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EXHIBIT 10.(u)
EMPLOYMENT AGREEMENT
This employment agreement is made and entered into as of the 10th day
of March, 1999 by and between Xxxxxx Automotive Group, Inc. (the "Employer"), a
Louisiana corporation, and Xxx Xxxxxx, a resident of the State of Texas (the
"Employee").
WITNESSETH:
1. Employment. The Employer hereby employs the Employee, and the Employee
hereby accepts such employment, upon the terms and subject to the
conditions set forth in this Agreement.
2. Term. Subject to the provisions of termination as hereinafter
provided, the term of employment under this Agreement shall be for a
five-year term beginning as of the date hereof, unless employment is
terminated as otherwise provided in this Agreement.
3. Compensation, Reimbursement, Etc.
(a.) The basic compensation to the Employee shall be payable in accordance
with company policy, not less than bi-weekly, and shall, during the
first three years of this Agreement, be based upon calendar year
annual compensation of $295,000.00, and thereafter shall be determined
pursuant to clause (h) below.
(b.) The compensation provided for in Section 3 (a) above shall be in
addition to any pension or profit sharing payments set aside or
allocated for the benefit of the Employee.
(c.) The Employee shall be entitled to such other benefits (e.g., health,
life or disability insurance) as may be provided from time to time by
the Employer to other management employees.
(d.) The Employee shall be entitled to (3) weeks of paid vacation per year.
(e.) Employer shall reimburse all reasonable travel, entertainment and
other out-of-pocket expenses incurred by the Employee in connection
with the performance of his duties pursuant to this Agreement,
consistent with the Employer's policies then in effect.
(f.) At the discretion of the Board of Directors of the Employer, the
Employee will be from time to time be awarded a cash bonus or bonuses,
or other incentive compensation, including stock options, for services
rendered or other contributions made to the Employer during the
Employment Term consistent with any such awards to other executive
officers of Employer.
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(g.) Simultaneously with the execution hereof, the Employer has Granted to
the Employee an option to purchase 300,000 shares of Employer's common
stock on the terms set forth in the Stock Option Agreement between the
Employer and Employee of even date herewith.
(h.) Prior to December 31, 2001, Employer will engage an independent
compensation consulting firm mutually acceptable to Employer and the
Employee to make a recommendation to Employer's Board of Directors (or
the Compensation Committee thereof) regarding the compensation and
benefits to be payable to Employee during the fourth and fifth years
of this Agreement, such compensation and benefits to be competitive
with compensation and benefits payable to similarly situated
executives in comparable companies. Employee's compensation and
benefits for the fourth and fifth years of this Agreement shall be
determined by the Employer's Board of Directors (or Compensation
Committee) in light of the recommendation of such consulting firm but
in no event shall the aggregate amount thereof be less than 90% of the
aggregate amount recommended by such consulting firm or 115% of the
aggregate amount of Employee's compensation and benefits during the
third year of this Agreement.
(i.) The Employer will provide to Employee during the term of this
Agreement in accordance with Company policy an automobile suitable to
Employee's position with the Company and will reimburse Employee for
the insurance, gasoline, maintenance and other reasonable expenses
associated therewith. Initially, the Company will provide the Employee
with a 1998 Yukon GMC.
4. Duties.
(a.) The Employee shall serve as the President and Chief Operating Officer
of Employer and shall have such duties as may from time to time be
reasonably assigned to him by the Board of Directors and the Chief
Executive Officer of the Employer and as are appropriate to the
Employee's office.
(b.) The principal services for which the Employee is engaged are to manage
the business of the Employer under the reasonable direction of the
Board of Directors and the Chief Executive Officer of Employer.
5. Extent of Service. During the term of his employment under this
Agreement, the Employee shall devote such time and efforts to the
business of the Employer, as may be reasonably necessary in the normal
course of business; provided, however, that the Employee may engage in
personal investment activities and serve as a director of other
corporation(s) so long as such activities do not interfere with the
performance of his duties hereunder. The Employee shall not be
required to perform his services hereunder outside of the Greater
Houston, Texas Metropolitan area, except for services rendered on
business trips on behalf of the Employer in the ordinary course of
Employer's business.
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6. Termination.
(a.) All rights of the Employee hereunder, shall terminate upon his death
except that the Employer shall pay to the estate of the Employee such
compensation and benefits, as would otherwise have been payable to the
Employee up to the end of the month in which his death occurs and any
benefits under any benefit plan or arrangement of Employer to which
Employee's estate is otherwise entitled. The Employer shall have no
additional financial obligation under this Agreement to the Employee
or his estate.
(b.) All rights of the Employee hereunder, shall terminate upon his
retirement except that the Employer shall pay to the Employee such
compensation and benefits, as would otherwise have been payable to the
Employee up to the end of the month in which his retirement occurs and
any benefits under any benefit plan or arrangement of Employer to
which Employee's estate is otherwise entitled. The Employer shall have
no additional financial obligation under this Agreement to the
Employee.
(c.) All rights of the Employee hereunder shall terminate upon his
disability, except that the Employer shall pay to the Employee such
compensation and benefits as would otherwise have been payable to the
Employee up to the end of the month in which such disability occurs
and any benefits under any benefit plan or arrangement of Employer to
which employee is otherwise entitled. The Employer shall have no
additional financial obligation under this Agreement to the Employee.
For the purposes hereof, the Employee shall be deemed to be disabled
if the Employee (i) is considered disabled under any individual
disability insurance plan maintained by the Employer for the benefit
of the Employee at that time or under any group disability plan
maintained by the Employer at that time or (ii) is unable for a period
of 180 days out of any consecutive 360 day period to perform his
duties under this Agreement.
(d.) (i) The Employer may terminate the employment of the Employee
hereunder. for "cause" by giving Employee thirty (30) days'
written notice of the termination date, which notice shall
set forth the facts and circumstances claimed to constitute
"cause" hereunder.
(ii) The term "good cause" as used in this Agreement shall mean
(i) any act or omission that constitutes a material breach by
the Employee of his obligations or agreements under this
Agreement (other than by reason of illness, injury or
incapacity), (ii) the Employee's conviction of a felony or
other crime involving moral turpitude, (iii) the Employee's
engaging in willful misconduct or gross neglect with respect
to the Employer's business that has had a material adverse
effect on the Employer, (iv) the Employee's embezzlement or
wrongful diversion of the Employer's funds, (v) employee's
habitual absenteeism (other than by reason of illness, injury
or incapacity) or (vi) Employee's dependence, as determined
by a physician mutually acceptable to Employer and Employee,
on alcohol or drugs. In the case of "cause"
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based on a material breach under clause (i) above, the
employee's employment shall not be terminated as of the
proposed termination date if the Employee shall have
corrected the problem prior to that date. If the employment
of the Employee is terminated pursuant to clause (d), the
Employer shall pay to the Employee any compensation and
benefits earned but not paid to the Employee prior to such
termination. Such payment shall be in full and complete
discharge of any and all liabilities or obligations of the
Employer hereunder, and the Employee shall be entitled to no
further benefits under this Agreement, except as otherwise
specifically provided in Section 3 of this Agreement.
(e.) The Employee may terminate his employment hereunder for "good reason"
by giving the Employer 30 days' written notice of the termination
date, which notice shall set forth the facts and circumstances claimed
to constitute good reason hereunder. Upon any such termination, the
Employer shall pay to the Employee such compensation and benefits as
would otherwise have been payable to the Employee through the
remaining term of this Agreement, or the equivalent of three year's
compensation and benefits, whichever is less. For purposes hereof,
"good reason" means the occurrence (without the Employee's written
consent) of any of the following circumstances that shall not have
been remedied prior to the termination date specified in the
Employee's notice: (i) the assignment to the Employee of any duties
that are materially inconsistent with the Employee's position as
President of the Employer, (ii) any material breach of this Agreement
by the Employer,(iii) the Employer's requiring the Employee to be
based anywhere other than the Greater Houston Metropolitan area,
except for required travel on the Employer's business; or (iv) the
decision by Employer's Board of Directors to change Employer's
business in such a manner as to result in no substantial portion of
such business consisting of auto parts business.
(f.) Effect of Termination. Any termination of the Employee's employment
shall not release either the Employee or the Employer from their
respective obligations under this Agreement that are required to be
performed subsequent to the date of such termination; provided,
however, that if the Employee's employment is terminated by the
Employee pursuant to Section 6(e) and Employer fails to promptly pay
to Employee the compensation and benefits contemplated by such
section, or by the Employer in breach of this Agreement and the
Employer fails to promptly pay to Employee the compensation and
benefits that would otherwise have been payable to Employee through
the remaining term of the Agreement, the Employee shall be relieved
from performing his obligations under, and shall no longer be subject
to, Section 10 hereof or, to the extent it applies to the period after
termination of Employee's employment hereunder, Section 9 hereof.
7. Omitted.
8. Disclosure.
(a.) The Employee agrees that he will fully disclose and disclose only
to the Employer all ideas,
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methods, plans, developments, improvements or patentable inventions,
of any kind, developed or conceived by him which relate directly or
indirectly to the business of the Employer during the term of this
Agreement. The Employee also agrees that he will fully disclose, and
disclose only to the Employer all ideas, methods, plans, developments,
improvements or patentable inventions which relate directly or
indirectly to the business of the Employer and which are developed or
conceived by the Employee at any time during the term his employment
by the Employer and for a period of twelve (12) months after the
termination of his employment with the Employer. All disclosures are
to be made promptly after conception of the idea, method, plan,
development, improvement or invention. Nothing in this Section 8 shall
be construed as requiring any communication to the Employer of the
idea, method, plan, development, improvement or invention if lawfully
protected by any other lawful prohibition against such communication.
(b.) Any idea, method, plan, development, improvement or invention
which the Employee is obligated to disclose to the Employer under
this Section 8 shall be the property of the Employer, regardless
of whether it is disclosed by the Employee to the Employer. The
Employee agrees that he will provide, at Employer's expense, any
and all reasonable assistance to the Employer in making any patent
applications or other applications for obtaining exclusive rights
in, and will do all other things that may be reasonably necessary
to vest in the Employer or its assigns such ideas, methods, plans,
developments, improvements of inventions.
9. Confidentiality
The Employee agrees to keep in strict secrecy and confidence any
and all information the Employee assimilates or to which he has
access during his employment by the Employer other than any
information that is in the public domain through no act or
omission of the Employee or which Employee is authorized to
disclose. The Employee agrees that both during and, with respect
to information constituting trade secrets, after the term of this
employment by the Employer, he will not, without prior written
consent of the Employer, disclose any such confidential
information to any third person, partnership, joint venture,
company, corporation or other organization.
10. Noncompetition and Nonsolicitation.
(a.) During the term of this Agreement, except as contemplated herein,
and for a period of two (2) years after the termination of his
employment with the Employer, if such termination occurs prior to
the third anniversary hereof and for a period of one (1) year
after termination of his employment if such termination occurs
after the third anniversary hereof, the Employee shall not,
directly or indirectly, within the State of Texas, or within any
other state or foreign country in which the Employer maintains a
branch office or conducts business, enter into, engage in, be
employed by, or consult with any business in competition with the
business of the Employer as it is then carried on; further, the
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Employee shall not sell to, market, produce or otherwise deal with
any customer of the Employer, TO THE EXTENT THAT ANY SUCH
ACTIVITIES ARE IN COMPETITION WITH THE BUSINESS OF THE EMPLOYER.
The restrictions of this Section 10 shall extend to any and all
activities of the Employee, whether as an independent contractor,
partner or joint venturer, or as an officer, director,
stockholder, agent, employee or salesman for any person, firm,
partnership, corporation or other entity, or otherwise. The
restrictions of this Section 10 shall not be violated by the
ownership of no more than 2% of the outstanding securities of any
company whose stock is traded on a national securities exchange or
is quoted in the Automated Quotation System of the National
Association of Securities Dealers (NASDAQ). Solicitation or
acceptance of orders outside of any prohibited territory as
described above for shipment to, delivery in or service in any
restricted territory shall also constitute engaging in business
within the restricted territories in violation of this Section 10
to the extent such conduct is otherwise competitive with the
business of Employer.
(b.) During his employment with the Employer, except as contemplated
herein, and for a period of two (2) years after the termination of
his employment with the Employer, if such termination occurs prior
to the third anniversary hereof and for a period of one year after
termination of his employment if such termination occurs after the
third anniversary hereof, the Employee agrees he will refrain from
and will not directly or indirectly, as independent contractor,
employee, consultant, agent, partner, joint venturer, or otherwise
solicit any of the employees of the Employer to terminate their
employment.
(c.) The period of time during which the Employee is prohibited from
engaging in certain business practices pursuant to Sections 10(a)
or (b) shall be extended by any length of time during which the
Employee is in breach of such covenants.
(d.) It is understood by and between the parties hereto that the
Foregoing restrictive covenants set forth in Sections 10(a)
through (c) are essential elements of this Agreement, and that,
but for the agreement of the Employee to comply with such
covenants, the Employer would not have agreed to enter into this
Agreement. Such covenants by the Employee shall be construed as
agreements independent of any other provision in this Agreement.
Except as expressly provided in Section 7 hereof, the existence of
any claim or cause of action of the Employee against the Employer,
whether predicated on this Agreement, or otherwise, shall not
constitute a defense to the enforcement by the Employer of such
covenants.
(e.) It is agreed by the Employer and Employee that if any portion of
the covenants set forth in this Section 10 are held to be invalid,
unreasonable, arbitrary or against public policy, then such
portion of such covenants shall be considered divisible both as to
time and geographical area. The Employer and Employee agree that,
if any court of competent jurisdiction determines the specified
time period or the specified geographical area applicable to this
Section 10 to be invalid, unreasonable, arbitrary or against
public
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policy, a lesser time period or geographical area which is
determined to be reasonable, nonarbitrary and not against public
policy may be enforced against the Employee. The Employer and the
Employee agree that the foregoing covenants are appropriate and
reasonable when considered in light of the nature and extent of
the business conducted by the Employer.
11. Specific Performance. The Employee agrees that damages at law will
be an insufficient remedy to the Employer if the Employee violates
the terms of Sections 8, 9, or 10 of this Agreement and that the
Employer would suffer irreparable damage as a result of such
violation. Accordingly, it is agreed that the Employer shall be
entitled, upon application to a court of competent jurisdiction to
obtain injunctive relief to enforce the provisions of such
Sections, which injunctive relief shall be in addition to any
other rights or remedies available to the Employer. If it is
determined that such violation has occurred, the Employee agrees
to pay to the Employer all costs and expenses incurred by the
Employer relating to the enforcement of the terms of Sections 8, 9
or 10 of this Agreement, including reasonable fees and
disbursements of counsel (both at trial and in appellate
proceedings).
12. Compliance with other Agreements. The Employee represents and
warrants that the execution of this Agreement and performance of
the obligations hereunder will not conflict with, result in the
breach of any provisions of or the termination of or constitute a
default under any Agreement to which the Employee is a party or by
which the Employee is or may be bound.
13. Waiver of Breach. The waiver by the Employer of a breach of any of
the provisions of this Agreement by the Employee shall not be
construed as a waiver of any subsequent breach by the Employee.
14. Binding Effect; Assignment. The rights and obligations of the
Employer under this Agreement shall inure to the benefit of and
shall be binding upon the successors and of the Employer. This
Agreement is a personal employment contract and the rights,
obligations and interests of the Employee and Employer hereunder
may not be sold, assigned, transferred, pledged or hypothecated.
15. Entire Agreement. This Agreement contains the entire agreement and
supersedes all prior agreements and understandings, oral or
written, with respect to the subject matter hereof. This Agreement
may be amended only by an agreement in writing signed by each of
the parties hereto.
16. Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
17. Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Texas.
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18. Notices. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and if sent by
certified or registered mail, first class, return receipt
requested, to the parties at the following addresses:
To the Employer: Xxxxxx Automotive Group, Inc.
0000 X.XxxXxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Facsimile No. 000-000-0000
If to Employee: Xxx Xxxxxx
0 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Facsimile No. 000-000-0000
In witness whereof the parties hereto have executed this
Agreement as of the year and date set forth above.
EMPLOYER:
XXXXXX AUTOMOTIVE GROUP, INC.
ATTEST:
BY:/s/ Xxxxx Xxxxx /s/ Xxxxxxx X. Xxxxxx
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Xxxxx Xxxxx, Secretary Xxxxxxx X. Xxxxxx, CEO
Witnesses as to Employee: EMPLOYEE:
/s/Xxxxx X. Xxxxxx Xxx X. Xxxxxx
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Xxx Xxxxxx
/s/ K.S. Xxxxxx
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