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EXHIBIT 10.1
[XXXXX CORPORATION LETTERHEAD]
March 24, 1999
Xx. Xxxxx X. Xxxxxxxxx
0000 Xxxxxxxxxx Xxxxx
Xxxxx, Xxxxx 00000
Re: Employment Agreement for Chief Financial Officer Position
Dear Xxxx:
We are looking forward to having you join Xxxxx's management team. I
hope this letter addresses all of the points of our previous discussion and, as
such, this letter is presented as a formal contract offer. I apologize for the
delay in getting this to you and I assure you we don't normally move this
slowly. If you agree to the proposed terms, your signature below will signify
full acceptance of this offer.
1. POSITION, AUTHORITY, AND RESPONSIBILITIES. You will commence duties
effective April 1, 1999 as Chief Financial Officer. As Chief Financial Officer
you shall have full authority and responsibility for all traditional treasury
functions, with the Accounting Department and Controller functions reporting
directly to you. You shall report to the President and Chief Executive Officer,
the Board of Directors of Xxxxx (the "Board") and such other officers of Xxxxx
as the Board may designate. You shall also perform such other duties on behalf
of Xxxxx and its subsidiaries as may from time to time be authorized or directed
by the Board or the President and CEO. Your principal office for the performance
of your duties under this Agreement will originally be located within the
greater metropolitan area of Dallas-Fort Worth, Texas. You shall remain employed
until terminated under the provisions of this agreement ("Employment Period").
2. COMPENSATION.
(a) Base Salary. During the Employment Period, Xxxxx shall pay you a
base salary at the rate of One Hundred Eighty Thousand Dollars ($180,000.00) per
annum ("Base Salary"), payable in accordance with Xxxxx's executive payroll
policy. Such Base Salary shall be reviewed annually, and shall be subject to
such annual increases, if any, as determined by the Compensation Committee of
the Board, within its sole discretion.
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(b) Other Benefits. During the Employment Period, you shall be entitled
to participate, on terms at least as favorable as any other Xxxxx executive, in
Xxxxx's employee benefit plans generally available to senior executives of Xxxxx
(all such benefits being hereinafter referred to as the "Employee Benefits"). A
summary description of Xxxxx's Employee Benefits and their respective
qualification periods is attached. Regardless of the terms of the standard
vacation benefits offered to other newly employed executives, you will be
granted no less than two weeks vacation for calendar year 1999. In addition to
those enumerated, you would be eligible to participate in our executive Annual
Bonus Program, future grants pursuant to the Xxxxx Stock Option Plan and a
monthly car allowance of $350 per month. These plans are subject to revision in
accordance with their terms and employment benefit law.
(c) Expense Reimbursement. During the Employment Period, Xxxxx shall
reimburse you for all proper expenses incurred by you in the performance of your
duties hereunder in accordance with Xxxxx's policies and procedures. These
expenses shall include dues and fees for professional activities related to
conducting your duties under this Agreement.
3. TERMINATION. As with all other officers, you will serve at the
pleasure of the Board of Directors, subject to the following limitations:
(a) Death. In the unlikely event of your death, this Agreement shall
automatically terminate and your rights and the rights of your heirs, executors
and administrators to compensation and other benefits under this Agreement shall
cease, except for compensation which shall have accrued to the date of death,
including accrued Base Salary.
(b) Disability. Xxxxx may, at its option, terminate this Agreement
upon written notice to you if you, because of physical or mental incapacity or
disability, fail to perform the essential functions of your position with or
without reasonable accommodation for a continuous period of ninety (90) days or
any one hundred twenty (120) days out of any 12-month period ("Disability").
Upon such termination, all obligations of Xxxxx hereunder shall cease, except
for compensation which shall have accrued to the date of termination, including
accrued Base Salary.
(b) Cause.
(i) During the first three years of employment, Xxxxx may, at
its option, terminate your employment under this Agreement for Cause (as
hereinafter defined) without triggering any duties to provide the severance
payments detailed below in paragraph 3(d).
(ii) If Xxxxx terminates your employment for Cause, you shall
only be entitled to accrued Base Salary through the date of the termination of
your employment; and other Employee Benefits to which you are entitled upon the
termination of your employment with Xxxxx, in accordance with the terms of the
plans and programs of Xxxxx.
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(iii) Any such termination for Cause shall be authorized by
the Board. You shall be given written notice by Xxxxx (the "Cause Notice"). The
Cause Notice shall state the particular action(s) or inaction(s) giving rise to
termination for Cause. You shall have 30 days after the Cause Notice is given to
cure the particular action(s) or inaction(s), to the extent a cure is possible.
If you effect a cure to the satisfaction of the Board, the Cause Notice shall be
deemed rescinded.
(iv) As used in this Agreement, the term "Cause" means any one
or more of the following:
(A) any refusal to perform your material duties under
this Agreement or to perform specific directives of the Board or
material directives of the CEO which are consistent with the scope and
nature of your duties and responsibilities as set forth herein;
(B) any intentional act of fraud, embezzlement or
theft in connection with your duties hereunder, or any conviction of a
felony or of any crime involving moral turpitude, fraud, embezzlement,
theft or misrepresentation;
(C) any conduct by you which constitutes gross
negligence or willful misconduct resulting in a material loss to Xxxxx
or any of its subsidiaries, or significant damage to the reputation of
Xxxxx or any of its subsidiaries;
(D) any material breach by you of any one or more of
the covenants contained in Section 1 hereof;
(E) any conduct by you that constitutes a significant
violation of any statutory or common law duty of loyalty owed to Xxxxx
or any of its subsidiaries.
(v) The exercise of the right of Xxxxx to terminate this
Agreement pursuant to this Section 3(c) shall not abrogate the rights or
remedies of Xxxxx or you in respect of the breach giving rise to such
termination.
(d) Without Cause. If, during the first three years of employment,
Xxxxx terminates your employment without Cause, Disability or Death:
(i) concurrent with such termination, you shall be entitled to
receive the payments and benefits specified by Section 3(c)(ii); and,
(ii) Xxxxx shall pay you as severance payments an amount
equivalent to one hundred and eighty thousand dollars, less appropriate income
and payroll taxes, to be paid in twelve equal monthly installments in the same
manner as normal monthly salary payments, and
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Xxxxx for twelve months following your separation date, shall provide either (a)
medical coverage under the terms of Xxxxx's medical plan in which you were
enrolled at the time of the Xxxxx's termination decision or (b) equivalent
medical coverage under COBRA (so long as under either option you shall maintain
payments and co-payment[s] as required by the medical plan or COBRA), provided,
however, such severance payments and medical coverage shall be conditioned on
your signing a severance agreement containing a general release of any and all
claims against Xxxxx.
(e) Termination by Company after Three Years of Employment.
Beginning on the first day of the fourth year of your employment, with the
single and sole exception of a potential duty to offer you a change of control
agreement, you will be employed at-will and nothing in this Agreement will limit
Xxxxx's ability to terminate your employment at the pleasure of the Board of
Directors or as otherwise authorized by the Board of Directors.
(f) Voluntary Termination By Executive. You may voluntarily
terminate your employment with Xxxxx on 30 days notice. If, during the
Employment Period, you voluntarily terminate your employment hereunder you shall
be entitled to the payments specified by Section 3(c)(ii) above.
(g) Justifiable Termination by Executive Under Specific
Circumstances. If before the first day of the fourth year of employment you
terminate your employment within 40 days following the uncured occurrence of
either of the below listed Justifiable Circumstances, then you will be eligible
to receive the benefits listed under Paragraph 3(d) above.
(i) For the Purpose of this subsection, Justifiable
Circumstances shall be limited to the following:
(A) Involuntary permanent relocation to an
office location which is located more than 50 miles from the Dallas,
Texas central business district.
(B) Involuntary significant material
reduction in the duties of the Chief Financial Officer position and/or
involuntary transfer from the Chief Financial Officer position.
(iii) In order to qualify for any benefits under this
subsection, you must notify Xxxxx in writing within thirty days of the
occurrence of a Justifiable Circumstance, stating that you believe a Justifiable
Circumstance has occurred, identifying the Justifiable Circumstance and stating
when you believe it occurred, and stating that you will exercise your rights
under this subsection if the occurrence is not cured. Regardless of when that
notice is received, Xxxxx will have until the 40th day following the alleged
occurrence to cure the circumstance.
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4. CHANGE OF CONTROL.
(a) Change in Control Agreement. Xxxxx agrees that continued
loyalty and efficiency in the face of a potential change of control will be
needed despite the personal and professional hardships a change of control might
bring. Currently Xxxxx does not offer its executives "Change of Control"
Agreements. If in the future Xxxxx offers other senior executives a "change of
control" agreement, Xxxxx will also offer such an agreement to you. While Xxxxx
reserves the right to offer different bottom line amounts to its senior
executives, Xxxxx agrees to offer any agreement to you based on the same general
terms, ratios or formulas as offered other senior executives, provided that
under any formula that takes years of service into consideration, you shall be
granted an extra five years of service, above and beyond actual service. Any
such agreement will require you to sign a severance agreement with a full and
final release of claims as a condition of payment. Additionally, you will also
be granted five years of additional service for purposes of Xxxxx's qualified
defined benefit retirement plan ("Retirement Plan"); provided however, that this
specific grant of five years additional service for Retirement Plan purposes
will not occur unless allowed by law, legally permissible under the terms of the
Retirement Plan and capable of being implemented under state and federal law
without altering the Retirement Plan obligations or actuarial accounting
requirements regarding benefits which are or might become due to other employees
under Xxxxx's Retirement Plan.
(b) Interplay of Severance with Change in Control Agreement.
If there is a change of control and you are subsequently terminated without
Cause during the Initial Term of this Agreement, you may not receive benefits
under both a change in control agreement and the severance payments arrangement
outlined above in paragraph 3(d); if you are covered by an applicable change in
control agreement, you will not be covered by the severance payments arrangement
outlined in paragraph 3(d) unless you give written notice to Xxxxx within 21
days of your notice of the decision to terminate your employment that you elect
to receive benefits under the severance payments arrangement in paragraph 3(d)
and not to receive any benefits under the applicable change in control
agreement.
5. CONFIDENTIALITY. You shall not, at any time during the Employment
Period or thereafter, make use of or disclose, directly or indirectly, any (i)
trade secret or other confidential or secret information of Xxxxx or of any of
its subsidiaries or (ii) other technical, business, proprietary or financial
information of Xxxxx or of any of its subsidiaries not available to the public
generally or to the competitors of Xxxxx or to the competitors of any of its
subsidiaries ("Confidential Information"), except to the extent that such
Confidential Information (a) becomes a matter of public record; (b) is required
to be disclosed by any law, regulation or order of any court or regulatory
commission, department or agency; or (c) is necessary to perform your duties
under this Agreement. This section of the Agreement shall survive and continue
in full force and effect in accordance with its terms, notwithstanding any
termination of the Employment Period.
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6. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
and understanding between you and Xxxxx with respect to the subject matter
hereof and supersede and preempt any prior understandings, agreements or
representations by or between you and Xxxxx, written or oral, which may have
related in any manner to the subject matter hereof.
7. CHOICE OF LAW, VENUE AND FORUM. This Agreement shall be governed by
and construed and enforced in accordance with the internal laws of the State of
Texas without regard to principles of conflict of laws. You agree that any
dispute between you and Xxxxx related to this agreement, including all claims
related to your employment, shall be heard in Dallas County, Texas, before
either an arbitrator of the parties choosing, or in the Court of appropriate
jurisdiction. Notwithstanding any prior statement in this section, in the event
of dispute regarding this Agreement or any item related to the relationship
between you and Xxxxx, you agree to final, binding, confidential and enforceable
arbitration. Any arbitration conducted under this provision shall be resolved
and settled in accordance with the rules and procedures of the American
Arbitration Association for Labor Arbitration at the complaining party's written
request, which must be filed within 180 days of the act or occurrence upon which
the claim is based.
CONCLUSION
Xxxx, if you have any questions, please feel free to contact me.
Otherwise, your signature below will finalize this Agreement and begin a new
relationship as our Chief Financial Officer.
Sincerely,
/s/ XXXXXXX X. XXXXXXX
Xxxxxxx X. Xxxxxxx
President
AGREED TO AND ACCEPTED THIS 29 DAY OF MARCH, 1999.
/s/ XXXXX X. XXXXXXXXX
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XXXXX X. XXXXXXXXX
