AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
AMENDED AND RESTATED EMPLOYMENT AGREEMENT dated [to be dated as of closing]
_________, 1997 among XXXXXX XXXXXX, INC., a Delaware corporation ("Company"),
XXXXXX BAILLY CONSULTING, INC., a Delaware corporation ("Consulting"), XXXXXX
XXXXXX SERVICES, INC., a Delaware corporation ("Services") and XXXXX-XXXXXX X.
XXXXXX ("Executive").
WHEREAS, the Company, Services and Executive entered into an Employment
Agreement on May 25, 1995 with respect to Executive's employment with Company
and Services; and
WHEREAS, Services was formerly named Xxxxxx Bailly Consulting, Inc. and
upon the name change to Services, Consulting, a new subsidiary of the Company,
was formed; and
WHEREAS, Executive is no longer an officer of Services and was elected
Chairman, Managing Director, President and Chief Executive Officer of
Consulting; and
WHEREAS, the Company, Consulting, Services and Executive mutually desire to
amend and restate the original Employment Agreement pursuant to the terms set
forth herein.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, Company, Consulting and Executive, intending to be legally bound,
agree as follows:
1. Employment and Term. Company agrees to employ Executive and Executive
agrees to serve Company as Chairman, President and Chief Executive Officer of
Company, and Consulting agrees to employ Executive and Executive agrees to serve
Consulting as Chairman, Managing Director, President and Chief Executive Officer
of Consulting, or in such other executive position as may be mutually agreed
upon by Executive and Company or Consulting, during the Term (as defined below).
Subject to the provisions of this Agreement to the contrary, the term of this
Agreement (the "Term") shall commence on the date hereof, and end on the date
which is the third-year anniversary thereof, or such later date to which
Executive's employment may be extended as provided in Section 10.
2. Duties. During the Term, Executive agrees to serve Company and
Consulting faithfully and to the best of his ability; to devote his entire time,
energy and skill during regular business hours (except for illness or incapacity
and except for vacation time as provided herein) to such employment; to use his
best efforts, skills and ability to promote its interests; if elected, to serve
as a director of Company and its subsidiaries or affiliated
corporations or entities; and to perform such duties as from time to time may be
assigned to him, subject to Section 3 hereof. Notwithstanding the foregoing,
Executive may continue to serve on the Board of Directors of TXN, Inc. and
Resource Capital Associates, Inc., and may engage in charitable and public and
industry service activities so long as such activities do not materially
interfere with the performance of his duties and responsibilities under this
Agreement. During the Term, Executive shall serve as a member of the Board of
Directors of Company (the "Company Board") and the Board of Directors of
Consulting (the "Consulting Board").
3. Responsibilities. Executive's area of responsibility shall be that of
Chairman, President and Chief Executive Officer of Company and as Chairman,
Managing Director, President and Chief Executive Officer of Consulting, or such
other executive position as may be mutually agreed upon by Executive and Company
or Consulting, and during the Term, Company shall not assign any duties to or
remove any duties from Executive inconsistent therewith and, further, Company
and Consulting shall at all times provide Executive with such executive powers
and authority as shall reasonably be required to enable him to discharge such
duties in an efficient manner, together with such facilities and services as are
suitable or customary to such position.
4. Compensation. Company agrees to pay Executive as compensation for all
duties performed by him in any capacity during the period of his employment
under this Agreement:
a. base salary ("Base Salary"), payable in equal bi-weekly installments,
at the rate set forth in Appendix 1 attached to this Agreement and made a part
hereof ("Appendix 1");
b. a bonus (the "Bonus") as set forth in Appendix 1;
c. option to purchase 25,000 shares of Common Stock of the Company the
terms of which (including a vesting schedule) are set forth in resolutions
adopted by the Board of Directors of the Company on January 17, 1997.
d. from time to time, Executive shall also be eligible to receive
options to purchase Common Stock of the Company pursuant to the terms of the
Xxxxxx Xxxxxx, Inc. Employee Incentive Non-Qualified Stock Option and Restricted
Stock Plan of the Company or any successor plan, and in the amounts determined
by, and subject to the terms and conditions of, the Stock Option Committee of
the Board of Directors of the Company.
5. Benefits; Reimbursement of Expenses; Vacation. Executive shall also be
entitled to:
a. participate in all of the benefit programs which are presently or may
hereafter be provided by Company, including, without limitation, all stock
option, pension, thrift, employee stock ownership, incentive, retirement, in
each case to be made without regard to
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any policy or agreement that would otherwise require the deferral of any bonus,
health insurance and life insurance programs ("benefit programs");
b. reimbursement by Company of all expenses reasonably incurred by him
in connection with the performance of his duties, including, without limitation,
travel and entertainment expenses reasonably related to the business or
interests of Company; upon submission by him of written documentation of such
expenses;
c. a fully-paid annual physical examination; and
d. the other benefits set forth in Appendix 1.
6. Disability or Death.
a. If, during the Term of this Agreement, Executive becomes disabled or
incapacitated for a period of twelve (12) consecutive months to such an extent
that he is unable to perform his duties hereunder ("Permanently Disabled"),
Company shall have the right at any time thereafter, so long as Executive is
then still Permanently Disabled, to terminate this Agreement. If Company elects
to terminate this Agreement by reason of Executive becoming Permanently
Disabled, Company, for the unexpired Term of this Agreement, shall continue to
pay;
(1) to Executive, sixty percent (60%) of his Base Salary (whether
through insurance or otherwise) at the rate in effect on the date of such
termination, such payments to be made as set forth in Section 4;
(2) in the event of Executive's death after such termination for
Permanent Disability, then to the persons and in the manner set forth in
subparagraph (c) of this Section 6, an amount per annum equal to sixty percent
(60%) of Executive's Base Salary (whether through insurance or otherwise) at the
rate in effect on the date this Agreement is terminated by Company, such
payments to be made as set forth in Section 4; or
(3) if, and so long as, Company does not elect to terminate this
Agreement as a result of Executive's Permanent Disability, this Agreement shall
continue in full force and effect and Executive shall be entitled to all
benefits including compensation as set forth herein.
b. If the Executive dies during the Term, this Agreement shall
automatically terminate, except that for the unexpired portion of the Term
Company shall continue to pay to the persons and in the manner set forth in
subparagraph (c) of this Section 6, an amount per annum equal to sixty percent
(60%) of Executive's Base Salary in effect on the date of Executive's death,
such payments to be made as set forth in Section 4.
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c. Any payments to be made pursuant to subparagraph (a) or (b) of this
Section 6 to persons other than Executive in the event of the death of Executive
shall be made to Executive's designated beneficiaries or, if no such designation
has been made and Executive's spouse survives Executive, then the payments shall
be made to Executive's spouse, and if such spouse subsequently dies before all
such payments are made, the remaining payments shall be made to the estate of
Executive's spouse. If Executive is not survived by a spouse, then the payments
shall be made among Executive's issue who survive Executive, per stirpes, and if
any individual who is issue of Executive and who as of the date of death of
Executive is entitled to receive payments dies after Executive's death, the
payments which such issue would have been entitled to receive shall be made to
his or her estate. If at the date of Executive's death Executive is not survived
by any spouse, or any issue, then the payments shall be made to Executive's
estate.
d. To the extent there is keyman insurance on the life of the Executive
and so long as the Stockholders Agreement between the Company and its
stockholders, dated May 15, 1995 (as amended, the "Stockholders Agreement")
remains in effect, the proceeds shall be dedicated to stock redemption under the
Stockholders Agreement and not to payment of amounts under this Section 6.
7. Termination. In addition to the provisions of Section 1 hereof, this
Agreement may be terminated prior to the expiration of its Term as follows:
a. Automatically upon Executive's death, in which event the provisions
of Section 6 shall continue to be applicable;
b. Upon notice from the Company upon Executive's Permanent Disability,
in the event Company elects to terminate Executive's employment pursuant to the
provisions of Section 6;
c. Upon sixty (60) days' prior written notice from Company for "cause,"
which for purposes hereof shall mean conduct of the Executive involving any type
of disloyalty to Company, including without limitation theft, fraud,
embezzlement, proven dishonesty, physical violence, or the influence of drugs or
alcohol;
d. Upon notice from Executive upon Company's breach of any material
provision of this Agreement. Without limiting the generality of the foregoing,
it is acknowledged and agreed that Sections 2, 3, 4 and 5 of this Agreement are
material provisions of this Agreement;
e. Upon notice from Executive upon Company's failure to pay Executive
amounts under Section 4 when due;
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f. Upon notice from Executive following a "change in control" (as
defined in Appendix 1).
8. Wrongful Termination; Company Breach; Change in Control. In the event of
the termination of this Agreement by Executive pursuant to paragraph (d), (e) or
(g) of Section 7, or in the event of the termination of this Agreement by
Company other than pursuant to either a notice of non-renewal under Section 10
or a notice of termination under paragraph (b) or (c) of Section 7, Executive
shall be entitled to receive all of the compensation and benefits provided
herein until the later of (i) the date the Term would have expired absent any
termination of this Agreement, or (ii) thirty six (36) months from the effective
date of such termination (such later date being herein referred to as the "Final
Payment Date"). If Company and Executive shall become involved in a dispute
relating to any alleged breach of this Agreement by Company or Executive, and if
Executive prevails (by judgment, settlement or otherwise) in such dispute,
Company shall reimburse Executive for all reasonable costs (including reasonable
fees and disbursements of counsel) incurred by him in connection with such
dispute upon presentation to Company of evidence of such costs.
9. Termination of Prior Agreements. This Agreement expressly supersedes all
agreements and understandings between the parties regarding the subject matter
hereof and any such agreement is terminated as of the date first above written.
10. Renewal/Nonrenewal. This Agreement shall be automatically extended
without further action by the parties for one additional year unless either
party shall, at least 90 days prior to the expiration date or the expiration
date as so extended, have given notice to the other party that this Agreement
shall not be so extended. Upon notification by Company that this Agreement is
not to be extended or renewed, Executive shall be entitled to continue to
receive for a period of twelve (12) months commencing on the expiration of the
Term, all of the compensation and benefits provided for herein.
11. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto, their respective legal representatives and to any
successor of Company, which successor shall be deemed substituted for company
under the terms of this Agreement. As used in this Agreement, the term
"successor" shall include any person, firm, corporation or other business entity
which at any time, whether by merger, purchase or otherwise, acquires all or
substantially all of the assets or business of Company.
12. Waiver of Breach. The waiver by Company of a breach of any provision of
this Agreement by Executive shall not operate or be construed as a waiver of any
subsequent breach.
13. Notices. Any notice required or permitted to be given hereunder shall
be sufficient if in writing and if sent by registered or certified mail to
Executive at his residence or to Company at its principal place of business.
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14. Entire Agreement. This document contains the entire agreement of the
parties and may not be changed except in a writing signed by both parties.
15. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Virginia as applied to contracts
executed and performed wholly within the State of Virginia.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.
XXXXXX XXXXXX, INC.
[to be signed as of closing]
By:__________________________________
Name:
Title:
XXXXXX BAILLY CONSULTING, INC.
[to be signed as of closing]
By:__________________________________
Name:
Title:
XXXXXX XXXXXX SERVICES, INC.
[to be signed as of closing]
By:__________________________________
Name:
Title:
[to be signed as of closing]
_____________________________________
XXXXX-XXXXXX X. XXXXXX
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HB CAPITAL, INC., hereby jointly and severally with Company and Consulting,
guarantees and agrees to act as sureties for the prompt and full performance and
payment by Company and Consulting of all of the obligations of Company and
Consulting under this Agreement as and when due to be paid and performed.
HB CAPITAL, INC.
[to be signed as of closing]
By:__________________________________
Name:
Title:
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APPENDIX 1 TO AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
(THE "AGREEMENT")
between
XXXXXX XXXXXX, INC.
and
XXXXXX BAILLY CONSULTING, INC.
and
XXXXXX XXXXXX SERVICES, INC.
and
XXXXX-XXXXXX X. XXXXXX
Dated ___________, 1997
As used in this Appendix, all terms not otherwise specifically defined
herein shall have the meanings given in the Agreement. Any reference in this
Appendix or in the Agreement to the term "Agreement," "herein," "hereof" or the
like shall be deemed to refer to the Agreement, including this Appendix.
1. Base Salary. The Base Salary payable to Executive pursuant to Section 4
of the Agreement shall be paid at an initial annual rate of $375,000 commencing
on the date hereof. On January 1 of each year during the Term commencing January
1, 1998, the annual rate of Base Salary shall be increased by no less than the
greater of five percent (5%) over the annual rate of Base Salary in effect for
the preceding year, and the increase in the CPI National Index for the year.
2. Bonus.
a. A Bonus payment shall be made to Executive for each calendar year
during the Term (including the 1997 year) in an amount determined by the
Executive Compensation Committee of the Company Board.
b. In the event of termination of the Agreement pursuant to paragraph
(a) or (b) of Section 7 of the Agreement, then in lieu of a Bonus under Section
4(b) of the
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Agreement for the year in which such termination occurs ("Termination Year"),
Executive shall be entitled to receive a Termination Bonus (as defined in
paragraph (d) below), payable when Company's management employees have
customarily received their annual bonus payments. The Termination Bonus shall be
reduced on a pro rata basis in the event of termination of the Agreement prior
to the end of the Termination Year.
c. In the event of termination of the Agreement by Executive pursuant to
paragraph (d), (e), (f) or (g) of Section 7 of the Agreement, or in the event of
the termination of the Agreement by Company other than pursuant to paragraph
(a), (b) or (c) of said Section 7, then in lieu of any Bonus for the Termination
Year and any subsequent year until and including the year in which the Final
Payment Date occurs, Company shall pay Executive a Termination Bonus for each
such full or partial year, payable immediately upon such termination. The
Termination Bonus shall be reduced on a pro rata basis for any year in respect
of which such Termination Bonus is being paid which is less than a full year.
d. For purposes hereof, the term "Termination Bonus" shall mean an
amount equal to the "Average Percentage" (as defined below) multiplied by the
Base Salary in effect as of the date of termination of the Agreement. For
purposes hereof, the "Average Percentage" shall mean that number (expressed as a
percentage) derived by dividing (i) the aggregate bonuses paid by Company to
Executive (whether pursuant to this Agreement or otherwise) during the three
calendar years immediately preceding the Termination Year (or such lesser number
of years for which Executive has received bonus compensation from Company) by
(ii) the aggregate Base Salary paid during the same period utilized in clause
(i).
3. Member of Board of Directors. During the Term, unless Executive elects
not to serve as a member of the Company Board the Consulting Board, Company
shall cause all securities entitled to vote in the election of Company's and
Consulting.'s directors to be voted for the election of Executive as a director
of the Company Board and the Consulting Board, respectively. So long as the
Stockholders Agreement remains in effect and so long as Executive has a Common
Equity Percentage (as defined in the Stockholders Agreement) of at least eight
and one-half percent (8-1/2%), Executive shall serve on the Company Board until
1999 or such later date as to which Executive may be nominated. So long as
Executive is a member of the Company Board, the Consulting Board or the board of
directors of any of Company's other subsidiaries or affiliated companies,
Executive shall receive such compensation and other benefits (including
insurance coverage and indemnification) as other similarly situated members of
such board of directors receive for their service in such capacity.
4. Change of Control. For purposes hereof, the term "change in control"
shall mean any of the following events:
a. if any "Person" (as the term person is used for purposes of Sections
13(d) or 14(d) of the 0000 Xxx) shall have "Beneficial Ownership" (as the term
beneficial ownership is used for purposes of Rule 13d-3 promulgated under the
0000 Xxx) of thirty three
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percent (33%) or more of the combined voting power of Company's then outstanding
voting securities ("Voting Securities"), at any time that the Beneficial
Ownership of Voting Securities of Company by such Person exceeds Executive's
Beneficial Ownership of Voting Securities of Company;
b. the approval by stockholders of Company of (A) a merger,
reorganization or consolidation involving Company if the stockholders of Company
immediately before such merger, reorganization or consolidation, do not or will
not own directly or indirectly immediately following such merger, reorganization
or consolidation more than fifty percent (50%) of the combined voting power of
the outstanding voting securities of the corporation resulting from or surviving
such merger, reorganization or consolidation in substantially the same
proportion as their ownership of the Voting Securities of Company immediately
before such merger, reorganization or consolidation or (B) (1) a complete
liquidation or dissolution of Company or (2) an agreement for the sale or other
disposition of all or substantially all of the assets of Company; or
c. the acceptance by stockholders of Company of shares in a share
exchange if the stockholders of Company immediately before such share exchange,
do not or will not own directly or indirectly immediately following such share
exchange more than fifty percent (50%) of the combined voting power of the
outstanding voting securities of the corporation resulting from or surviving
such share exchange in substantially the same proportion as the ownership of the
Voting Securities of Company outstanding immediately before such share exchange.
5. Arbitration. In the event of any dispute between the parties under or
relating to this Agreement or otherwise relating to Executive's employment by
Company, such dispute shall be submitted to and settled by arbitration in
Arlington, Virginia, in accordance with the rules and regulations of the
American Arbitration Association then in effect. The arbitrators shall have the
right and authority to determine how their award or decision as to each issue
and matter in dispute may be implemented or enforced. Any decision or award
shall be final and conclusive on the parties; judgment upon any award or
decision may be entered in any court of competent jurisdiction in the
Commonwealth of Virginia or elsewhere; and the parties hereto consent to the
application by any party in interest to any court of competent jurisdiction for
confirmation or enforcement of such award.
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