1
SPECIAL ASSIGNMENT AGREEMENT
----------------------------
This Agreement (the "Agreement") between Xxxxxx X. Xxxxxx, Xx. ("Xxxxxx")
and Xxxxxxxx'x Inc. ("Xxxxxxxx'x" or the "Company") intended to be effective as
of April 17, 1997.
WHEREAS, Xxxxxx is currently a member of the Board of Directors of
Xxxxxxxx'x; and
WHEREAS, financial circumstances made it prudent and necessary for
Xxxxxxxx'x to file for reorganization pursuant to Title 11 of the United States
Code and Xxxxxx shall continue to serve as a member of the Board of Xxxxxxxx'x,
to devote time to Xxxxxxxx'x affairs in that capacity, and having been duly
elected by the Board of Xxxxxxxx'x to serve as interim President and CEO of
Xxxxxxxx'x as principally responsible to direct its reorganization efforts in
connection with the Chapter 11 bankruptcy proceedings ("Special Assignment
Duties"); and
WHEREAS, this Agreement is intended to supersede any oral or written
agreements between Xxxxxxxx'x and Xxxxxx prior to the effective date hereof
which are in any way inconsistent with this Agreement and any such agreement
shall be deemed to have been satisfied as of the effective date hereof; and
WHEREAS, in recognition of the foregoing and the services to be performed
by Xxxxxx during periods on and after April 17, 1997, the Board has authorized
the arrangements set forth in this Agreement subject to any approval or
modification which may be required by the United States Bankruptcy Court for the
District of Delaware where the Xxxxxxxx'x case is pending;
NOW, THEREFORE, the parties hereby agree as follows:
1. Effective April 17, 1997, Xxxxxx shall (i) continue to serve as a member
of the Board of Xxxxxxxx'x and (ii) shall perform Special Assignment Duties in
connection with the Chapter 11 reorganization.
2. For Xxxxxx'x services in the Board position listed in paragraph 1,
Xxxxxxxx'x will pay to Xxxxxx such Board fees as shall be authorized to be paid
by the Board of Directors consistent with fees paid to other Directors and
reimbursement of all actual and necessary reasonable business expenses incurred
by Xxxxxx in connection with attendance at, or participation in, Board and
Committee meetings including, without limitation, his reasonable travel expenses
(upon submission by Xxxxxx of reasonable substantiation thereof).
3. Xxxxxx and Xxxxxxxx'x also agree that Xxxxxx will be available during
the period of the bankruptcy proceedings and a transitional period thereafter to
perform Special Assignment Duties as directed by the Board. For these services,
Xxxxxx shall be compensated by Xxxxxxxx'x at the rate of $2,000 per day plus the
cost of actual and necessary reasonable business expenses incurred in the
performance of such duties, including, without limitation, his reasonable travel
expenses (subject to submission by him of reasonable substantiation thereof).
Provided that in cases in which it would be reasonable for Xxxxxx to incur
travel expenses to
2
fly home to Phoenix from Boston for weekends to visit his family, he may choose
to remain in Boston and fly his spouse or other family members to Boston from
Phoenix to visit provided that such total cost does not exceed the cost of his
flying from Boston to Phoenix on such weekend(s). Provided, further, that Xxxxxx
shall also be reimbursed for the expense of retaining an administrative
assistant to perform Xxxxxxxx'x related duties up to 15 hours per week at a rate
of no more than $40 per hour. Such assistant shall not be an employee of
Xxxxxxxx'x or have any employment rights as a Xxxxxxxx'x employee. Xxxxxx or the
assistant shall be responsible for any tax or other payments or employment
liabilities due as a result of Xxxxxx'x retention of this Administrative
Assistant.
4. Xxxxxxxx'x may terminate this Agreement with cause upon written notice,
and such termination shall be effective immediately upon such notice. For
purposes of this provision cause shall include: (i) a breach of fiduciary duty;
(2) commission of a misdemeanor involving personal integrity, any felony or any
other act which brings Xxxxxxxx'x into disrepute; (3) gross negligence or
willful misconduct or (4) other material breach of this Agreement by Xxxxxx.
Upon termination with cause, Xxxxxxxx'x will pay Xxxxxx payments due under
paragraphs 2 and 3 for services performed and expenses incurred prior to the
issuance of the termination notice and Xxxxxxxx'x shall have no further
obligation to Xxxxxx under this Agreement, except as provided in paragraph 9
below. Either Xxxxxx xx Xxxxxxxx'x may terminate this Agreement for any reason
other than cause as defined above, upon sixty (60) days written notice ("60 Day
Notice Period"). During such 60 Day Notice Period, Xxxxxx shall continue to be
available to perform Special Assignment Duties as directed by the Xxxxxxxx'x
Board of Directors, and the Board shall continue to pay Xxxxxx at the $2,000 per
day rate provided in paragraph 3 above, for no fewer than 40 days. In addition,
during such 60 Day Notice Period Xxxxxx shall continue to be eligible for
expense reimbursement and Board fees, if applicable, as provided in paragraphs 2
and 3 above, but Xxxxxxxx'x shall have no further obligation under this
Agreement to Xxxxxx, except as provided in paragraph 9 below. After issuance of
any notice of termination by either Xxxxxxxx'x or Xxxxxx, Xxxxxx shall remain on
the Board of Xxxxxxxx'x subject to Xxxxxxxx'x procedures then contained in its
by-laws.
5. All notices and other communications shall be in writing, either hand
delivered or mailed by first class registered mail, postage prepaid, if to
Xxxxxx at the address set forth below under Xxxxxx'x signature, or, if to
Xxxxxxxx'x, at 00 Xxx Xxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, attention of the
Secretary, or at such other address as either party shall designate by written
notice to the other. No notice shall be deemed to have been given until actually
received by the party to whom it is addressed; provided, that a certified,
registered mail return receipt, or proof of delivery from an established
overnight delivery service shall be conclusive evidence of such receipt.
6. This Agreement may not be changed, waived, discharged or terminated
orally, but only by an instrument in writing, signed by the party against which
enforcement of such change, waiver, discharge or termination is sought, or by
order of a court with jurisdiction and authority to enter such order.
-2-
3
7. Neither this Agreement nor any rights or obligations hereunder may be
assigned by either party without the written consent of the other, except that
this Agreement will be binding upon and inure to the benefit of any successor or
successors of Xxxxxxxx'x whether by merger, consolidation, sale of assets or
otherwise and reference herein to Xxxxxxxx'x is intended to include any such
successor or successors, and any Bankruptcy trustee.
8. Xxxxxxxx'x agrees to pay the reasonable fees and expenses of Xxxxxx'x
counsel in connection with the negotiation of this Agreement.
9. From the effective date of this Agreement, Xxxxxx will be entitled to
indemnification by Xxxxxxxx'x and limitation of liability for acts and omissions
by reason of and in his capacity as a director, interim President and CEO of
Xxxxxxxx'x or any subsidiary as an administrative expense under its Agreement
subject to any limitations on indemnification set forth by the Restated
Certificate of Incorporation and By-laws of Xxxxxxxx'x as in effect on the
effective date of this Agreement or to any greater extent provided by any
amendment to those documents.
10. This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Delaware. This Agreement embodies the entire
agreement of the parties with respect to the subject matter hereof and
supersedes all prior agreements and understandings. If any one or more of the
provisions of this Agreement shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such provision shall be in effective to
the extent, but only to the extent, of such invalidity, illegibility or
unenforceability without invalidating the remainder of such invalid, illegal or
unenforceable provision or provisions or any other provision hereof.
11. All information obtained or possessed by Xxxxxx relative to the
activities of Xxxxxxxx'x and its subsidiaries which is of a secret or
confidential nature, including business plans, expansion plans, marketing data,
financial data, customer lists, technical know-how, patents, trademarks,
developments, inventions, processes or administrative procedures, is the
property of Xxxxxxxx'x and its subsidiaries or its licensors, as the case may
be, and Xxxxxx shall not, during the term of this Agreement or thereafter, use
any such information for the benefit of others than Xxxxxxxx'x and its
subsidiaries or disclose it to others; provided, that nothing herein shall
prevent Xxxxxx from using or availing himself of his general commercial,
technical and inventive skill, knowledge and experience, including that
pertaining to or derived from the nonsecret and nonconfidential aspects of the
business of Xxxxxxxx'x and its subsidiaries nor shall this paragraph apply to
information made available in Xxxxxxxx'x securities or bankruptcy court filings
or otherwise publically available other than by breach by Xxxxxx of his
obligations hereunder.
12. Nothing in this Agreement shall be construed to make Xxxxxx an employee
of Xxxxxxxx'x it being understood that Xxxxxx is an independent contractor and
is entitled to no rights as an employee of Xxxxxxxx'x.
-3-
4
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
XXXXXXXX'X INC.
By:
--------------------------------------
Name:
Title:
-----------------------------------------
Xxxxxx X. Xxxxxx, Xx.
0000 Xxxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
-4-
