1
Exhibit 10.31
[SYKES LOGO]
PLEASE READ THIS AGREEMENT CAREFULLY. THIS AGREEMENT DESCRIBES THE BASIC LEGAL
AND ETHICAL RESPONSIBILITIES THAT YOU ARE REQUIRED TO OBSERVE AS AN EXECUTIVE
EXPOSED TO HIGHLY SENSITIVE TECHNOLOGY AND STRATEGIC INFORMATION. CONSULT WITH
YOUR LEGAL COUNSEL IF ALL THE TERMS AND PROVISIONS OF THIS AGREEMENT ARE NOT
FULLY UNDERSTOOD BY YOU.
THIS AGREEMENT is made effective as of the 6th day of March, 2000, by
and between XXXXX ENTERPRISES, INCORPORATED, a Florida corporation (the
"Company"), and W. XXXXXXX XXXXXXX (the "Executive").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Company desires to assure itself of the Executive's
continued employment in an executive capacity as the Company's Vice President
and Chief Financial Officer; and
WHEREAS, the Executive desires to be employed by the Company on the
terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements of the parties contained herein, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto covenant and agree as follows:
1. EMPLOYMENT AND DUTIES. Subject to the terms and conditions of
this Agreement, the Company shall employ the Executive during the Term (as
hereinafter defined) as its Vice President and Chief Financial Officer. The
Executive shall report to the Office of the Chairman, which will comprise the
Chairman of the Board of Directors, the Chief Executive Officer, and the
President of the Company. The Executive accepts such employment and agrees to
devote his best efforts and entire business time, skill, labor, and attention
to the performance of such duties. During the Term, the Executive agrees to
promptly provide a description of any other commercial duties or pursuits
engaged in by the Executive to the Company's Board of Directors. If the Board
of Directors determines in good faith that such activities conflict with the
Executive's performance of his duties hereunder, the Executive shall promptly
cease such activities to the extent as directed by the Board of Directors. It
is acknowledged and agreed that such description shall be made regarding any
such activities in which the Executive owns more than 5 % of the ownership of
the organization or which may be in violation of Section 5 hereof, and that the
failure of the Executive to provide any such description shall enable the
Company to terminate the Executive for Cause (as provided in Section 6(c)
hereof). The Company agrees to hold any such information provided by the
Executive confidential and not disclose the same to any person other than a
person to whom disclosure is reasonably necessary or appropriate in light of
the circumstances. In addition, the Executive agrees to serve without
additional compensation if elected or appointed to any office or position,
including as a director, of the Company or any subsidiary or affiliate of the
Company; provided, however, that the Executive shall be entitled to receive
such benefits and additional compensation, if any, that is paid to executive
officers of the Company in connection with such service.
2. TERM. Subject to the terms and conditions of this Agreement,
including, but not limited to, the provisions for termination set forth in
Section 6 hereof, the employment of the Executive under this Agreement shall
commence on the effective date hereof and shall continue through and including
the close of business on the date hereof as set forth on Exhibit A attached
hereto and incorporated herein (such term shall herein be defined as the
"Term"). The Executive agrees that some portions of this Agreement, including
Sections 4, 5, and 6 hereof, will remain in force after the termination of this
Agreement.
2
W. Xxxxxxx Xxxxxxx
3. COMPENSATION.
(a) Base Salary and Bonus. As compensation for the
Executive's services under this Agreement, the Executive shall receive and the
Company shall pay a weekly base salary set forth on Exhibit A. Such base salary
may be increased but not decreased during the Term in the Company's discretion
based upon the Executive's performance and any other factors the Company deems
relevant. Such base salary shall be payable in accordance with the policy then
prevailing for the Company's executives. In addition to such base salary, the
Executive shall be entitled during the Term to a performance bonus set forth on
Exhibit A and to participate in and receive payments from, at the Company's
election, other bonus and other incentive compensation plans, if any, as may be
adopted by the Company and made available to other similarly-situated executive
officers of the Company.
(b) Payments. All amounts paid pursuant to this
Agreement shall be subject to withholding or deduction by reason of the Federal
Insurance Contribution Act, federal income tax, state and local income tax, if
any, and comparable laws and regulations.
(c) Other Benefits. The Executive shall be reimbursed by
the Company for all reasonable and customary travel and other business expenses
incurred by the Executive in the performance of the Executive's duties
hereunder in accordance with the Company's standard policy regarding expense
verification practices. The Executive shall be entitled to that number of weeks
paid vacation per year that is available to other executive officers of the
Company in accordance with the Company's standard policy regarding vacations
and such other fringe benefits as may be set forth on Exhibit A and shall be
eligible to participate in such pension, life insurance, health insurance,
disability insurance, and other executive benefits plans, if any, which the
Company may from time to time make available to its similarly-situated
executive officers generally.
4. CONFIDENTIAL INFORMATION.
(a) The Executive has acquired and will acquire
information and knowledge respecting the intimate and confidential affairs of
the Company, including, without limitation, confidential information with
respect to the Company's technical data, research and development projects,
methods, products, software, financial data, business plans, financial plans,
customer lists, business methodology, processes, production methods and
techniques, promotional materials and information, and other similar matters
treated by the Company as confidential (the "Confidential Information").
Accordingly, the Executive covenants and agrees that during the Executive's
employment by the Company (whether during the Term hereof or otherwise) and
thereafter, the Executive shall not, without the prior written consent of the
Company, disclose to any person, other than a person to whom disclosure is
reasonably necessary or appropriate in connection with the performance by the
Executive of the Executive's duties hereunder, any Confidential Information
obtained by the Executive while in the employ of the Company.
(b) The Executive agrees that all memoranda; notes;
records; papers or other documents; computer disks; computer, video or audio
tapes; CD-ROMs; all other media and all copies thereof relating to the
Company's operations or business, some of which may be prepared by the
Executive; and all objects associated therewith in any way obtained by the
Executive shall be the Company's property. This shall include, but is not
limited to, documents; computer disks; computer, video and audio tapes;
CD-ROMs; all other media and objects concerning any technical data, methods,
products, software, research and development projects, financial data,
financial plans, business plans, customer lists, contracts, price lists,
manuals, mailing lists, advertising materials; and all other materials and
records of any kind that may be in the Executive's possession or under the
Executive's control. The Executive shall not, except for the Company's use,
copy or duplicate any of the aforementioned documents or objects, nor remove
them from the Company's facilities, nor use any information concerning them
except for the Company's benefit, either during the Executive's employment or
thereafter. The Executive covenants and agrees that the Executive will deliver
all of the
2
3
W. Xxxxxxx Xxxxxxx
aforementioned documents and objects, if any, that may be in the Executive's
possession to the Company upon termination of the Executive's employment, or at
any other time at the Company's request.
(c) In any action to enforce or challenge these
Confidential Information provisions, the prevailing party is entitled to
recover its reasonable attorney's fees and costs.
5. COVENANT NOT-TO-COMPETE AND NO SOLICITATION. Executive
recognizes that the Company is in the business of employing individuals to
provide specialized and technical services to the Company's Clients. The
purpose of these Covenant Not-to-Compete and No Solicitation provisions are to
protect the relationship which exists between the Company and its Client while
Executive is employed and after Executive leaves the employ of the Company. The
consideration for these Covenant Not-to-Compete and No Solicitation provisions
is the Executive's employment with the Company.
(a) Executive acknowledges the following:
(1) The Company expended considerable resources
in obtaining contracts with its Clients;
(2) The Company expended considerable resources
to recruit and hire employees who could perform services for
its Clients;
(3) Through his/her employ with the Company,
Executive will develop a substantial relationship with the
Company's existing or potential Clients;
(4) Executive will be exposed to valuable
confidential business information about the Company, its
Clients, and the Company's relationship with its Client;
(5) By providing services on behalf of the
Company, Executive will develop and enhance the valuable
business relationship between the Company and its Client;
(6) The relationship between the Company and
its Client depends on the quality and quantity of the
services Executive performs;
(7) Through employment with the Company,
Executive will increase his/her opportunity to work directly
for the Client or for a competitor of the Company; and
(8) The Company will suffer irreparable harm if
Executive breaches these Covenant Not-to-Compete and No
Solicitation provisions of this Agreement.
(b) Executive agrees that:
(1) The relationship between the Company and
its Client (developed and enhanced when the Executive
performs services on behalf of the Company) is a legitimate
business interest for the Company to protect;
(2) The Company's legitimate business interest
is protected by the existence and enforcement of these
Covenant Not-to-Compete and No Solicitation provisions;
(3) The business relationship which is created
or exists between the Company and its Client, or the goodwill
resulting from it, is a business asset of the Company and not
the Executive; and
3
4
W. Xxxxxxx Xxxxxxx
(4) Executive will not seek to take advantage
of opportunities which result from his/her employment with
the Company and that entering into the Agreement containing
Covenant Not-to-Compete and No Solicitation provisions is
reasonable to protect the Company's business relationship
with its Clients.
(c) Restrictions on Executive. During the term of this
Agreement and for a period of time set forth on Exhibit A after the
termination of this Agreement, for whatever reason, whether such
termination was by the Company or the Executive, voluntarily or
involuntarily, and whether with or without cause, Executive agrees
that he/she shall not, as a principal, employer, stockholder, partner,
agent, consultant, independent contractor, employee, or in any other
individual or representative capacity:
(1) Directly or indirectly engage in, continue
in, or carry on the business of the Company or any business
substantially similar thereto, including owning or
controlling any financial interest in any corporation,
partnership, firm, or other form of business organization
which competes with or is engaged in or carries on any aspect
of such business or any business substantially similar
thereto;
(2) Consult with, advise, or assist in any way,
whether or not for consideration, any corporation,
partnership, firm, or other business organization which is
now, becomes, or may become a competitor of the Company in
any aspect of the Company's business during the Executive's
employment with the Company, including, but not limited to,
advertising or otherwise endorsing the products of any such
competitor or loaning money or rendering any other form of
financial assistance to or engaging in any form of
transaction whether or not on an arm's length basis with any
such competitor;
(3) Provide or attempt to provide or solicit
the opportunity to provide or advise others of the
opportunity to provide any services of the type Executive
performed for the Company or the Company's Clients
(regardless of whether and how such services are to be
compensated, whether on a salaried, time and materials,
contingent compensation, or other basis) to or for the
benefit of any Client (i) to which Executive has provided
services in any capacity on behalf of the Company, or (ii) to
which Executive has been introduced to or about which the
Executive has received information through the Company or
through any Client from which Executive has performed
services in any capacity on behalf of the Company;
(4) Retain or attempt to retain, directly or
indirectly, for itself or any other party, the services of
any person, including any of the Company's employees, who
were providing services to or on behalf of the Company while
Executive was employed by the Company and to whom Executive
has been introduced or about whom Executive has received
information through Employer or through any Client for which
Executive has performed services in any capacity on behalf of
the Company;
(5) Engage in any practice, the purpose of
which is to evade the provisions of this Agreement or to
commit any act which is detrimental to the successful
continuation of or which adversely affects the business or
the Company; provided, however, that the foregoing shall not
preclude the Executive's ownership of not more than 2% of the
equity securities registered under Section 12 of the
Securities Exchange Act of 1934, as amended; or
(6) For purpose of these Covenant
Not-to-Compete and No Solicitation provisions, Client
includes any subsidiaries, affiliates, customers, and clients
of the Company's Clients. The Executive agrees that, for the
purposes of Sections 5(c)(1), 5(c)(2) and 5(c)(4), the
geographic scope of this Covenant Not-to-Compete shall extend
to the geographic area that is within 50 miles of any of the
Company's business locations. For the purposes of Section
4
5
W. Xxxxxxx Xxxxxxx
5(c)(3), the geographic scope of this Covenant Not-to-Compete
shall extend to the geographic area where the Company's
Clients conduct business at any time during the Term of this
Agreement. For purposes of this Agreement, "Clients" means
any person or entity to which the Company provides or has
provided within a period of one (1) year prior to the
Executive's termination of employment labor, materials or
services for the furtherance of such entity's or person's
business or any person or entity that within such period of
one (1) year the Company has pursued or communicated with for
the purpose of obtaining business for the Company.
(d) Enforcement. These Covenant Not-to-Compete and No
Solicitation provisions shall be construed and enforced under the laws
of the State of Florida. In the event of any breach of this Covenant
Not-to-Compete, the Executive recognizes that the remedies at law will
be inadequate, and that in addition to any relief at law which may be
available to the Company for such violation or breach and regardless
of any other provision contained in this Agreement, the Company shall
be entitled to equitable remedies (including an injunction) and such
other relief as a court may grant after considering the intent of this
Section 5. It is further acknowledged and agreed that the existence of
any claim or cause of action on the part of the Executive against the
Company, whether arising from this Agreement or otherwise, shall in no
way constitute a defense to the enforcement of this Covenant
Not-to-Compete, and the duration of this Covenant Not-to-Compete shall
be extended in an amount which equals the time period during which the
Executive is or has been in violation of this Covenant Not-to-Compete
In the event a court of competent jurisdiction determines that the
provisions of this Covenant Not-to-Compete are excessively broad as to
duration, geographic scope, prohibited activities or otherwise, the
parties agree that this covenant shall be reduced or curtailed to the
extent necessary to render it enforceable.
e) In an action to enforce or challenge these Covenant
Not-to-Compete and No Solicitation provisions, the prevailing party is
entitled to recover its reasonable attorney's fees and costs.
f) By signing this Agreement, the Executive
acknowledges that he/she understands the effects of these Covenant
Not-to-Compete and No Solicitation provisions and agrees to abide by
them.
6. TERMINATION
(a) Death. The Executive's employment hereunder shall
terminate upon his death. The Company shall pay Executive's estate all
accrued but unpaid base salary and bonus and all accrued but unused
vacation time through the date of death.
(b) Disability. If during the Term the Executive becomes
physically or mentally disabled in accordance with the terms and
conditions of any disability insurance policy covering the Executive,
or, if due to such physical or mental disability the Executive becomes
unable for a period of more than six (6) consecutive months to perform
his duties hereunder on substantially a full-time basis as determined
by the Company in its reasonable discretion, the Company may, at its
option, terminate the Executive's employment hereunder upon not less
than thirty (30) days' written notice.
(c) Cause. The Company may terminate the Executive's
employment hereunder for Cause effective immediately upon notice. For
purposes of this Agreement, the Company shall have "Cause" to
terminate the Executive's employment hereunder: (i) if the Executive
engages in conduct which has caused or is reasonably likely to cause
demonstrable and serious injury to Company; (ii) if the Executive is
convicted of a felony as evidenced by a binding and final judgment,
order, or decree of a court of competent jurisdiction; (iii) for the
Executive's neglect of his duties hereunder or the Executive's refusal
to perform his duties or responsibilities hereunder as determined by
the Company's Board of Directors in good faith; (iv) consistent
failure to achieve goals established by the Board of Directors or
their designate, provided that such goals are presented in writing or
otherwise communicated to Executive; (v) gross incompetence; (vi) for
the Executive's
5
6
W. Xxxxxxx Xxxxxxx
violation of this Agreement, including, without limitation. Section 5
hereof; (vii) chronic absenteeism; (viii) for use of illegal drugs;
(ix) insobriety by the Executive while performing his or her duties
hereunder; and (x) for any act of dishonesty or falsification of
reports, records, or information submitted by the Executive to the
Company.
(d) Non-Compete Payment. In the event of a termination
of the Executive's employment pursuant to Section 6 or by the
Executive, all payments and Company benefits to the Executive
hereunder, except the payments (if any) specified in Section 6(a)
above or provided for below, shall immediately cease and terminate. In
the event of a termination by the Company of the Executive's
employment with the Company for any reason other than pursuant to
Section 6(c), the Covenant Not-to-Compete set forth in Section 5
hereof shall remain in full force and effect through the full stated
Term of this Agreement; and additionally, from the end of the Term of
this Agreement through the non-compete period stated on Exhibit "A",
the Company shall pay the Executive Not-to-Compete pay in equal
biweekly installments ("Non-Compete Payment Installments") in the
amount set forth on Exhibit A ("Non-Compete Payment"). Such
Non-Compete Payment, however, shall not be required to be paid by the
Company if the Company elects, in its sole discretion, to release the
Executive from the Covenant Not-to-Compete set forth in Section 5
hereof. Additionally, if the Company commences paying Executive
Non-Compete Payment Installments and subsequently elects in the
future, in its sole discretion, to release Executive from the Covenant
Not-to-Compete and gives notice to Executive, then, at the effective
date of such notice, Executive shall no longer be subject to the
Covenant Not-to-Compete, and no further Non-Compete Payment
Installments shall be due or payable to Executive. If the Company
terminates the Executive's employment pursuant to Section 6(c) or the
Executive terminates such employment, the Executive shall not be
entitled to the Non-Compete Payment, and the Covenant Not-to-Compete
set forth in Section 5 hereof shall remain in full force and effect.
Notwithstanding anything to the contrary herein contained, the
Executive shall receive all compensation and other benefits to which
he was entitled under this Agreement or otherwise as an executive of
the Company through the termination date.
7. NOTICE. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given when hand-delivered, sent by telecopier, facsimile
transmission, or other electronic means of transmitting written documents (as
long as receipt is acknowledged) or mailed by United States certified or
registered mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive, to the address set forth on the
signature page.
If to the Company: Xxxxx Enterprises, Incorporated
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attention: VP Human Resources
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that a notice of change of address shall
be effective only upon receipt.
8. ENFORCEMENT, GOVERNING LAW, AND ATTORNEY'S FEES. It is
stipulated that a breach by Executive of the restrictive covenants set forth in
Sections 4 and 5 of this Agreement will cause irreparable damage to Company or
its Clients, and that in the event of any breach of those provisions, Company
is entitled to injunctive relief restraining Executive from violating or
continuing a violation of the restrictive covenants as well as other remedies
it may have. Additionally, such covenants shall be enforceable against the
Executive's successors or assigns or by successor assigns.
The validity, interpretation, construction, and performance
of this Agreement shall be governed by the internal laws of the State of
Florida. Any litigation to enforce this Agreement shall be brought in the state
or federal courts of Hillsborough County, Florida, which is the principal place
of business for
6
7
W. Xxxxxxx Xxxxxxx
Company and which is considered to be the place where this Agreement is made.
Both parties hereby consent to such courts' exercise of personal jurisdiction
over them.
In the event action is brought by either party to enforce
any of the terms and conditions set forth herein, the prevailing party is
entitled to recover its reasonable attorneys' fees and costs.
9. MISCELLANEOUS. No provision of this Agreement may be modified
or waived unless such waiver or modification is agreed to in writing signed by
the parties hereto. No waiver by any party hereto of any breach by any other
party hereto shall be deemed a waiver of any similar or dissimilar term or
condition at the same or at any prior or subsequent time. This Agreement is the
entire agreement between the parties hereto with respect to the Executive's
employment by the Company and there are no agreements or representations, oral
or otherwise, expressed or implied, with respect to or related to the
employment of the Executive which are not set forth in this Agreement. Any
prior agreement relating to the Executive's employment with the Company is
hereby superseded and void, and is no longer in effect. This Agreement shall be
binding upon and inure to the benefit of the Company, its respective successors
and assigns, and the Executive and his heirs, executors, administrators and
legal representatives. Except as expressly set forth herein, no party shall
assign any of his or its rights under this Agreement without the prior written
consent of the other party and any attempted assignment without such prior
written consent shall be null and void and without legal effect. The parties
agree that if any provision of this Agreement shall under any circumstances be
deemed invalid or inoperative, the Agreement shall be construed with the
invalid or inoperative provision deleted and the rights and obligations of the
parties shall be construed and enforced accordingly. This Agreement may be
executed in one or more counterparts, each of which shall be deemed to be an
original but all of which together will constitute but one and the same
instrument. This Agreement has been negotiated and no party shall be considered
as being responsible for such drafting for the purpose of applying any rule
construing ambiguities against the drafter or otherwise.
10. PLACE OF PERFORMANCE. During the Term, Executive's principal
place of business shall be located in Tampa, Florida.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
XXXXX ENTERPRISES, INCORPORATED EXECUTIVE
By: /s/ Xxxxx X. Xxxxxx /s/ W. Xxxxxxx Xxxxxxx
---------------------------------- -------------------------------------
W. Xxxxxxx Xxxxxxx
Address:
000 X. Xxxxxx
-------------------------------------
Xxxxx, Xxxxxxx 00000-0000
-------------------------------------
7
8
W. Xxxxxxx Xxxxxxx
EXHIBIT A TO EMPLOYMENT AGREEMENT
---------------------------------
TERM: Two (2) years
BASE SALARY: $3,846.15 per week
PERFORMANCE BONUS: Eligible for 0 % to 100 % of base
compensation based on Performance Bonus Plan
for Vice President & Chief Financial Officer
to be developed.
FRINGE BENEFITS: Eligible for standard fringe benefits for
Executives.
STOCK OPTIONS: 50,000 1996 options, vesting 1/3 per year
for 3 years; 60,000 1997 performance
options, vesting based on goal achievement.
COVENANT NOT TO COMPETE: Twelve (12) months
NON-COMPETE PAYMENT: $3,846.15 per week for 52 weeks
THE COMPANY RESERVES THE RIGHT, AT ITS SOLE DISCRETION, AT SUCH TIME
OR TIMES AS IT ELECTS, TO CHANGE OR ELIMINATE BONUSES OR OTHER BENEFITS, EXCEPT
FOR THOSE BONUSES AND OTHER BENEFITS SET FORTH IN THE EMPLOYMENT AGREEMENT.
IN WITNESS WHEREOF, the parties have executed this Exhibit A effective
as of the 6th day of March, 2000.
XXXXX ENTERPRISES, INCORPORATED EXECUTIVE
---------------------------------- -------------------------------------
By: /s/ Xxxxx X. Xxxxxx /s/ W. Xxxxxxx Xxxxxxx
------------------------------- -------------------------------------
W. Xxxxxxx Xxxxxxx
8
9
[SYKES LOGO]
November 8, 2000
Mr. W. Xxxxxxx Xxxxxxx
000 X. Xxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Re: LETTER AGREEMENT SETTING FORTH AMENDMENTS TO
EMPLOYMENT AGREEMENT
Dear Xxxx:
This letter agreement sets forth certain amendments to the. Employment
Agreement, dated March 6, 2000 (the "Employment Agreement"), between you
(hereafter "Executive") and Xxxxx Enterprises, Incorporated, a Florida
corporation ("Sykes"). All capitalized terms set forth in this letter agreement
shall have the meanings ascribed thereto in the Employment Agreement, unless
otherwise specifically defined herein. Effective as of the date hereof, the
Employment Agreement shall be amended as follows:
1. BASE SALARY. Executive's base salary, as set forth on Exhibit
A to the Employment Agreement, shall be increased to $5,576.92 per week.
2. BONUSES. On Exhibit A to the Employment Agreement, the
language set forth under the caption entitled "PERFORMANCE BONUS" shall be
deleted and replaced with the following:
"Eligible for 0% to 50% of base compensation based on Performance
Bonus Plan for Vice President and Chief Financial Officer to be
developed for each fiscal year. Executive shall be entitled to a
minimum performance bonus of $200,000 for the fiscal year 2000,
provided that Executive is still employed by the Company on the date
on which the Company's audit for the fiscal year 2000 is successfully
completed. Such performance bonus payments shall be made in accordance
with the Company's standard policy for the payment of performance
bonuses."
3. TERMINATION AFTER CHANGE OF CONTROL. A new Section 10 is
hereby added to the end of the Employment Agreement, and such Section 10 shall
read as follows:
"10. Termination after Change of Control. In the event
Executive's employment hereunder is terminated by the Company for any
of the reasons set
10
forth in Section 6(a), (b), or (c), or by the Executive (other than
for Good Reason, defined herein below), then this Section 10, dealing
with Change of Control, shall have no effect, and Executive shall not
be entitled to any Change of Control Termination Payment in such
event. If, however, Executive's employment hereunder is terminated
after a Change of Control (i) by the Executive for Good Reason; or
(ii) by the Company (or any successor thereto or assignee thereof)
other than pursuant to Section 6(a), (b), or (c), then, in that event,
Executive shall receive (in equal installments over two years and in
accordance with Company policy immediately prior to such termination)
an amount to be determined by multiplying by two (2) Executive's base
salary and actual bonus for the calendar year immediately prior to
such termination ("Change of Control Termination Payment"). A "Change
in Control" shall be deemed to have occurred if the event set forth in
any one of the following paragraphs shall have occurred:
(i) the following individuals cease for any reason to
constitute a majority of the number of directors then serving:
individuals who, immediately after the annual meeting of shareholders
of the Company held in 2000, constituted the Board of Directors and any
new directors (other than directors whose initial assumption of office
is in connection with an actual or threatened election contest,
including but not limited to a consent solicitation, relating to the
election of directors of the Company, as such terms are used in Rule
14a-11 of Regulation 14A under the Act) whose appointment or election
by the Board or nomination for election by the Company's stockholders
was approved by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors immediately after the
annual meeting of shareholders of the Company held in 2000 or whose
appointment, election or nomination for election was previously so
approved; or
(ii) the stockholders of the Company approve a merger,
consolidation or share exchange of the Company with any other
corporation or approve the issuance of voting securities of the Company
in connection with a merger, consolidation or share exchange of the
Company (or any direct or indirect subsidiary of the Company) pursuant
to applicable stock exchange requirements, other than (A) a merger,
consolidation or share exchange which would result in the voting
securities of the Company outstanding immediately prior to such merger,
consolidation or share exchange continuing to represent (either by
remaining outstanding or by being converted into the right to receive
voting securities of the surviving entity or any parent thereof) at
least 50 % of the combined voting power of the voting securities of the
Company or such surviving entity or any parent thereof outstanding
immediately after such merger, consolidation or share exchange, or (B)
a merger, consolidation or share exchange effected to implement a
recapitalization of the Company (or similar transaction) in which no
Person (other than Xxxx X. Xxxxx) is or becomes the beneficial owner,
directly or indirectly, of securities of the
-2-
11
Company (not including in the securities beneficially owned by such
Person any securities acquired directly from the Company or its
Affiliates after the annual meeting of shareholders of the Company held
in 2000 pursuant to express authorization by the Board that refers to
this exception) representing 45 % or more of either the then
outstanding shares of common stock of the Company or the combined
voting power of the Company's then outstanding voting securities; or
(iii) The stockholders of the Company approve a plan of
complete liquidation or dissolution of the Company or an agreement for
the sale or disposition by the Company of all or substantially all of
the Company's assets (in one transaction or a series of related
transactions within any period of 24 consecutive months), other than a
sale or disposition by the Company of all or substantially all of the
Company's assets to an entity at least 75 % of the combined voting
power of the voting securities of which are owned by Persons in
substantially the same proportions as their ownership of the Company
immediately prior to such sale.
Notwithstanding the foregoing, no "Change in Control" shall
be deemed to have occurred if there is consummated any transaction or
series of integrated transactions immediately following which the
record holders of the common stock of the Company immediately prior to
such transaction or series of transactions continue to have
substantially the same proportionate ownership in an entity that owns
all or substantially all of the assets of the Company immediately
following such transaction or series of transactions.
The Executive may terminate his own employment pursuant to
and only after the condition of this Section 10 has occurred for Good
Reason; and the Company expressly acknowledges and agrees that, upon
such termination, the Executive shall be entitled to the Change of
Control Termination Payment, as hereinafter defined, to which the
Executive, but for such termination, would otherwise be entitled. For
purposes of this Agreement, "Good Reason" shall mean the occurrence of
any of the following events subsequent to a Change of Control: (i) any
reduction of the Base Salary or any other compensation or benefits
(other than the Performance Bonus); or (ii) any other material adverse
change to the terms and conditions of the Executive's employment,
including but not limited to any diminution of the Customary Duties
(as herebelow defined).
Subsequent to a Change of Control, the Executive shall
continue to hold such office and such level of authority and
responsibility within the Company either (a) as was held immediately
prior to such Change of Control or (b) of such scope, importance and
influence as is customarily associated with the office held by him at
the time of such Change of Control (hereinafter collectively referred
to as the "Customary Duties")."
-3-
12
4. OTHER TERMS AND PROVISION. Except as specifically set forth
in this letter agreement, all of the terms and provisions set forth in the
Employment Agreement shall remain in full force and effect.
If you are in agreement with the terms and conditions of this letter
agreement, please sign below to indicate your assent.
Sincerely,
/s/ Xxxx X. Xxxxx
-------------------------------------
Xxxx X. Xxxxx, Chairman of the
Board of Directors
Agreed to and acknowledged this
8th day of November, 2000.
M. XXXXXXX XXXXXXX
By: /s/ W. Xxxxxxx Xxxxxxx
---------------------------------
W. Xxxxxxx Xxxxxxx, individually
-4-
