Exhibit 10.1
NORTH CAROLINA )
) EXECUTIVE EMPLOYMENT AGREEMENT
GUILFORD COUNTY )
THIS AGREEMENT, made and entered into the 28th day of October,
1994, and effective as of September 1, 1994, by and between LADD Furniture,
Inc., a North Carolina corporation ("Company"), and Richard R. Allen, an
individual resident of North Carolina ("Executive");
WITNESSETH:
WHEREAS, Company is engaged in the manufacture, distribution, and
sale of furniture; and
WHEREAS, Company desires to employ Executive as its Chairman,
Chief Executive Officer and President and Executive desires to accept such
employment on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual promises contained
herein, the parties agree as follows:
1. Employment. Company hereby employs Executive, and Executive
hereby accepts employment and agrees to remain in the employ of the company
during the term of this Agreement, on the terms and conditions hereinafter set
forth.
2. Term of Employment. Subject to the provisions in Section 9
below, the term of this Agreement shall be for a two-year period beginning on
the date hereof and terminating on August 31, 1996, unless otherwise
terminated as provided herein.
3. Nature of Employment. Executive is employed as Chairman of
the Board, Chief Executive Officer and President of Company. Consistent with
such position, Executive shall, subject to the direction of the Board of
Directors of Company, direct and manage the affairs of the Company. During
the term of this Agreement and any extensions or renewals thereof, Executive
shall have no other employment of any nature whatsoever without the prior
consent of Company. Accordingly, unless otherwise approved by Company,
Executive agrees to devote his full working time to the business of Company;
provided, however, nothing herein contained shall restrict or prevent
Executive from personally and for his own
account owning and dealing in stocks, bonds, securities, real estate,
commodities, or other investment properties for his own benefit or the
benefit of his family. Further, nothing herein contained shall restrict or
prevent Executive from serving on the Board of Directors of any entity which
does not directly of indirectly compete with Company.
4. Compensation.
(a) Base Salary. Compensation to Executive for the services
rendered on behalf of Company during the term of this Agreement shall be no
less than Three Hundred Sixty-Five Thousand Dollars ($ 365,000.00) per year,
payable in equal monthly installments. From time to time during the term of
this Agreement, Executive's compensation may be increased if approved by the
Board of Directors of Company, but shall in no event be decreased from the
amount of the base salary in effect at that time. Company shall review
Executive's compensation hereunder at least on an annual basis.
(b) Incentive Compensation. In addition to Executive's base
salary, Executive shall be entitled to participate in incentive compensation
plans and programs generally available to executives of the Company, provided
that performance goals and award targets used in the computation of awards to
the Executive hereunder shall be no less favorable than those which are used
in the computation of awards to other executives of the Company and shall
recognize the level of responsibility of the Executive. The annual incentive
opportunity shall have a maximum no less than one hundred percent (100%) of
Executive's then current base salary.
5. Expenses. Executive is authorized to incur reasonable
expenses in connection with the business of Company, including expenses for
travel and similar items. Company will reimburse Executive for all such
expenses upon the presentation by Executive, from time to time, of an itemized
account of expenditures.
6. Vacation. Executive shall be entitled to paid vacations
during each calendar year of the term of this Agreement at such times and for
such duration as may be determined by the Board of Directors of the Company,
t a king into consideration the needs and requirements of Company for
Executive's services; provided, however, the minimum paid vacation to which
Executive shall be entitled in any calendar year is four (4) weeks.
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7. Death During Employment. If Executive dies during the term
of this Agreement, Company shall pay to the estate of Executive the
compensation to which he would otherwise be entitled through the end of the
month in which death occurs in accordance with Section 4(a) above, plus the
sum of Five Thousand Dollars ($5,000.00) as an additional death benefit.
Company shall also pay to the estate of Executive an amount equal to any bonus
or other incentive payments which would otherwise have been due to Executive
had Executive been employed as of fiscal year end, pro-rated to date of death.
This Agreement shall thereupon terminate, and Company shall have no further
obligation to the estate of Executive.
8. Permanent Disability During Employment. If Executive
becomes permanently disabled during the term of this Agreement, Company shall
pay to Executive the compensation, in accordance with Section 4(a) above, to
which he would otherwise be entitled to the end of the month in which such
permanent disability occurs. Thereafter, the Executive shall continue to
receive his then base salary, minus any payments provided by the Company's
benefit plans and by any government sponsored program, for a twenty-four (24)
month period from the date of permanent disability. This Agreement shall
thereupon terminate and Company shall have no further obligation to Executive
except as may be provided under Company's short-term and long-term disability
plans during the term of such disability and any prorata portion of any bonus
or incentive plan. Permanent disability for purposes of this Agreement shall
mean a physical or mental condition of Executive that renders Executive
incapable of performing the essential duties of his job and which condition
shall be medically determined to be of permanent duration as same is construed
under Company's disability plans.
9. Renewal. Executive's term of employment shall be auto-
matically extended upon the same terms and conditions contained herein for
successive one-year periods unless a written notice of termination is given by
either party at least 90 days before the end of the term of employment or any
renewals or extensions thereof. In the event that the Company gives timely
notice to terminate this agreement, the severance provision of Section 11
pertaining to termination without cause shall become effective.
10. Termination for Cause. Company may terminate Executive's
employment at any time "for cause". The term "for
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cause" shall mean (i) a material default or other breach by Executive of
his obligations under this Agreement, (ii) material failure by Executive
to diligently and competently perform his duties under this Agreement,
which shall be determined by Company's Board of Directors in its
reasonable discretion, (iii) insubordination or other act or acts by
Executive detrimental to Company or damaging to Company's relationships with
customers, suppliers or employees or (iv) fraud, dishonesty, misappropriation
of Company's assets, or conviction of a felony. Upon the occurrence of (i),
(ii) or (iii) above, Company shall be entitled to terminate the employment
relationship hereunder upon thirty (30) days prior written notice to
Executive, which notice shall state the reason for such termination
and shall provide Executive an opportunity to remedy or cure such
cause during such period. If such cause is not remedied or cured
during such period, Company may terminate Executive's employment immediately.
In the event of a termination for cause, Company shall have no obligation or
liability to Executive under this Agreement except for the compensation to
which he is entitled through the end of the month of termination in accordance
with Section 4(a) above.
11. Termination Without Cause. Company shall be entitled to
terminate the employment relationship hereunder without cause at any time upon
thirty (30) days prior written notice to Executive. In such event, Executive,
if requested by Company, shall continue to render his services up to the date
of termination and shall be paid the compensation to which he is entitled
through the end of the month of termination in accordance with Section 4(a)
above. In addition, if Company terminates this Agreement for any reason other
than for cause, as specified in Section 10 above, the Executive shall be
entitled to receive in twenty-four (24) equal monthly payments in an amount
equal to two times the sum of (i) his then current base salary in accordance
with Section 4(a) above and (ii) the average annual incentive payments to the
Executive during the preceding three (3) years less earned income received
during the 24-month severance period. Further, Executive shall be deemed to
be One Hundred Percent (100%) vested in the Supplemental Retirement Income
Plan for Salaried Employees of LADD Furniture, Inc.("SERP"). Payments under
this Section 11 are in addition to and not in lieu of any benefits under the
SERP or other benefit programs of the Company. The Company shall thereafter
have no other obligation or liability to Executive under this Agreement.
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12. Termination upon Change of Control. In the event of a
"change in control" of the Company (as hereinafter defined), the Executive may
terminate his employment for Good Reason. For purposes of this Agreement,
"Good Reason" shall mean the occurrence of any of the following events during
the twelve (12) months immediately preceding or following the effective date
of a change in control of the Company:
(a) a material change in the scope of the Executive's
assigned duties and responsibilities from those in
effect immediately prior to a change in control of the
Company or the assignment of duties or
responsibilities that are inconsistent with the
Executive's status in the Company;
(b) a reduction by the Company in the Executive's base
salary or incentive compensation as in effect on the
date of a change in control;
(c) the Company's requirement that the Executive be
based anywhere other than the Company's office at
which he was based prior to the change in control of
the Company; or
(d) the failure by the Company to continue to provide
the Executive with benefits substantially similar to
those specified in Section 14 of this Agreement.
If the Executive shall terminate his employment for Good Reason,
then the Company shall pay him a lump sum severance payment in an amount equal
to two times the sum of (i) his then current base salary and (ii) the average
annual incentive payments to the Executive during the preceding three (3)
years. Further, upon termination for Good Reason, the Executive shall
immediately become 100% vested in the SERP, all outstanding stock options
shall become immediately exercisable and all restrictions under Restricted
Stock Agreements shall be eliminated.
For purposes of this Agreement, a "change in control" shall be
deemed to have occurred when (i) any person, corporation, or group of
associated persons, excluding affiliates of the
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Company, acquires a beneficial ownership of an aggregate of more than
fifty percent (50%) of the then outstanding shares of voting stock of
the Company or (ii) a merger or consolidation to which the Company is a
party and where the Company is not a surviving or continuing entity has been
completed.
13. Property of Company. Executive agrees that upon the
termination of his employment he will turn over to Company all property of
Company which has come into his possession while an Executive of Company.
14. Additional Benefits. During the term of this Agreement and
any renewals or extensions thereof, Company shall keep and maintain, for the
benefit of Executive, life insurance having a death benefit of not less than
one hundred percent (100%) of base pay (not to exceed $300,000) and disability
insurance that will provide Executive a benefit of not less than sixty-percent
(60%) of base pay per month during the term of any disability. Executive and,
as applicable, the Executive's family shall also have the right to participate
in any Executive benefit plans or other fringe benefits adopted by Company for
its officers and/or other key management employees or as a part of Company's
regular compensation structure for its employees, including any group
hospitalization, medical, dental, accidental death and disability and long-
term disability income replacement insurance plans and any retirement income
and capital accumulation plans. All such benefits shall be in addition to the
compensation payments provided by this Agreement.
15. Covenants by Executive.
(a) Non-competition. During the term of employment under
this Agreement including any renewals or extensions thereof, and
for a period of two (2) years thereafter, Executive shall not,
without the prior written approval of Company, directly or
indirectly, as employer, employee, partner, stockholder, joint
venturer or otherwise, enter into or in any manner take part in
any business or other endeavor which would be in competition with
Company in the continental United States as such business is
conducted at the time of termination.
(b) Respect for Economic Relationships. Executive will
not, during the term of his employment under this
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Agreement including any renewals or extensions thereof, and for a
period of two (2) years thereafter, in any fashion, form, or manner,
either directly or indirectly, solicit, interfere with, or endeavor
to entice away from Company any customer or person, firm or
corporation, regularly dealing with Company or directly or
indirectly interfere with, entice away, or cause any other entity
to employ any other employee of Company.
(c) Validity of Covenants. Executive agrees that the
covenants contained in this Section are reasonably necessary to
protect the legitimate interests of Company, are reasonable with
respect to time, territory and scope, and do not interfere with
the interests of the public. Executive further agrees that the
descriptions of the covenants contained in this Section are
sufficiently accurate and definite to inform Executive of the
scope of such covenants. Executive acknowledges that prior to
entering into this Agreement he was employed "at will", and agrees
that the term of employment and termination provisions contained
in Sections 2, 9, 10 and 11 above constitute fully adequate and
sufficient consideration for the covenants contained in Sections
15 and 17 of this Agreement.
(d) Specific Performance. Executive agrees that a breach
or violation of any of the covenants under this Section will
result in immediate and irreparable harm to Company in an amount
which will be impossible to ascertain at the time of the breach or
violation and that the award of monetary damages will not be
adequate relief to Company. Therefore, the failure on the part of
Executive to perform all of the covenants established by this Sec-
tion shall give rise to a right to Company to obtain enforcement
of this Section in a court of equity by a decree of specific
performance or other injunctive relief. This remedy, however,
shall be cumulative and in addition to any other remedy Company
may have.
16. Patent, Trade Dress and Trademark Assignment. Executive
agrees without additional compensation to assign promptly to Company all
rights, title, and interest in and to any and all trade secrets, inventions,
letters patent, applications for letters patent, trade dress, and trademarks
whether or not subject to state
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or federal trademark during the term of employment hereunder if related to
the then current products and activities of Company, such activities to
include, without limitation, product development by Company, or if developed
or made with the use of its facilities, equipment, materials, personnel, or
trade secrets, or result directly from any work performed by Executive
for Company. Executive further agrees to disclose promptly to Company
any such trade secrets, inventions, letters patent, applications for
letters patent, trade dress, and trademarks, and, at the request and
expense of Company, to apply for letters patent or registration thereon in
every jurisdiction designated by Company.
17. Confidential Information. Executive agrees both during the
term of this Agreement and thereafter to keep secret and confidential all
information labeled confidential or not generally known which is heretofore or
hereafter acquired concerning the business and affairs of Company, including
without limitation, information regarding trade secrets, trade dress,
proprietary processes, confidential business plans, market research data and
financial data, and further agrees not to disclose any such information to any
person, firm, or corporation or use the same in any manner other than in
furtherance of the business or affairs of Company or unless such information
shall become public knowledge by other means. Executive agrees that such
information is a valuable, special, and unique asset of Company. Upon the
termination of Executive's employment with Company, Executive shall
immediately return to Company all documents, records, notebooks, and similar
repositories of information relating to confidential information of Company
and/or the development of any inventions.
18. Waiver of Breach. The waiver by Company or Executive of any
breach of a provision of this Agreement shall not operate or be construed as a
waiver of any subsequent breach by the parties.
19. Notice. All notices, requests, demands, payments, or other
communications hereunder shall be deemed to have been duly given if in writing
and hand delivered or sent by certified or registered mail, return receipt
requested, to the appropriate address indicated below or to such other address
as may be given in a notice sent to all parties hereto:
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(a) If to Company, to:
LADD Furniture, Inc.
One Plaza Center
P. O. Box HP-3
High Point, NC 27261
Attn: Chief Financial Officer
b) If to Executive, to:
Richard R. Allen
2815 Lake Forest Drive
Greensboro, NC 27408
20. Entire Agreement. This Agreement supersedes any and all
other understandings and agreements, either oral or in writing, between the
parties hereto with respect to the subject matter hereof and constitutes the
sole and only agreement between the parties with respect to said subject
matter. Each party to this Agreement acknowledges that no representations,
inducements, promises, or agreements, oral or otherwise, have been made by any
party or by anyone acting on behalf of any party, which are not embodied here-
in, and that no agreement, statement, or promise not contained in this
Agreement shall be valid or binding or of any force or effect. No change or
modification of this Agreement shall be valid or binding upon the parties
hereto unless such change or modification is in writing and is signed by the
parties hereto.
21. Severability. If any one or more of the provisions
contained in this Agreement shall be held by a court of competent jurisdiction
to be invalid, illegal, or unenforceable in any respect for any reason, that
invalidity, illegality, or unenforceability shall not affect any other
provisions hereof, and this Agreement shall be construed as if that invalid,
illegal, or unenforceable provision had never been contained herein.
22. Parties Bound. The terms, promises, covenants, and
agreements contained in this Agreement shall apply to, be binding upon, and
inure to the benefit of the parties hereto and their respective successors and
assigns; provided, however, that this Agreement may not be assigned by Company
or Executive without the prior written consent of the other party.
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23. Consolidation, Merger or Sale of Assets. Nothing in this
Agreement shall preclude the Company from consolidating or merging into, or
with, or transferring all or substantially all of its assets to another
corporation which assumes this Agreement and all obligations and undertakings
of the Company hereunder. Upon such a consolidation or merger, the use of the
word "Company" herein shall mean such other corporation, and this Agreement
shall continue in full force and effect.
24. Survival. The provisions of Sections 15 and 17 of this
Agreement shall survive the termination of this Agreement and shall continue
for the terms set forth in Sections 15 and 17.
25. Captions. Captions to the Sections of this Agreement are
inserted solely for the convenience of the parties, are not a part of this
Agreement, and in no way define, limit, extend or describe the scope thereof
or the intent of any of the provisions.
26. Applicable Law. This Agreement shall be construed and the
legal relationship between the parties determined in accordance with the laws
of the State of North Carolina.
IN WITNESS WHEREOF, the parties hereto have hereunto set their
hands and seals as of the day and year first above written, the corporate
party acting through duly authorized officers.
ATTEST: LADD Furniture, Inc.
___________________________ By:_______________________________
Secretary Vice Chairman
(Corporate Seal)
___________________________ s/Richard R. Allen (SEAL)
(Witness) Richard R. Allen
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