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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
BETWEEN
XXXXXXXX AND XXXXXXXX, INC.
AND
XXXXXX X. XXXXXXXX, XX.
EFFECTIVE: OCTOBER 2, 1997
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EMPLOYMENT AGREEMENT
TABLE OF CONTENTS
Page
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1. Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Duties and Functions as Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
A. Positions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
B. General Duties and Functions as Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
C. Access to Informational Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3. Extent of Employee Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
4. Satisfaction of Employer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
5. Employee Compensation, Employee Retirement and Deferred Compensation, and Surviving Spouse Benefits . . . . 2
A. Employment Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
B. Deferred Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
C. Surviving Spouse Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
D. Office at the Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
E. Alternative Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
F. Home Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
G. Secretarial Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
H. Automobile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
I. Sabbaticals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
J. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
K. Stock Registration Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
6. Employee Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
A. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
B. Non-Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
C. Non-Interference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
D. Disclosure of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
E. Return of Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
F. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
7. Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
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8. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
A. Death . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
B. Disability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
C. Mutual Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
D. By Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
E. For "Good Cause" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
F. October 2, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
9. Payments upon Termination; Severance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
A. Death . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
B. Disability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
C. Mutual Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
D. By Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
E. For Good Cause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
F. Expiration of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
G. Additional Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
H. Rights of Employee in the Event of a Change of Control . . . . . . . . . . . . . . . . . . . . . . . 12
10. References and Gender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
11. Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
12. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
13. Insurance; Medical Exam . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
14. Invalid Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
15. Nonassignability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
16. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
17. Laws Governing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
18. Succession . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
19. Arbitration; Legal Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
A. Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
B. Legal Fees and Expenses in Event of Dispute . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
20. Waivers and Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
21. Multiple Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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EMPLOYMENT AGREEMENT
This Executive, Employment, Retirement, and Deferred Compensation
Agreement (the "Agreement") is entered into by and between Xxxxxxxx and
Xxxxxxxx, Inc., a Pennsylvania corporation (the "Corporation" or "Employer"),
including any and all subsidiaries thereof or controlled entity, and Xxxxxx X.
Xxxxxxxx, Xx. (the "Employee") as of the 2nd day of October, 1997.
R E C I T A L S:
The Employee has served and led the Corporation for more than
forty-four years; and
The Employee has forgone opportunities to recognize substantial gain
upon his contributions to the Corporation over the years in a desire to best
serve and enhance the value of the Corporation for all of its constituents, and
particularly, for the benefit of its shareholders; and
The Employee has been compensated by the Corporation over the years at
amounts appreciably less than would have been justified by the contributions
and leadership of the Employee; and
The Corporation and the Employee desire to enter into this Agreement
to set forth the role, rights and executive compensation, retirement and
deferred compensation benefits to be afforded to the Employee by the
Corporation throughout his lifetime and for the benefit of his surviving
spouse.
AGREEMENT
1. EMPLOYMENT. The Employer hereby employs Employee and Employee
hereby accepts such employment upon the terms and conditions of this Agreement.
2. DUTIES AND FUNCTIONS AS EMPLOYEE. Employee is engaged by the
Employer to perform the following duties and functions:
A. POSITIONS. For so long as the Employee so desires
and is capable (with the issue of capability, if questioned at any time, to be
determined pursuant to Section 8B), for a period of fifteen (15) years from the
date hereof, the Employee will be afforded the title and position of Chief
Executive Officer. At such times as Employee serves on the Board of Directors
of the Corporation, he also will be afforded the title and position of Chairman
of the Board of Directors.
B. GENERAL DUTIES AND FUNCTIONS AS EMPLOYEE. For so
long as he holds the title and position of Chief Executive Officer, it will be
the role of Employee to guide the policies and the
EMPLOYMENT AGREEMENT - 1 -
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direction of the Corporation and to serve such functions as are customary and
appropriate for the Chief Executive Officer of the Corporation.
C. ACCESS TO INFORMATIONAL REPORTS. For so long as
Employee holds the title and position of Chief Executive Officer the Employee
will be afforded access to any and all information of the Corporation, and the
employees of the Corporation will be instructed to furnish such information to
the Employee as the highest of priorities. The Corporation will prepare and
furnish to the Employee any and all reports that the Employee might request.
3. EXTENT OF EMPLOYEE SERVICES. Commensurate with his seniority
and special status, Employee shall devote reasonable time, attention, efforts,
and energies to the business and affairs of the Employer and its affiliated
companies as Chief Executive Officer of the Corporation. Employee during the
term of this Agreement shall not engage in any other business activity similar
to the Employer's business without the Employer's consent, whether or not that
business activity is pursued for gain, profit, or other pecuniary advantages,
nor shall Employee be interested, directly or indirectly, in any form, fashion,
or manner, as partner, officer, director, stockholders advisor, employee,
investor, or in any other form or capacity in such other business; provided,
however, that nothing herein contained shall be deemed to prevent or limit the
right of Employee to invest any of his personal funds in securities of any
corporation whose securities are regularly traded on any public exchange or
regulated market of which Employee, after any such investment, owns less than
five percent (5%) of any class of such corporation's outstanding securities.
Notwithstanding the foregoing, Employee may, with the permission of the Board,
sit on the boards of corporations (public and private) and devote time and
attention to nonprofit organizations and academic institutions, provided such
activities shall be consistent with Employee's commitments to the Employer and
not affect Employee's performance of Employee's obligations under this
Agreement.
4. SATISFACTION OF EMPLOYER. Employee agrees that he will
faithfully, promptly, and to the best of his ability, experience, and talent,
perform all of the duties that may be required of and from him pursuant to the
express and implicit terms hereof.
5. EMPLOYEE COMPENSATION, EMPLOYEE RETIREMENT AND DEFERRED
COMPENSATION, AND SURVIVING SPOUSE BENEFITS. For all services rendered by
Employee for his prior services and during his employment hereunder, the
Employer shall compensate Employee as follows:
A. EMPLOYMENT COMPENSATION. For so long as the
Employee's employment with the Corporation is being substantially full time for
relevant Internal Revenue Code determination purposes, Employee will be
entitled to receive annual compensation of $475,000, adjusted as hereafter
described, to be paid in accordance with the regular payment practices of the
Corporation for executives of the Corporation. The amount of compensation will
be increased each year on the 1st of October, or at such earlier time annually
as determined by the Board of Directors, in the discretion of the Board of
Directors, provided that in no event will such increase be less than a multiple
of two times any change in the Consumer Price Index from the preceding year.
EMPLOYMENT AGREEMENT - 2 -
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B. DEFERRED COMPENSATION. After the expiration of
fifteen (15) years from the date hereof, for a period of five (5) years
thereafter, or, if Employee's employment with the Corporation is terminated
for any reason or if the number of hours Employee regularly devotes to the
business of the Corporation is reduced to substantially less than full time,
then Employee, commencing in such month, will be entitled to receive, for the
balance of such fifteen (15) year period plus five (5) years thereafter, annual
compensation of seventy-five percent (75%) of $475,000 or such greater amount
as Employee may be receiving as compensation pursuant to Section 5A at the time
the provisions of this Section 5B become applicable, adjusted as hereafter
described. Such annual compensation will be prorated for any partial year and
will be payable in equal monthly payments. The amount of compensation will be
adjusted each year on the 1st of October, or at such earlier time annually as
determined by the Board of Directors, in the discretion of the Board of
Directors, provided that in no event will such increase be less than a multiple
of two times any change in the Consumer Price Index from the preceding year.
C. SURVIVING SPOUSE BENEFITS. Upon Employee's death,
the Corporation will pay to Employee's surviving spouse, if applicable, an
annual death benefit for the remainder of her life equal to two-thirds of the
amount of Deferred Compensation to which Employee would be entitled if he were
then living.
D. OFFICE AT THE CORPORATION. Upon the request of the
Employee from time to time, the Corporation will afford to the Employee an
office at the headquarters of the Corporation, which is appropriate for the
status and role of the Employee and reasonably acceptable to such Employee and
the Corporation.
E. ALTERNATIVE OFFICE. If Employee does not select
an office at the Corporation's headquarters, then, upon the request of Employee
at any time, the Corporation will afford the Employee with an office outside of
the headquarters of the Corporation of the Employee's choosing and which is
reasonably acceptable to such Employee and the Corporation. Such office will
be equipped with and afforded all appropriate and modern equipment to permit
the Execute to fulfill his role with the Corporation, including expressly
on-line electronic access to the files, records, internal and external
communications, and other information of the Corporation.
F. HOME OFFICE. Upon the request of the Employee at any
time, the Corporation will equip and furnish a home office for the Employee's
use and fulfillment of his role with the Corporation which is reasonably
acceptable by Employee and the Corporation. Such home office will be equipped
with all modern facilities and equipment appropriate to permit the Employee to
fulfill his role, including expressly on-line electronic access to the files,
records, internal and external communications, and other information of the
Corporation.
G. SECRETARIAL SUPPORT. The Corporation will afford
secretarial assistance to the Employee at any office or offices maintained by
the Employee, with the nature and extent of such
EMPLOYMENT AGREEMENT - 3 -
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assistance to be determined by the Employee in his reasonable discretion and
reasonably acceptable to the Corporation.
H. AUTOMOBILE. The Corporation will provide an
automobile of Employee's choice, to be replaced by the Corporation every two
years or less at the reasonable discretion of Employee, for use by the Employee
throughout the lifetime of the Employee and also will furnish a driver if
requested by Employee.
I. SABBATICALS.
(1) EARNED SABBATICALS. The Corporation
acknowledges that the Employee has earned the right to
sabbaticals and will be afforded sabbaticals as the Employee
and the Corporation may deem appropriate, being mindful of his
responsibilities as Chief Executive Officer, from time to
time.
(2) PLANNED SABBATICAL. The Corporation
acknowledges that the Employee has planned, and contemplates
taking, a sabbatical of one year in length, at a time of his
choosing.
(3) RIGHTS AND OBLIGATIONS DURING SABBATICAL.
While Employee will be relieved of any specific
responsibilities during a sabbatical, the Employee will
maintain each and every of the rights afforded to the Employee
throughout any sabbatical the Employee may take.
J. INSURANCE. Throughout the lifetime of the Employee,
to the extent procurable, the Corporation will afford and maintain for the
benefit of the Employee full health, disability and life insurance, as well as
general liability, errors and omissions, officers and directors, and umbrella
insurance, and the Corporation will expressly list the Employee as an insured
or co-insured whenever it would be beneficial to the Employee to do so,
provided that such a listing would not be applicable for general liability
insurance. Such insurance, to the extent procurable, will in no event be less
attractive or complete for the Employee than that currently maintained by the
Corporation, and, further, will in no event be less attractive or complete for
the Employee than that insurance maintained or procured for any employee of the
Corporation from time to time.
K. STOCK REGISTRATION RIGHTS.
(1) ONE DEMAND REGISTRATION RIGHTS. During the
lifetime of Employee, the Employee will be afforded one demand
registration right at the expense of the Corporation, provided
that the Corporation may delay any such registration for a
period of up to 180 days if such is deemed necessary by the
Corporation to protect the best interests of the Corporation.
The Corporation acknowledges that affording such demand
registration right to the Employee is reasonable and
appropriate under
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the circumstances for the Corporation and the Employer in
light of the longstanding and invaluable contributions of the
Employee, the forbearance of the Employee from prior
opportunities to liquidate his investment in the Corporation
in prior periods out of a desire to benefit the shareholders
of the Corporation, and the resulting need of the Employee to
have access to the public markets for his investments in the
Corporation with the full cooperation of the Corporation, and
at the expense of the Corporation, during his lifetime.
(2) TWO PIGGYBACK REGISTRATION RIGHTS. During
the lifetime of Employee, whenever the Corporation
contemplates a public offering of its securities, the
Corporation will advise the Employee of its plans to register
securities and will afford the Employee an opportunity
(subject to the advice of underwriters for such registration
as to the practicality of including selling shareholder shares
and marketable amounts thereof) to register shares owned by
the Employee as part of such registration statement, all at
the sole expense of the Corporation, provided that the
Employee may exercise such right no more than two times.
6. EMPLOYEE COVENANTS.
A. CONFIDENTIALITY
(1) PROPRIETARY INFORMATION. Employee is aware
and acknowledges that through his efforts and
with his help and guidance, Employer has
developed a special competence in its
Business (hereinafter defined) and has
accumulated Confidential Information
(hereinafter defined) not generally known to
others in the field which is of unique value
in the conduct and growth of Employer's
Business and which Employer treats as
proprietary.
(2) ACCESS TO CONFIDENTIAL INFORMATION. In the
course of Employee's employment, Employee has
been and will be employed in a position or
positions with Employer in which Employee may
receive or contribute to the Confidential
Information of Employer. Employee recognizes
the optimum progress of Employer's Business
cannot take place unless Confidential
Information is entrusted to Employee.
(3) PROTECTION OF GOODWILL. Employee
acknowledges that in the course of carrying
out, performing, and fulfilling his
responsibilities to Employer, Employee has
and will have access to and be entrusted with
Confidential Information relating to
Employer's Business and Clients (hereinafter
defined). Employee recognizes that (i) the
goodwill of Employer depends upon, among
other things, its keeping
EMPLOYMENT AGREEMENT - 5 -
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the Confidential Information confidential
and that unauthorized disclosure of the
Confidential Information would irreparably
damage Employer, and (ii) disclosure of any
Confidential Information to competitors of
Employer or to the general public would be
highly detrimental to Employer. Employee
further acknowledges that in the course of
performing his obligations to Employer, he may
be a representative of Employer to many of
Employer's Clients and in some instances
Employer's primary contact with the Client,
and as such will be responsible for
maintaining or enhancing the business and
goodwill of Employer with those Clients.
(4) MEANINGS OF TERMS. Employee acknowledges
that the following terms shall have the
following meanings:
a. BUSINESS shall mean Employer's
present business of providing
personnel services, including but
not limited to, temporary help
services, employee placement,
employee search, employee leasing,
and as such business may be expanded
and diversified in the future
through acquisitions by Employer or
future development or
diversification, including any
business which Employer has targeted
or discussed to be targeted by
officers or board members for
acquisition or entry during the
Restricted Period (as defined
below).
b. EMPLOYER shall refer to Xxxxxxxx and
Xxxxxxxx, Inc. d/b/a Xxxxxxxx
Personnel Services and shall also be
deemed to include any other business
or entity in which Employer has or
acquires an equity interest.
c. CLIENTS means any individual,
principal, proprietorship,
partnership, corporation,
association, or other entity that
has been served by Employer as a
customer or franchisee during the
term of Employee's employment,
including those who were (or became)
Client(s) of Employer at the time of
(or at any time during) Employee's
employment.
d. COMPETING BUSINESS means any
business, firm, undertaking,
company, or organization, other than
Employer, which competes in any
state in the United States in which
the Employer's business is located
(the "Restricted Area") with
Employer's Business.
EMPLOYMENT AGREEMENT - 6 -
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e. CONFIDENTIAL INFORMATION means
information disclosed or known to
Employee as a direct or indirect
consequence of, or through his
employment with Employer, about
Employer's business methods,
operations, and services, including,
but not limited to, all information,
written or oral, including without
limitation, manuals, videos, audios,
and internal publications not
generally known, or proprietary to
Employer, about Employer's training,
marketing, pricing, accounting,
merchandising, and information
gathering techniques and methods,
and all accumulated data, listings,
or similar recorded matter used or
useful in Employer's Business,
including but not limited to,
Employer's Client lists, Employer's
franchisees' Client lists, reports,
business forms, advertisements, and
marketing reports and presentation
materials. Without regard to
whether any or all of the foregoing
matters would be deemed
confidential, material, or
important, the parties hereto
stipulate that as between them, the
same are important, material, and
confidential and gravely affect the
effective and successful conduct of
the business of the Employer, and
its goodwill.
B. NON-COMPETITION. Employee agrees that during his
employment with Employer, Employee shall not within the Restricted Area, either
through any kind of ownership (other than ownership of securities any
corporation whose securities are regularly traded on any public exchange or
regulated market of which Employee owns less than five percent (5%) of any
class of such corporation's outstanding securities), or as a director, officer,
principal, agent, employee, employer, advisor, consultant, co-partner, or in
any individual or representative capacity whatsoever, either for Employee's own
benefit or for the benefit of any other person or firm, partnership,
association, corporation, or other entity, without the prior written consent of
Employer, participate, directly or indirectly, in a Competing Business
involving any Client.
C. NON-INTERFERENCE. During his employment with the
Employer and for a period of thirty-six (36) months after the termination of
his employment irrespective of the time, manner, or cause of his termination,
Employee shall not:
(1) SOLICITATION. Directly or indirectly, either
as principal, agent, employee, employer,
stockholder, co-partner, or in any other
individual or representative capacity
whatsoever induce, solicit, or attempt to
induce or solicit any Client or induce,
solicit or attempt to induce or solicit any
Client to terminate its relationship with
Employer, either for Employee's own benefit
or for the benefit of any
EMPLOYMENT AGREEMENT - 7 -
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other person, firm, or corporation
competitive with that of the Employer.
(2) SOURCES. Directly or indirectly, request or
advise any present or future merchandise
resource, supply resource, financial
resource, or service resource of the employer
or any Client to withdraw, curtail, or cancel
the furnishing or sales of merchandise,
supplies, or services to the Employer or any
Client.
(3) EMPLOYEES. Directly or indirectly, induce or
attempt to influence any employee of the
Employer or employee of any Client to
terminate employment with the Employer or the
client, as the case may be, or hire any
former employee of the Employer who has
resigned.
D. DISCLOSURE OF INFORMATION. Unless compelled to
disclose information in a legal proceeding, Employee expressly covenants and
agrees that he will not, during or after the termination of his employment with
the Employer, irrespective of the time, manner or cause of the termination,
directly or indirectly use, disclose, copy, or assist any other person or firm
in the use, disclosure, or copying of, any Confidential Information, except
with the written consent of or at the written request of Employer.
E. RETURN OF RECORDS. Upon termination of his
employment, Employee will surrender to the Employer all lists, books, and
records of or in connection with the Employer's Clients, customers, suppliers,
prospective customers, or businesses and all copies thereof and all other
property belonging to the Employer, whatsoever, including, without limitation,
all Confidential Information. Employee shall have no right to copy or
otherwise reproduce lists, books or accounts, records or other property of the
Employer.
F. REMEDIES.
(1) ENFORCEMENT OF COVENANTS. Employee agrees
that a violation on his part of any Covenant
in this Paragraph 6 will cause such damage to
the Employer as will be irreparable and for
that reason, Employee further agrees that the
Employer shall be entitled, as a matter of
right, to an injunction out of any court of
competent jurisdiction, restraining any
further violation of the Covenants by
Employee, his employer, employees, partners,
or agents. In addition to the foregoing
remedy, in the event of a violation by
Employee of any Covenant in this Paragraph 6,
Employee shall be liable to the Employer for
actual damages. Such right to injunction and
actual damages shall be cumulative and in
addition to whatever other remedies the
Employer may have.
EMPLOYMENT AGREEMENT - 8 -
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(2) INDEPENDENT COVENANTS. Each of the Covenants
contained in this Paragraph 6 shall be
construed as covenants or agreements
independent of any other provision of this
Paragraph 6 of this Agreement and the
allegation or existence of any claim or cause
of action of Employee against the Employer,
whether predicated on this Agreement or
otherwise, shall not constitute a defense to
the enforcement by the Employer of the
Covenants contained herein.
(3) INTERPRETATION. It is the intent of the
parties that the provisions contained in
Paragraph 6 shall, to the fullest extent
permissible under law and public policy, be
enforced by the courts of each state and
jurisdiction in which enforcement is sought
and that the unenforceability (or the
modification necessary to conform with such
law and public policy) of any part of
Paragraph 6 shall not be deemed to render
unenforceable any other part of Paragraph 6.
Accordingly, if any part of Paragraph 6 shall
be adjudicated to be invalid or unenforceable
in any action or proceeding in which
Employee, his heirs, executors,
administrators and the Employer, its
successors, or assigns, are parties, whether
in its entirety or except as modified as to
duration, territory, accounts, employees, or
otherwise, then that part shall be deemed
deleted or amended, as the case may be, from
the Agreement in order to render the
remainder of Paragraph 6 both valid and
enforceable. Any such deletion or amendment
shall apply only where the court rendering
the same has jurisdiction.
(4) SURVIVAL. Notwithstanding any provision in
this Agreement to the contrary, the
representations of Employee contained in
Paragraph 6A and the rights of the Employer
hereunder shall not terminate upon the
termination of this Agreement but shall
continue to remain in full force and effect
FOR A PERIOD OF THIRTY-SIX (36) MONTHS AFTER
THE TERMINATION FOR EMPLOYEE'S EMPLOYMENT
WITH THE EMPLOYER, IRRESPECTIVE OF THE TIME,
MANNER OR CAUSE OF HIS TERMINATION.
(5) NOTICE REQUIRED. Employee expressly agrees
to notify any prospective employer or
affiliate in a Competing Business of the
Covenants, and authorizes Employer to make
contact with, and discuss the nature and
obligations of these Covenants with, any
person or affiliate reasonably believed by
Employer to be engaged or about to be engaged
in an act that would constitute a violation
of the Covenants. Employee hereby waives and
releases Employer from, any claims whatsoever
arising in connection with the Employer's
contact or discussions with such person or
affiliate.
EMPLOYMENT AGREEMENT - 9 -
13
7. TERM. Subject to the provisions for termination as provided
elsewhere herein the term of Employee's employment under this Agreement shall
commence on October 2, 1997, and terminate only pursuant to such stated
provisions for termination.
8. TERMINATION. Notwithstanding anything herein contained to
the contrary (including Section 7 hereof), the employment portions (as
distinguished from the retirement and deferred compensation provisions hereof
which continue for so long as Employee or his spouse is living during the
period of twenty (20) years from the date hereof) of this Agreement shall
terminate upon the first to occur of any of the following events:
A. DEATH. Upon the death of Employee.
B. DISABILITY. In the event that there should be at any
time any issue or dispute regarding the disability or capacity of the Employee
to fulfill the role of Chief Executive Officer and, when applicable, Chairman,
such issue will be resolved by a licensed physician of the appropriate
recognized field of medicine or psychiatric practice selected by Employer who
has examined Employee; provided, however, if Employee disagrees with such
determination, then Employee and Employer shall agree upon an independent
qualified physician to review the case and make a final determination of
disability. If the parties cannot agree upon an independent physician to make
such determination, then each party shall appoint a physician and those two
physicians shall select a third physician who shall then make a final and
binding determination with respect to Employee's disability.
C. MUTUAL CONSENT. By mutual written consent of the
parties.
D. BY EMPLOYEE. By Employee by giving 30 days' written
notice of termination to Employer.
E. FOR "GOOD CAUSE". By Employer upon written notice
for "good cause", which shall mean for purposes of this Agreement, Employee's
(i) conviction of a felony or any other criminal act which the Board considers
materially damaging to the reputation of the Employer, (ii) conviction of
fraud, (iii) conviction of dishonesty, self- dealing, or embezzlement, (iv)
willful and intentional violation of Employer's published policies, (v) gross
or intentional neglect of duty, (vi) failure or unwillingness to perform
substantially and faithfully Employee's duties hereunder (other than a failure
due to Employee's disability), or (vii) any act or failure to act which
undermines or besmirches the Employer's business reputation; provided, however,
in the event "good cause" relates to item (iv) through (vi) above, then
Employer shall notify Employee of such cause, and, if such violation can be
cured, Employee shall have 30 days from receipt of notice to cure such
violation.
F. OCTOBER 2, 2012.
The effective date of termination under the foregoing provisions shall be as
follows:
EMPLOYMENT AGREEMENT - 10 -
14
(1) SECTION 8(A), the date of death.
(2) SECTION 8(B), the date of written notice from
the Employer to Employee of his "disability"
termination.
(3) SECTION 8(C), the date determined under the
written mutual consent of the parties.
(4) SECTION 8(D), the termination date as
provided in Employee's written notice;
provided that the Employer may accelerate the
termination so that it occurs at any time
during the 30-day notice period, while
continuing Employee's Base Salary for the
remainder of the 30-day notice period.
(5) SECTION 8(E), the termination shall be
immediate upon the delivery by Employer of
written notice or the end of the cure period
if cure is possible but is not effected.
(6) SECTION 8(F), the date therein stated.
Notwithstanding the foregoing Employer may terminate Employee's use of
Employer's offices, equipment and supplies at any time after notice of
termination of employment is given by Employer or Employee.
9. PAYMENTS UPON TERMINATION; SEVERANCE.
A. DEATH. In the event termination of employment is the
result of death under Section 8A above, Employee shall be paid his Base Salary
through the end of the month in which death occurred; and the right of
Employee's representative to exercise stock options, if any, will be determined
in accordance with the terms of the Stock Option Plan.
B. DISABILITY. In the event of termination of
employment for disability under Section 8(B) above, Employee shall be paid his
Base Salary through the date of termination of employment; and the right of
Employee or Employee's representative to exercise stock options, if any, will
be determined in accordance with the terms of the Stock Option Plan.
C. MUTUAL CONSENT. If termination of employment is by
mutual consent under Section 8(C) above, the parties shall agree to the
payments to be made, if any, to Employee upon such termination.
D. BY EMPLOYEE. In the event of termination of
employment by Employee under Section 8(D), Employee shall be paid his Base
Salary through the date of termination of
EMPLOYMENT AGREEMENT - 11 -
15
employment. Employee's right to exercise stock options, if any, will be
determined in accordance with the terms of the Stock Option Plan.
E. FOR GOOD CAUSE. In the event of a termination of
employment for good cause under Section 8(E), Employee will be entitled to
receive his Base Salary through the date of termination of employment.
Employee will not be entitled to exercise any unexercised stock options under
the Stock Option Plan.
F. EXPIRATION OF AGREEMENT. In the event termination of
employment is the result of death under Section 8A above, Employee shall be
paid his Base Salary through the end of the month in which death occurred; and
the right of Employee's representative to exercise stock options, if any, will
be determined in accordance with the terms of the Stock Option Plan.
G. ADDITIONAL BENEFITS. In the event of termination of
employment under Section 8, other than for good cause under Section 8(E),
Employee will be entitled to receive, in addition to any other amounts payable
to Employee under Sections 9(A) through 9(D) above, a severance benefit in an
amount equal to two times his base salary paid by Employer during the twelve
month period immediately preceding his termination of employment, reduced by
the Base Salary payable to Employee under Sections 9(A) through 9(D). In no
event will any such payment reduce retirement and deferred compensation
payments to the Employee.
H. RIGHTS OF EMPLOYEE IN THE EVENT OF A CHANGE OF
CONTROL.
(1) CHANGE OF CONTROL. In the event that twenty
percent (20%) or more of the equity securities of the Corporation
should be acquired by one or more affiliated persons other
than members of the Xxxxxxxx Family (with the Xxxxxxxx Family
expressly including the families of Xxxxxx X. Xxxxxxxx, Xx., J.
Xxxxxxx Xxxxx, Xxxxxxx X. Xxxxxxxx, Xxxxxx X. Xxxxx, Xxxxx X. Xxxxx
and Xxxxxx X. Xxxxxxx) or if the Corporation should be party to a
merger in which the Corporation is not the survivor (other than a
reincorporation for the sole purpose of changing the state of
incorporation of the Corporation), or in the event that a majority of
the Corporation's nominees for the Board of Directors of the
Corporation should not be elected as Directors of the Corporation in
any year, the Employee will have the right to afford himself with the
remedies set forth at Section 9(G)(2) hereof.
(2) RIGHTS AND REMEDIES. In the event that the
conditions as set forth in Section 9(G)(1) hereof exist, the
Employee at his election within twelve (12) months of such event,
either:
a. Have the right to have his payments
pursuant to Section 5 hereof
increased by ten percent (10%)
(which alternative will be deemed to
have been selected if no election is
made); or
EMPLOYMENT AGREEMENT - 12 -
16
b. Require the Corporation to pay as a
lump sum to the Employee the present
value of the economic benefits
pursuant to this Agreement utilizing
the life expectancies and actuarial
value based upon the Actuarial Value
Alpha Tables published by the
Internal Revenue Service utilizing
the Consumer Price Index average of
the preceding three years and
determining the present value by
utilizing 120% of the Applicable
Federal Rate (as defined under
Section 1274 of the Internal Revenue
Code of 1986) in effect at such time
(the amount determined pursuant to
hereto being the "Determined Present
Value").
(3) INCREASE FOR ANY APPLICABLE EXTRAORDINARY
TAXES. In the event that the exercise of any remedies by the Employee
should have the effect of increasing any applicable tax (other than
ordinary income tax or capital gains tax) payable by the Employee,
the amount payable will be grossed up so that the net effect to the
Employee will be the same as if no such extraordinary tax had been
imposed.
(4) RIGHTS OF SURVIVING SPOUSE. In the event of
the Employee's death, his surviving spouse will be afforded the same
economic rights and remedies pursuant to this Section as the Employee
hereunder to the extent of the spouse's interests.
10. REFERENCES AND GENDER. All references to "sections" or
"subsections" contained herein are, unless specifically indicated otherwise,
references to sections or subsections of this Agreement. Whenever herein the
singular number is used, the same shall include the plural where appropriate,
and words of any gender shall include each other gender where appropriate. The
terms "herein" and "hereof" as used in this Agreement are references to this
Agreement, unless the context indicates otherwise.
11. CAPTIONS. The captions, headings, and arrangements used in
this Agreement are for convenience only and do not in any way affect, limit,
amplify, or modify the terms and provisions hereof.
12. NOTICES. Whenever this Agreement requires or permits any
consent, approval, notice, request, or demand from one party to another, the
consent, approval, notice, request, or demand must be in writing to be
effective, including, without limitation, telex, or telegraphic communications,
and shall be deemed to have been given on the earlier of receipt or the third
day after it is enclosed in an envelope, addressed to the Employee at the
address set forth for the Employee on the payroll records of the employer and
to the Employer at the address stated below or at such other address as the
Employer may designate for all purposes as its corporate headquarters, properly
stamped, sealed, and deposited in the United States mail. The address of
Employer as of the effective date of this Agreement is as set forth on the
signature page hereof.
EMPLOYMENT AGREEMENT - 13 -
17
13. INSURANCE; MEDICAL EXAM. During Employee's employment,
Employee agrees to take a physical examination to be performed by a medical
doctor selected by the Employer. The cost of such exam will be borne by the
Employer. During Employee's employment, Employer shall be required as a
condition of employment to take an annual physical exam at the expense of the
Employer. In addition, Employee agrees to take such physical examination as
may be required by the Employer in order for the Employer to purchase insurance
on Employee's life in such amount or amounts as the Employer deems appropriate.
14. INVALID PROVISIONS. If any provision of this Agreement is
held to be illegal, invalid, or unenforceable under present or future laws
effective during the term, including renewals, of this Agreement, such
provision shall be fully severable; this Agreement shall be constructed and
enforced as if such illegal, invalid, or unenforceable provision had never
comprised a part of this Agreement; and the remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected by
the illegal, invalid, or unenforceable provision or by its severance from this
Agreement. Furthermore, in lieu of each such illegal, invalid, or
unenforceable provision there shall be added automatically as part of this
Agreement a provision as similar in terms to such illegal, invalid, or
unenforceable provision as may be possible and be legal, valid, and
enforceable.
15. NONASSIGNABILITY. Neither this Agreement, nor any rights or
obligations of either party hereunder may be transferred or assigned except
that the Employer may assign this entire Agreement to any successor to all or
substantially all of the employer's business and assets.
16. ENTIRE AGREEMENT. This Agreement contains the entire
agreement of the parties hereto and supersedes any prior agreement regarding
the subject matter hereof. No modification or amendment of any of the terms,
conditions, or provisions herein may be made otherwise than by written
agreement signed by the parties hereto, or in any event by the parties sought
to be bound hereby.
17. LAWS GOVERNING. THIS AGREEMENT SHALL BE CONSTRUED AND
INTERPRETED ACCORDING TO THE LAWS OF THE STATE OF TEXAS.
18. SUCCESSION. This Agreement shall inure to the benefit of and
be binding upon the parties hereto, and upon their successors in interest of
any kind whatsoever.
19. ARBITRATION; LEGAL FEES
A. ARBITRATION. Any controversy or claim arising out of
or relating to this Agreement, including but not limited to claims based on or
arising from an alleged tort, shall at the request of any party be determined
by arbitration, under the auspices and rules of the American Arbitration
Association, in accordance with the Texas General Arbitration Act if
applicable, otherwise in accordance with the United States Arbitration Act.
Judgment upon the award rendered by the arbitrator shall be entered in any
court having jurisdiction. The institution and maintenance
EMPLOYMENT AGREEMENT - 14 -
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of an action for judicial relief or pursuant of any provisional or ancillary
remedy shall not constitute a waiver of the right of any party to submit the
controversy or claim to arbitration. Nothing contained in this paragraph is
intended to prevent a party from bringing an action in State or Federal court
in Dallas County, Texas, or such other county and state in which Employer then
has its principal place of business, to (i) enforce that party's right to
arbitrate under this Agreement or (ii) to obtain relief by way of Specific
Performance to enforce the Covenants contained in Paragraph 6 hereof. The
arbitration shall be commenced by filing a demand for arbitration upon the
other party who is qualified to make decisions in legal matters. The
arbitration proceeding shall be held in Dallas County, Texas. The arbitrator
shall maintain the privacy of the hearings, and shall have the power to exclude
witnesses, other than a party, during the testimony of any other witness. The
prevailing party in the arbitration proceeding shall be entitled to reasonable
attorney's fees, costs, and necessary expenses incurred in connection with such
proceeding, as determined by the arbitrator.
B. LEGAL FEES AND EXPENSES IN EVENT OF DISPUTE.
The Corporation will pay promptly upon submission by the Employee any and all
legal fees and expenses of Employee in the event of any dispute or any
disagreement regarding this Agreement, its terms or the effect hereof. The
Corporation will make prompt payment of any such fees and expenses upon
submission thereof by Employee, or on his behalf, without requiring detailed
descriptions of the services provided, which could compromise the privilege of
such counsel. Such payment will be made in all events within thirty (30) days
of submission by the Employee.
20. WAIVERS AND CONSENTS. One or more waivers of any covenant,
term, or provision of this Agreement by any party shall not be construed as a
waiver of a subsequent breach of the same covenant, term, or provision, nor
shall it be considered a waiver of any other then existing or subsequent breach
of a different covenant, term, or provision. The consent or approval by either
party to or of any act by the other party requiring such consent or approval
shall not be deemed to waiver or render unnecessary consent to or approval of
any subsequent similar act. No custom or practice of either party shall
constitute a waiver of either party's rights to insist upon strict compliance
with the terms hereof.
21. MULTIPLE COUNTERPARTS. This Agreement may be executed in a
number of identical counterparts, each of which, for all purposes, is to be
deemed an original, and all of which constitute, collectively, an agreement;
but in making proof of this Agreement, it shall not be necessary to produce or
account for more than one such counterpart.
EMPLOYMENT AGREEMENT - 15 -
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IN WITNESS WHEREOF, this Agreement executed as of the date first
written above.
EMPLOYEE: EMPLOYER:
XXXXXXXX AND XXXXXXXX, INC.
-----------------------------
Xxxxxx X. Xxxxxxxx, Xx.
By:
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: President
Address:
00000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
EMPLOYMENT AGREEMENT - 16 -
