EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (the "Agreement") made and entered into effective
as of the first day of October, 1998, by and between Visionary Retail
Management, Inc., a Delaware corporation (the "Company"), or its assigns, and
Xxxxx Xxxxxx ("Employee");
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company desires to employ executive on the terms and
conditions set forth below; and
WHEREAS, Employee desires to serve in the employment of the Company on the
terms and conditions set forth below;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the parties hereto agree as follows:
1. Employment. The Company hereby employs Employee and Employee hereby
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accepts such employment, upon the terms and conditions set forth herein.
2. Term. The term of this Agreement shall commence on the date
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hereof (the "Effective Date") and shall terminate on December 31, 1999, subject
to earlier termination and extension as hereinafter provided (the "Term").
Thereafter, and subject to Section 8(d), this Agreement shall automatically
renew for successive one-year terms unless either party gives written notice of
its election not to renew at least thirty (30) days prior to the end of the then
current period. In the event of such extension, all of the terms and conditions
of this Agreement shall remain in full force and effect.
3. Duties. During the Term, Employee agrees that he will devote his
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full business time, attention and energies to the business of the Company and
its subsidiaries and affiliates, if applicable, and to the performance of his
duties hereunder, and shall not engage in any other business, profession, or
occupation for compensation or otherwise.
4. Compensation.
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(a) Base Compensation. During the term of this Agreement, the Company
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shall pay to Employee a salary at an annual rate of not less than $135,000 (the
"Base Salary"). The Base Salary shall be reviewed by the Board from time to
time as the Board deems appropriate. The Base Salary shall be payable during the
Term in substantially equal installments not less frequently than monthly in
accordance with the Company's standard payroll policy or in such other
installments as the parties may mutually agree.
(b) Bonus. Employee shall be eligible to earn a bonus based upon a
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bonus plan to be determined from time to time by the Company for each fiscal
year. For fiscal year 1998 Employee shall be guaranteed a minimum bonus of
$20,000 and shall have the opportunity to ear up to an additional $20,500 above
the guarantee level based upon objectives shown on the attached bonus addendum.
(c) Reimbursement of Expenses; Automobile. The Company shall reimburse
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Employee, in accordance with the Company's policy in effect from time to time,
for all reasonable travel, entertainment and other business expenses incurred by
Employee in the performance of his duties and responsibilities hereunder.
Employee will receive, at either an automobile allowance of $500 per month or
use of an automobile under a company lease and will be reimbursed for his
reasonable automobile insurance costs. The determination of whether an
automotive lease or an automobile allowance is provided for the employee will be
solely the Company's determination.
(d) Stock Option Plan. Employee shall be eligible to participate in the Eye
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Care Centers of America, Inc.'s 1998 Stock Option Plan, and his rights with
respect to options granted to him thereunder shall be governed solely by the
terms of such plan, as it may be in effect from time to time, and the terms of
the Stock Option Agreement evidencing the grant of such options.
(e) Net Payments. The amount of any gross payments provided for in this
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Agreement shall be paid net of any applicable withholding required under
federal, state or local law.
5. Benefits. Employee shall be entitled to receive the benefits made
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available or applicable from time to time to the employees of the Company;
provided, however, that the receipt of such benefits by Employee shall be
subject to the Company's eligibility and enrollment requirements pertaining to
such benefit programs.
6. Confidentiality and Competitive Activities.
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(a) Confidentiality. Employee acknowledges that during his employment
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with the Company, the Company has and will continue to disclose to him the
confidential affairs and proprietary information of the Company and its
subsidiaries and affiliates which is developed by and belongs to the Company and
its subsidiaries and affiliates, including matters of a business nature such as
information about costs, profits, markets, sales, trade secrets, potential
patents and other business ideas, customer lists, supplier and vendor lists,
plans for future developments and/or acquisitions, and information of any other
kind not known within the optical retail industry generally (collectively,
"Confidential Matters"). Employee further acknowledges that the Company would
not hire Employee or disclose these Confidential Matters to Employee without the
promises made by Employee in this Section 6. In light of the foregoing,
Employee agrees:
(i) To keep secret all Confidential Matters of the Company and of
any subsidiaries and affiliates of the Company, and not to disclose them to
anyone outside of the Company or its subsidiaries or affiliates, or otherwise
use them or use his knowledge of them for his own benefit or for the benefit of
any third party, including, without limitation, use of the trade secrets, trade
names or trademarks of the Company, either during or after the Term, except with
the Company's prior written consent; and
(ii) To deliver promptly to the Company at the termination of the
Term, or at any time the Company may request, all memoranda, notices, records,
reports and other documents (and all copies thereof) relating to the business of
the Company or any of its
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subsidiaries or affiliates, including, but not limited to, Confidential Matters,
which he may then possess or have under his control. Notwithstanding any of the
foregoing, the term "Confidential Matters" does not include information which (
) is or becomes generally available to the public other than as a result of any
disclosure by Employee or ( ) Employee is compelled to disclose by judicial or
administrative process; provided, that in the case of any such requirement or
purported requirement Employee shall provide written notice to the Company prior
to producing such information, which notice shall be given at least ten (10)
days prior to the producing such information, if practicable, so that the
Company may seek a protective order or other appropriate remedy.
(b) Competitive Activities. Employee expressly recognizes and
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acknowledges that the terms and condition of this Section 6(b) are reasonable as
to time, area and scope of restricted activity, necessary to protect the
legitimate interests of the Company, and are not unduly burdensome to Employee.
For a period commencing on the Effective Date and ending nine (9) months
following the effective date of a termination of Employee's employment (for any
reason whatsoever other than termination by the Company without Cause or if the
Company elects not to renew the Term as provided in Section 2 hereof), Employee
shall not, without the written consent of the Company, directly or indirectly
(whether for compensation or otherwise), alone or as officer, director,
stockholder (excepting not more than 1% stockholdings for investment purposes in
securities of publicly held and traded companies), partner, associate, employee,
agent, principal, trustee, salesman, consultant, capacity, take any action in or
participate with or become interested in or associated with the companies
commonly referred to as Xxxx/Pearl, Lenscrafter or Walmart (or any successor
thereto). (Such activities are hereinafter referred to as the "Competitive
Activities").
(c) Antisolicitation. Employee agrees that during the Term of this
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Agreement, and for a period of two (2) years thereafter, he will not influence
or attempt to influence customers (including customers with respect to managed
care plans), vendors or suppliers of the Company or any of its present or future
direct or indirect subsidiaries or affiliates, either directly or indirectly, to
divert their business from the Company or any of its direct or indirect
subsidiaries or affiliates to any individual, partnership, firm, corporation or
other entity then in competition with the business of the Company or any
subsidiary or affiliate of the Company; provided this prohibition shall not
apply to general advertisements in newspaper or other widely distributed
publications, media, or mail, whether electronic or otherwise.
(d) Soliciting Employees. Employee agrees that during the Term of this
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Agreement, and for a period of two (2) years thereafter, he will not, directly
or indirectly, contact or solicit to employ, or employ, any of the then current
or past employees of the Company or any subsidiary or affiliate of the Company
unless such person shall have ceased to be employed by the Company and such
cessation of employment shall have occurred at least twelve (12) months prior
thereto.
(e) Comments Regarding Employer. Employer and Employee agree
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that during Employee's employment and following Employee's separation from
employment with Employer, Employee will not defame, disparage or in any way
malign Employer, its officers, directors or past and present employees to
anyone, including but not limited to prospective employers, competitors, vendors
or suppliers to the employer, and current or former employees
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of the Employer. Employer agrees that it will not defame, disparage or malign
Employee in any way to any third party.
7. Remedies for Breach. In addition to the rights and remedies
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provided in Section 14, and without waiving the same if Employee breaches, or
threatens to breach, any of the provisions of Section 6, the Company shall have
the following rights and remedies, in addition to any others, each of which
shall be independent of the other and severally enforceable:
(i) The right and remedy to have such provisions specifically enforced
by any court having equity jurisdiction together with an accounting for any
benefit or gain by Employee in connection with any such breach. Employee
specifically acknowledges and agrees that any breach or threatened breach of the
provisions of Section 6 will cause irreparable injury to the Company and that
money damages will not provide an adequate remedy to the Company. Such
injunction shall be available without the posting of any bond or other security.
(ii) The right and remedy to require Employee to account for and pay
over to the Company all compensation, profits, monies, accruals, increments or
other benefits (hereinafter collectively the "Benefits") derived or received,
directly or indirectly, by Employee as a result of any transactions constituting
a breach of any of the provisions of Section 6, Employee hereby agreeing to
account for and pay over the Benefits to the Company.
(iii) The right to terminate Employee's employment pursuant to Section
8(c).
(iv) Upon discovery by the Company of a breach or immediate and
material threatened breach of Section 6, the right to immediately suspend
payments to Employee under Section 8, pending a resolution of the dispute.
If any covenant contained in Section 6 or any portion thereof is hereafter
construed to be invalid or unenforceable, the same shall not affect the
remainder of the covenant or covenants contained therein, which shall be given
full effect, without regard to the invalid portions, and any court having
jurisdiction shall reform the covenant to the extent necessary to cause the
limitations contained therein as to time, geographical area and scope of
activity to be restrained to be reasonable and to impose a restraint that is not
greater than necessary to protect the goodwill and other business interest of
the Company and to enforce the covenant as reformed. The parties hereto intend
to and hereby confer jurisdiction to enforce the covenants contained in Section
6 upon the courts of any state or other jurisdiction in which any alleged breach
of any such covenant occurs. If the courts of any of one or more of such states
or other jurisdictions shall hold such covenants not wholly enforceable by
reason of the scope thereof or otherwise, it is the intention of the parties
hereto that such determination not bar or in any way affect the Company's right
to the relief provided above in the courts of any other states or jurisdictions
as to breaches of such covenants in such other respective states or
jurisdictions, and the above covenants as they relate to each state or
jurisdiction being, for this purpose, severable into diverse and independent
covenants.
8. Termination of Agreement.
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(a) Death. This Agreement shall automatically terminate upon the death
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of Employee. During the Term, if Employee's employment is terminated due to his
death,
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Employee's estate shall be entitled to receive the Base Salary set forth in
Section 4 accrued through the date of death; provided, however, Employee's
estate shall not be entitled to any bonus payments (except as otherwise provided
in the applicable bonus plan) or any other benefits (except as provided by law).
(b) Disability. If Employee is unable to perform his services by
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reason of mental or physical Disability (as herein defined), the Company may
terminate this Agreement at any time. Upon termination of Employee's employment
due to Disability, Employee shall be entitled to receive the Base Salary set
forth in Section 4 accrued through the date on which Employee is first eligible
to receive payment of disability benefits under the employee benefit plans as
then in effect, and if no such plan is in effect, through the month ending one
hundred eighty (180) days after onset of Disability and Employee shall not be
entitled to any bonus payments (except as otherwise provided in the applicable
bonus plan) or any other benefits (except as provided by law). The term
"Disability" shall mean an infirmity preventing Employee from performing his
duties for a period of more than three (3) consecutive months where no
reasonable accommodation is available or where a reasonable accommodation would
create an undue burden on the Company. Any question as to the existence of the
Disability of Employee as to which Employee and the Company cannot agree shall
be determined in writing by a qualified independent physician mutually
acceptable to Employee and the Company. If the Employee and the Company cannot
agree as to a qualified independent physician, each shall appoint such a
physician and those two physicians shall select a third who shall make such
determination in writing. The determination of Disability made in writing to
the Company and Employee shall be final and conclusive for all purposes of the
Agreement.
(c) Termination For Cause. The Company may terminate this Agreement at
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any time for "Cause" in accordance with the procedures provided below.
Termination of this Agreement for "Cause" shall mean termination upon (i) the
breach of any material provision of this Agreement by Employee which has not
been rectified or cured within 30 days after notice by the Company to the
Employee containing in reasonably specific detail the violation or breach and
the necessary corrective action to rectify or cure such violation or breach,
(ii) commission of an act punishable by imprisonment, (iii) willful failure to
substantially perform his duties hereunder (other than as a result of total or
partial incapacity due to physical or mental illness) which has not been
rectified or cured within 30 days after notice by the Company to the Employee
containing in reasonably specific detail the acts or omissions complained of and
the necessary corrective action to rectify or cure the matters set forth in such
notice; provided, however, if the actions or omissions that are the subject of
such notice are substantially similar to acts or omissions with respect to which
the Employee has received notice hereunder within the prior 12 months and had an
opportunity to cure or rectify, the Employee shall not be entitled to such
notice and opportunity to cure, (iv) the engaging by Employee in conduct that is
materially injurious to the Company, monetarily or otherwise, including, without
limitation, embezzlement, fraud, theft, dishonesty, misfeasance,
insubordination, malfeasance, and neglect of duties, (v) violation of the
Company's code of conduct or any material violation or repeated violations by
Employee of the other policies and procedures promulgated from time to time by
the Company, or (vi) current alcohol or drug abuse by Employee. In the event of
termination of Employee's employment for Cause, Employee shall be entitled to
receive only the Base Salary set forth in Section 4 accrued through the date of
termination and he shall not be entitled to any bonus payments or other benefits
(except as provided by law).
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(d) Other Termination by the Company. The Company may terminate this
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Agreement at any time without "Cause" by providing written notice to Employee.
If the Company terminates this Agreement at any time without Cause (i.e., other
than pursuant to Section 8(b) or 8(c) above), or the Company elects not to renew
the Term as provided in Section 2 hereof, the Company shall continue to pay
Employee his Base Salary for a period of nine-months following the date of
termination of employment, the timing and manner of such payments to be in
accordance with the salary payment arrangements in effect at the time of such
termination. Employee shall be required to comply with Section 6. It shall be a
condition precedent of payment to Employee of such continued payments pursuant
to this subsection (d) that the Employee execute a full and complete release of
the Company, each of its subsidiaries, affiliates and their respective past,
present and future officers, directors, employees, consultants, attorneys,
agents and shareholders, in form and substance reasonably acceptable to the
Company, of any claims Employee may have against any of them, to the extent such
claims arise from Employee's employment hereunder. Notwithstanding any
provision in this Agreement to the contrary, the Company's obligations to make
payments pursuant to this Section 8(d) shall immediately terminate in the event
that the Employee engages in any of the Competitive Activities (even if Section
6(b) is not applicable due to termination of employment without Cause).
(e) Termination by Employee. Employee may terminate this Agreement
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upon thirty (30) days prior written notice to the Company. Termination shall be
effective at the expiration of the notice period. All obligations of the
Company under this Agreement shall end on the effective date of termination and
the Company shall have no further obligations under this Agreement, including,
but not limited to payment of salary, bonuses or any similar compensation or
benefits. Notwithstanding the notice provided by Employee, the Company, in its
sole discretion, may choose to accept Employee's resignation immediately. In
that event, the Company's only obligation to Employee will be to pay the Base
Salary Employee would have received during the notice period.
(f) Mitigation. Employee shall not be required to mitigate the amount
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of any payment or benefit to be provided pursuant to Section 8(d) ("Severance")
by seeking other employment. However, anything in this Agreement
notwithstanding, if Employee provides services for other than de minimus pay to
anyone other than the Company or any of its subsidiaries or affiliates ("Third
Party Services") during a period in which he is receiving such Severance (the
"Severance Period"), the amount of Severance to be paid to Employee with respect
to such Severance Period shall, beginning on the date such payment for Third
Party Services is received by employee, be reduced by the lesser of (i) fifty
percent (50%) of such Severance payment, or (ii) fifty percent (50%) of such
payment for Third Party Services rendered.
9. Effect of Termination. Upon the termination of this Agreement,
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whether by the expiration of the Term specified in Section 2 or pursuant to
Section 8, the rights of Employee which shall have accrued prior to the date of
such termination shall not be affected in any way. Except as provided in
Section 8(d), Employee shall not have any rights which have not previously
accrued upon termination of this Agreement.
10. Communications. All notices and other communications under this
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Agreement
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shall be in writing and shall be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) when received by
the addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the respective addresses set forth below,
or to such other addresses as either party may have furnished to the other in
writing in accordance herewith, except that notice of a change of address shall
be effective only upon actual receipt; to the Company: the Company, at c/o Eye
Care Centers of America, Inc., 00000 Xxxx Xxxxxx, Xxx Xxxxxxx, Xxxxx 00000-0000,
for the attention of Xxxxxxx Xxxxxxx, President; and to Employee: Xxxxx
Xxxxxx, 000 Xxxx Xxxxxxx, Xxxxxxxxxx, XX 00000.
11. Amendments or Additions. No amendments or additions to this
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Agreement shall be binding unless in writing and signed by all parties hereto.
12. Binding Effect; Assignability. This Agreement shall be binding
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upon, and shall inure to the benefit of, Employee; the obligations of Employee
hereunder are personal and this Agreement may not be assigned by Employee. This
Agreement is completely assignable by the Company without notice to or consent
of Employee. This Agreement shall be binding upon, and shall inure to the
benefit of, the Company and shall also bind and inure to the benefit of any
successor of the Company by merger or consolidation or any assignee of all or
substantially all of its properties.
13. Headings; References. The headings used in this Agreement are
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included solely for convenience and shall not affect, or be used in connection
with, the interpretation of this Agreement. References to a "Section" when used
without further attribution shall refer to the particular sections of this
Agreement.
14. Binding Arbitration. Subject to the rights of any party to seek
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injunctive relief pursuant to Section 7 above and without waiving the same, the
parties agree that all disputes, controversies or claims that may arise among
them (including their agents and employees), arising out of or relating to this
Agreement, or the breach, termination or invalidity thereof, shall be submitted
to, and determined by, binding arbitration. Such arbitration shall be conducted
before a single arbitrator pursuant to the Commercial Arbitration Rules then in
effect of the American Arbitration Association, except to the extent such rules
are inconsistent with this Section 14. Any arbitration between the parties shall
take place at a location agreeable to the parties but located in the state of
Kentucky. The arbitrator shall apply the laws of the State of Texas (without
regard to conflict of law rules) in determining the substance of the dispute,
controversy or claim and shall decide the same in accordance with applicable
usages and terms of trade. The fees of the arbitration initially shall be paid
one-half by the Company and one-half by Employee; provided, however, that the
prevailing party in any such arbitration shall be entitled to recover its
reasonable attorneys' fees, costs and expenses incurred in connection with the
arbitration. Any award pursuant to such arbitration shall be final and binding
upon the parties, and judgment on the award may be entered in any federal or
state court sitting in any court having jurisdiction. The obligations set forth
in this Section 14 shall survive the termination of this Agreement. THE COMPANY
AND EMPLOYEE EACH KNOWINGLY AND VOLUNTARILY GIVE UP ANY RIGHT TO A TRIAL BY JURY
IN CONNECTION WITH ANY DISPUTE, CLAIM OR CONTROVERSY WHICH MAY ARISE BETWEEN
THEM.
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15. Miscellaneous. No provision of this Agreement may be modified,
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waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by Employee and such officer as may be specifically
designated by the Board. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a
waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not expressly set forth in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Texas without regard to its conflicts of law
principles.
16. Surviving Provisions. The obligations of the Company under Section
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8, of Employee under Section 6, and of both the Company and Employee under
Section 14 shall survive the expiration of the Term of this Agreement.
17. Entire Agreement. This Agreement shall constitute the entire
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agreement between the parties superseding all prior agreements and all other
negotiations, letter of intent, memoranda of understandings, and representations
(if any) made by and among such parties, and may not be modified or amended, and
no waiver shall be effective, unless by written document signed by both parties
hereto. Notwithstanding its foregoing, the parties agree that the provisions of
Section 6 shall be in addition to, and shall not supersede, similar provisions
contained in the Stock Purchase Agreement. The Company and Employee have each
had an opportunity to consult with counsel of their choice regarding the terms
and conditions of this Agreement, and each understands the consequences of
entering into and complying with the terms and conditions of the Agreement.
18. Pronouns. In this Agreement, the use of any gender shall be deemed
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to include all genders, and the use of the singular shall include the plural,
wherever it appears appropriate from the context.
19. Enforcement Costs. If any legal action or other proceeding,
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including arbitration, is brought for the enforcement of this Agreement, or
because of an alleged dispute, breach, default or misrepresentation in
connection with any provisions of this Agreement, the prevailing party or
parties shall be entitled to recover reasonable attorneys' fees, court costs and
all expenses even if not taxable as court costs, incurred in that action or
proceeding, in addition to any other relief to which such party or parties may
be entitled.
20. Severability. The provisions of this Agreement shall be deemed
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severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof. Except
that to the extent any court determines that Section 6 is invalid or
unenforceable, in this event the Company shall be relieved of its payment
obligations to Employee under Section 8.
21. Indemnification. Employee shall be entitled to indemnification, in
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has capacity as an officer of the Company in accordance with the provisions of
the Company's certificate of incorporation, bylaws or actions of the Board, as
the same shall be in effect from time to time, and Employee shall be entitled to
the protection of any insurance policies the Company may elect to maintain
generally for the benefit of its officers or directors.
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22. Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed to be an original and all of which,
taken together, shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the
day and year first above written.
Eye Care Centers of America, Inc.
By: ___________________________
Xxxxxxx X. Xxxxxxx
Chairman & Chief Executive Officer
This signatory hereto on behalf of Company warrants and represents that he is
duly authorized to execute this Agreement and that all necessary corporate and
legal formalities have been complied with.
EMPLOYEE:
_______________________________
Xxxxx Xxxxxx
VP Operations
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