SERVICES AGREEMENT
This Services Agreement, dated as of July 19, 2002, between
Temtex Industries, Inc., a Delaware corporation with offices at
One Lincoln Centre, 0000 XXX Xxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx
00000 (the "Company"), and Xxxxxxx X. Xxxxxxxx ("Xxxxxxxx").
Recitals
WHEREAS, the Company desires to retain the services of
Xxxxxxxx; and
WHEREAS, Xxxxxxxx has agreed to provide certain services to
the Company pursuant to the terms and conditions of this
Agreement.
NOW, THEREFORE, in consideration of the foregoing premises
and other good and valuable consideration, the sufficiency of
which is hereby acknowledged, the Company and Xxxxxxxx hereby
agree as follows:
1. TERM AND RENEWAL.
The Company agrees to retain the Services (as hereinafter
defined) of Xxxxxxxx, and Xxxxxxxx agrees to provide such
Services, on the terms and conditions of this Agreement, for a
period commencing on July 19, 2002 and ending July 19, 2005 (the
"Reference Date"), or such shorter period as may be provided for
herein. The period during which Xxxxxxxx is obligated to provide
the Services hereunder is hereafter referred to as the "Service
Period."
2. SERVICES.
During the Service Period, Xxxxxxxx shall be retained by the
Company as the Chairman of the Board of Directors of the Company
and shall be responsible for the strategic planning and direction
of the Company and shall function to coordinate closely between
the executive officers of the Company and its Board of Directors
(the "Services"). In the performance of the Services, Xxxxxxxx
shall be subject to the direction of the Board of Directors of
the Company. Xxxxxxxx agrees to devote at least one full day per
work week toward the performance of the Services under this
Agreement. Xxxxxxxx acknowledges that, from time to time, he may
need to spend substantially more time than one full day per work
week on the affairs of the Company in order to fulfill his duties
under this Agreement. Xxxxxxxx shall be available to travel as
the needs of the business require.
3. COMPENSATION.
As compensation for the Services hereunder, the Company
shall pay Xxxxxxxx, during the Service Period, an amount, payable
in equal monthly installments, at the annual rate of $120,000
(the "Fee"). Except to the extent otherwise agreed by the
Company, Xxxxxxxx will not be eligible to participate in the
regular employee benefit programs now or hereafter established by
the Company or in any special executive benefits or perquisites
established by the Company's Board of Directors.
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4. EXPENSES.
Xxxxxxxx shall be entitled to reimbursement for travel and
other out-of-pocket expenses incurred by Xxxxxxxx in the
performance of his duties hereunder, upon submission and approval
of written statements and bills in accordance with the then
regular procedures of the Company.
5. NONCOMPETITION.
Xxxxxxxx agrees that (a) he will not during the Service
Period engage in, or otherwise directly or indirectly be employed
by, or act as a consultant or lender to, or be a director,
officer, employee, owner or partner of, any other business or
organization that directly or indirectly competes with the
business of the Company or any of its subsidiaries and (b) for a
period of two (2) years after he voluntarily terminates this
Agreement, Xxxxxxxx shall not directly or indirectly compete with
or be engaged in the same business as the Company or any of its
subsidiaries or be employed by, or act as consultant or lender
to, or be a director, officer, employee, owner, or partner of,
any business or organization which, at the time of such
cessation, directly or indirectly competes with or is engaged in
the same business as the Company or any of its subsidiaries;
provided, however, that notwithstanding the foregoing, the
provisions of this Section 5 will not be deemed breached merely
because Xxxxxxxx owns not more than 1 percent of the outstanding
equity securities of an entity, if, at the time of its
acquisition by Xxxxxxxx, such securities are listed on a national
securities exchange, is reported on NASDAQ, or is regularly
traded in the over-the-counter market by a member of a national
securities exchange.
6. CONFIDENTIAL INFORMATION.
All confidential information which Xxxxxxxx may now possess,
may obtain from the Company or its subsidiaries during or after
the Service Period, or may create prior to the end of the Service
Period or otherwise relating to the financial condition, results
of operations, business, properties, assets, liabilities, or
future prospects of the Company or of any customer or supplier of
any of them shall not be published, disclosed, or made accessible
by him to any other person or entity either during or after the
termination or expiration of this Agreement or used by him except
during the Service Period in the business and for the benefit of
the Company and its subsidiaries, in each case without prior
written permission of the Company. Xxxxxxxx shall deliver to the
Company all tangible evidence of such confidential information
prior to or at the termination or expiration of this Agreement.
The provisions of this Section 6 shall survive the termination of
this Agreement by either party.
7. TERMINATION.
(a) Xxxxxxxx'x Death. If Xxxxxxxx shall die during the
Employment Period, this Agreement shall terminate, except that
Xxxxxxxx'x estate shall be entitled to receive the Fee payable to
Xxxxxxxx, accrued to the last day of the month in which his death
occurs.
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(b) Xxxxxxxx'x Disability. If, during the Service Period,
Xxxxxxxx shall become physically or mentally disabled, whether
totally or partially, so that he is prevented from performing the
Services hereunder for a period of six (6) consecutive or
nonconsecutive months during any twelve (12) month period, this
Agreement shall terminate effective on such incapacity, and
Xxxxxxxx (or his legal representatives) shall be entitled only to
the Fee earned pro rata to the date of termination.
(c) Termination by the Company Without Cause. This Agreement may
be terminated by the Company without cause upon thirty (30) days'
prior written notice thereof given to Xxxxxxxx. In the event of
termination without cause, the Company shall continue to pay
Xxxxxxxx the Fee effective at the time of termination, in monthly
installments, up to and through the reference Date.
(d) Termination by the Company for Cause. This Agreement may be
terminated by the Company "for cause," as defined below, by
delivering to Xxxxxxxx written notice describing the cause and
granting Xxxxxxxx fifteen (15) days to respond to the Board of
Directors. If this Agreement is terminated by the Company for
cause, Xxxxxxxx shall only be entitled to the Fee earned by him
to the date of termination with no entitlement to any Fee
continuation payments. The determination as to whether
termination shall be for cause shall be made by the Board of
Directors of the Company in the exercise of its business
judgment. Termination of this Agreement by the Company for cause
shall be deemed to have occurred only if:
(i) termination shall have been the result of an act or acts
of dishonesty on Xxxxxxxx'x part constituting a felony or intended
to result directly or indirectly in substantial gain or personal
enrichment to him at the expense of the Company; or
(ii) termination shall have been the result of Xxxxxxxx'x
willful and continued failure substantially to perform the Services
(other than such failure resulting from his incapacity due to
physical or mental illness) after a demand for substantial
performance is delivered to Xxxxxxxx by the Board of Directors of
the Company which specifically identifies the manner in which
such Board believes that Xxxxxxxx has not substantially performed
the Services and Xxxxxxxx is given a reasonable time after such
demand substantially to perform such Services; or
(iii) termination shall have been the result of a material
breach of this Agreement.
Xxxxxxxx'x employment shall in no event be considered to
have been terminated by the Company for cause if the act or
failure to act upon which the termination is based (A) was done
or omitted to be done without intent of gaining therefrom
directly or indirectly a profit to which Xxxxxxxx was not legally
entitled and as a result of his good faith belief that such act
or failure to act was in or was not opposed to the interests of
the Company, or (B) is an act or failure to act in respect of
which Xxxxxxxx meets the applicable standard of conduct
prescribed for indemnification or reimbursement of expenses under
the Bylaws of the Company or the laws of its state of
incorporation.
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(e) Voluntary Termination by Xxxxxxxx. Xxxxxxxx may terminate
this Agreement at any time upon delivering thirty (30) days'
written notice to the Company. In the event of such voluntary
termination other than for "good reason", as hereinafter defined,
Xxxxxxxx shall be entitled to the Fee earned to the date of his
resignation, but no Fee continuation payment. On or after the
date the Company receives notice of Xxxxxxxx'x termination (other
than termination for good reason), the Company may, at its
option, pay Xxxxxxxx his Fee through the effective date of his
termination and terminate his services immediately.
(f) Termination by Xxxxxxxx For Good Reason. Xxxxxxxx may at any
time voluntarily terminate this Agreement for "good reason", as
defined below, upon thirty (30) days written notice thereof to
the Company. In the event of such voluntary termination for "good
reason", Xxxxxxxx shall be deemed to have been terminated without
cause with the same payments and benefits set forth in Section
7(c) being applicable to Xxxxxxxx'x termination under this
Section 7(f).
For purposes of this Agreement, "good reason" shall
mean the occurrence of any of the following events:
(i) removal from the position as Chairman of the Board or a
material reduction in Xxxxxxxx'x authority or responsibility, but
not including termination of Xxxxxxxx "for cause";
(ii) reduction in the Fee payable to Xxxxxxxx; or
(iii) the Company otherwise commits a material breach of this
Agreement.
8. SURVIVAL.
The covenants, agreements, representations, and warranties
contained in or made pursuant to this Agreement shall survive
Xxxxxxxx'x termination of this Agreement.
9. MODIFICATION.
This Agreement sets forth the entire understanding of the
parties with respect to the subject matter hereof, supersedes all
existing agreements between them concerning such subject matter,
and may be modified only by a written instrument duly executed by
each party.
10. NOTICES.
Any notice or other communication required or permitted to
be given hereunder shall be in writing and shall be mailed by
certified mail, return receipt requested, or by Federal Express,
Express Mail, or similar overnight delivery or courier service or
delivered (in person or by telecopy, telex, or similar
telecommunications equipment) against receipt to the party to
whom it is to be given at the address of such party set forth in
the preamble to this Agreement (or to such other address as the
party shall have furnished in writing in accordance with the
provisions of this Section 10). Any notice given to the Company
shall be addressed to the attention of the Corporate Secretary.
Notice to the estate of Xxxxxxxx shall be sufficient if addressed
to Xxxxxxxx as provided in this Section 10. Any notice or other
communication given by certified mail shall be deemed given at
the time of certification thereof, except for a notice changing a
party's address which shall be deemed given at the time of
receipt thereof. Any notice given by other means permitted by
this Section 10 shall be deemed given at the time of receipt
thereof.
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11. WAIVER.
Any waiver by either party of a breach of any provision of
this Agreement shall not operate as or be construed to be a
waiver of any other breach of that provision or of any breach of
any other provision of this Agreement. The failure of a party to
insist upon strict adherence to any term of this Agreement on one
or more occasions shall not be considered a waiver or deprive
that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement. Any
waiver must be in writing.
12. BINDING EFFECT.
Xxxxxxxx'x rights and obligations under this Agreement shall
not be transferable by assignment or otherwise, such rights shall
not be subject to commutation, encumbrance, or the claims of
Xxxxxxxx'x creditors, and any attempt to do any of the foregoing
shall be void. The provisions of this Agreement shall be binding
upon and inure to the benefit of Xxxxxxxx and his heirs and
personal representatives, shall be binding upon and inure to the
benefit of the Company and its successors and assigns.
13. HEADINGS.
The headings of this Agreement are solely for the
convenience of reference and shall be given no effect in the
construction or interpretation of this Agreement.
14. COUNTERPARTS; GOVERNING LAW.
This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
It shall be governed by and construed in accordance with the laws
of the State of Delaware, without giving effect to the conflict
of laws rules.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have duly executed this
Services Agreement as of the date first above written.
COMPANY:
TEMTEX INDUSTRIES, INC.
By:_______________________________
Name:_____________________________
Title:____________________________
XXXXXXXX:
__________________________________
Xxxxxxx X. Xxxxxxxx
