (as defined in Section 7.4).
3.4 Good Reason. In addition to termination under the
Notice Exception, the Executive may terminate his employment at
any time for Good Reason (as defined in this Section 3.4). If the
Executive desires to terminate his employment for Good Reason, he
shall give notice to the Company as provided in Section 3.5. For
purposes of this Section 3.4, "Good Reason" shall mean any of the
following:
(a) The Executive's resignation from the Company's
employment on account of the failure by the Board to reelect
the Executive to a responsible executive position in the
Company and the Executive then elects to leave the Company's
employment within six (6) months of such failure to so
reelect or reappoint the Executive;
(b) The Executive's resignation from the Company's
employment on account of a material modification by the
Board or any officer of the Company as may be senior in
authority to the Executive of the duties, functions and
responsibilities of the Executive as the Company's
Senior Vice President without his consent within six (6)
months of such modification; or
(c) The Executive's resignation from the Company's
employment on account of any material breach of a provision
of this Agreement by the Company, which breach is not cured
within thirty (30) days after notice has been given to the
Company by the Executive. Without limiting the generality
of the foregoing sentence, the Company shall be in material
breach of its obligations hereunder if, for example, the
Company shall not permit the Executive to exercise such
responsibilities as are consistent with the Executive's
position and are of such a nature as are usually associated
with such offices of a corporation engaged in substantially
the same business as the Company, or the Executive shall at
any time be required to report to anyone other than directly
to the Board or any officer of the Company as may be senior
in authority to the Executive, or the Company causes the
Executive to relocate his residence from Danville, Virginia
or makes it impractical for him to continue to reside there
or causes him to reside away from there for extended periods
of time, or the Company shall fail to make a payment when
due to the Executive.
3.5 Notice of Termination. Any termination by the Company
under the Cause Exception or by the Executive for Good Reason
shall be communicated by Notice of Termination to the other party
hereto. For purposes of Sections 3.3 and 3.4, a "Notice of
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Termination" means a written notice which (i) indicates the
specific termination provision in this Agreement relied upon, (ii)
sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's
employment under the provision so indicated and (iii) if the
termination date is other than the date of receipt of such notice,
specifies the effective date of termination (with respect to the
events described in Sections 3.4(a) and (b), such date shall be
not more than 30 days after the giving of such notice).
3.6 Rights of Executive Upon Termination of Employment.
(a) Following a Termination Date that occurs on account of
one of the terminating events described in subparagraphs (i), (ii),
(v) or (vii) of Section 3.1, the rights of the Executive shall be as
provided in ARTICLES 4, 5, 6, 9, 10, 12, 13, 14, 15, 16, 18 and
26.
(b) Following a Termination Date that occurs on account of
the Executive's death as provided in subparagraph (iii) of
Section 3.1, the rights of the Executive's personal representative
and designated beneficiary (as determined pursuant to ARTICLE 16)
shall be as provided in ARTICLES 4, 5, 8, 10, 12, 14, 15, 16, 18
and 26.
(c) Following a Termination Date that occurs on account of
the Executive's Total Disability as provided in subparagraph
(iv) of Section 3.1, the rights of the Executive shall be as
provided in ARTICLES 4, 5, 7, 9, 10, 12, 13, 14, 15, 16, 18 and
26.
(d) Following a Termination Date that occurs because the
Executive is terminated for Cause as provided in subparagraph (vi)
of Section 3.1, the rights of the Executive shall be as provided
in ARTICLES 4, 5, 9, 10, 12, 13, 14, 15, 16, 18 and 26.
ARTICLE 4. COMPENSATION. For all services rendered by the
Executive during the Term and prior to a Termination Date, including
without limitation, services as an executive, officer, director (except
fees and reimbursements to which all members of the Board, or a subsidiary
or affiliate of the Company, are generally entitled) or member of any
committee of the Company or of any subsidiary, affiliate, or division
thereof, the Company shall pay the Executive as compensation the
following:
4.1 Base Salary. The Executive shall be paid for his
services during the Term and prior to a Termination Date a base
annual salary of $155,000 (the "Base Salary"), payable in
appropriate installments to conform with regular payroll dates for
salaried personnel of the Company. The Executive's Base Salary
shall be automatically increased on November 1 of each Employment
Year to reflect increases in the cost of living (as hereinafter
described). In no event, however, shall the Executive's Base
Salary under this Agreement ever be less than $163,000. In
addition to any cost of living increase in the Executive's Base
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Salary, the Board or its Compensation Committee may, in its sole
discretion, increase the Executive's Base Salary based on his
performance. The amount of any annual automatic cost of living
increase in the Executive's Base Salary shall be determined by
multiplying the most recent Base Salary times a fraction whose
numerator shall be the Consumer Price Index (the "CPI") [All Urban
Consumers, South Region Average (1982-84 = 100); All Items, Bureau
of Labor Statistics of The United States Department of Labor], for
the month of September next preceding the November 1 of the
current Employment Year, and whose denominator shall be the CPI
for the month of September next preceding the November 1 of the
Employment Year immediately prior to the current Employment Year.
If the quotient obtained in the foregoing fraction shall be a
number less than one (1), the Base Salary shall be equal to the
Base Salary of the Employment Year just completed. In the event
(i) the CPI ceases to use the 1982-84 average of 100 as the base
of calculation, or (ii) a substantial change is made in the
quality or quantity of the items utilized in determining the CPI,
or (iii) the publishing of the CPI shall be discontinued for any
reason, the United States Department of Labor shall be requested
to furnish a new index comparable to the CPI, together with the
information which will make possible the conversion of such new
index to replace the CPI for the purposes of computing the Base
Salary as provided for herein. If for any reason the United
States Department of Labor does not furnish such an index and
information, the parties hereto shall thereafter accept and use,
as determined by the Board, such other index or comparable
statistics to measure the cost of living as shall be computed and
published by (i) an agency of the United States Government, (ii) a
reasonable financial periodical or (iii) a recognized authority
mutually selected by the Company and the Executive.
4.2 Cash Bonus Plan. In addition to the Base Salary
provided for in Section 4.1, during the Term and prior to a
Termination Date the Executive shall be eligible to participate in
the Company's Cash Bonus Plan (or any successor plan or
arrangement) and to receive bonuses in accordance with the terms
of such plan. Any such bonus shall be payable in the manner
provided in the Company's Cash Bonus Plan (or any successor plan
or arrangement).
ARTICLE 5. REIMBURSEMENT OF EXPENSES, OFFICE AND
SECRETARIAL ASSISTANCE. The Company recognizes that the Executive will
incur, from time to time, expenses for the benefit of the Company and in
furtherance of the Company's business, including, but not limited to,
expenses for entertainment, travel and other business expenses consistent
with the Company's past practices. During (i) the Term and prior to a
Termination Date and (ii) any Compensation Continuance Period (as defined
in ARTICLE 12), the Executive will be reimbursed for his reasonable
expenses incurred for the benefit of the Company in accordance with the
general policy of the Company as adopted from time to time by the Board.
To receive such reimbursement, the Executive must present to the Company
an itemized accounting of such expenses, in such detail as the Company may
reasonably request. The Company further agrees to furnish the Executive
during (i) the Term and prior to any Termination Date, (ii) any
Compensation Continuance Period (as defined in ARTICLE 12) with an office
and such secretarial assistance as shall be suitable to the character of
the Executive's position with the Company and adequate for the performance
of his duties hereunder. In the event of the termination of the
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Executive's employment for any reason, the Company shall reimburse the
Executive (or in the event of death, his personal representative) for
expenses incurred by the Executive on behalf of the Company prior to the
Termination Date to the extent such expenses have not been previously
reimbursed by the Company.
ARTICLE 6. SPECIAL SUPPLEMENTAL RETIREMENT BENEFIT; SPECIAL
HEALTH CARE BENEFIT.
6.1 Special Supplemental Retirement Benefit. Upon a
Termination Date (other than for one of the terminating events
described in subparagraphs (iii), (iv) or (vi) of Section 3.1),
whether voluntary or involuntary on the part of the Executive, the
Executive shall be entitled to receive a special supplemental
annual retirement benefit (the "Deferred Benefit") equal to fifty
percent (50%) of his Average Base Salary (as defined in this
Section 6.1) reduced (but not below zero), by the amount of any
"Basic Benefit" (as defined in the Company's Pension Equalization
Plan) payable to the Executive under the Company's Pension
Equalization Plan. If the Executive is eligible to receive the
Severance Benefit (as defined in ARTICLE 12), the Deferred Benefit
shall be payable for nine (9) years in approximately equal monthly
installments commencing on the first day of the month next
following the end of the Severance Period (as defined in ARTICLE
12) and continuing for one hundred seven (107) consecutive
calendar months thereafter. If the Executive is not eligible to
receive the Severance Benefit, the Deferred Benefit shall be
payable for ten (10) years in approximately equal installments
commencing on the first day of the month next following the end of
the Employment Year in which the Term expires and continuing for
one hundred nineteen (119) consecutive calendar months thereafter.
The Deferred Benefit payments shall be paid in accordance with the
payroll schedule for salaried personnel of the Company. For
purposes of this Agreement, the "Average Base Salary" of the
Executive shall mean the average of his annual Base Salary for the
five (5) consecutive calendar years of employment pursuant to this
Agreement (or, in the event the Executive does not have five (5)
consecutive calendar years of employment pursuant to this
Agreement, his annual salary for calendar years of employment
prior to the date of this Agreement) ending coincident with or
next preceding the Termination Date. If the Executive shall not
have five (5) consecutive calendar years of employment, his
Average Base Salary shall be equal to the Base Salary (or annual
salary, as the case may be) for the calendar year of employment
next preceding the Termination Date. Notwithstanding the
foregoing, for purposes of this Section 6.1, the Executive's
Average Base Salary shall in no event be less than $163,000. The
Deferred Benefit payable under this Section 6.1 shall not affect
the Executive's rights under the Company's Pension Equalization
Plan.
6.2 Special Health Care Benefit. In addition to the other
benefits provided for in this Agreement, upon a Termination Date
(other than for one of the terminating events described in
subparagraph (iii) or (vi) of Section 3.1), the Executive shall be
entitled for the period commencing on the Termination Date and
ending on the date of the Executive's death (the "Coverage
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Period") to participate in any group health plan or program
(whether insured or self-insured, or any combination thereof)
provided by the Company for the benefit of its active employees or
former employees (the "Company Plan"). The Company, consistent
with sound business practices, shall use its best efforts to
provide the Executive with coverage for the Executive and his
spouse under the Company Plan during the Coverage Period (and any
period thereafter to the extent required by applicable state and
federal law), including, if necessary, amending the applicable
provisions of the Company Plan and negotiating the addition of any
necessary riders to any group health insurance contract. If the
amount of the premium charged for coverage of the Executive and
his spouse under the Company Plan shall exceed the amount of the
premium charged an active employee participating in the Company
Plan with respect to coverage under the Company Plan for the
active employee and his spouse (or, the active employee and his
family, in the event the Company Plan does not offer employee and
spouse only coverage) (the "Maximum Premium Charge"), the amount
of the premium charged for coverage of the Executive and his
spouse under the Company Plan in excess of the Maximum Premium
Charge shall be paid by the Company. In addition, the Company
shall pay all or any portion of the Maximum Premium Charge with
respect to the coverage of the Executive and his spouse to the
extent of the highest premium paid by the Company for other
retired executives of the Company. The portion of the Maximum
Premium Charge not paid by the Company, if any, shall be paid by
the Executive. If the amount of the premium charged to active
employees participating in the Company Plan with respect to
coverage under the Company Plan for such active employees and
their spouses (or families, as the case may b to be paid for
coverage of the Executive under such government programs shall be
paid by the Executive.
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ARTICLE 7. DISABILITY BENEFITS.
7.1 Commencement of Total Disability. If the Executive
suffers a "Total Disability" (as defined in Section 7.4), he shall
be deemed totally disabled ("Totally Disabled") for purposes of
this Agreement as of the date such Total Disability commenced.
7.2 Benefits Payable Upon Total Disability. In the event
of the Total Disability of the Executive, the Executive shall be
entitled to benefits that are not less than the benefits payable
under the Company's Long-Term Disability Plan as in effect on
November 1, 1994. In the event that the Executive's Total
Disability continues for a period of one hundred eighty (180) days
(measured from the date the Executive became Totally Disabled), a
Termination Date shall automatically occur, as provided in
subparagraph (iv) of Section 3.1, at the end of such one hundred
eighty day period (the "Disability Period"). The disability
benefits payable under this Section 7.2 shall be paid in
accordance with the terms of the Company's Long-Term Disability
Plan as in effect on November 1, 1994.
7.3 Cessation of Disability. Notwithstanding the
provisions of Section 7.2, if prior to the end of the Disability
Period, the Executive's Total Disability shall have ceased under
the definition of Total Disability set forth in Section 7.4 and he
shall have resumed his regular duties hereunder, the following
special provisions shall apply: (i) this Agreement shall continue
in full force and effect (except as otherwise provided in
ARTICLE 3); and (ii) the Executive shall be entitled to resume his
employment under this Agreement and to receive thereafter
compensation in accordance with ARTICLE 4 as though he had not
been Totally Disabled; provided, however, that unless the
Executive shall perform his regular duties hereunder for a
continuous period of at least sixty (60) days following a period
of Total Disability before he again becomes Totally Disabled, he
shall not be entitled to start a new Disability Period, but
instead must continue under the remaining portion of the original
Disability Period. In this event, the resumption of the original
Disability Period shall commence on the date such Total Disability
resumed.
7.4 Definition of Total Disability. For purposes of this
Agreement, "Total Disability" shall mean a physical or mental
infirmity, or both, that entitles the Executive to a benefit under
the Company's Long-Term Disability Plan as in effect on July 1,
1994.
ARTICLE 8. DEATH BENEFIT. Upon the Termination Date that
occurs on account of the Executive's death (as provided in subparagraph
(iii) of Section 3.1), the Company shall pay to the Executive's designated
beneficiary (as determined pursuant to ARTICLE 16) an annual death benefit
(the "Death Benefit") equal to twenty-five percent (25%) of the
Executive's Average Base Salary (as defined in Section 6.1). The Death
Benefit shall be payable to the Executive's designated beneficiary for
five (5) years in approximately equal monthly installments on the first
day of each calendar month commencing with the calendar month next
following the month in which occurs the Executive's death and continuing
for fifty-nine (59) consecutive calendar months thereafter.
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ARTICLE 9. DEATH FOLLOWING COMMENCEMENT OF PAYMENTS. Upon
a Termination Date on account of an event entitling the Executive to
receive payments pursuant to Section 6.1 or ARTICLES 7 or 12, and if he
shall die prior to receiving any or all of the monthly installments to
which he is due hereunder, then such remaining monthly installments shall
be payable to his designated beneficiary (as determined pursuant to
ARTICLE 16).
ARTICLE 10. OTHER EMPLOYEE BENEFITS. In addition to the
benefits provided under this Agreement, the Executive shall be entitled to
participate in any and all retirement, health, disability, life insurance,
nonqualified deferred compensation and tax-qualified retirement plans or
any other plans or benefits offered by the Company to its executives
generally, if and to the extent the Executive is eligible to participate
in accordance with the terms and provisions of any such plan or benefit
program. Nothing in this ARTICLE 10 is intended, or shall be construed,
to require the Company to institute any particular plan, program or
benefit. Benefits payable pursuant to this Agreement shall be in addition
to benefits payable to the Executive under all other employee benefit
plans or programs of the Company.
ARTICLE 11. VACATION AND SICK LEAVE. The Executive shall
be entitled to reasonable periods of vacation and sick leave during each
Employment Year, commensurate with his position and in accordance with
established Company policy. The Executive shall continue to receive his
Base Salary during the time of his vacation and sick leave. Vacation and
sick leave not taken during the applicable Employment Year cannot be
accumulated and taken during a subsequent Employment Year nor will the
Executive be paid for vacation and sick leave not taken.
ARTICLE 12. TERMINATION COMPENSATION.
12.1 Monthly Compensation. Upon a Termination Date that
occurs for any reason, the Executive shall be entitled to continue
to receive his Base Salary through the last day of the month in
which the Termination Date occurs (the "Termination Month").
12.2 Compensation Continuance. In addition to the
compensation provided for in Section 12.1, upon the termination of
the Executive's employment by the Company's exercise of the Notice
Exception or by the Executive for Good Reason, the Executive (or
in the event of his subsequent death, his designated beneficiary)
shall be entitled to continue to receive during the remainder of
the Term following the last day of the Termination Month (the
"Compensation Continuance Period"), the Base Salary (as increased
each year to reflect increases in the cost of living) that he
would have received pursuant to Section 4.1 during the
Compensation Continuance Period if the Termination Date had not
occurred and bonuses equal to the bonuses that would have been
payable to the Executive under the Company's Cash Bonus Plan (or
any successor plan or arrangement) based on the terms of such plan
and the Executive's participation level immediately before the
Termination Date. During the Compensation Continuance Period, the
Executive shall (i) subject to the provisions of Section 6.2,
continue to participate in all employee benefit plans or programs
of the Company (as described in ARTICLE 10), and (ii) be available
at reasonable times to provide consulting services to the Company.
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12.3 Special Severance Benefit. In addition to the
compensation provided for in Sections 12.1 and 12.2, upon the
termination of the Executive's employment by the Company's
exercise of the Notice Exception, or by the Executive for Good
Reason, or by the Company's giving notice which would cause the
Term to expire at the end of the Initial Term or at the end of any
succeeding Extension Period, the Executive (or in the event of his
subsequent death, his designated beneficiary) shall be entitled to
a special severance benefit (the "Severance Benefit") equal to his
Base Salary and bonus under the Cash Bonus Plan (or any successor
plan or arrangement) for the Employment Year just completed, which
Severance Benefit shall be payable for one (1) year in
approximately equal monthly installments commencing on the first
day of the month next following the expiration of the Compensation
Continuance Period (or the last day of the Termination Month, as
the case may be), and continuing for eleven (11) consecutive
calendar months thereafter (the "Severance Period"). The
Severance Benefit payments shall be paid in accordance with the
payroll schedule for salaried personnel of the Company.
See Section 6.1 for additional benefits the Executive may be entitled to
receive following receipt of the compensation provided for in this ARTICLE
12.
ARTICLE 13. POST-TERMINATION OBLIGATIONS. All payments and
benefits to the Executive under this Agreement shall be subject to the
Executive's compliance with the following provisions during the Term and
following the termination of the Executive's employment:
13.1 Assistance in Litigation. The Executive shall, upon
reasonable notice, furnish such information and assistance to the
Company as may reasonably be required by the Company in connection
with any litigation in which it is, or may become, a party, and
which arises out of facts and circumstances known to the
Executive. The Company shall promptly reimburse the Executive for
his out-of-pocket expenses incurred in connection with the
fulfillment of his obligations under this Section 13.1.
13.2 Confidential Information. The Executive shall not
disclose or reveal to any unauthorized person any trade secret or
other confidential information relating to the Company, its
subsidiaries or affiliates, or to any businesses operated by them,
and the Executive confirms that such information constitutes the
exclusive property of the Company; provided, however, that the
foregoing shall not prohibit the Executive from disclosing such
information to the extent necessary or desirable in connection
with obtaining financing for the Company (or furnishing such
information under any agreements, documents or instruments under
which such financing may have been obtained) or otherwise
disclosing such information to third parties or governmental
agencies in furtherance of the interests of the Company; or as may
be required by law.
13.3 Noncompetition. The Executive shall not: (i) prior
to a Termination Date and for the one-year period following a
Termination Date, without the prior written consent of the
Company, engage directly or indirectly, as a licensee, owner,
manager, consultant, officer, employee, director, investor or
otherwise, in any business in competition with the Company; or
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(ii) usurp for his own benefit any corporate opportunity under
consideration by the Company during his employment, unless the
Company shall have finally decided not to take advantage of such
corporate opportunity. The restrictions of part (i) of this
Section 13.3 shall not apply if the employment of the Executive is
terminated by the Company's exercise of the Notice Exception or by
the Executive for Good Reason, and shall further not apply to a
passive investment by the Executive constituting ownership of less
than five percent (5%) of the equity of any entity engaged in any
business described in part (i) of this Section 13.3. The amount,
if any, payable to the Executive after a Termination Date but
prior to the end of the Term shall be reduced, but not below zero,
by the amount of any remuneration for personal services earned by
or payable to the Executive by a business that is in competition
with the Company. The Executive acknowledges that the possible
restrictions on his activities which may occur as a result of his
performance of his obligations under this Section 13.3 are
required for the reasonable protection of the Company.
13.4 Failure to Comply. In the event that the Executive
shall fail to comply with any provision of this ARTICLE 13, and
such failure shall continue for ten (10) days following delivery
of notice thereof by the Company to the Executive, all rights
hereunder of the Executive and any person claiming under or
through him shall thereupon terminate and no person shall be
entitled thereafter to receive any payments or benefits hereunder
(except for benefits under employee benefit plans or programs as
provided in ARTICLE 10 which have been earned or otherwise fixed
or determined to be payable prior to such termination). In
addition to the foregoing, in the event of a breach or threatened
breach by the Executive of the provisions of this ARTICLE 13, the
Company shall have and may exercise any and all other rights and
remedies available to the Company at law or otherwise, including
but not limited to obtaining an injunction from a court of
competent jurisdiction enjoining and restraining the Executive
from committing such violation, and the Executive hereby consents
to the issuance of such injunction.
ARTICLE 14. ADDITIONAL PAYMENTS BY COMPANY. In the event
that any amount required to be paid or distributed to the Executive
pursuant to this Agreement shall constitute a parachute payment within the
meaning of Section 280G of the Internal Revenue Code of 1986, as amended
(the "Code"), and the aggregate of such parachute payments and any other
amounts otherwise required to be paid or distributed to the Executive by
the Company shall cause the Executive to be subject to the excise tax on
excess parachute payments under Section 4999 of the Code (the "Excise
Tax"), or any successor or similar provision thereof, the Company shall
pay to the Executive an additional amount (the "Gross-Up Payment") such
that the net amount the Executive shall receive after the payment of any
Excise Tax, shall equal the amount which he would have received if the
Excise Tax had not been imposed. The Gross-Up Payment shall be the sum of
the following:
(a) The rate of the Excise Tax multiplied by the amount of
the excess parachute payments;
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(b) Any federal income tax, social security tax,
unemployment tax or Excise Tax imposed upon the Executive as a
result of the Gross-Up Payment required to be made under this
ARTICLE 14; and
(c) Any state income or other tax imposed upon the
Executive as a result of the Gross-Up Payment required to be made
under this ARTICLE 14.
For purposes of determining the amount of the Gross-Up
Payment, the Executive shall be deemed to pay federal income taxes at the
highest marginal rate of federal income taxation for individuals in the
calendar year in which the Excise Tax is required to be paid. In
addition, the Executive shall be deemed to pay state income taxes at a
rate determined in accordance with the following formula:
(1 - (highest marginal rate of federal income taxation for
individuals)) x (highest marginal rate of Virginia income taxes
for individuals in the calendar year in which the Excise Tax is
required to be paid).
In the event the Executive is subject to the provisions of Section 68 of
the Code, the combined federal and state income tax rate determined above
shall be adjusted to reflect any loss in the federal deduction for state
income taxes on the Gross-Up Payment.
The Gross-Up Payment shall be made not later than the fifth
(5th) day, or as soon thereafter as the Company deems practicable,
following the date the Executive becomes subject to payment of the Excise
Tax; provided, however, that if the amount of such payment cannot be
finally determined on or before such day, the Company shall pay to the
Executive on such day an estimate, as determined in good faith by the
Company, of the minimum amount of such payment and shall pay the remainder
of such payment (together with interest at the rate provided under
Section 1274(b)(2)(B) of the Code) as soon as the amount can be determined
but no later than the thirtieth (30th) day after the date the Executive
becomes subject to the payment of the Excise Tax. In the event the amount
of the estimated payment exceeds the amount subsequently determined to
have been due, such excess shall constitute a loan by the Company to the
Executive, payable on the fifth (5th) day after demand by the Company
(together with interest at the rate provided in Section 1274(b)(2)(B) of
the Code).
In the event that the Excise Tax is subsequently determined
to be less than the amount taken into account hereunder at the time the
Gross-Up Payment is made, the Executive 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 (plus the portion of the Gross-Up Payment attributable to the
Excise Tax, federal and state taxes imposed on the Gross-Up Payment being
repaid by the Executive, if such repayment results in a reduction in
Excise Tax and/or a federal or state tax deduction) plus interest on the
amount of such repayment at the rate provided in Section 1274(b)(2)(B) of
the Code. The Executive shall not be required to make the payment
described in the preceding sentence if he paid the Excise Tax to the
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Internal Revenue Service and the period for requesting a refund for all or
part of such Excise Tax payment has expired. In the event that the Excise
Tax is determined to exceed the amount taken into account hereunder at the
time the Gross-Up Payment is made (including by reason of any payment the
existence or amount of which cannot be determined at that time of the
Gross-Up Payment), the Company shall make an additional Gross-Up Payment
in respect of such excess (plus any interest payable with respect to such
excess) at the time that the amount of such excess is finally determined.
The Company shall not be required to make the payment described in the
preceding sentence if the period in which the Internal Revenue Service may
assess additional Excise Tax against the Executive has expired.
ARTICLE 15. ATTORNEYS' FEES. In the event that the
Executive incurs any attorneys' fees in protecting or enforcing his rights
under this Agreement or under any employee benefit plans or programs
sponsored by the Company in which the Executive is a participant, the
Company shall reimburse the Executive for such reasonable attorneys' fees
and for any other reasonable expenses related thereto. Such reimbursement
shall be made within thirty (30) days following final resolution of the
dispute or occurrence giving rise to such fees and expenses.
ARTICLE 16. BENEFICIARY. The Executive shall name one or
more primary beneficiaries and one or more contingent beneficiaries, who
shall be entitled to receive any death benefit payable under ARTICLE 8 or
any benefits payable under ARTICLE 9 due to the Executive's death
following commencement of payments under Section 6.1 or ARTICLES 7 or 12,
which beneficiary or beneficiaries shall be subject to change from time to
time by notice in writing to the Board. A beneficiary may be a trust, an
individual or the Executive's estate. If the Executive fails to designate
a beneficiary, primary or contingent, then and in such event, such benefit
shall be paid to the surviving spouse of the Executive or, if he shall
leave no surviving spouse, then to the Executive's estate. If a named
beneficiary entitled to receive any death benefit is not living or in
existence at the death of the Executive or dies prior to asserting a
written claim for any such death benefit, then and in any such event, such
death benefit shall be paid to the other primary beneficiary or
beneficiaries named by the Executive who shall then be living or in
existence, if any, otherwise to the contingent beneficiary or
beneficiaries named by the Executive who shall then be living or in
existence, if any; but if there are no primary or contingent beneficiaries
then living or in existence, such benefit shall be paid to the surviving
spouse of the Executive or, if he shall leave no surviving spouse, then to
the Executive's estate. If a named beneficiary is receiving or is
entitled to receive payments of any such death benefit and dies before
receiving all of the payments due him, any remaining benefits shall be
paid to the other primary beneficiary or beneficiaries named by the
Executive who shall then be living or in existence, if any, otherwise to
the contingent beneficiary or beneficiaries named by the Executive who
shall then be living or in existence, if any; but if there are no primary
or contingent beneficiaries then living or in existence, the balance shall
be paid to the estate of the beneficiary who was last receiving the
payments.
ARTICLE 17. DECISIONS BY COMPANY; FACILITY OF PAYMENT. Any
powers granted to the Board hereunder may be exercised by a committee,
appointed by the Board, and such committee, if appointed, shall have
general responsibility for the administration and interpretation of this
Agreement. Subject to and to the extent not inconsistent with the
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provisions of ARTICLE 16, if the Board or the committee shall find that
any person to whom any amount is or was payable hereunder is unable to
care for his affairs because of illness or accident, or is a minor, or has
died, then the Board or the committee, if it so elects, may direct that
any payment due him or his estate (unless a prior claim therefore has been
made by a duly appointed legal representative) or any part thereof be paid
or applied for the benefit of such person or to or for the benefit of his
spouse, children or other dependents, an institution maintaining or having
custody of such person, any other person deemed by the Board or committee
to be a proper recipient on behalf of such person otherwise entitled to
payment, or any of them, in such manner and proportion as the Board or
committee may deem proper. Any such payment shall be in complete
discharge of the liability of the Company therefor.
ARTICLE 18. INDEMNIFICATION. The Company shall indemnify
the Executive during his employment and thereafter to the maximum extent
permitted by applicable law for any and all liability of the Executive
arising out of, or in connection with, his employment by the Company or
membership on the Board; provided, that in no event shall such indemnity
of the Executive at any time during the period of his employment by the
Company be less than the maximum indemnity provided by the Company at any
time during such period to any other officer or director under and
indemnification insurance policy or the bylaws or charter of the Company
or by agreement.
ARTICLE 19. SOURCE OF PAYMENTS; NO TRUST. The obligations
of the Company to make payments hereunder shall constitute a liability of
the Company to the Executive. Such payments shall be from the general
funds of the Company, and the Company shall not be required to establish
or maintain any special or separate fund, or otherwise to segregate assets
to assure that such payments shall be made, and neither the Executive nor
his designated beneficiary shall have any interest in any particular asset
of the Company by reason of its obligations hereunder. Nothing contained
in this Agreement shall create or be construed as creating a trust of any
kind or any other fiduciary relationship between the Company and the
Executive or any other person. To the extent that any person acquires a
right to receive payments from the Company hereunder, such right shall be
no greater than the right of an unsecured creditor of the Company.
ARTICLE 20. SEVERABILITY. All agreements and covenants
contained herein are severable, and in the event any of them shall be held
to be invalid by any competent court, this Agreement shall be interpreted
as if such invalid agreements or covenants were not contained herein.
ARTICLE 21. ASSIGNMENT PROHIBITED. This Agreement is
personal to each of the parties hereto, and neither party may assign nor
delegate any of his or its rights or obligations hereunder without first
obtaining the written consent of the other party; provided, however, that
nothing in this ARTICLE 21 shall preclude (i) the Executive from
designating a beneficiary to receive any benefit payable under this
Agreement upon his death or (ii) the executors, administrators, or other
legal representatives of the Executive or his estate from assigning any
rights under this Agreement to the person or persons entitled thereto.
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ARTICLE 22. NO ATTACHMENT. Except as otherwise provided in
this Agreement or required by applicable law, no right to receive payments
under this Agreement shall be subject to anticipation, commutation,
alienation, sale, assignment, encumbrance, charge, pledge or hypothecation
or to execution, attachment, levy, or similar process or assignment by
operation of law and any attempt, voluntary or involuntary, to effect any
such action shall be null, void and of no effect.
ARTICLE 23. HEADINGS. The headings of articles, paragraphs
and sections herein are included solely for convenience of reference and
shall not control the meaning or interpretation of any of the provisions
of this Agreement.
ARTICLE 24. GOVERNING LAW. The parties intend that this
Agreement and the performance hereunder and all suits and special
proceedings hereunder shall be construed in accordance with and under and
pursuant to the laws of the Commonwealth of Virginia and that in any
action, special proceeding or other proceeding that may be brought arising
out of, in connection with, or by reason of this Agreement, the laws of
the Commonwealth of Virginia shall be applicable and shall govern to the
exclusion of the law of any other forum, without regard to the
jurisdiction in which any action or special proceeding may be instituted.
ARTICLE 25. BINDING EFFECT. This Agreement shall be
binding upon, and inure to the benefit of, the Executive and his heirs,
executors, administrators and legal representatives and the Company and
its permitted successors and assigns.
ARTICLE 26. MERGER OR CONSOLIDATION. The Company will not
consolidate or merge into or with another corporation, or transfer all or
substantially all of its assets to another corporation (the "Successor
Corporation") unless the Successor Corporation shall assume this
Agreement, and upon such assumption, the Executive and the Successor
Corporation shall become obligated to perform the terms and conditions of
this Agreement.
ARTICLE 27. COUNTERPARTS. This Agreement may be executed
simultaneously in one or more counterparts, each of which shall be deemed
an original but all of which together shall constitute one and the same
instrument.
ARTICLE 28. ENTIRE AGREEMENT. This Agreement expresses the
whole and entire agreement between the parties with reference to the
employment of the Executive and, as of the effective date hereof,
supersedes and replaces any prior employment agreement, understanding or
arrangement (whether written or oral) between the Company and the
Executive. Each of the parties hereto has relied on his or its own
judgment in entering into this Agreement.
ARTICLE 29. NOTICES. All notices, requests and other
communications to any party under this Agreement shall be in writing
(including telefacsimile transmission or similar writing) and shall be
given to such party at its address or telefacsimile number set forth below
or such other address or telefacsimile number as such party may hereafter
specify for the purpose by notice to the other party:
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(a) If to the Executive:
T. H. Faucett
512 Bridge Street
Danville, VA 24541
(b) If to the Company:
Dibrell Brothers, Incorporated
512 Bridge Street
P.O. Box 681
Danville, Virginia 24541-0681
Fax Number: (804) 791-0180
Each such notice, request or other communication shall be effective (i) if
given by mail, 72 hours after such communication is deposited in the mails
with first class postage prepaid, addressed as aforesaid or (ii) if given
by any other means, when delivered at the address specified in this
ARTICLE 29.
ARTICLE 30. PEP. The Company agrees that its Pension
Equalization Plan shall be amended (i) to provide that the greater of (x)
the Executive's actual age and service or (y) the Executive's projected
age and service at the end of the Initial Term shall be used in
determining whether the Executive is entitled to a benefit under the
Company's Pension Equalization Plan and (ii) to provide that the Executive
will be entitled to a benefit under the Company's Pension Equalization
Plan if, prior to his separation from service (x) the sum of the
Executive's age and service (pursuant to the amendment described in (i)
above) is at least 82, (y) the Executive attains age 54 or more and (z)
the Executive completes at least 24 years of service; provided, however,
that such amendments shall not apply if the Executive's employment is
terminated during the Initial Term for Cause or the Executive resigns
during the Initial Term without Good Reason. The Company further agrees
that except as provided in the preceding sentence, during the Term the
Company's Pension Equalization Plan shall not be amended without the
Executive's consent.
ARTICLE 31. MODIFICATION OF AGREEMENT. No waiver or
modification of this Agreement or of any covenant, condition, or
limitation herein contained shall be valid unless in writing and duly
executed by the party to be charged therewith. No evidence of any waiver
or modification shall be offered or received in evidence at any
proceeding, arbitration, or litigation between the parties hereto arising
out of or affecting this Agreement, or the rights or obligations of the
parties hereunder, unless such waiver or modification is in writing, duly
executed as aforesaid. The parties further agree that the provisions of
this ARTICLE 30 may not be waived except as herein set forth.
ARTICLE 32. TAXES. To the extent required by applicable
law, the Company shall deduct and withhold all necessary Social Security
taxes and all necessary federal and state withholding taxes and any other
similar sums required by law to be withheld from any payments made
pursuant to the terms of this Agreement.
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ARTICLE 33. EFFECTIVENESS. This Agreement shall have no
effect, and shall be null and void ab initio, if the Company and Monk-
Austin, Inc. do not consummate the transaction described in Agreement and
Plan of Reorganization, dated as of October 22, 1994, on or before
June 30, 1995 (or as of any extension of such deadline as may be approved
by the Company's Board of Directors or if the Company and Standard
Commercial Corporation do not consummate a merger, combination or similar
reorganization on or before June 30, 1995.
ARTICLE 34. RECITALS. The Recitals to this Agreement are
incorporated herein and shall constitute an integral part of this
Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement on
the day and year first above written.
EXECUTIVE:
/s/ L. N. Dibrell, III
_______________________________(SEAL)
L. N. DIBRELL, III
WITNESS:
/s/ Jo Annette Morris
_______________________________
JO ANNETTE MORRIS
DIBRELL BROTHERS, INCORPORATED:
John O. Hunnicutt
By:____________________________________
Vice President
JOHN O. HUNNICUTT
Attest:
Debra H. Slaughter
_______________________________
Asst. Secretary
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Exhibit 10.5
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), made and entered into
on the 13th day of January, 1995, to be effective as of the 1st day of
November, 1994, by and between DIBRELL BROTHERS, INCORPORATED (the
"Company"), a corporation organized and existing under the laws of the
Commonwealth of Virginia and having its principal office at Danville,
Virginia, and H. P. GREEN, III (the "Executive"), an individual residing at
Danville, Virginia.
R E C I T A L S:
The Company is engaged in the business of purchasing and
processing leaf tobacco and selling processed tobacco to manufacturers of
cigarettes and other consumer tobacco products. The Executive is
experienced in, and knowledgeable concerning, all aspects of the business
of the Company. The Executive has heretofore been employed by the Company
as its Senior Vice President. The Company desires to continue to employ
the Executive as Senior Vice President of the Company, and the Executive
desires to continue to be employed by the Company in that capacity.
Furthermore, the Company desires to provide for the Executive certain
disability, death, severance and supplemental retirement benefits in
addition to those provided by the employee benefit plans of the Company.
The Company and the Executive desire to reduce to writing the terms of
their understanding and to provide for the Executive's continued
employment by the Company pursuant to the terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations herein and the compensation the Company agrees herein to pay
the Executive, and of other good and valuable consideration, the receipt
of which is hereby acknowledged, the Company and the Executive agree as
follows:
ARTICLE 1. EMPLOYMENT OF EXECUTIVE. Subject to the terms
and conditions set forth in this Agreement, the Company hereby employs the
Executive and the Executive hereby accepts such employment for the period
stated in ARTICLE 3 of this Agreement.
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ARTICLE 2. POSITION, RESPONSIBILITIES AND DUTIES.
2.1 Position and Responsibilities. The Executive shall
serve as Senior Vice President of the Company on the conditions
herein provided. The Executive shall provide such executive
services in the management of the Company's business not
inconsistent with his position and the provisions of Section 2.2
as shall be assigned to him from time to time by the Board of
Directors of the Company (the "Board") or by such officers of the
Company as may be senior in authority to the Executive.
2.2 Duties. In addition to having the responsibilities
described in Section 2.1, the Executive shall also serve, if
elected, as an officer and director of the Company or of any
subsidiary or affiliate of the Company. Except for illness,
reasonable vacation periods, and reasonable leaves of absence, the
Executive shall devote his full business time, attention, skill,
energies and efforts to the faithful performance of his duties
hereunder and to the business and affairs of the Company and any
subsidiary or affiliate of the Company and shall not during his
employment by the Company be employed in any other business
activity, whether or not such activity is pursued for gain, profit
or other pecuniary advantage; provided however, that (i) with the
approval of the Board, the Executive may serve, or continue to
serve, on the board of directors of, and hold any other offices or
positions in, other companies or organizations, which, in the
Board's judgment, will not present any conflict of interest with
the Company or any of its subsidiaries or affiliates or divisions,
or materially affect the performance of the Executive's duties
pursuant to this Agreement and (ii) the Executive shall not be
prevented from investing his personal assets in any business which
does not compete with the Company or with any subsidiary or
affiliate of the Company, where the form or manner of such
investment will not require substantial services on the part of
the Executive in the operation of business in which such
investment is made. Notwithstanding the foregoing, the duties of
the Executive (i) shall not be expanded without the Executive's
prior approval and (ii) shall not require him to relocate his
residence from Danville, Virginia, and shall not make it
impractical for him to continue to reside there or cause him to
reside away from there for extended periods of time.
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ARTICLE 3. TERM.
3.1 Term of Employment. The term of the Executive's
employment under this Agreement shall be effective as of
November 1, 1994, and shall continue until the earliest to occur
of the following (the "Termination Date"): (i) October 31, 1999
(except as otherwise provided in this Section 3.1); (ii) the last
day of the Employment Year (as defined in this Section 3.1) in
which the Executive attains the age of sixty-five (65); (iii) the
date of death of the Executive; (iv) the date coinciding with the
end of one hundred eighty (180) days of continuous "Total
Disability" of the Executive (as defined in ARTICLE 7); (v) the
specified date of termination under the Notice Exception (as
defined in Section 3.2); (vi) the date of termination under the
Cause Exception (as defined in Section 3.3); or (vii) the date the
Executive terminates his employment for Good Reason (as defined in
Section 3.4). In the event that the Initial Term (as defined in
this Section 3.1) shall expire for the terminating event described
in subparagraph (i) of this Section 3.1, then, notwithstanding the
provisions of subparagraph (i) of this Section 3.1, the term of
this Agreement shall be extended automatically, without any
further action by the Company or the Executive, for successive
one-year periods (each, an "Extension Period") following the
expiration of the Initial Term (as defined in this Section 3.1)
(by reason of the terminating event described in subparagraph (i)
of this Section 3.1) or any succeeding one-year Extension Period
(except as otherwise provided in this Section 3.1). If either
party hereto desires for the Term to expire at the end of the
Initial Term or at the end of any succeeding one-year Extension
Period, such party shall give written notice of such desire to the
other party no later than September 1 of the Employment Year (as
defined in this Section 3.1) in which the Initial Term (as defined
in this Section 3.1) will expire or September 1 of any succeeding
one-year Extension Period. The "Initial Term" is the period
beginning on November 1, 1994, and ending on October 31, 1999.
All references herein to the term of the Executive's employment
(the "Term") shall refer to the Initial Term and shall include any
Extension Period. Each twelve-month period beginning November 1
during the Term is referred to herein as an "Employment Year."
3.2 Termination of Giving Notice. If either party hereto
desires to terminate the Executive's employment prior to the
expiration of the Term, such party shall give not less than sixty
(60) days written notice of such desire to the other party
specifying the date of termination (the "Notice Exception").
Notwithstanding the foregoing, the Notice Exception shall not be
effected by the Company while the Executive is Totally Disabled as
provided in ARTICLE 7.
3.3 Termination for Cause; Automatic Termination. The
Company shall at all times have the right to discharge the
Executive for Cause. For purposes of this Agreement, Cause shall
be limited to one or more of the following: (i) habitual
intoxication by the Executive while performing his duties under
this Agreement; (ii) theft or embezzlement; (iii) alcoholism; (iv)
drug addiction; (v) conviction of a felony; or (vi) willful,
flagrant, deliberate and repeated infractions of material
published policies and regulations of the Company of which the
Executive has actual knowledge (the "Cause Exception"). If the
Company desires to discharge the Executive under the Cause
Exception, it shall give notice to the Executive as provided in
Section 3.5 and the Executive shall have thirty (30) days after
notice has been given to him in which to cure the reason for the
Company's exercise of the Cause Exception. If the reason for the
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Company's exercise of the Cause Exception is timely cured by the
Executive, the Company's notice shall become null and void. For
purpose of this Agreement, Cause shall not include the Executive's
Total Disability (as defined in Section 7.4).
3.4 Good Reason. In addition to termination under the
Notice Exception, the Executive may terminate his employment at
any time for Good Reason (as defined in this Section 3.4). If the
Executive desires to terminate his employment for Good Reason, he
shall give notice to the Company as provided in Section 3.5. For
purposes of this Section 3.4, "Good Reason" shall mean any of the
following:
(a) The Executive's resignation from the Company's
employment on account of the failure by the Board to reelect
the Executive to a responsible executive position in the
Company and the Executive then elects to leave the Company's
employment within six (6) months of such failure to so
reelect or reappoint the Executive;
(b) The Executive's resignation from the Company's
employment on account of a material modification by the
Board or any officer of the Company as may be senior in
authority to the Executive of the duties, functions and
responsibilities of the Executive as the Company's
Senior Vice President without his consent within six (6)
months of such modification; or
(c) The Executive's resignation from the Company's
employment on account of any material breach of a provision
of this Agreement by the Company, which breach is not cured
within thirty (30) days after notice has been given to the
Company by the Executive. Without limiting the generality
of the foregoing sentence, the Company shall be in material
breach of its obligations hereunder if, for example, the
Company shall not permit the Executive to exercise such
responsibilities as are consistent with the Executive's
position and are of such a nature as are usually associated
with such offices of a corporation engaged in substantially
the same business as the Company, or the Executive shall at
any time be required to report to anyone other than directly
to the Board or any officer of the Company as may be senior
in authority to the Executive, or the Company causes the
Executive to relocate his residence from Danville, Virginia
or makes it impractical for him to continue to reside there
or causes him to reside away from there for extended periods
of time, or the Company shall fail to make a payment when
due to the Executive.
3.5 Notice of Termination. Any termination by the Company
under the Cause Exception or by the Executive for Good Reason
shall be communicated by Notice of Termination to the other party
hereto. For purposes of Sections 3.3 and 3.4, a "Notice of
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Termination" means a written notice which (i) indicates the
specific termination provision in this Agreement relied upon, (ii)
sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's
employment under the provision so indicated and (iii) if the
termination date is other than the date of receipt of such notice,
specifies the effective date of termination (with respect to the
events described in Sections 3.4(a) and (b), such date shall be
not more than 30 days after the giving of such notice).
3.6 Rights of Executive Upon Termination of Employment.
(a) Following a Termination Date that occurs on account of
one of the terminating events described in subparagraphs (i), (ii),
(v) or (vii) of Section 3.1, the rights of the Executive shall be as
provided in ARTICLES 4, 5, 6, 9, 10, 12, 13, 14, 15, 16, 18 and
26.
(b) Following a Termination Date that occurs on account of
the Executive's death as provided in subparagraph (iii) of
Section 3.1, the rights of the Executive's personal representative
and designated beneficiary (as determined pursuant to ARTICLE 16)
shall be as provided in ARTICLES 4, 5, 8, 10, 12, 14, 15, 16, 18
and 26.
(c) Following a Termination Date that occurs on account of
the Executive's Total Disability as provided in subparagraph
(iv) of Section 3.1, the rights of the Executive shall be as
provided in ARTICLES 4, 5, 7, 9, 10, 12, 13, 14, 15, 16, 18 and
26.
(d) Following a Termination Date that occurs because the
Executive is terminated for Cause as provided in subparagraph (vi)
of Section 3.1, the rights of the Executive shall be as provided
in ARTICLES 4, 5, 9, 10, 12, 13, 14, 15, 16, 18 and 26.
ARTICLE 4. COMPENSATION. For all services rendered by the
Executive during the Term and prior to a Termination Date, including
without limitation, services as an executive, officer, director (except
fees and reimbursements to which all members of the Board, or a subsidiary
or affiliate of the Company, are generally entitled) or member of any
committee of the Company or of any subsidiary, affiliate, or division
thereof, the Company shall pay the Executive as compensation the
following:
4.1 Base Salary. The Executive shall be paid for his
services during the Term and prior to a Termination Date a base
annual salary of $155,000 (the "Base Salary"), payable in
appropriate installments to conform with regular payroll dates for
salaried personnel of the Company. The Executive's Base Salary
shall be automatically increased on November 1 of each Employment
Year to reflect increases in the cost of living (as hereinafter
described). In no event, however, shall the Executive's Base
Salary under this Agreement ever be less than $163,000. In
addition to any cost of living increase in the Executive's Base
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Salary, the Board or its Compensation Committee may, in its sole
discretion, increase the Executive's Base Salary based on his
performance. The amount of any annual automatic cost of living
increase in the Executive's Base Salary shall be determined by
multiplying the most recent Base Salary times a fraction whose
numerator shall be the Consumer Price Index (the "CPI") [All Urban
Consumers, South Region Average (1982-84 = 100); All Items, Bureau
of Labor Statistics of The United States Department of Labor], for
the month of September next preceding the November 1 of the
current Employment Year, and whose denominator shall be the CPI
for the month of September next preceding the November 1 of the
Employment Year immediately prior to the current Employment Year.
If the quotient obtained in the foregoing fraction shall be a
number less than one (1), the Base Salary shall be equal to the
Base Salary of the Employment Year just completed. In the event
(i) the CPI ceases to use the 1982-84 average of 100 as the base
of calculation, or (ii) a substantial change is made in the
quality or quantity of the items utilized in determining the CPI,
or (iii) the publishing of the CPI shall be discontinued for any
reason, the United States Department of Labor shall be requested
to furnish a new index comparable to the CPI, together with the
information which will make possible the conversion of such new
index to replace the CPI for the purposes of computing the Base
Salary as provided for herein. If for any reason the United
States Department of Labor does not furnish such an index and
information, the parties hereto shall thereafter accept and use,
as determined by the Board, such other index or comparable
statistics to measure the cost of living as shall be computed and
published by (i) an agency of the United States Government, (ii) a
reasonable financial periodical or (iii) a recognized authority
mutually selected by the Company and the Executive.
4.2 Cash Bonus Plan. In addition to the Base Salary
provided for in Section 4.1, during the Term and prior to a
Termination Date the Executive shall be eligible to participate in
the Company's Cash Bonus Plan (or any successor plan or
arrangement) and to receive bonuses in accordance with the terms
of such plan. Any such bonus shall be payable in the manner
provided in the Company's Cash Bonus Plan (or any successor plan
or arrangement).
ARTICLE 5. REIMBURSEMENT OF EXPENSES, OFFICE AND
SECRETARIAL ASSISTANCE. The Company recognizes that the Executive will
incur, from time to time, expenses for the benefit of the Company and in
furtherance of the Company's business, including, but not limited to,
expenses for entertainment, travel and other business expenses consistent
with the Company's past practices. During (i) the Term and prior to a
Termination Date and (ii) any Compensation Continuance Period (as defined
in ARTICLE 12), the Executive will be reimbursed for his reasonable
expenses incurred for the benefit of the Company in accordance with the
general policy of the Company as adopted from time to time by the Board.
To receive such reimbursement, the Executive must present to the Company
an itemized accounting of such expenses, in such detail as the Company may
reasonably request. The Company further agrees to furnish the Executive
during (i) the Term and prior to any Termination Date, (ii) any
Compensation Continuance Period (as defined in ARTICLE 12) with an office
and such secretarial assistance as shall be suitable to the character of
the Executive's position with the Company and adequate for the performance
of his duties hereunder. In the event of the termination of the
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Executive's employment for any reason, the Company shall reimburse the
Executive (or in the event of death, his personal representative) for
expenses incurred by the Executive on behalf of the Company prior to the
Termination Date to the extent such expenses have not been previously
reimbursed by the Company.
ARTICLE 6. SPECIAL SUPPLEMENTAL RETIREMENT BENEFIT; SPECIAL
HEALTH CARE BENEFIT.
6.1 Special Supplemental Retirement Benefit. Upon a
Termination Date (other than for one of the terminating events
described in subparagraphs (iii), (iv) or (vi) of Section 3.1),
whether voluntary or involuntary on the part of the Executive, the
Executive shall be entitled to receive a special supplemental
annual retirement benefit (the "Deferred Benefit") equal to fifty
percent (50%) of his Average Base Salary (as defined in this
Section 6.1) reduced (but not below zero), by the amount of any
"Basic Benefit" (as defined in the Company's Pension Equalization
Plan) payable to the Executive under the Company's Pension
Equalization Plan. If the Executive is eligible to receive the
Severance Benefit (as defined in ARTICLE 12), the Deferred Benefit
shall be payable for nine (9) years in approximately equal monthly
installments commencing on the first day of the month next
following the end of the Severance Period (as defined in ARTICLE
12) and continuing for one hundred seven (107) consecutive
calendar months thereafter. If the Executive is not eligible to
receive the Severance Benefit, the Deferred Benefit shall be
payable for ten (10) years in approximately equal installments
commencing on the first day of the month next following the end of
the Employment Year in which the Term expires and continuing for
one hundred nineteen (119) consecutive calendar months thereafter.
The Deferred Benefit payments shall be paid in accordance with the
payroll schedule for salaried personnel of the Company. For
purposes of this Agreement, the "Average Base Salary" of the
Executive shall mean the average of his annual Base Salary for the
five (5) consecutive calendar years of employment pursuant to this
Agreement (or, in the event the Executive does not have five (5)
consecutive calendar years of employment pursuant to this
Agreement, his annual salary for calendar years of employment
prior to the date of this Agreement) ending coincident with or
next preceding the Termination Date. If the Executive shall not
have five (5) consecutive calendar years of employment, his
Average Base Salary shall be equal to the Base Salary (or annual
salary, as the case may be) for the calendar year of employment
next preceding the Termination Date. Notwithstanding the
foregoing, for purposes of this Section 6.1, the Executive's
Average Base Salary shall in no event be less than $163,000. The
Deferred Benefit payable under this Section 6.1 shall not affect
the Executive's rights under the Company's Pension Equalization
Plan.
6.2 Special Health Care Benefit. In addition to the other
benefits provided for in this Agreement, upon a Termination Date
(other than for one of the terminating events described in
subparagraph (iii) or (vi) of Section 3.1), the Executive shall be
entitled for the period commencing on the Termination Date and
ending on the date of the Executive's death (the "Coverage
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Period") to participate in any group health plan or program
(whether insured or self-insured, or any combination thereof)
provided by the Company for the benefit of its active employees or
former employees (the "Company Plan"). The Company, consistent
with sound business practices, shall use its best efforts to
provide the Executive with coverage for the Executive and his
spouse under the Company Plan during the Coverage Period (and any
period thereafter to the extent required by applicable state and
federal law), including, if necessary, amending the applicable
provisions of the Company Plan and negotiating the addition of any
necessary riders to any group health insurance contract. If the
amount of the premium charged for coverage of the Executive and
his spouse under the Company Plan shall exceed the amount of the
premium charged an active employee participating in the Company
Plan with respect to coverage under the Company Plan for the
active employee and his spouse (or, the active employee and his
family, in the event the Company Plan does not offer employee and
spouse only coverage) (the "Maximum Premium Charge"), the amount
of the premium charged for coverage of the Executive and his
spouse under the Company Plan in excess of the Maximum Premium
Charge shall be paid by the Company. In addition, the Company
shall pay all or any portion of the Maximum Premium Charge with
respect to the coverage of the Executive and his spouse to the
extent of the highest premium paid by the Company for other
retired executives of the Company. The portion of the Maximum
Premium Charge not paid by the Company, if any, shall be paid by
the Executive. If the amount of the premium charged to active
employees participating in the Company Plan with respect to
coverage under the Company Plan for such active employees and
their spouses (or families, as the case may b to be paid for
coverage of the Executive under such government programs shall be
paid by the Executive.
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ARTICLE 7. DISABILITY BENEFITS.
7.1 Commencement of Total Disability. If the Executive
suffers a "Total Disability" (as defined in Section 7.4), he shall
be deemed totally disabled ("Totally Disabled") for purposes of
this Agreement as of the date such Total Disability commenced.
7.2 Benefits Payable Upon Total Disability. In the event
of the Total Disability of the Executive, the Executive shall be
entitled to benefits that are not less than the benefits payable
under the Company's Long-Term Disability Plan as in effect on
November 1, 1994. In the event that the Executive's Total
Disability continues for a period of one hundred eighty (180) days
(measured from the date the Executive became Totally Disabled), a
Termination Date shall automatically occur, as provided in
subparagraph (iv) of Section 3.1, at the end of such one hundred
eighty day period (the "Disability Period"). The disability
benefits payable under this Section 7.2 shall be paid in
accordance with the terms of the Company's Long-Term Disability
Plan as in effect on November 1, 1994.
7.3 Cessation of Disability. Notwithstanding the
provisions of Section 7.2, if prior to the end of the Disability
Period, the Executive's Total Disability shall have ceased under
the definition of Total Disability set forth in Section 7.4 and he
shall have resumed his regular duties hereunder, the following
special provisions shall apply: (i) this Agreement shall continue
in full force and effect (except as otherwise provided in
ARTICLE 3); and (ii) the Executive shall be entitled to resume his
employment under this Agreement and to receive thereafter
compensation in accordance with ARTICLE 4 as though he had not
been Totally Disabled; provided, however, that unless the
Executive shall perform his regular duties hereunder for a
continuous period of at least sixty (60) days following a period
of Total Disability before he again becomes Totally Disabled, he
shall not be entitled to start a new Disability Period, but
instead must continue under the remaining portion of the original
Disability Period. In this event, the resumption of the original
Disability Period shall commence on the date such Total Disability
resumed.
7.4 Definition of Total Disability. For purposes of this
Agreement, "Total Disability" shall mean a physical or mental
infirmity, or both, that entitles the Executive to a benefit under
the Company's Long-Term Disability Plan as in effect on July 1,
1994.
ARTICLE 8. DEATH BENEFIT. Upon the Termination Date that
occurs on account of the Executive's death (as provided in subparagraph
(iii) of Section 3.1), the Company shall pay to the Executive's designated
beneficiary (as determined pursuant to ARTICLE 16) an annual death benefit
(the "Death Benefit") equal to twenty-five percent (25%) of the
Executive's Average Base Salary (as defined in Section 6.1). The Death
Benefit shall be payable to the Executive's designated beneficiary for
five (5) years in approximately equal monthly installments on the first
day of each calendar month commencing with the calendar month next
following the month in which occurs the Executive's death and continuing
for fifty-nine (59) consecutive calendar months thereafter.
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ARTICLE 9. DEATH FOLLOWING COMMENCEMENT OF PAYMENTS. Upon
a Termination Date on account of an event entitling the Executive to
receive payments pursuant to Section 6.1 or ARTICLES 7 or 12, and if he
shall die prior to receiving any or all of the monthly installments to
which he is due hereunder, then such remaining monthly installments shall
be payable to his designated beneficiary (as determined pursuant to
ARTICLE 16).
ARTICLE 10. OTHER EMPLOYEE BENEFITS. In addition to the
benefits provided under this Agreement, the Executive shall be entitled to
participate in any and all retirement, health, disability, life insurance,
nonqualified deferred compensation and tax-qualified retirement plans or
any other plans or benefits offered by the Company to its executives
generally, if and to the extent the Executive is eligible to participate
in accordance with the terms and provisions of any such plan or benefit
program. Nothing in this ARTICLE 10 is intended, or shall be construed,
to require the Company to institute any particular plan, program or
benefit. Benefits payable pursuant to this Agreement shall be in addition
to benefits payable to the Executive under all other employee benefit
plans or programs of the Company.
ARTICLE 11. VACATION AND SICK LEAVE. The Executive shall
be entitled to reasonable periods of vacation and sick leave during each
Employment Year, commensurate with his position and in accordance with
established Company policy. The Executive shall continue to receive his
Base Salary during the time of his vacation and sick leave. Vacation and
sick leave not taken during the applicable Employment Year cannot be
accumulated and taken during a subsequent Employment Year nor will the
Executive be paid for vacation and sick leave not taken.
ARTICLE 12. TERMINATION COMPENSATION.
12.1 Monthly Compensation. Upon a Termination Date that
occurs for any reason, the Executive shall be entitled to continue
to receive his Base Salary through the last day of the month in
which the Termination Date occurs (the "Termination Month").
12.2 Compensation Continuance. In addition to the
compensation provided for in Section 12.1, upon the termination of
the Executive's employment by the Company's exercise of the Notice
Exception or by the Executive for Good Reason, the Executive (or
in the event of his subsequent death, his designated beneficiary)
shall be entitled to continue to receive during the remainder of
the Term following the last day of the Termination Month (the
"Compensation Continuance Period"), the Base Salary (as increased
each year to reflect increases in the cost of living) that he
would have received pursuant to Section 4.1 during the
Compensation Continuance Period if the Termination Date had not
occurred and bonuses equal to the bonuses that would have been
payable to the Executive under the Company's Cash Bonus Plan (or
any successor plan or arrangement) based on the terms of such plan
and the Executive's participation level immediately before the
Termination Date. During the Compensation Continuance Period, the
Executive shall (i) subject to the provisions of Section 6.2,
continue to participate in all employee benefit plans or programs
of the Company (as described in ARTICLE 10), and (ii) be available
at reasonable times to provide consulting services to the Company.
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12.3 Special Severance Benefit. In addition to the
compensation provided for in Sections 12.1 and 12.2, upon the
termination of the Executive's employment by the Company's
exercise of the Notice Exception, or by the Executive for Good
Reason, or by the Company's giving notice which would cause the
Term to expire at the end of the Initial Term or at the end of any
succeeding Extension Period, the Executive (or in the event of his
subsequent death, his designated beneficiary) shall be entitled to
a special severance benefit (the "Severance Benefit") equal to his
Base Salary and bonus under the Cash Bonus Plan (or any successor
plan or arrangement) for the Employment Year just completed, which
Severance Benefit shall be payable for one (1) year in
approximately equal monthly installments commencing on the first
day of the month next following the expiration of the Compensation
Continuance Period (or the last day of the Termination Month, as
the case may be), and continuing for eleven (11) consecutive
calendar months thereafter (the "Severance Period"). The
Severance Benefit payments shall be paid in accordance with the
payroll schedule for salaried personnel of the Company.
See Section 6.1 for additional benefits the Executive may be entitled to
receive following receipt of the compensation provided for in this ARTICLE
12.
ARTICLE 13. POST-TERMINATION OBLIGATIONS. All payments and
benefits to the Executive under this Agreement shall be subject to the
Executive's compliance with the following provisions during the Term and
following the termination of the Executive's employment:
13.1 Assistance in Litigation. The Executive shall, upon
reasonable notice, furnish such information and assistance to the
Company as may reasonably be required by the Company in connection
with any litigation in which it is, or may become, a party, and
which arises out of facts and circumstances known to the
Executive. The Company shall promptly reimburse the Executive for
his out-of-pocket expenses incurred in connection with the
fulfillment of his obligations under this Section 13.1.
13.2 Confidential Information. The Executive shall not
disclose or reveal to any unauthorized person any trade secret or
other confidential information relating to the Company, its
subsidiaries or affiliates, or to any businesses operated by them,
and the Executive confirms that such information constitutes the
exclusive property of the Company; provided, however, that the
foregoing shall not prohibit the Executive from disclosing such
information to the extent necessary or desirable in connection
with obtaining financing for the Company (or furnishing such
information under any agreements, documents or instruments under
which such financing may have been obtained) or otherwise
disclosing such information to third parties or governmental
agencies in furtherance of the interests of the Company; or as may
be required by law.
13.3 Noncompetition. The Executive shall not: (i) prior
to a Termination Date and for the one-year period following a
Termination Date, without the prior written consent of the
Company, engage directly or indirectly, as a licensee, owner,
manager, consultant, officer, employee, director, investor or
otherwise, in any business in competition with the Company; or
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(ii) usurp for his own benefit any corporate opportunity under
consideration by the Company during his employment, unless the
Company shall have finally decided not to take advantage of such
corporate opportunity. The restrictions of part (i) of this
Section 13.3 shall not apply if the employment of the Executive is
terminated by the Company's exercise of the Notice Exception or by
the Executive for Good Reason, and shall further not apply to a
passive investment by the Executive constituting ownership of less
than five percent (5%) of the equity of any entity engaged in any
business described in part (i) of this Section 13.3. The amount,
if any, payable to the Executive after a Termination Date but
prior to the end of the Term shall be reduced, but not below zero,
by the amount of any remuneration for personal services earned by
or payable to the Executive by a business that is in competition
with the Company. The Executive acknowledges that the possible
restrictions on his activities which may occur as a result of his
performance of his obligations under this Section 13.3 are
required for the reasonable protection of the Company.
13.4 Failure to Comply. In the event that the Executive
shall fail to comply with any provision of this ARTICLE 13, and
such failure shall continue for ten (10) days following delivery
of notice thereof by the Company to the Executive, all rights
hereunder of the Executive and any person claiming under or
through him shall thereupon terminate and no person shall be
entitled thereafter to receive any payments or benefits hereunder
(except for benefits under employee benefit plans or programs as
provided in ARTICLE 10 which have been earned or otherwise fixed
or determined to be payable prior to such termination). In
addition to the foregoing, in the event of a breach or threatened
breach by the Executive of the provisions of this ARTICLE 13, the
Company shall have and may exercise any and all other rights and
remedies available to the Company at law or otherwise, including
but not limited to obtaining an injunction from a court of
competent jurisdiction enjoining and restraining the Executive
from committing such violation, and the Executive hereby consents
to the issuance of such injunction.
ARTICLE 14. ADDITIONAL PAYMENTS BY COMPANY. In the event
that any amount required to be paid or distributed to the Executive
pursuant to this Agreement shall constitute a parachute payment within the
meaning of Section 280G of the Internal Revenue Code of 1986, as amended
(the "Code"), and the aggregate of such parachute payments and any other
amounts otherwise required to be paid or distributed to the Executive by
the Company shall cause the Executive to be subject to the excise tax on
excess parachute payments under Section 4999 of the Code (the "Excise
Tax"), or any successor or similar provision thereof, the Company shall
pay to the Executive an additional amount (the "Gross-Up Payment") such
that the net amount the Executive shall receive after the payment of any
Excise Tax, shall equal the amount which he would have received if the
Excise Tax had not been imposed. The Gross-Up Payment shall be the sum of
the following:
(a) The rate of the Excise Tax multiplied by the amount of
the excess parachute payments;
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(b) Any federal income tax, social security tax,
unemployment tax or Excise Tax imposed upon the Executive as a
result of the Gross-Up Payment required to be made under this
ARTICLE 14; and
(c) Any state income or other tax imposed upon the
Executive as a result of the Gross-Up Payment required to be made
under this ARTICLE 14.
For purposes of determining the amount of the Gross-Up
Payment, the Executive shall be deemed to pay federal income taxes at the
highest marginal rate of federal income taxation for individuals in the
calendar year in which the Excise Tax is required to be paid. In
addition, the Executive shall be deemed to pay state income taxes at a
rate determined in accordance with the following formula:
(1 - (highest marginal rate of federal income taxation for
individuals)) x (highest marginal rate of Virginia income taxes
for individuals in the calendar year in which the Excise Tax is
required to be paid).
In the event the Executive is subject to the provisions of Section 68 of
the Code, the combined federal and state income tax rate determined above
shall be adjusted to reflect any loss in the federal deduction for state
income taxes on the Gross-Up Payment.
The Gross-Up Payment shall be made not later than the fifth
(5th) day, or as soon thereafter as the Company deems practicable,
following the date the Executive becomes subject to payment of the Excise
Tax; provided, however, that if the amount of such payment cannot be
finally determined on or before such day, the Company shall pay to the
Executive on such day an estimate, as determined in good faith by the
Company, of the minimum amount of such payment and shall pay the remainder
of such payment (together with interest at the rate provided under
Section 1274(b)(2)(B) of the Code) as soon as the amount can be determined
but no later than the thirtieth (30th) day after the date the Executive
becomes subject to the payment of the Excise Tax. In the event the amount
of the estimated payment exceeds the amount subsequently determined to
have been due, such excess shall constitute a loan by the Company to the
Executive, payable on the fifth (5th) day after demand by the Company
(together with interest at the rate provided in Section 1274(b)(2)(B) of
the Code).
In the event that the Excise Tax is subsequently determined
to be less than the amount taken into account hereunder at the time the
Gross-Up Payment is made, the Executive 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 (plus the portion of the Gross-Up Payment attributable to the
Excise Tax, federal and state taxes imposed on the Gross-Up Payment being
repaid by the Executive, if such repayment results in a reduction in
Excise Tax and/or a federal or state tax deduction) plus interest on the
amount of such repayment at the rate provided in Section 1274(b)(2)(B) of
the Code. The Executive shall not be required to make the payment
described in the preceding sentence if he paid the Excise Tax to the
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Internal Revenue Service and the period for requesting a refund for all or
part of such Excise Tax payment has expired. In the event that the Excise
Tax is determined to exceed the amount taken into account hereunder at the
time the Gross-Up Payment is made (including by reason of any payment the
existence or amount of which cannot be determined at that time of the
Gross-Up Payment), the Company shall make an additional Gross-Up Payment
in respect of such excess (plus any interest payable with respect to such
excess) at the time that the amount of such excess is finally determined.
The Company shall not be required to make the payment described in the
preceding sentence if the period in which the Internal Revenue Service may
assess additional Excise Tax against the Executive has expired.
ARTICLE 15. ATTORNEYS' FEES. In the event that the
Executive incurs any attorneys' fees in protecting or enforcing his rights
under this Agreement or under any employee benefit plans or programs
sponsored by the Company in which the Executive is a participant, the
Company shall reimburse the Executive for such reasonable attorneys' fees
and for any other reasonable expenses related thereto. Such reimbursement
shall be made within thirty (30) days following final resolution of the
dispute or occurrence giving rise to such fees and expenses.
ARTICLE 16. BENEFICIARY. The Executive shall name one or
more primary beneficiaries and one or more contingent beneficiaries, who
shall be entitled to receive any death benefit payable under ARTICLE 8 or
any benefits payable under ARTICLE 9 due to the Executive's death
following commencement of payments under Section 6.1 or ARTICLES 7 or 12,
which beneficiary or beneficiaries shall be subject to change from time to
time by notice in writing to the Board. A beneficiary may be a trust, an
individual or the Executive's estate. If the Executive fails to designate
a beneficiary, primary or contingent, then and in such event, such benefit
shall be paid to the surviving spouse of the Executive or, if he shall
leave no surviving spouse, then to the Executive's estate. If a named
beneficiary entitled to receive any death benefit is not living or in
existence at the death of the Executive or dies prior to asserting a
written claim for any such death benefit, then and in any such event, such
death benefit shall be paid to the other primary beneficiary or
beneficiaries named by the Executive who shall then be living or in
existence, if any, otherwise to the contingent beneficiary or
beneficiaries named by the Executive who shall then be living or in
existence, if any; but if there are no primary or contingent beneficiaries
then living or in existence, such benefit shall be paid to the surviving
spouse of the Executive or, if he shall leave no surviving spouse, then to
the Executive's estate. If a named beneficiary is receiving or is
entitled to receive payments of any such death benefit and dies before
receiving all of the payments due him, any remaining benefits shall be
paid to the other primary beneficiary or beneficiaries named by the
Executive who shall then be living or in existence, if any, otherwise to
the contingent beneficiary or beneficiaries named by the Executive who
shall then be living or in existence, if any; but if there are no primary
or contingent beneficiaries then living or in existence, the balance shall
be paid to the estate of the beneficiary who was last receiving the
payments.
ARTICLE 17. DECISIONS BY COMPANY; FACILITY OF PAYMENT. Any
powers granted to the Board hereunder may be exercised by a committee,
appointed by the Board, and such committee, if appointed, shall have
general responsibility for the administration and interpretation of this
Agreement. Subject to and to the extent not inconsistent with the
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provisions of ARTICLE 16, if the Board or the committee shall find that
any person to whom any amount is or was payable hereunder is unable to
care for his affairs because of illness or accident, or is a minor, or has
died, then the Board or the committee, if it so elects, may direct that
any payment due him or his estate (unless a prior claim therefore has been
made by a duly appointed legal representative) or any part thereof be paid
or applied for the benefit of such person or to or for the benefit of his
spouse, children or other dependents, an institution maintaining or having
custody of such person, any other person deemed by the Board or committee
to be a proper recipient on behalf of such person otherwise entitled to
payment, or any of them, in such manner and proportion as the Board or
committee may deem proper. Any such payment shall be in complete
discharge of the liability of the Company therefor.
ARTICLE 18. INDEMNIFICATION. The Company shall indemnify
the Executive during his employment and thereafter to the maximum extent
permitted by applicable law for any and all liability of the Executive
arising out of, or in connection with, his employment by the Company or
membership on the Board; provided, that in no event shall such indemnity
of the Executive at any time during the period of his employment by the
Company be less than the maximum indemnity provided by the Company at any
time during such period to any other officer or director under and
indemnification insurance policy or the bylaws or charter of the Company
or by agreement.
ARTICLE 19. SOURCE OF PAYMENTS; NO TRUST. The obligations
of the Company to make payments hereunder shall constitute a liability of
the Company to the Executive. Such payments shall be from the general
funds of the Company, and the Company shall not be required to establish
or maintain any special or separate fund, or otherwise to segregate assets
to assure that such payments shall be made, and neither the Executive nor
his designated beneficiary shall have any interest in any particular asset
of the Company by reason of its obligations hereunder. Nothing contained
in this Agreement shall create or be construed as creating a trust of any
kind or any other fiduciary relationship between the Company and the
Executive or any other person. To the extent that any person acquires a
right to receive payments from the Company hereunder, such right shall be
no greater than the right of an unsecured creditor of the Company.
ARTICLE 20. SEVERABILITY. All agreements and covenants
contained herein are severable, and in the event any of them shall be held
to be invalid by any competent court, this Agreement shall be interpreted
as if such invalid agreements or covenants were not contained herein.
ARTICLE 21. ASSIGNMENT PROHIBITED. This Agreement is
personal to each of the parties hereto, and neither party may assign nor
delegate any of his or its rights or obligations hereunder without first
obtaining the written consent of the other party; provided, however, that
nothing in this ARTICLE 21 shall preclude (i) the Executive from
designating a beneficiary to receive any benefit payable under this
Agreement upon his death or (ii) the executors, administrators, or other
legal representatives of the Executive or his estate from assigning any
rights under this Agreement to the person or persons entitled thereto.
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ARTICLE 22. NO ATTACHMENT. Except as otherwise provided in
this Agreement or required by applicable law, no right to receive payments
under this Agreement shall be subject to anticipation, commutation,
alienation, sale, assignment, encumbrance, charge, pledge or hypothecation
or to execution, attachment, levy, or similar process or assignment by
operation of law and any attempt, voluntary or involuntary, to effect any
such action shall be null, void and of no effect.
ARTICLE 23. HEADINGS. The headings of articles, paragraphs
and sections herein are included solely for convenience of reference and
shall not control the meaning or interpretation of any of the provisions
of this Agreement.
ARTICLE 24. GOVERNING LAW. The parties intend that this
Agreement and the performance hereunder and all suits and special
proceedings hereunder shall be construed in accordance with and under and
pursuant to the laws of the Commonwealth of Virginia and that in any
action, special proceeding or other proceeding that may be brought arising
out of, in connection with, or by reason of this Agreement, the laws of
the Commonwealth of Virginia shall be applicable and shall govern to the
exclusion of the law of any other forum, without regard to the
jurisdiction in which any action or special proceeding may be instituted.
ARTICLE 25. BINDING EFFECT. This Agreement shall be
binding upon, and inure to the benefit of, the Executive and his heirs,
executors, administrators and legal representatives and the Company and
its permitted successors and assigns.
ARTICLE 26. MERGER OR CONSOLIDATION. The Company will not
consolidate or merge into or with another corporation, or transfer all or
substantially all of its assets to another corporation (the "Successor
Corporation") unless the Successor Corporation shall assume this
Agreement, and upon such assumption, the Executive and the Successor
Corporation shall become obligated to perform the terms and conditions of
this Agreement.
ARTICLE 27. COUNTERPARTS. This Agreement may be executed
simultaneously in one or more counterparts, each of which shall be deemed
an original but all of which together shall constitute one and the same
instrument.
ARTICLE 28. ENTIRE AGREEMENT. This Agreement expresses the
whole and entire agreement between the parties with reference to the
employment of the Executive and, as of the effective date hereof,
supersedes and replaces any prior employment agreement, understanding or
arrangement (whether written or oral) between the Company and the
Executive. Each of the parties hereto has relied on his or its own
judgment in entering into this Agreement.
ARTICLE 29. NOTICES. All notices, requests and other
communications to any party under this Agreement shall be in writing
(including telefacsimile transmission or similar writing) and shall be
given to such party at its address or telefacsimile number set forth below
or such other address or telefacsimile number as such party may hereafter
specify for the purpose by notice to the other party:
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(a) If to the Executive:
T. H. Faucett
512 Bridge Street
Danville, VA 24541
(b) If to the Company:
Dibrell Brothers, Incorporated
512 Bridge Street
P.O. Box 681
Danville, Virginia 24541-0681
Fax Number: (804) 791-0180
Each such notice, request or other communication shall be effective (i) if
given by mail, 72 hours after such communication is deposited in the mails
with first class postage prepaid, addressed as aforesaid or (ii) if given
by any other means, when delivered at the address specified in this
ARTICLE 29.
ARTICLE 30. PEP. The Company agrees that its Pension
Equalization Plan shall be amended (i) to provide that the greater of (x)
the Executive's actual age and service or (y) the Executive's projected
age and service at the end of the Initial Term shall be used in
determining whether the Executive is entitled to a benefit under the
Company's Pension Equalization Plan and (ii) to provide that the Executive
will be entitled to a benefit under the Company's Pension Equalization
Plan if, prior to his separation from service (x) the sum of the
Executive's age and service (pursuant to the amendment described in (i)
above) is at least 82, (y) the Executive attains age 54 or more and (z)
the Executive completes at least 24 years of service; provided, however,
that such amendments shall not apply if the Executive's employment is
terminated during the Initial Term for Cause or the Executive resigns
during the Initial Term without Good Reason. The Company further agrees
that except as provided in the preceding sentence, during the Term the
Company's Pension Equalization Plan shall not be amended without the
Executive's consent.
ARTICLE 31. MODIFICATION OF AGREEMENT. No waiver or
modification of this Agreement or of any covenant, condition, or
limitation herein contained shall be valid unless in writing and duly
executed by the party to be charged therewith. No evidence of any waiver
or modification shall be offered or received in evidence at any
proceeding, arbitration, or litigation between the parties hereto arising
out of or affecting this Agreement, or the rights or obligations of the
parties hereunder, unless such waiver or modification is in writing, duly
executed as aforesaid. The parties further agree that the provisions of
this ARTICLE 30 may not be waived except as herein set forth.
ARTICLE 32. TAXES. To the extent required by applicable
law, the Company shall deduct and withhold all necessary Social Security
taxes and all necessary federal and state withholding taxes and any other
similar sums required by law to be withheld from any payments made
pursuant to the terms of this Agreement.
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<PAGE>
ARTICLE 33. EFFECTIVENESS. This Agreement shall have no
effect, and shall be null and void ab initio, if the Company and Monk-
Austin, Inc. do not consummate the transaction described in Agreement and
Plan of Reorganization, dated as of October 22, 1994, on or before
June 30, 1995 (or as of any extension of such deadline as may be approved
by the Company's Board of Directors or if the Company and Standard
Commercial Corporation do not consummate a merger, combination or similar
reorganization on or before June 30, 1995.
ARTICLE 34. RECITALS. The Recitals to this Agreement are
incorporated herein and shall constitute an integral part of this
Agreement.
- 109 -
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement on
the day and year first above written.
EXECUTIVE:
/s/ H. P. Green, III
_______________________________(SEAL)
H. P. GREEN, III
WITNESS:
/s/ T. W. Oakes
_______________________________
T. W. OAKES
DIBRELL BROTHERS, INCORPORATED:
John O. Hunnicutt
By:____________________________________
Vice President
JOHN O. HUNNICUTT
Attest:
Debra H. Slaughter
_______________________________
Asst. Secretary
- 110 -
<PAGE>
Exhibit 10.6
January 11, 1995
Mr. _______________
512 Bridge Street
Danville, VA 24541
Option and SAR Agreements
Dear Mr. Owen:
As you know, the Omnibus Stock Incentive Plan gives the Compensation
Committee broad discretion and authority with respect to the administration of
the Plan. For example, the Committee prescribes the terms of awards and
approves the agreements that evidence awards. The Committee also may adopt
rules and regulations and make interpretations that are necessary or desirable
for the administration of the Plan.
At its meeting on December 20, 1994, the Committee approved an
employment agreement, effective as of November 1, 1994, between you and
Dibrell Brothers, Incorporated (the "Employment Agreement"). The Committee
also considered how the agreements evidencing your outstanding awards under
the Plan should be interpreted in light of your and Dibrell's intent in
entering into the Employment Agreement.
Paragraph 3 of your outstanding option and SAR agreements provide
that your rights under the awards will terminate upon your separation from
service for reasons other than death, disability or retirement. The Committee
determined that during the Initial Term, Paragraph 3 will not be applied to
extinguish your rights under outstanding options and SARs unless your
employment is terminated with Cause or you resign without Good Reason. For
this purpose, the terms Cause, Good Reason and Initial Term have the same
meaning given them in the Employment Agreement.
The Committee's determination does not affect your rights under
outstanding options and SARs in the event of your death, disability or
retirement. Your rights (or those of your estate or beneficiary) will be
governed by Paragraphs 4, 5 and 6 of the option and SAR agreements in the
event that your employment terminates for either of those reasons.
You should keep this letter with the agreements evidencing your
outstanding options and SARs. If you have any questions about the Committee's
action, please do not hesitate to contact me.
Sincerely yours,
John O. Hunnicutt
Vice President - Administration
and Secretary
hmb
- 111 -
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 11
Dibrell Brothers Incorporated and Subsidiaries
Computation of Earnings Per Common Share
Three and Six Months Ended December 31, 1994 and 1993
1995 1994 1995 1994
Second Second First Six First Six
Quarter Quarter Months Months
<S> <C> <C> <C> <C>
Primary
Earnings
Net Income . . . . . . . . . . . $ 3,323,113 $ 2,208,342 $ 2,056,391 $ 6,534,659
Shares
Weighted average number of
common shares outstanding . . . 13,303,354 13,302,547 13,303,222 13,302,168
Shares applicable to stock options,
net of shares assumed to be
purchased from proceeds at
average market price . . . . . 17,664 32,876 8,881 26,660
Average Number of Shares
Outstanding . . . . . . . . . . 13,321,018 13,335,423 13,312,103 13,328,828
Earnings per Share
Net Income . . . . . . . . . . . $.25 $.17 $.15 $.49
Assuming Full Dilution
Earnings
Net Income . . . . . . . . . . . $ 3,323,113 $ 2,208,342 $ 2,056,391 $ 6,534,659
Add after tax interest
expense applicable
to 7 3/4% Convertible
Debentures issued
June 3, 1991 . . . . . . . . . 657,901 668,568 1,335,803 1,335,933
Adjusted Net Income . . . . . . . $ 3,981,014 $ 2,876,910 $ 3,392,194 $ 7,870,592
Shares
Weighted average number of
common shares outstanding . . . 13,303,354 13,302,547 13,303,222 13,302,168
Shares applicable to stock options,
net of shares assumed to be
purchased from proceeds at
ending market price . . . . . . 17,664 32,876 17,664 32,876
Assuming conversion of 7 3/4%
Convertible Debentures
at beginning of period . . . 2,802,034 2,802,034 2,802,034 2,802,034
Average Number of Shares
Outstanding . . . . . . . . . . 16,123,052 16,137,457 16,122,920 16,137,078
Earnings Per Share
Net Income as Adjusted . . . . . $.25 $.18 $.21 $.49
</TABLE>
- 112 -
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLAR
<EXCHANGE-RATE> 1
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-START> JUL-01-1994
<PERIOD-END> DEC-31-1994
<PERIOD-TYPE> 6-MOS
<S> <C>
<CASH> 13,499,550
<SECURITIES> 0
<RECEIVABLES> 154,177,643
<ALLOWANCES> 6,875,946
<INVENTORY> 276,165,013
<CURRENT-ASSETS> 463,920,733
<PP&E> 197,203,889
<DEPRECIATION> 61,247,175
<TOTAL-ASSETS> 713,211,656
<CURRENT-LIABILITIES> 346,093,996
<BONDS> 211,055,376
<COMMON> 13,303,489
0
0
<OTHER-SE> 113,885,409
<TOTAL-LIABILITY-AND-EQUITY> 713,211,656
<SALES> 486,057,758
<TOTAL-REVENUES> 486,057,758
<CGS> 433,031,894
<TOTAL-COSTS> 433,031,894
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 854,841
<INTEREST-EXPENSE> 13,155,560
<INCOME-PRETAX> 2,765,860
<INCOME-TAX> 1,572,296
<INCOME-CONTINUING> 2,056,391
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,056,391
<EPS-PRIMARY> 0.15
<EPS-DILUTED> 0.15
<PAGE>
</TABLE>