Exhibit 2.20
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") dated November 1, 1998, between MLC
Enterprises, Inc., a Texas corporation ("Company"), and Xxxxxxx X. Xxxxx, a
Texas resident ("Employee"), evidences that, in consideration of the mutual
covenants and agreements contained herein, the Company hereby employs Employee
and Employee hereby accepts such employment and agrees to perform the services
specified herein upon the terms and conditions set forth in this Agreement.
1. DUTIES AND RESPONSIBILITIES. During the Term of Employment (as defined in
Section 2), Employee shall:
(a) serve as the Managing Director of the Company promoting the products
and services offered by the Company for sale, subject in all events to the
direction and control of the board of directors of the Company;
(b) serve in such other capacities, perform such other services and have
such duties and responsibilities with the Company and its affiliates and
subsidiaries as are assigned to Employee, subject in all events to the direction
and control of the board of directors of the Company. To the extent that
Employee is requested to perform services and/or is assigned duties and
responsibilities with an affiliate of the Company, Employee shall be entitled to
additional compensation. To the extent that the Company and Employee are unable
to agree on such additional compensation, Employee may decline to perform duties
or services for an affiliate of the Company;
(c) be a full-time employee of the Company, subject to Employee's
obligations to Flameout Design & Fabrication, Inc. as detailed in paragraph 6
(b), and devote Employee's full business time, attention, efforts and energy to
the affairs of the Company, subject to Employee's right to vacations as provided
herein, and subject to absences on account of temporary illness;
(d) faithfully, diligently, competently and to the best of Employee's
ability perform all duties incident to Employee's employment hereunder;
(e) use Employee's best efforts to promote the interests of the Company;
and
2. TERM OF EMPLOYMENT. The "Term of Employment" as used in this Agreement
shall means the three year period commencing on November 13, 1998 ("Effective
Date"). The Term of Employment shall be earlier terminated as follows:
(a) Should Employee die, the Term of Employment shall be terminated upon
Employee's death.
(b) Should Employee become disabled and should Employee's disability
exceed the period of paid leave plus twelve unpaid work weeks during any twelve
month period, the Term of Employment may, at the option of the Company, be
terminated by the Company upon ten days written notice to Employee.
(c) Should Employee (i) violate any of the terms and provisions of this
Agreement or otherwise fail to satisfactorily perform any obligation due to the
Company hereunder or otherwise, (ii) engage in misrepresentation, dishonesty,
embezzlement, fraud or disloyalty in matters affecting the Company or the
employment relationship or usurpation of a benefit that rightfully belongs to
the Company, (iii) be negligent with respect to matters involving or affecting
the Company or the duties and responsibilities of Employee to the Company, or
(iv) engage in any crime (other than minor traffic violations), the Term of
Employment, at the option of the Company, may be terminated by the Company
immediately upon written notice to Employee. Any such termination by virtue of
this Section 2(c) shall be deemed "for cause" and shall not prejudice any remedy
that the Company may have at law, in equity, or under this Agreement for breach
hereof by Employee.
3. DISABILITY. If, because of illness or otherwise, Employee should
become physically or mentally disabled and is therefore unable to perform
Employee's duties hereunder, Employee shall be entitled to such paid temporary
leaves of absence as may be in the Company's policies and procedure. Should the
duration of any such disability exceed the Company's period of paid leave,
Employee shall be entitled to unpaid leave of up to twelve work weeks during any
twelve month period. Should Employee's disability exceed the period of paid
leave plus twelve unpaid work weeks during any twelve month period, Employee may
be subject to termination at the sole discretion of Company.
4. COMPENSATION. As compensation ("Compensation") for Employee's
services, during the Term of Employment, the Company shall pay the following
compensation or provide the following benefits, as the case may be, to Employee:
(a) DRAW AGAINST COMMISSIONS. Company shall allow Employee a draw
against commissions in the amount of Sixty Thousand and No/100 Dollars
($60,000.00) per year, payable bi-weekly in equal installments.
EXPENSES. Employee shall be responsible for all expenses incurred by
Employee in generating sales on behalf of Company.
COMMISSION. Employee shall be entitled to a commission of six percent
(6%) of the Gross
Profits on sales generated by Company and received by Company as hereinafter
defined.
Gross Profits Received shall be equal to gross revenue ACTUALLY RECEIVED
during the contract term on sales generated by Company, adjusted to reflect all
costs other than General and Administrative expenses, together with any
backcharges, discounts, reductions or rebates associated with the sales
generating such revenue.
Commissions less accumulated draws due shall be paid on the 15th
day of the next calendar month following receipt of payment by Company.
(b) Coverage for Employee under group medical, life, accidental death,
long-term disability, and dental insurance policies provided by the Company, if
any, all on such terms as the Company extends to its employees from time to
time. Employee shall not be entitled to be paid any additional cash
Compensation for accrued, unused sick leave, if any.
(c) Prior Commissions. Prior to execution of this Agreement Employee has
accrued unpaid commissions in the amount of $250,000.00 owed by Company to
Employee. Upon Execution of this Agreement, Employee shall receive the amount
of $63,438.14 cash and title to a 1999 Chevrolet Suburban free and clear of any
liens, which the parties agree has a value of $36,561.86. The balance due in the
amount of $150,000.00, which shall not bear interest, shall be due and payable
as follows:
February 1, 1999 $ 25,000.00
May 1, 1999 25,000.00
August 1, 1999 25,000.00
November 1, 1999 25,000.00
February 1, 2000 25,000.00
May 1, 2000 25,000.00
The February 1, 1999 and May 1, 1999 payments shall be made irregardless of
the Company's Accumulated Profits. The remaining payments shall be made only to
such extent as the Company has Accumulated Profits that exceed the amount of all
cumulative payments made to the Employee pursuant to this paragraph including
the February 1, 1999 and May 1, 1999 payments. Should the Company fail to have
Accumulated Profits sufficient to make any such payment, such payments will be
deferred until such as the Company has accumulated profits to make the payment.
Company may prepay this amount in whole or in part, without penalty, at any
time.
In consideration of this sum, Employee does hereby Release and Discharge
Company from any claim for compensation in any form, be it salary, commissions,
bonus or otherwise arising out of Employee's employment and/or ownership with/of
Company prior to November 1, 1998.
5. TERMINATION PAYMENTS. In the event of termination of the Term of
Employment, whether by action of the Company, Employee or by mutual agreement,
voluntary or involuntary, the Company shall no longer be obligated to make any
payments of any kind to Employee, except for accrued unpaid commissions and
commissions for orders booked prior to the date of termination and paid
following the date of termination, if any, which payments shall be paid in the
same manner as setforth above. Upon any termination, Employee shall pay the
Company any amounts owed by Employee to the Company by reason of the breach
hereof or otherwise and the Company shall be entitled to offset against any
amounts owed to Employee any amounts owed by Employee to the Company or any of
its subsidiaries or affiliates, whether under this Agreement or otherwise,
without prejudice to any other rights or remedies of the Company or its
subsidiaries or affiliates available at law or equity.
6. NON-COMPETITION COVENANT.
(a) Except as provided in paragraph 6 (b), Employee represents that
Employee is subject to no obligation to any third party that would restrict or
interfere with Employee's ability to perform hereunder. Employee agrees that
from the date hereof and for the one year period following the termination of
the Term of Employment ("Covenant Trigger"), whether by action of the Company,
Employee, or by mutual agreement, voluntary or involuntary, other than by
violation of this agreement by the Company, Employee will not, directly or
indirectly, (i) own, manage, operate, join, control, or participate in the
ownership, management, operation or control of, or be employed by, or otherwise
engage in or become interested in or be connected in any manner with any
business located in the United States of America which offers goods or services
of the type offered by the Company ("Competing Business"), (ii) solicit, on
behalf of Employee or any business in the same or similar business as that
engaged in by the Company ("Competing Business"), any person or entity that has
been a customer of the Company, either directly or indirectly through a broker
or otherwise, at any time during the two year period preceding the Covenant
Trigger ("Company Customer"), to purchase or otherwise acquire or use any
products or services of the same or similar nature as products or services
offered by the Company, (iii) solicit any person who, at any time within the two
year period preceding the Covenant Trigger, has been an employee of the Company
("Company Employee"), except a Company Employee who was terminated by the
Company, to become an employee of Employee or any Competing Business. Employee
shall not be deemed to be so competing solely by reason of purchasing stock of
companies listed on the New York Stock Exchange, the American Stock Exchange, or
quoted on the National Association of Securities Dealers Automatic Quotation
System (NASDAQ), provided that Employee's direct and beneficial ownership of any
class of securities in any of such entities is less than 5% of the aggregate
number of outstanding units, interests or shares of such class of securities.
The term "solicit" as used herein shall refer, in addition to its common usages,
to communications or transactions with intent to violate this paragraph whether
initiated by Employee or a third party. All parties acknowledge that the
restrictions and restraints contained in
this covenant are reasonable. Should any court of competent jurisdiction
determine that, consistent with the established precedent of the forum
jurisdiction, the public policy of such jurisdiction requires a more limited
restriction, duration, nature of restricted activity, or any combination
thereof, it would be in furtherance of the intentions of the parties hereto
for the court to so interpret and construe the terms of this Section 6 to
apply only to the extent of such limited restriction. In the event of a
breach of this covenant the running of the non-competition period herein
provided shall be tolled for the duration of such breach. In the event of
any breach or attempted or threatened breach of this covenant any aggrieved
party shall have the right in addition to all other rights and remedies at
law and in equity, to obtain an injunction prohibiting such breach or
attempted or threatened breach and commanding compliance with this covenant
merely by proving the existence of such breach or threatened or attempted
breach, and without the necessity of proving irreparable harm or inadequacy
of legal remedies.
(b) Company acknowledges that Employee is an officer, director and
shareholders of Flameout Design & Fabrication, Inc., (Flameout), that Employee
has obligations to Flameout, and that Flameout has in the past engaged in the
same or similar business as that engaged in by the Company. The Company agrees
that Employee may engage in such corporate governance activity as is necessary
to keep Flameout as an active corporation for the purpose of pursuing the
litigation in Cause No. 01-98-00543-CV; Flameout Design & Fabrication, Inc.,
Appellant v. Pennzoil Caspian Corporation, Pennzoil Corporation and Pennzoil
Exploration and Production Company, Appellees; In the Court of Appeals for the
First District of Texas at Houston, Texas. Such governance activity shall not
constitute a violation of paragraph 6(a). Employee agrees not to engage in any
other activity for Flameout other than the activity specifically described
herein.
7. CONFIDENTIALITY OF INFORMATION. Employee acknowledges that Employee
has had and will have access to certain confidential information of the Company
or its subsidiaries or affiliates, including, without limitation, product
designs, employee lists, customer lists, supplier lists, manuals, forms,
documentation, data, trade secrets, specifications, methods, procedures,
systems, plans, techniques, know-how, plans, and computer programs
("Information") and that such Information constitutes valuable, special and
unique assets of the Company or such other entities. Employee will cause the
Information obtained by Employee to be treated as strictly confidential.
Employee shall not use or knowingly permit others to use any such Information in
a manner detrimental to the Company or its subsidiaries or affiliates, or for
Employee's own account and shall not directly or indirectly disclose any such
Information to any person, firm, corporation, association or other entity for
any reason or purpose, except to such parties to whom such information is
furnished in the normal course of business under established policies approved
by the Company, authorized representatives of the Company, or upon the written
consent of the Company, or as required by law, or to a governmental agency
pursuant to a valid subpoena or other order or pursuant to applicable
governmental regulations, rules or statutes unless such
information is otherwise available in the public domain. For purposes
hereof, authorized representatives of the Company shall be directors and
officers of the Company to which such Information is furnished in the normal
course of business under established policies approved by the Company.
Employee further agrees that, upon termination of the Term of Employment,
Employee will not take with Employee or retain, or disclose to others without
written authorization from the Company, any Information, papers, files or
other documents or copies thereof of any kind belonging to the Company or any
of its subsidiaries or affiliates.
The obligations of this Section 7 shall continue as to each item of such
Information, both during and after termination of the Term of Employment, until
the Company's competitors have become cognizant of such item of Information from
published sources through no fault of or action by Employee.
8. PROPRIETARY DEVELOPMENTS. Employee agrees promptly to fully disclose
and assign and does hereby assign to the Company the entire right, title and
interest throughout the world in and to all product formulations, inventions,
improvements, discoveries, know-how, trade secrets, information, processes,
machines, manufactures, compositions, apparatus or products ("Proprietary
Information"), whether or not patentable, made or conceived or discovered or
developed or reduced to practice, solely or jointly, by Employee during the Term
of Employment that are related to the manufacture, distribution and sale of oil
and gas products and industrial fire suppression systems (Company's Business):
(a) Regardless of whether or not during working time chargeable to the
Company, which relate in any manner to the Company's Business or are suggested
by or to Employee or result from work performed by Employee for the Company or
are made by the use of the Company's materials or equipment, or
(b) While on the Company's time pursuing Company's Business.
It shall be presumed, subject to clear and convincing proof to the
contrary, that all Inventions, whether or not patentable, relating to the
Company's Business and developed by Employee during the six month period
beginning on the date of termination of the Term of Employment were, for the
purposes of this Agreement, conceived prior to the termination of the Term of
Employment.
Employee will cooperate with the Company in all lawful ways in order to
carry into effect the provisions of this Section 8, including the execution of
any papers or documents deemed by the Company to be desirable or necessary to
enable the Company to apply for, secure and maintain patent or copyright
protection thereon in the United States of America and in foreign countries
including, but not limited to applications, assignments and other legal
instruments.
9. ENFORCEMENT. Employee acknowledges that the rights reserved to the
Company under Sections 6, 7, and 8 hereof are necessarily of a special, unique
and extraordinary nature and that the loss arising from a breach or threatened
breach thereof cannot reasonably and adequately be compensated by money damages
and will cause the Company to suffer irreparable harm and that a remedy at law
for any breach thereof will be inadequate. Accordingly, Employee hereby agrees
that the Company shall be entitled to injunctive or other extraordinary relief
in case of any such breach or threatened breach, and without the necessity of
proving irreparable harm or inadequacy of legal remedies, which shall, however,
in no way limit any other rights, including the recovery of damages, which the
Company may have at law or in equity. In addition, and without limitation of
the foregoing or any other rights the Company may have at law or in equity, if
Employee shall at any time before, during, or following the Term of Employment
violate Sections 6, 7, and 8 or use any Confidential Information or Proprietary
Information for Employee's personal benefit or the benefit of any third party,
Employee agrees to pay to the Company immediately without demand seventy five
percent of the gross receipts therefrom.
10. NOTICES. All notices, requests, demands and other communications
under this Agreement or any instrument contemplated hereby shall be in writing
and shall be personally delivered or mailed by United States registered or
certified mail, first class, postage prepaid, return receipt requested, to the
address of the respective parties hereto as shown under their names on the
signature page hereof and shall be deemed given on the earlier of actual receipt
(as evidenced by return receipt if mailed) or the date five days after mailing.
Any party hereto may change his or its address for such notices by giving notice
of such change pursuant to this Section 10.
11. BINDING EFFECT. This Agreement shall inure to the benefit of and
shall be binding upon the Company and its successors and assigns and upon
Employee and Employee's personal representatives and heirs. The provisions of
Sections 5 through 18 hereof shall survive any termination of this Agreement.
If the Company has or adopts an employee manual or policies of a similar nature
that conflict with this Agreement the terms and provisions of this Agreement
shall control.
12. WAIVER. No failure to insist upon strict compliance
with any provision hereof shall be deemed a waiver of such provision or any
other provision hereof. No failure to exercise and no delay in exercising, on
the part of the Company, any right, power or privilege hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of any right,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right power or privilege. The rights and remedies
herein provided are cumulative and not exclusive of any rights or remedies
provided by law or in any other agreement.
13. GOVERNING LAW: VENUE. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS (EXCEPT THOSE
RELATING TO THE CONFLICT OF LAWS) AND SHALL BE PERFORMABLE IN XXXXXX COUNTY.
EACH PARTY HERETO SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF
TEXAS AND THE FEDERAL COURTS IN AND FOR THE SOUTHERN DISTRICT OF TEXAS IN
CONNECTION WITH ANY DISPUTE ARISING UNDER THIS AGREEMENT OR ANY DOCUMENT OR
INSTRUMENT ENTERED INTO IN CONNECTION HEREWITH. ALL ACTIONS HEREUNDER MUST BE
BROUGHT IN THE STATE COURTS OF XXXXXX COUNTY, TEXAS OR THE FEDERAL COURTS IN AND
FOR THE SOUTHERN DISTRICT OF TEXAS.
14. SEVERABILITY. If any provision of this Agreement, or the application
thereof to any person or circumstance, is for any reason or to any extent,
invalid or unenforceable, the remainder of the Agreement and the application of
such provision to the other persons or circumstances shall not be affected
thereby, but rather is to be enforced to the greatest extent permitted by law.
15. ASSIGNMENT. The rights and interest of Employee under this
Agreement including Employee's right to receive Employee's Compensation
hereunder, may not be assigned, sold, transferred, pledged or hypothecated, nor
may the duties and obligations of Employee hereunder be delegated. The rights
and interests of the Company hereunder are freely assignable and delegable by
the Company with Employees consent which shall not be unreasonably withheld.
16. PRIOR AGREEMENTS SUPERSEDED. This Agreement constitutes the sole
agreement of the parties hereto concerning the within subject matter and
supersedes any prior understandings or written or oral agreements between the
parties, SPECIFICALLY TERMINATING AND SUPERSEDING THE EMPLOYMENT AGREEMENT
EXECUTED BY AND BETWEEN M L C ENTERPRISES, INC. D/B/A MARINE & INDUSTRIAL FIRE &
SAFETY, COMPANY, AND XXXXXXX X. XXXXX, EMPLOYEE, DATED APRIL 28, 1998, A TRUE
AND CORRECT COPY OF WHICH IS ATTACHED HERETO AS EXHIBIT "A", respecting the
within subject matter.
17. CAPTIONS. The captions used in this Agreement are for convenience
only and are not to be construed in interpreting this Agreement.
18. AMENDMENT. This Agreement may be amended only by a written
instrument signed by each party hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the day and year first above written.
Company: MLC ENTERPRISES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: President
Address: 000 Xxxxxxx Xxxxx, Xxxx. 000
Xxxxxxx, Xxxxx 00000
Employee: /s/ Xxxxxxx X. Xxxxx
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Name: XXXXXXX X. XXXXX
