EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement"), dated as of
July 8, 1997, is made and entered into by and between XXXXXX
INDUSTRIES, INC., a Tennessee corporation (the "Company"), and
XXXXXXX X. XXXXXX (the "Employee").
W I T N E S S E T H:
WHEREAS, the Company desires to continue its employment of
the Employee, and the Employee desires to continue his employment
with the Company, on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of these premises, and of
the mutual covenants and agreements hereinafter set forth, the
parties agree as follows:
1. TERM. Employee's employment under this Agreement shall
commence on the date hereof and shall continue until terminated
in accordance with the provisions of Section 4 below (the
"Employment Period").
2. SALARY AND BENEFITS.
2.1 During the Employment Period, for all services
rendered by the Employee under this Agreement, the Company shall
pay the Employee a base salary per annum (the "Base Salary") that
shall be agreed to by the Company and the Employee from time to
time, but which shall in any event be substantially the same as
the base salary of the Co-Chief Executive Officer of the Company
or the Chief Executive Officer of the Company if other than
Employee, payable in accordance with the customary payroll policy
of the Company in effect at the time such payment is made.
2.2 In addition to the Base Salary, the Employee shall
be entitled to participate in any of the Company's present and
future stock or cash based bonus plans that are generally
available to its senior executives, as such plans may exist or be
changed from time to time at the discretion of the Company.
2.3 The Employee shall be entitled to such vacation
time, fringe benefits, insurance coverage, and other benefits as
the Company generally provides to its executive officers from
time to time.
3. DUTIES. The Employee shall serve the Company as its
Chairman of the Board ("Chairman") and as its Co-Chief Executive
Officer ("CCEO") (the Employee may cease serving as the CCEO at
his discretion without terminating or otherwise affecting
thisAgreement). As Chairman and CCEO, the duties of the Employee
shall include but not be limited to the supervision of the
business affairs of the Company and such other duties as are
customarily performed by comparably situated officers and as may
be assigned from time to time by the Company's Board of Directors
(the "Board"). During the term of this Agreement, the Employee
shall devote his primary time, attention and skill to his duties
hereunder; faithfully and diligently perform such duties and
exercise such powers as may be from time to time assigned to or
vested in him by the Board; obey the directions of the Board; and
use his best efforts to promote the interests of the Company.
The Company acknowledges, however, that the Employee may pursue
other business related interests so long as they do not interfere
with the performance of Employee's duties for the Company. The
Employee may be required in pursuance of his duties hereunder, to
perform services for any company controlling, controlled by or
under common control with the Company (such companies hereinafter
collectively called "Affiliates") for some period of time and
from time to time. The Employee shall obey all policies of the
Affiliates.
4. TERMINATION. Unless terminated in accordance with the
following provisions to this Section 4, the Company shall
continue to employ the Employee and the Employee shall continue
to work for the Company, during the Employment Period.
4.1 The Company may terminate the Employee's
employment at any time for Cause. "Cause" shall mean (i) willful
malfeasance or gross negligence or (ii) knowingly engaging in
wrongful conduct resulting in detriment to the good will of the
Company or damage to the Company's relationships with its
customers, suppliers or employees. Upon termination pursuant to
this Section 4.1, the Company shall pay the Employee any salary
earned and unpaid to the date of termination, and any outstanding
funds advanced by the Company to or on behalf of the Employee
shall become immediately due and payable.
4.2 In the event the Employee dies or becomes mentally
or physically handicapped or disabled so as to be unable to
perform his duties during the Employment Period, this Agreement
shall automatically terminate with no further liability on the
part of the Company.
4.3 This Agreement may be terminated by either party
upon three (3) years prior written notice of termination, with or
without Cause.
4.4 In the event of a "Change in Control" (as such
term is defined in Section __ of the Company's Stock Option and
Incentive Plan), the Employee may terminate this Agreement upon
sixty (60) days notice of termination.
5. COMPETITION. The Employee agrees that during the term
of this Agreement, the Employee will not directly or indirectly,
whether or not for compensation and whether or not as an
employee, be engaged in any business competing with or which may
compete with the business of the Company (or with any business of
any Affiliate for which the Employee performed services
hereunder) within any state, region or locality in which the
Company or such Affiliate is then doing business or marketing its
products, as the business of the Company or such Affiliate may
then be constituted and in which the Employee has been involved.
This agreement not to compete shall be applicable for three (3)
years from the date of termination of employment hereunder by the
Employee in breach of this Agreement or by the Company for Cause,
notwithstanding that the Employee shall not be entitled to any
compensation hereunder from and after any such termination.
For purposes of this Agreement, the Employee shall be deemed
to be engaged in such a business if he is an employee, officer,
director, or partner, of any person, partnership, corporation,
trust or other entity which is engaged in such a business or if
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he directly or indirectly performs services for such entity or if
he or any member of his immediate family beneficially owns an
equity interest, or interest convertible into equity, in such
entity; provided, however, that the foregoing shall not prohibit
the Employee or a member of his immediate family from owning, for
the purpose of passive investment, less than five percent (5%) of
any class of securities of a publicly held corporation.
The Employee acknowledges that his services to be rendered
to the Company in the aforesaid capacity are of a special and
unusual character which have a unique value to the Company, the
loss of which cannot adequately be compensated by damages in an
action at law. In view of (i) the unique value to the Company of
the services of the Employee for which the Company has employed
the Employee; and (ii) the confidential information to be
obtained by or disclosed to the Employee as an employee of the
Company; and as a material inducement to the Company to employ
the Employee and to pay to the Employee the compensation for such
services to be rendered for the Company by the Employee, the
Employee covenants and agrees the Company shall be entitled to
equitable relief to the full extent available under the
applicable law.
6. CONFIDENTIALITY. The Employee shall not divulge or
communicate to any person (except in performing his duties under
this Agreement) or use for his own purposes trade secrets,
confidential commercial information or any other information,
knowledge or data of the Company or of any of its Affiliates
which is not generally known to the public and shall use his best
efforts to prevent the publication or disclosure by any other
person of any such secret, information, knowledge or data. All
documents and objects made, compiled, received, held or used by
the Employee while employed by the Company in connection with the
business of the Company shall be and remain the Company's
property and shall be delivered by the Employee to the Company
upon the termination of the Employee's employment or at any
earlier time requested by the Company.
7. OWNERSHIP OF CONFIDENTIAL INFORMATION. The Employee
hereby agrees that any and all improvements, inventions,
discoveries, formulas, processes, methods, know-how, confidential
data, trade secrets and other proprietary information
(collectively "Work Product") within the scope of any business of
the Company or any Affiliate which the Employee may conceive or
make or has conceived or made during his employment with the
Company shall be and are the sole and exclusive property of the
Company, and that the Employee shall, whenever requested to do so
by the Company, at its expense, execute and sign any and all
applications, assignments or other instruments and do all other
things which the Company may deem necessary or appropriate (i) in
order to apply for, obtain, maintain, enforce or defend letters
patent of the United States or any foreign country for any Work
Product, or (ii) in order to assign, transfer, convey or
otherwise make available to the Company the sole and exclusive
right, title and interest in and to any Work Product.
8. MISCELLANEOUS.
8.1 NOTICE. Any notice or other communication
required or permitted under this Agreement shall be effective
only if it is in writing and delivered personally or sent by
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registered or certified mail, postage prepaid, addressed as
follows:
If to the Company: Xxxxxx Industries, Inc.
X.X. Xxx 000
0000 Xxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxx 00000
Attention: President
If to the Employee: Xxxxxxx X. Xxxxxx
0000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
or to such other address as any party may designate by notice to
the others, and shall be deemed to have been given upon receipt.
8.2 ENTIRE AGREEMENT. This Agreement constitutes the
entire agreement between the parties hereto with respect to the
Employee's employment by the Company, and supersedes and is in
full substitution for any and all prior understandings or
agreements with respect to the Employee's employment.
8.3 AMENDMENT. This Agreement may be amended only by
an instrument in writing signed by the parties hereto, and any
provision hereof may be waived only by an instrument in writing
signed by the party or parties against whom or which enforcement
of such waiver is sought. The failure of either party hereto to
comply with any provision hereof shall in no way affect the full
right to require such performance at any time thereafter, nor
shall the waiver by either party hereto of a breach of any
provision hereof be taken or held to be a waiver of any
succeeding breach of such provision, or a waiver of the provision
itself, or a waiver of any other provision of this Agreement.
8.4 BINDING EFFECT. This Agreement is binding on and
is for the benefit of the parties hereto and their respective
successors, heirs, executors, administrators and other legal
representatives. Neither this Agreement nor any right or
obligation hereunder may be assigned by the Employee or the
Company, except for assignment by the Company to any wholly owned
subsidiary.
8.5 SEVERABILITY AND MODIFICATION. If any provision
of this Agreement or portion thereof is so broad, in scope or
duration, so as to be unenforceable, such provision or portion
thereof shall be interpreted to be only so broad as is
enforceable. In addition, to the extent that any provision of
this Agreement as applied to either party or to any circumstances
shall be adjudged by a court of competent jurisdiction to be void
or unenforceable, the same shall in no way affect any other
provision of this Agreement or the validity or enforceability of
this Agreement.
8.6 COST OF LITIGATION. In the event there is any
litigation between the Company or its successors or assigns and
the Employee or his heirs or representatives concerning or
arising out of this Agreement, the party prevailing in such
litigation shall be reimbursed for all costs and expenses
(including, but not limited to, reasonable attorneys' fees)
incurred in connection with such litigation.
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8.7 INTERPRETATION. This Agreement shall be
interpreted, construed and governed by and under the laws of the
State of Tennessee. If any provision of this Agreement is deemed
or held to be illegal, invalid, or unenforceable under present or
future laws effective during the term hereof, this Agreement
shall be considered divisible and inoperative as to such
provision to the extent it is deemed to be illegal, invalid or
unenforceable, and in all other respects this Agreement shall
remain in full force and effect; provided, however, that if any
provision of this Agreement is deemed or held to be illegal,
invalid or unenforceable there shall be added hereto
automatically a provision as similar as possible to such illegal,
invalid or unenforceable provision as shall be legal, valid or
enforceable. Further, should any provision contained in this
Agreement ever be reformed or rewritten by any judicial body of
competent jurisdiction, such provision as so reformed or
rewritten shall be binding upon the Employee and the Company.
8.8 COUNTERPARTS. This Agreement may be executed in
several counterparts, each of which shall be deemed an original,
but all of which shall constitute one and the same instrument.
8.9 NO CONFLICTING AGREEMENT. The Employee represents
and warrants that he is not party to any agreement, contract or
understanding which would prohibit him from entering into this
Agreement or performing fully his obligations hereunder.
IN WITNESS WHEREOF, the Company and the Employee have
executed this Agreement as of the date first written above.
/s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
XXXXXX INDUSTRIES, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx
President and Co-Chief Executive
Officer
