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EXHIBIT 10.17
LONG-TERM INCENTIVE BONUS AGREEMENT
This LONG-TERM INCENTIVE BONUS AGREEMENT is dated effective as of
November 11, 1997 (this "Agreement") between Xxxxxx Industries, Inc., a Texas
corporation (together with any successors or assigns, the "Corporation"), and
Xxxxxxx X. Xxxxxxxx (the "Executive").
R E C I T A L S:
WHEREAS, the Board of Directors of the Corporation (the "Board") deems
it is in the best interests of the Corporation to enter into long-term incentive
bonus agreements, substantially in the form of this Agreement, between the
Corporation and certain officers and other key executives of the Corporation;
WHEREAS, the Board believes such officers and key executives have
unique skills and information that are crucial to the Corporation attaining its
growth goals over the next two to three years; and
WHEREAS, the Corporation would not have entered into this Agreement
unless the Executive agreed to the terms and conditions contained herein.
NOW, THEREFORE, to assure that the Corporation will have the continued
dedication of the Executive, and the availability of Executive's advice and
counsel as to the best interests of the Corporation and its stockholders, and to
induce the Executive to remain in the employ of the Corporation, the Corporation
and Executive hereby agree as follows:
1. Bonus Payments.
(a) Subject to the terms and conditions set forth herein, the
Corporation hereby agrees that in the event the Executive continues to be an
employee of the Corporation as of March 1, 1999 and March 1, 2000 (each an
"Incentive Bonus Payment Date"), the Corporation agrees to pay to the Executive
a lump-sum cash bonus (an "Incentive Bonus") in the amount of $250,000 on each
such Incentive Bonus Payment Date. Notwithstanding the foregoing, in the event
that the Executive's employment is terminated by the Corporation for Cause (as
hereinafter defined) or by the Executive for other than Good Reason (as
hereinafter defined), the Corporation shall have no further obligation to pay to
the Executive the Incentive Bonus amounts which are not due as of the
termination date. In the event that the Executive's employment is terminated by
the Corporation for any reason other than Cause, or shall be terminated by the
Executive for Good Reason, Permanent Disability, or in the event of the
Executive's death, any and all remaining Incentive Bonus amounts due hereunder
shall become immediately vested and shall be due and payable to the Executive
within 14 days of the date of such termination or death. The parties hereby
acknowledge and agree that the Incentive Bonus provided herein is exclusive of
and in
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addition to the base salary, other compensation and employment benefits that the
Executive is at any time entitled to receive in his position with the
Corporation.
(b) Definitions. For purposes of this Agreement, the following terms
shall have the related meanings ascribed to them:
"Cause" shall mean (i) any act or acts of personal dishonesty taken by
the Executive and intended to result in personal enrichment of the Executive at
the expense of the Corporation, (ii) Executive's conviction of a felony, or
(iii) Executive's gross and deliberate disregard of Executive's duties and
responsibilities, as reasonably determined by the Board after written notice of
such failure and the failure or refusal by Executive to correct such failure
within 10 days from the date notice is given.
"Good Reason" shall mean (i) Executive's base salary is reduced to an
amount below the base salary in effect immediately prior to the date hereof,
(ii) Executive is required to relocate to a new principal place of employment
outside his current city of residence as of the date hereof, or (iii) any
significant reduction in the general level of Executive's authorities or
responsibilities. The parties hereby expressly recognize and agree that (whether
in connection with any reorganization, merger or consolidation, or sale,
transfer or other disposition of all or substantially all of the assets or stock
of the Corporation or otherwise) Executive's job title may change, Executive may
be reassigned to perform other duties for the Corporation, or Executive may
report to another officer of the Corporation, and the foregoing shall not
constitute "Good Reason" as long as the general level of Executive's authorities
and responsibilities is not significantly reduced.
"Permanent Disability" shall mean the absence of the Executive from the
Executive's duties with the Corporation on a full-time basis for 180 calendar
days as a result of incapacity due to mental or physical illness which is
determined to be total and permanent by a physician selected by the Corporation
and reasonably acceptable to the Executive or his legal representatives.
2. Non-competition; Non-solicitation.
(a) In furtherance of the agreements set forth herein, from the date
hereof and for a period ending March 1, 2000, Executive, on behalf of himself
and his present and future affiliates and employers and others, agrees not to
and shall not, directly or indirectly, (i) within those states or territories
where the Executive conducted business on behalf of the Corporation during the
term of Executive's employment with the Corporation, whether as owner, partner,
joint venturer, lender, shareholder, director, officer, employee, consultant or
otherwise, engage, invest or otherwise take part in (whether for his own account
or for the account of any other person other than Corporation or any affiliate
of Corporation), or render any service (whether for or without compensation) to
any person (other than Corporation or any affiliate of Corporation) who or which
is, directly or indirectly, engaged in any business which is competitive with
any of the businesses conducted by the Corporation during the time Executive was
employed by the Corporation, except by owning for investment purposes only less
than 5% of the publicly-traded stock of a company competing in any of the
businesses conducted by the Corporation, (ii)
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compete for or solicit any of the business conducted by the Corporation from any
customer of the Corporation, (iii) induce any customer of the Corporation to
patronize any other entity engaged in any of the businesses conducted by the
Corporation or request or advise any such customer to withdraw, curtail or
cancel any such customer's business with the Corporation, or (iv) solicit the
employment or services of, or cause or attempt to cause to leave the employment
or services of Corporation or any affiliate of Corporation, any person employed
by, or otherwise engaged to perform services for Corporation or any affiliate of
Corporation (whether in the capacity of Executive, consultant, independent
contractor or otherwise); provided, however, that in the event Executive's
employment is terminated after the date hereof by the Corporation for other than
Cause or by the Executive for Good Reason, without affecting the Corporation's
obligations set forth in Paragraph 1(a) the restrictive covenants contained in
this Paragraph 2(a) shall no longer be binding on Executive after the date of
such termination.
(b) In the event that a court of competent jurisdiction determines as a
matter of law that any of the terms of this Paragraph 2 are unreasonable or
overbroad, the parties expressly allow such court to reform this Agreement to
the extent necessary to make it reasonable as a matter of law and to enforce it
as so reformed.
(c) Executive acknowledges and agrees that the Corporation will suffer
irreparable harm if Executive fails to comply with his obligations in this
Paragraph 2 and that monetary damages would be inadequate to compensate the
Corporation for such breach. Accordingly, Executive agrees that the Corporation
will, in addition to any other remedies available to it at law, in equity, or
otherwise, be entitled to injunctive relief or specific performance to enforce
the terms, or prevent or remedy the violation, of any provisions of this
Paragraph 2.
(d) This Paragraph 2 shall not be enforceable against Executive if the
Corporation is in breach of its obligation to pay the Incentive Bonus to
Executive pursuant to Paragraph 1.
3. General.
(a) Successors. This Agreement shall inure to the benefit of and be
binding upon the Corporation and its successors and assigns. Neither party
hereto may assign its rights and obligations hereunder except with the prior
written consent of the other party. The Corporation shall require any successor
to all or substantially all of the business and/or assets of the Corporation to
assume expressly and agree to perform the obligations set forth in this
Agreement.
(b) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, without reference to principles
of conflict of laws.
(c) Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior written and oral and all contemporaneous oral agreements, understandings
and negotiations with respect to the subject matter hereof. This Agreement may
not be changed orally, but only by an agreement in writing signed by both
parties hereto.
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(d) Headings; Construction. The paragraph headings and captions
contained herein are for reference purposes and convenience only and shall not
in any way affect the meaning or interpretation of this Agreement. It is
intended by the parties that this Agreement be interpreted in accordance with
its fair and simple meaning, not for or against either party, and neither party
shall be deemed to be the drafter of this Agreement.
(e) Severability. If any portion or provisions of this Agreement is
determined to be invalid, illegal or unenforceable, the remaining portions or
provisions hereof shall not be affected.
(f) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same agreement.
(g) Certain Definitions. As used in this Agreement, the term
"Corporation" shall be deemed to include the Corporation, its successors,
assigns and any division or subsidiary thereof.
(h) No Contract of Employment. Nothing in this Agreement is intended to
be nor can be construed as a guarantee or contract for continued employment.
Executive acknowledges and agrees that his employment with the Corporation is
at-will and that the Corporation or the Executive may terminate his employment
with the Corporation at any time, with or without notice, for any reason or no
reason.
(i) Other Compensation. The parties hereby acknowledge that this
Agreement and any benefits inuring to the Executive pursuant hereto are not
intended to be taken into account in determining Executive's base salary, or in
other compensation, and/or in employment benefits to which the Executive may be
entitled as a result of his satisfactory employment with the Corporation.
IN WITNESS WHEREOF, the parties have executed this Agreement, effective
as of the date set forth above.
XXXXXX INDUSTRIES, INC.
By: Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
Chairman of the Board, President and
Chief Executive Officer
Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
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