Exhibit 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is entered into as of
January 12, 2001 by and between Xxxxxx Group, Inc., a Delaware corporation
("Xxxxxx Group" or the "Company") and Xx. Xxxx X. Xxxxxx ("Xx. Xxxxxx").
RECITALS
WHEREAS, Xx. Xxxxxx is the President and Chief Executive Officer of Xxxxxx
Group reporting to the Board of Directors and an integral part of its
management who participates in the decision-making process relative to short
and long-term planning and policy for Xxxxxx Group; and
WHEREAS, Xxxxxx Group has determined that it would be in the best interests
of Xxxxxx Group and its stockholders to assure continuity in the management
of Xxxxxx Group's operations by entering into an employment agreement to
retain the services of Xx. Xxxxxx; and
WHEREAS, Xxxxxx Group wishes to assure itself of the continued services of
Xx. Xxxxxx, and Xx. Xxxxxx is willing to be employed by Xxxxxx Group upon the
terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the obligations
undertaken by the parties pursuant hereto and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Xxxxxx Group and Xx. Xxxxxx agree as follows:
1. DEFINITIONS. The defined terms used in this Agreement shall have the
meanings ascribed to them in this Section 1.
1.1 BOARD OF DIRECTORS. "Board" or the "Board of Directors" shall mean the
Board of Directors of Xxxxxx Group or any committee of the Board empowered to
act or make decisions or determinations with respect to this Agreement.
1.2 CAUSE. "Cause" shall mean that, as described below, Xx. Xxxxxx has
engaged in any act of gross misconduct that is injurious to Xxxxxx Group or
its business:
(a) Any act by Xx. Xxxxxx of dishonesty, misconduct, fraud,
misappropriation, embezzlement, theft, moral turpitude or the like;
(b) Insubordination by Xx. Xxxxxx (e.g., refusal to perform the duties
or responsibilities assigned to him by the Company), unsatisfactory
performance of any such duties or responsibilities, or dereliction of duty; or
(c) A material breach of this Agreement or violation of any material
provision of this Agreement.
1.3 CHANGE IN CONTROL. "Change in Control" shall mean:
(a) if any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing 40 percent
or more of the combined voting power of the Company's then outstanding
securities; or
(b) if individuals who, as of the date hereof, constitute the Board
(the "Incumbent Board") cease for any reason to constitute more than 50
percent of the members of the Board; provided, however, that any individual
becoming a director subsequent to the date hereof whose election or
nomination for election by Xxxxxx Group's stockholders was approved by a vote
of at least two-thirds of the directors then constituting the Incumbent
Board, shall be considered as though such individual were a member of the
Incumbent Board; or
(c) if stockholders of the Company approve a merger, consolidation, or
reorganization of the Company with or into another corporation or other legal
person, and as a result of such merger, consolidation or reorganization less
than 51% of the combined voting power of the then outstanding securities of
the remaining corporation or legal person or its ultimate parent immediately
after such transaction is owned by persons who were stockholders of the
Company immediately prior to such merger, consolidation, or reorganization; or
(d) if stockholders of the Company approve a sale or disposition of all
or substantially all of the Company's assets to any other corporation or
other legal person, and as a result of such sale less than 51% of the
combined voting power of the then outstanding securities of such corporation
or legal person or its ultimate parent immediately after such transaction is
owned by persons who were stockholders of the Company immediately prior to
such sale or disposition; or
(e) if stockholders of the Company approve a plan of liquidation or
dissolution of the Company; or
(f) any occurrence that would be required to be reported in response to
Item 6(e) of Schedule 14A of Regulation 14A or any successor rule or
regulation promulgated under the Exchange Act.
1.4 COMMON STOCK. "Common Stock" shall mean the common stock of Xxxxxx
Group, par value $.01 per share.
1.5 DISABILITY. "Disability" shall mean the inability of Xx. Xxxxxx to
perform his material managerial duties and responsibilities as contemplated
under Section 2 during his employment with Xxxxxx Group, with or without a
reasonable accommodation, for a consecutive period of three (3) months or a
non-consecutive period of six (6) months within any twelve- (12) month
period. The Company will comply with the requirements of the Americans with
Disabilities Act with respect to attempting to reach a reasonable
accommodation. The existence of Disability and the date of commencement of
Disability shall be determined in accordance with Section 5.1(e).
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1.6 GOOD REASON. "Good Reason" shall mean Xx. Xxxxxx'x decision to terminate
his employment under this Agreement if Xxxxxx Group or any successor commits
any material breach of this Agreement, or the diminishment of Xx. Xxxxxx'x
base salary below $425,000, or the diminishment in Xx. Xxxxxx'x work
responsibilities below those of President and Chief Executive Officer.
1.7 TERM OF EMPLOYMENT. "Term of Employment" shall mean the period of time
commencing January 12, 2001 and continuing until January 12, 2004, during
which Xx. Xxxxxx is to remain in the employ of Xxxxxx Group; PROVIDED,
HOWEVER, that Xx. Xxxxxx and Xxxxxx Group can agree, in writing, to extend
the Term of Employment.
2. EMPLOYMENT. Xxxxxx Group employs Xx. Xxxxxx and Xx. Xxxxxx accepts
employment by Xxxxxx Group as President and Chief Executive Officer of Xxxxxx
Group for the Term of Employment on the terms and conditions and for the
compensation set forth in this Agreement. Subject to the authority of the
Board of Directors, Xx. Xxxxxx shall be responsible for the overall
operations of Xxxxxx Group in the ordinary course of its business with all
such powers as may be reasonably incident to such responsibilities as its
President and Chief Executive Officer. Xx. Xxxxxx shall devote his full time
and effort to the discharge of his duties as Xxxxxx Group's President and
Chief Executive Officer.
3. COMPENSATION AND BENEFITS DURING THE TERM OF EMPLOYMENT.
3.1 BASE COMPENSATION. Xx. Xxxxxx shall receive base compensation ("Base
Compensation") in the amount determined by the Nominating, Corporate
Governance and Compensation Committee of the Board of Directors (the
"Compensation Committee"). The amount of Xx. Xxxxxx'x Base Compensation
shall initially be $425,000 annually and shall be reviewed annually by the
Compensation Committee, no later than March 30 of each year. Xxxxxx Group
shall pay Base Compensation to Xx. Xxxxxx in equal monthly installments.
3.2 INCENTIVE COMPENSATION ARRANGEMENT. In further consideration of Xx.
Xxxxxx'x performance of services under Section 2, Xxxxxx Group agrees to
compensate Xx. Xxxxxx under the incentive compensation arrangement set forth
in the document entitled "Incentive Compensation for Xxxx X. Xxxxxx." The
computation of annual incentive compensation will be based upon the audited
financial results of Xxxxxx Group. Xxxxxx Group shall pay the incentive
compensation to Xx. Xxxxxx within fifteen (15) days following completion of
the audit of Xxxxxx Group's financial statements by the Company's certified
public accountants, and no later than April 15 of each year. Except as
contemplated by Exhibit I, Xx. Xxxxxx must be on the active payroll at the
time an incentive award is paid, in order to be eligible to receive an award.
3.3 TRAVEL COSTS. Xxxxxx Group shall reimburse Xx. Xxxxxx for all
reasonable travel costs incurred by Xx. Xxxxxx in connection with Xxxxxx
Group's business, together with all other reasonable business expenses of Xx.
Xxxxxx in performing his duties.
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3.4 AUTOMOBILE EXPENSES. Xxxxxx Group shall provide Xx. Xxxxxx a monthly
car allowance in the amount of $1,400.
3.5 INSURANCE; BENEFIT PLAN PARTICIPATION. Xx. Xxxxxx shall be entitled to
participate in Xxxxxx Group's 401(k) and deferred compensation plans, subject
to the terms and conditions of such plans. Xxxxxx Group also shall provide
medical, disability and life insurance coverage to Xx. Xxxxxx on the terms
and conditions of each of the plans Xxxxxx Group maintains. Xxxxxx Group
will purchase term insurance covering Xx. Xxxxxx, payable to Xx. Xxxxxx'x
designated beneficiaries (or to his estate) in the case of death while in the
employment of Xxxxxx Group. Such term insurance will have a face value of $1
million and Xxxxxx Group will pay the annual premiums while Xx. Xxxxxx is in
the employ of Xxxxxx Group.
3.6 STOCK OPTIONS. During the Term of Employment, Xxxxxx Group will grant
Xx. Xxxxxx options to purchase 300,000 shares of Xxxxxx Group Common Stock.
Such options will be granted in three tranches: 100,000 on January 12, 2001,
an additional 100,000 on January 12, 2001, and an additional 100,000 on
January 12, 2001. Each grant will have a one-year vesting period. At the
discretion of the Compensation Committee, additional options may be granted
on each anniversary date of this Agreement. The exercise price for each
option shall be 100% of the fair market value of the Common Stock on the date
of grant.
3.7 RELOCATION COSTS. Xxxxxx Group will reimburse Xx. Xxxxxx for the
direct costs of moving Xx. Xxxxxx and his family to Dallas, Texas. Such
reimbursement will be grossed up for taxes. Xx. Xxxxxx will receive a
$500,000 loan from the Company, documented by a promissory note. The Company
will pay interest on the promissory note, grossed up for taxes, until Xx.
Xxxxxx sells his residence in Florida, at which time Xx. Xxxxxx will repay
the promissory note in full.
The Company will pay all costs of Xx. Xxxxxx'x residence in Florida
(mortgage, taxes, utilities, insurance, and maintenance), grossed up for
taxes, once Xx. Xxxxxx closes on his residence in Texas and until Xx. Xxxxxx
sells his residence in Florida. Xx. Xxxxxx agrees to use all reasonable
efforts to sell his residence in Florida.
The Company will pay all closing costs of buying and selling Xx. Xxxxxx'x
Texas and Florida residences, grossed up for taxes, and will pay customary
points for the purchase of the Texas residence.
4. TERM OF THE AGREEMENT. The term of this Agreement, unless terminated
sooner pursuant to Section 5, shall be for the Term of Employment.
5. TERMINATION; DISABILITY; DEATH; CHANGE IN CONTROL.
5.1 BASIS. Xx. Xxxxxx'x employment under this Agreement may be terminated
as described in this Section 5.1. In the event that Xx. Xxxxxx'x employment
is terminated, Xx. Xxxxxx shall be entitled to receive the benefits described
in Section5.2 that correspond with the manner of such termination.
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(a) TERMINATION WITHOUT CAUSE. Xxxxxx Group may terminate Xx. Xxxxxx'x
employment without Cause by written notice to Xx. Xxxxxx to that effect.
Unless otherwise specified in the notice, such termination shall be effective
immediately.
(b) TERMINATION WITH CAUSE. Xxxxxx Group may terminate the employment of
Xx. Xxxxxx for Cause by written notice to Xx. Xxxxxx to that effect. Unless
otherwise specified in the notice, such termination shall be effective
immediately.
(c) GOOD REASON. Upon the occurrence of an event constituting Good Reason
as described in Section 1.6, Xx. Xxxxxx may terminate his employment for Good
Reason within 30 days thereafter upon written notice to Xxxxxx Group to that
effect. If the effect of the occurrence of the event described in Section
1.6 may be cured, Xxxxxx Group shall have the opportunity to cure any such
effect for a period of 30 days following receipt of Xx. Xxxxxx'x termination
notice. The right of Xx. Xxxxxx to terminate his employment for Good Reason
under this Section 5.1(c) shall not limit Xxxxxx Group's ability to terminate
Xx. Xxxxxx for Cause under Section 5.1(b), if Cause is determined to exist
prior to the time Xx. Xxxxxx delivers to Xxxxxx Group his written notice of
termination for Good Reason.
(d) WITHOUT GOOD REASON. Xx. Xxxxxx may voluntarily terminate his
employment without Good Reason upon written notice to Xxxxxx Group to that
effect.
(e) DISABILITY. Xx. Xxxxxx or Xxxxxx Group may terminate Xx. Xxxxxx'x
employment by reason of Disability, immediately upon written notice to the
other party to that effect. If the parties are unable to agree as to the
existence of Disability or as to the date of commencement of Disability, each
of Xx. Xxxxxx and Xxxxxx Group shall select a physician licensed to practice
medicine in the United States and the determination as to any such question
shall be made by such physicians; PROVIDED, HOWEVER, that if such two
physicians are unable to agree, they shall mutually select a third physician
licensed to practice medicine in the United States and the determination as
to any such question shall be made by a majority of such physicians. Any
determination made by such physicians in accordance with the provisions of
the immediately foregoing sentence shall be final and binding on the parties.
Xx. Xxxxxx agrees to submit to any and all reasonable medical examinations
or procedures and to execute and deliver any and all consents to release of
medical information and records or otherwise as shall be reasonably required
by any of the physicians selected in accordance with this Section 5.1(e).
Unless otherwise specified in the notice, such termination shall be effective
immediately.
(f) DEATH. This Employment Agreement shall automatically terminate as of
the date of Xx. Xxxxxx'x death.
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(g) CHANGE IN CONTROL. Following a Change in Control, Xx. Xxxxxx shall be
required to continue his employment under this Agreement for 90 days after
the date of such Change in Control, unless his employment is terminated
sooner by Xxxxxx Group as set forth in Section 5.1(h). In the event that Xx.
Xxxxxx decides to resign or otherwise voluntarily terminate his employment
following the occurrence of a Change in Control, Xx. Xxxxxx may do so by
giving written notice to Xxxxxx Group to that effect on or before 90 days
after the occurrence of the Change in Control. If Xx. Xxxxxx does not give
such notice to Xxxxxx Group, this Agreement will remain in effect; PROVIDED,
HOWEVER, that the failure of Xx. Xxxxxx to terminate this Agreement following
the occurrence of a Change in Control shall not be deemed a waiver of Xx.
Xxxxxx'x right to terminate his employment upon a subsequent occurrence of a
Change in Control in accordance with the terms of this subsection.
(h) Notwithstanding that Employee has given notice of termination pursuant
to Section 5.1(g), Xxxxxx Group may, in its sole discretion, thereafter
require Xx. Xxxxxx to terminate his employment prior to the expiration of the
applicable notice period.
5.2 BENEFITS UPON TERMINATION. Xx. Xxxxxx shall receive the benefits
described in the subsection below that corresponds with the manner of
termination of Xx. Xxxxxx'x employment under Section 5.1.
(a) WITHOUT CAUSE. In the event Xxxxxx Group terminates Xx. Xxxxxx'x
employment without Cause, Xx. Xxxxxx shall be entitled to the payments and
benefits set forth on Exhibit I.
(b) WITH CAUSE. In the event Xx. Xxxxxx'x employment is terminated with
Cause, no further payments or benefits shall be paid or provided by Xxxxxx
Group to Xx. Xxxxxx except for reimbursement for expenses incurred prior to
the date of termination, or the payment of incentive compensation that has
become due and payable to Xx. Xxxxxx on or before the date of such
termination under Section 3.2. In addition, Xx. Xxxxxx shall be entitled to
exercise any vested but unexercised stock options for a period of 90 days
following the effective date of the termination for Cause, and if any such
options remain unexercised upon the expiration of such 90-day period, they
shall be determined forfeited.
(c) GOOD REASON. In the event Xx. Xxxxxx terminates his employment for Good
Reason, Xx. Xxxxxx shall be entitled to the payments and benefits set forth
on ExhibitI.
(d) WITHOUT GOOD REASON. In the event Xx. Xxxxxx terminates his employment
without Good Reason pursuant to Section 5.1(d), Xx. Xxxxxx shall be entitled
to the benefits or payments provided for in Section 5.2(b).
(e) DISABILITY. In the event that Xx. Xxxxxx'x employment is terminated by
reason of Disability, Xx. Xxxxxx shall be entitled to the payments and
benefits set forth on ExhibitI. Additionally, Xx. Xxxxxx or the estate,
beneficiary or legal representative of Xx. Xxxxxx shall be entitled to
disability benefits available under benefit plans maintained by the Company
at the time of such Disability.
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(f) DEATH. In the event Xx. Xxxxxx'x employment is terminated by reason of
his death, Xxxxxx Group shall not be required to make any payments or provide
any benefits, except for (a) reimbursement for expenses incurred prior to
such termination date and (b) payment of incentive compensation through such
termination date as provided in Section 3.2, PROVIDED, HOWEVER, that nothing
contained herein shall limit or diminish any rights of Xx. Xxxxxx'x estate or
any other person to payments under any life insurance policy maintained by
Xxxxxx Group for the benefit of Xx. Xxxxxx or his beneficiaries or any
health, disability or other benefit plan provided pursuant to Section 3.5, in
each case in accordance with the terms of such plan. If Xx. Xxxxxx'x
employment is terminated by reason of his death, the benefits provided under
this Section 5.2(f) shall be paid to the beneficiary or beneficiaries
designated in writing by Xx. Xxxxxx and delivered to an officer/manager of
Xxxxxx Group; however, if no such beneficiary designation is made by Xx.
Xxxxxx during his lifetime, the benefits hereunder shall be paid to his
estate. In addition, Xx. Xxxxxx'x estate shall be entitled to exercise any
vested but unexercised stock options for a period of 180 days following the
date of Xx. Xxxxxx'x death, and if any such options remain unexercised upon
the expiration of such 180-day period, they shall be determined forfeited.
(g) CHANGE IN CONTROL. In the event Xx. Xxxxxx'x employment is terminated
as provided in Section 5.1(g) following the occurrence of a Change in
Control, Xx. Xxxxxx shall be entitled to the payments and benefits provided
in Exhibit I.
6. RESTRICTIVE COVENANTS; WORK PRODUCT; CONFIDENTIALITY.
6.1 RESTRICTIVE COVENANTS
Without the prior written consent of Xxxxxx Group, Xx. Xxxxxx shall not:
(a) During employment with Xxxxxx Group and for a period of two (2) years
following termination of employment, engage in or perform services for a
Competing Business. For purposes of this Agreement a "Competing Business" is
one which provides the same or substantially similar products and services as
those provided by Xxxxxx Group during Xx. Xxxxxx'x employment, including but
not limited to management consulting services to improve the cycle time of
business processes of any business organization. This restriction is limited
to the geographic area(s) in which Xx. Xxxxxx performed services for Xxxxxx
Group, including but not limited to, the area within a 50-mile radius of any
office or facility of Xxxxxx Group.
(b) During employment with Xxxxxx Group and for a period of two (2) years
following the termination of employment, solicit business from, attempt to do
business with, or do business with any client of Xxxxxx Group with whom
Xxxxxx Group did business within the preceding 12 months, and with whomMr.
Hamann became acquainted as a result of his employment with Xxxxxx Group.
This restriction applies also to prospective clients of Xxxxxx Group for whom
Xxxxxx Group has performed an analysis or assessment. This restriction
applies only to business that is in the scope of a Competing Business as
defined in this Agreement. The geographic area for purposes of this
restriction is the area where the client/prospective client is located and/or
does business.
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(c) For a period of two (2) years following the termination of employment,
solicit, induce or attempt to solicit or induce any employee of Xxxxxx Group
to terminate his/her employment with Xxxxxx Group and/or accept employment
elsewhere.
Xx. Xxxxxx agrees that the scope of the restrictions in this section is
reasonable and necessary to protect Xxxxxx Group's business goodwill,
Confidential Information and other legitimate business interests.
6.2 RIGHT TO WORK PRODUCT; CONFIDENTIALITY.
(a) Xxxxxx Group and Xx. Xxxxxx each acknowledge that performance of this
Agreement may result in the discovery, creation or development of inventions,
combinations, methods, formulae, techniques, processes, improvements,
software designs, computer programs, strategies, specific computer-related
know-how, course materials, seminar materials, computer models, customer
lists, data and original works of authorship (collectively, the "Work
Product"). Xx. Xxxxxx agrees that he will promptly and fully disclose to
Xxxxxx Group any and all Work Product generated, conceived, reduced to
practice or learned by him, either solely or jointly with others, during his
employment with Xxxxxx Group, which in any way relates to the business of
Xxxxxx Group. Xx. Xxxxxx further agrees that neither he, nor any party
claiming through him will, other than in the performance of this Agreement,
make use of or disclose to others any proprietary information relating to the
Work Product.
(b) Xx. Xxxxxx agrees that, whether or not the services performed by Xx.
Xxxxxx under this Agreement are considered works made for hire or an
employment to invent, all Work Product discovered, created or developed under
this Agreement shall be and remain the sole property of Xxxxxx Group and its
assigns. Xx. Xxxxxx agrees that Xxxxxx Group shall have all copyright and
patent rights with respect to any Work Product discovered, created, or
developed under this Agreement without regard to the origin of the Work
Product.
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(c) Xxxxxx Group agrees that it will provide Xx. Xxxxxx with specialized
knowledge and training regarding the business in which Xxxxxx Group is
involved, and will provide Xx. Xxxxxx with initial and ongoing confidential
information and trade secrets of Xxxxxx Group ("Confidential Information").
For purposes of this Agreement, Confidential Information includes:
information regarding the use and application of Total Cycle Time
methodologies and other information and concepts developed by Xxxxxx Group to
improve the business processes of corporations and other organizations;
software or other technology developed by Xxxxxx Group and any research data
or other documentation related to the development of such
software/technology; client lists and prospects lists developed by Xxxxxx
Group; information regarding Xxxxxx Group's clients which Xx. Xxxxxx acquires
as a result of employment with Xxxxxx Group, including client contracts, work
performed for clients, client contacts, client requirements and needs, data
used by Xxxxxx Group to formulate client bids, client financial information,
and other information regarding the client's business; information related to
Xxxxxx Group's business, including but not limited to marketing strategies
and plans, sales procedures, operating policies and procedures, pricing and
pricing strategies, business plans, sales, profits, and other business and
financial information of the Company; training materials developed by and
utilized by Xxxxxx Group; and any other information which Xx. Xxxxxx acquired
as a result of his employment with Xxxxxx Group and which Xx. Xxxxxx has a
reasonable basis to believe Xxxxxx Group would not want disclosed to a
business competitor or to the general public.
(d) Xx. Xxxxxx understands and acknowledges that such Confidential
Information gives Xxxxxx Group a competitive advantage over others who do not
have this information, and that Xxxxxx Group would be harmed if the
Confidential Information were disclosed. Xx. Xxxxxx agrees that he will hold
all Confidential Information in trust and will not use the information for
any purpose other than the benefit of Xxxxxx Group, or disclose to any person
or entity any Confidential Information except as necessary during Xx.
Xxxxxx'x employment with Xxxxxx Group to perform services on behalf of Xxxxxx
Group. Xx. Xxxxxx will also take reasonable steps to safeguard such
Confidential Information and prevent its disclosure to unauthorized persons.
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7. GENERAL PROVISIONS.
7.1 NOTICES. All notices, requests, demands, or other communications with
respect to this Agreement shall be in writing and shall be personally
delivered, sent via telecopy, or mailed, postage prepaid, certified or
registered mail, or delivered by a nationally recognized express courier
service, charges prepaid, to the following addresses (or such other addresses
as the parties may specify from time to time in accordance with this Section
7.1):
Xx. Xxxxxx: Xxxx X. Xxxxxx
0000 Xxxxxx Xxxx
Xxxxxx, XX 00000
Xxxxxx Group: Xxxxxx Group, Inc.
0000 Xxxxx X'Xxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Any such notice shall, when sent in accordance with the preceding sentence,
be deemed to have been given and received (i) on the day personally delivered
or sent via telecopy, (ii) on the third day following the date mailed, or
(iii) 24 hours after shipment by such courier service.
7.2 ENTIRE AGREEMENT. This Agreement, together with the exhibits hereto,
supersedes any and all other agreements, either oral or written, between the
parties hereto with respect to the employment of Xx. Xxxxxx by Xxxxxx Group
and contains all of the covenants and agreements between the parties with
respect to such employment. Any modification of this Agreement will be
effective only if it is in writing signed by each of the parties hereto.
7.3 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
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7.4 RESOLUTION OF CERTAIN CONTROVERSIES. In the event of a breach of this
Agreement by Xx. Xxxxxx, Xxxxxx Group shall be entitled to all appropriate
equitable and legal relief, including, but not limited to: (a) injunction to
enforce this Agreement or prevent conduct in violation of this Agreement; (b)
damages incurred by Xxxxxx Group as a result of the breach; and (c)attorneys'
fees and costs incurred by Xxxxxx Group in enforcing the terms of this
Agreement. Additionally, any period or periods of breach of Section 6 of
this Agreement shall not count toward the restrictive period, but shall
instead be added to the restrictive period. In the event of any controversy
or claim arising out of or related to the provisions concerning the use and
protection of Confidential Information or the restrictive covenants, Xxxxxx
Group shall be entitled to seek equitable and other relief. In the event of
any controversy or claim arising out of or related to the other provisions of
this Agreement, the parties agree first to try in good faith to settle the
dispute by non-binding mediation administered by the American Arbitration
Association under its Commercial Mediation Rules. In the event that
mediation does not resolve the dispute, such dispute shall be settled
exclusively by arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association in Dallas, Texas, and judgment
may be entered in any court having jurisdiction thereof. Each party is
responsible for its own attorneys' fees and costs of preparing for and
presenting its case at the arbitration. However, Xxxxxx Group shall pay the
fee of the American Arbitration Association, the arbitration panel's fee, and
costs associated with the facilities for the arbitration, and the arbitration
panel shall not apportion these costs.
7.5 PARTIAL INVALIDITY. In the event any court of competent jurisdiction
holds any provision of this Agreement to be invalid, the remaining provisions
shall not be affected or invalidated and shall remain in full force and
effect.
7.6 REFORMATION. In the event any court of competent jurisdiction holds any
restrictions in this Agreement to be unreasonable and/or unenforceable as
written, the court may reform the Agreement to make it enforceable, and the
Agreement shall remain in full force and effect as reformed by the court.
7.7 BINDING EFFECT. This Agreement is for the sole and exclusive benefit
of, and shall be binding upon Employee, Xxxxxx Group and any subsidiaries,
affiliated companies, successors or assigns of Xxxxxx Group. This Agreement
is not assignable by Employee.
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7.8 AMENDMENTS. Amendments to any section of this Agreement shall not be
effective unless agreed to in writing by the parties to this Agreement. This
Agreement, including this provision against oral modification, shall not be
amended, modified or terminated except in a writing signed by each of the
parties to this Agreement, and no waiver of any provision of this Agreement
shall be effective unless in a writing duly signed by the party sought to be
bound.
7.9 SURVIVAL OF PROVISIONS. The covenants and obligations in Sections 6 and
7 of this Agreement shall survive and continue in effect following the
termination of this Agreement.
7.10 CERTAIN TAX PROVISIONS. Xx. Xxxxxx acknowledges and agrees that all
payments and benefits which are required by applicable federal, state or
local laws to be subject to withholding for income taxes, shall be so subject.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective
as of the date first above written.
XX. XXXXXX:
---------------------------------------------
Xxxx X. Xxxxxx, individually
XXXXXX GROUP, INC.
By:
------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chairman, Nominating, Corporate
Governance and Compensation Committee
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EXHIBIT I
SEVERANCE BENEFIT PAYMENTS
TERMINATION DURING THE FIRST 12 MONTHS OF THIS AGREEMENT:
1. A lump sum payment in cash, not later than 20 days after the termination
of Xx. Xxxxxx'x employment, in an amount equal to the total of (a) unpaid
base compensation through January 12, 2004 plus (b) unpaid incentive
compensation for fiscal years 2001, 2002 and 2003 at the target incentive
compensation of 50% of base compensation.
2. The unvested portion of stock options granted to Xx. Xxxxxx shall become
fully vested and immediately exercisable on the effective date of such
termination and shall be exercisable for the maximum period specified in such
options.
3. The Company will reimburse Xx. Xxxxxx for the direct costs of moving Xx.
Xxxxxx and his family to another location within the continental United
States. Such reimbursement will be grossed up for taxes.
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TERMINATION DURING THE FINAL 18 MONTHS OF THIS AGREEMENT:
1. A lump sum payment in cash, not later than 20 days after the termination
of Xx. Xxxxxx'x employment, in an amount equal to the total of (a) 1.5 times
Xx. Xxxxxx'x then-current base compensation plus (b) 18 months of incentive
compensation at the target incentive compensation of 50% of base compensation.
2. The unvested portion of stock options granted to Xx. Xxxxxx shall become
fully vested and immediately exercisable on the effective date of such
termination and shall be exercisable for the maximum period specified in such
options.
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