AGREEMENT
This agreement (the "Agreement") is entered into as of the 16 day of April,
1999 (the "Effective Date"), by and between Xxxxxx Industries, Inc., a Texas
corporation (the "Company"), and XXXX X. XXXXX ("Xxxxx").
The Company desires that Xxxxx accept employment by the Company and
election as Chairman of the Board of Directors of the Company, and Xxxxx desires
to accept such position, upon the terms and subject to the conditions set forth
in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements set forth in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. Position. Upon the terms and subject to the conditions set forth
herein, Xxxxx accepts employment by the Company and election by the Board of
Directors of the Company to serve as the Chairman of the Board of Directors of
the Company. Xxxxx shall not be required to devote his exclusive and full time
services to the performance of his duties and obligations hereunder, but Xxxxx
shall devote a reasonable amount of time to such duties.
2. Term. The term of this Agreement shall be for a period of two years
from the date hereof or such shorter period as Xxxxx may remain in the position
of Chairman of the Board of Directors of the Company (the "Term"); provided,
however, that the Term may be extended thereafter by the mutual agreement of the
parties hereto in writing.
3. Compensation. As compensation for services to be rendered to the
Company by Xxxxx:
(i) The Company shall pay to Xxxxx a base salary (the "Base
Salary") at an annual rate of $18,000; paid in equal periodic installments
in accordance with the Company's standard payroll policies, practices and
procedures.
(ii) The Company shall grant to Xxxxx options to purchase 100,000
shares of the Company's common stock, par value $2.50 per share (the
"Common Stock"). The options shall have a per share exercise price equal
to the fair market value of the Common Stock on the date hereof. The
options shall become exercisable on the second anniversary of the date of
this Agreement. The options shall be subject to the terms and conditions
of the Stock Option Agreement attached hereto as Exhibit A.
(iii) The Company shall grant to Xxxxx 40,000 shares of the Common
Stock (the "Restricted Stock") in accordance with the terms and conditions
of the Restricted Stock Award Agreement attached hereto as Exhibit B.
===============================================================================
4. Other Benefits; Expense Reimbursement.
4.1 The Company shall reimburse Xxxxx for all reasonable out-of-
pocket expenses incurred by Xxxxx in the course of his duties hereunder, in
accordance with the Company's standard policies, practices and procedures
as in effect generally from time to time with respect to a person holding
an executive office with the Company.
4.2 Xxxxx shall be entitled to use of the Company's airplanes for
business and other purposes in accordance with the Company's standard
policies, practices and procedures as in effect generally from time to
time.
5. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given and
delivered if delivered personally or sent by certified or registered mail,
postage prepaid, return receipt requested, or by express or other delivery
service, addressed:
If to Xxxxx:
If to the Company:
0000 Xxxx Xxxxxxx Xxxxxx
Xxxx Xxxxx, Xxxxx 00000
Attention: Secretary
(or such other address as specified from time to time by a party in a written
notice to the other party given as provided herein).
6. Governing Law. This Agreement shall be deemed to have been executed
and delivered within the State of Texas, and the rights and obligations of the
parties hereunder shall be construed and enforced in accordance with, and
governed by, the laws of the State of Texas without regard to principles of
conflict of laws.
7. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of any successor of the Company.
8. Amendment. This Agreement may not be amended without the written
consent of both the Company and Xxxxx.
9. Execution. This Agreement is being executed 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.
2
===============================================================================
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the date written above.
XXXXXX INDUSTRIES, INC.
By: /S/X. X. XXXXXXXXX
--------------------------
Name: X. X. Xxxxxxxxx
Title: President/CEO
/S/XXXX X. XXXXX
-----------------------------
Xxxx X. Xxxxx
3
===============================================================================
EXHIBIT A
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated April 16, 1999 (the "Option Agreement"),
between Xxxxxx Industries, Inc., a Texas corporation (the "Company"), and Xxxx
X. Xxxxx (the "Optionee").
WHEREAS, the Company and the Optionee have entered into an Agreement, dated
April 16, 1999 (the "Agreement"); and
WHEREAS, such Agreement provides for the Company to grant a stock option to
the Optionee.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained herein, the parties hereto agree as follows:
1. Grant of Option. The Company hereby grants to the Optionee, subject
to the terms and conditions set forth hereinafter, in the Company's 1999
Performance Incentive Plan (the "Plan") and in the Agreement, an option (the
"Option") to purchase from the Company 100,000 shares (the "Option Shares") of
Common Stock, par value $2.50 per share, of the Company at a purchase price of
$13.0625 per share.
2. Term of Option. The Option shall expire, and all rights granted
hereunder to purchase the Option Shares shall terminate, 5 years from the date
of this Option Agreement.
3. Vesting of Option. The Option shall become fully exercisable on the
second anniversary of the date hereof; provided, however, that in the event of a
Change in Control (as defined in the Agreement), the Option shall become fully
vested and immediately exercisable.
A-1
===============================================================================
4. Exercise of Option. The Option shall be exercised, subject to the
conditions set forth in Section 5 hereof, by the Optionee's delivering written
notice of the exercise of the Option or any portion thereof to the Company's
Treasurer (or any other officer of the Company who is designated by the Company
to accept such notices on its behalf), specifying the number of shares for which
it is exercised. The Option price shall be paid in full at the time of exercise
either (i) in cash by United States currency or check, (ii) with the consent of
the Company, by tendering to the Company Mature shares of Common Stock of the
Company held by the Optionee having a fair market value equal to the Option
price, or (iii) any combination of (i) and (ii), above; at the election of the
Optionee, any tax due on the gain realized upon exercise of an Option may
likewise be paid, with the consent of the Company, as aforesaid, and in
addition, with the consent of the Company, through withholding by the Company of
Option shares being exercised and having a fair market value equal to the Option
price for an amount that is no more than the minimum required tax withholding.
Mature shares are defined as shares owned by the Optionee for at least six
months prior to the date tendered for use as payment for option shares or
minimum taxes owed. Upon exercise of the Option or any portion thereof, the
Company will, as promptly as practicable, issue and deliver at the Company's
corporate office a stock certificate or certificates representing the Option
Shares so purchased. If the Company shall determine that it is required to
withhold any federal, state or local taxes as a result of the Optionee's
exercise of the Option, the Company shall give notice thereof to the Optionee
and the Company shall not be obligated to issue any Option Shares until the
Optionee shall have paid to the Company by certified or cashier's check or paid
through withholding of Option Shares, as described above, the amount of such
withholding taxes.
5. Certain Conditions to Exercise of the Option. The Option Shares
delivered pursuant to the exercise of the Option may be subject to certain
restrictions as provided in the Plan.
6. Non-Assignability of Option. This Option shall not be transferable or
assignable by the Optionee otherwise than as permitted by the Plan.
7. Changes to Capital Structure. In the event of any stock dividend,
stock split, combination of shares, merger, consolidation, recapitalization,
reclassification or other similar capital or corporate structure change, the
number of Option Shares unpurchased and remaining subject to this Option and the
purchase price of such Option Shares shall be appropriately adjusted to reflect
such change.
8. Notices. All notices or other communications required or permitted
hereunder shall be in writing and shall be delivered personally, sent by
facsimile transmission or certified, registered or express mail or overnight
courier service (postage and other charges prepaid), addressed:
If to the Optionee to:
Xxxx X. Xxxxx
If to the Company to:
Xxxxxx Industries, Inc.
0000 Xxxx Xxxxxxx Xxxxxx
Xxxx Xxxxx, Xxxxx 00000
Attention: Secretary
or to such other address as the person to whom notice is to be given may have
previously furnished to the other in writing in the manner set forth above, and
such notice or communication shall be deemed given when received if personally
delivered or sent by facsimile transmission, or three days after being placed in
the U.S. mail if sent by registered or certified mail, or one day after being
sent by express mail or overnight courier.
9. Miscellaneous. The Optionee shall have no rights as a shareholder of
the Company or any claim to dividends with respect to any Option Shares until
such Option Shares are issued to the Optionee by the Company. Nothing contained
in this Option shall confer upon the Optionee any rights with respect to the
Company except as specifically set forth herein.
A-2
==============================================================================
10. Incorporation of Agreement Provisions. This Option Agreement is made
pursuant to the Plan and is subject to all of the terms and provisions of the
Plan as if the same were fully set forth herein. Capitalized terms not
otherwise defined herein shall have the same meanings set forth for such terms
in the Plan.
11. Governing Law. This Option Agreement shall be governed by and
construed in accordance with the law of the State of Texas.
12. Counterparts. This Option Agreement may be executed 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.
IN WITNESS WHEREOF, this Option Agreement has been executed by the Company
and the Optionee as of the date first above written.
OPTIONEE:
/S/XXXX X. XXXXX
-----------------------------
Xxxx X. Xxxxx
XXXXXX INDUSTRIES, INC.
By: /S/X. X. XXXXXXXXX
--------------------------
Name: X. X. Xxxxxxxxx
Title: President/CEO
A-3
===============================================================================
EXHIBIT B
RESTRICTED STOCK AWARD AGREEMENT
RESTRICTED STOCK AWARD AGREEMENT, dated April 16, 1999, between Xxxxxx
Industries, Inc., a Texas corporation (the "Company"), and Xxxx X. Xxxxx (the
"Executive").
WHEREAS, pursuant to the provisions of the Company's 1999 Performance
Incentive Plan (the "Plan"), the Compensation Committee of the Board of
Directors of the Company (the "Committee") administers the Plan; and
WHEREAS, the Committee has determined that the Executive be granted a
Restricted Stock Award under the Plan for the number of shares of Common Stock
and upon the terms set forth below;
NOW, THEREFORE, the Company and the Executive hereby agree as follows:
1. Grant of Award. The Executive is hereby granted an award under the
Plan (the "Award"), subject to the terms and conditions hereinafter set forth,
with respect to 40,000 shares of Common Stock (the "Restricted Stock"). The
Executive shall be issued stock certificates evidencing the shares of Restricted
Stock covered by this Award. Such certificates shall be registered in the name
of the Executive, and shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to this Award, substantially in the
following form:
The transferability of this certificate and the shares of Common
Stock represented hereby are subject to the terms, conditions and
restrictions (including forfeiture) contained in the 1999 Performance
Incentive Plan of Xxxxxx Industries, Inc. and the Restricted Stock
Award Agreement entered into between the registered owner and Xxxxxx
Industries, Inc. Copies of such Plan and Agreement are on file in the
offices of Xxxxxx Industries, Inc., 0000 Xxxx Xxxxxxx Xxxxxx, Xxxx
Xxxxx, Xxxxx 00000.
The certificates evidencing the shares of Restricted Stock shall be held in
custody by the Company or its designee until the restrictions on such shares
shall have lapsed, and, as a condition of this Award, the Executive shall
deliver a stock power, duly endorsed in blank, relating to the shares of
Restricted Stock covered by this Award.
2. Transfer Restrictions. Except as expressly provided in the Plan, the
Restricted Stock issued with respect to this Award shall not be transferable or
assignable. This Award and the Restricted Stock issued with respect to this
Award may not be pledged or hypothecated or otherwise encumbered and shall not
be subject to execution, attachment or similar process. Upon any attempt to
effect any such disposition, or upon the levy of any such process, the Award
shall immediately become null and void and the shares of Restricted Stock
relating thereto shall be forfeited.
B-1
===============================================================================
3. Restrictions. The restrictions on the shares of Restricted Stock
shall lapse and such shares shall vest in accordance with the following
schedule:
(a) 20,000 shares of Restricted Stock shall vest at such time as the
last sale price of the Common Stock in the over-the-counter market as
reported by the Wall Street Journal is $16.00 per share for 10 consecutive
trading days;
(b) 10,000 shares of Restricted Stock shall vest at such time as the
last sale price of the Common Stock in the over-the-counter market as
reported by the Wall Street Journal is $18.00 per share for 10 consecutive
trading days; and
(c) 10,000 shares of Restricted Stock shall vest at such time as the
last sale price of the Common Stock in the over-the-counter market as
reported by the Wall Street Journal is $20.00 per share for 10 consecutive
trading days.
Notwithstanding the foregoing, the restrictions on the shares of Restricted
Stock, including vesting requirements, shall lapse at such time as a Change in
Control (as defined in the Plan) shall have occurred. Shares as to which
restrictions shall have lapsed shall no longer be deemed Restricted Stock. All
shares of Restricted Stock as to which the restrictions thereon shall not have
lapsed within five years following the date of this Agreement shall be
immediately forfeited to the Company.
4. Voting and Dividend Rights. During the period in which the
restrictions provided herein are applicable to the Restricted Stock, the
Executive shall have the right to vote the shares of Restricted Stock and to
receive any dividends paid or other distributions made with respect thereto;
provided, however, that any dividend or distribution payable with respect to
Restricted Stock shall be subject to the same restrictions and shall vest and
become payable or distributable to the Executive at the same time the related
Restricted Stock vests pursuant to Section 3 hereof. Any such dividend or
distribution shall be held by the Company for the account of the Executive,
subject to forfeiture pursuant to Section 3 hereof, until such time as the
related shares of Restricted Stock shall have become fully vested.
5. Distribution Following End of Restrictions. Upon the occurrence of
the vesting events provided in Section 3 hereof as to any portion of the
Restricted Stock, the Company will cause a new certificate evidencing such
number of vested shares of Common Stock to be delivered to the Executive, or in
the case of his death to his legal representative, beneficiary or heir, free of
the legend regarding transferability set forth in Section 1.
B-2
===============================================================================
6. Tax Withholding. The obligation of the Company to deliver any
certificate to the Executive pursuant to Sections 1 and 5 hereof shall be
subject to the receipt by the Company from the Executive of any withholding
taxes required as a result of the grant of the Award or lapsing of restrictions
thereon. Subject to the consent of the Committee, the Executive may satisfy all
or part of such withholding tax requirement by electing to require the Company
to purchase that number of unrestricted shares of Common Stock designated by the
Executive at a price equal to the last sale price or closing "asked" price of
the Common Stock in the over-the-counter market as reported by the National
Association of Securities Dealers Automatic Quotation System or other national
quotation service on the date of lapse of the restrictions or, if no such sale
of Common Stock is reported on such day, on the next preceding day on which
trading occurred.
7. Securities Laws Requirements. The Company shall not be required to
issue shares pursuant to the Award unless and until (a) such shares have been
duly listed upon each stock exchange, if any, on which the Common Stock is then
registered; and (b) the Company has complied with applicable federal and state
securities laws. The Committee may require the Executive to furnish to the
Company, prior to the issuance of any shares of Restricted Stock in connection
with this Award, an agreement, in such form as the Committee may from time to
time deem appropriate, in which the Executive represents that the shares
acquired by him under the Award are being acquired for investment and not with a
view to the sale or distribution thereof.
8. Incorporation of Plan Provisions. This Agreement is made pursuant to
the Plan and is subject to all of the terms and provisions of the Plan as if the
same were fully set forth herein, and receipt of a copy of the Plan is hereby
acknowledged by Executive. Capitalized terms not otherwise defined herein shall
have the same meanings set forth for such terms in the Plan.
9. Miscellaneous. This Agreement (a) shall be binding upon and inure to
the benefit of any successor of the Company, (b) shall be governed by the laws
of the State of Texas, and any applicable laws of the United States, and (c) may
not be amended without the written consent of both the Company and the
Executive. No contract or right of employment shall be implied by this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first above written.
XXXXXX INDUSTRIES, INC.
By: /S/X. X. XXXXXXXXX
--------------------------
Name: X. X. Xxxxxxxxx
Title: President/CEO
EXECUTIVE:
/S/XXXX X. XXXXX
-----------------------------
Xxxx X. Xxxxx
B-3
