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EXHIBIT 10.26
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made this 30th day of March, 1998, between WM.
CAMERON & CO., a Georgia corporation dba Xxxxxxx Xxxxxx Building Products (the
"Company"), and J. Xxxxxx Xxxxxx, a resident of the State of Texas ("Employee").
BACKGROUND
The Company desires to employ Employee on the terms and conditions set
forth below. Employee desires to accept employment on the terms and conditions
set forth below.
AGREEMENT
In consideration of the employment and continued employment of Employee
by the Company, the premises, and the mutual agreements hereinafter set forth,
the parties agree:
1. Definitions. The following terms used herein shall have the
definitions set forth below:
(a) "Business" or "Business of the Company" means the business of
the wholesale distribution, sale and marketing of building materials, building
supplies and mill work.
(b) "Cause" means conduct amounting to fraud or dishonesty against
the Company; Employee's violation of Sections 2(a) or (b) hereof, or any of the
Company's work rules or policies, or absences from work without a reasonable
excuse, if the President and Chief Executive Officer notifies Employee of such
violation or absence in writing and Employee fails to cure such violation or
absenteeism within five (5) days after written notice has been given, provided
that written notice relating to such violation or absenteeism shall only be
given once as it relates to a particular manner of conduct; intoxication with
alcohol or drugs while on Company business during regular business hours; a
conviction or plea of guilty or nolo contendere to a felony or a crime involving
dishonesty against the Company; or Employee's failure to observe the
requirements of Sections 2(c), 5 and 6 hereof.
(c) "Disability" means (i) the inability of Employee to perform the
duties of Employee's employment due to physical or emotional incapacity or
illness, where such inability is expected to be of long-continued and indefinite
duration or (ii) Employee shall be entitled to (x) disability retirement
benefits under the federal Social Security Act or (y) recover benefits under any
long-term disability plan or policy maintained by the Company. In the event of a
dispute, the determination of Disability shall be made reasonably by the Board
of Directors of the Company and shall be supported by advice of a physician
competent in the area to which such Disability relates.
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(d) "Effective Date" means the date hereof.
2. Terms of Engagement; Duties
(a) The Company hereby employs Employee, commencing on the Effective
Date, and Employee hereby accepts employment by the Company subject to the terms
and conditions hereof. Employee shall report to, shall have the title assigned
by, and shall perform the duties assigned by the Chairman and CEO of the Company
and Xxxxxxx Xxxxxx Building Products, Inc. (the "Parent") or other senior
executive of the Company from time to time in connection with the conduct of the
Business of the Company. Employee is engaged initially with the title and
functions of Executive Vice President and Chief Financial Officer (CFO) of the
Company and the Parent. Nothing herein shall preclude the Chairman and CEO of
the Company from changing the Employee's title and duties if the Chairman and
CEO of the Company has concluded in his reasonable judgment that such change is
in the Company's best interests. Employee shall not be required to reside
outside the Area (as defined in Section 6 hereof).
(b) Throughout the term of this Agreement, Employee shall:
(i) devote all of Employee's business effort, time, energy and
skill (reasonable vacations and reasonable absences due to illness
excepted) to the duties of Employee's employment hereunder assigned by
the senior officers of the Company;
(ii) faithfully, loyally, and industriously perform such duties,
subject to the control and supervision of the senior officers of the
Company; and
(iii) diligently follow and implement all lawful management
policies and decisions of the Company that are communicated to Employee.
(c) During the term of this Agreement, Employee shall not be engaged
(whether or not during normal business hours) in any other business or
professional activity, whether or not such activity is pursued for gain, profit
or other pecuniary advantage; but this shall not be construed as preventing
Employee from (i) investing his personal assets in businesses which do not
compete with the Company in such form or manner as will not require any services
on the part of Employee in the operation or the affairs of the companies in
which such investments are made and in which his participation is solely that of
an investor, (ii) purchasing securities in any corporation whose securities are
regularly traded provided that such purchase shall not result in his
collectively owning beneficially at any time five percent (5%) or more of the
equity securities of any corporation engaged in a business competitive to that
of the Company, or (iii) participating in conferences, preparing or publishing
papers or books or teaching so long as the Employee's supervisor approves of
such activities prior to Employee's engaging in them.
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3. Compensation.
(a) In consideration of the services rendered by Employee pursuant
to this Agreement, the Company shall provide the following:
(i) A base salary of Two Hundred Fifteen Thousand Dollars
($215,000) per annum (the "Base Salary") which Base Salary will be
reviewed periodically and may be increased by the Company from time to
time. The Base Salary shall be paid in accordance with the Company's
standard payroll practices in effect from time to time, and shall be
subject to such deductions and withholdings as are required by law or
by policies of the Company.
(ii) Reimbursement for all reasonable business expenses
(including a $600.00 per month car allowance) incurred by Employee in
connection with the Business of the Company subject to compliance with
the expense reimbursement policies established by the Company and in
sufficient detail to comply with Internal Revenue Service Regulations.
(b) Employee shall be eligible to be considered for an annual cash
performance bonus, which may consist of an amount of up to sixty percent (60%)
of the Base Salary in the applicable year based on the attainment of performance
objectives established by the Board of Directors of the Company and the Parent
in good faith and Employee's contributions to the attainment of those
objectives, and shall be in such amount and payable in such manner and on such
terms as are determined by the Board of Directors of the Company and the Parent.
Nothing contained in this subsection (b) shall obligate the Company to pay a
bonus to Employee, unless the Board of Directors of the Company and the Parent
determines to award such a bonus to Employee.
(c) Employee shall have the right to participate in (i) any
insurance plans maintained by the Company from time to time to the extent that
Employee's position, tenure, salary, age, health and other qualifications make
him eligible to participate, and (ii) such other fringe benefit plans or
programs as are provided to the other senior management employees of the
Company, provided that the Company shall not be required to adopt or continue
any insurance plans or fringe benefit plans or programs.
(d) Employee shall receive options to purchase 100,000 shares of
Common Stock of the Parent pursuant to the terms of a Non-Qualified Stock Option
Agreement ("Option Agreement"). Such options will have a term of ten years and
will vest in one-fifth increments over five years from the date of grant. The
exercise prices of such options shall be the exercise prices set forth in the
Option Agreement and the date of grant shall be the Effective Date.
(e) The remuneration and benefits set forth in this Section 3 shall
be the only compensation payable to Employee with respect to his employment
hereunder, and Employee shall not be entitled to receive any compensation in
addition to that set forth in this Section 3 for any
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services rendered by him in any capacity to the Company or any affiliated
corporation unless agreed to in writing by the Company or such affiliated
corporation.
4. Term and Termination of this Agreement. The term of employment of
Employee pursuant to this Agreement shall commence on the Effective Date and
shall continue for a term of five (5) years, or until sooner terminated as
provided herein.
(a) Employee's employment hereunder may be terminated:
(i) By the Company, upon the death or Disability of Employee;
(ii) By the Company, immediately for Cause;
(iii) By Employee upon ninety (90) days prior written notice to
the Company;
(iv) By mutual agreement between Employee and the Company; and
(v) By the Company, without Cause.
(b) In the event the Company terminates the employment of the
Employee without Cause, then, during the twelve (12) month period immediately
following the effective date of the termination of his employment, the Employee
shall continue to receive his base salary under this Agreement as in effect on
the date that his employment terminates subject to employee signing a Settlement
and Release Agreement agreeable to the Company. The payments described in this
Section 4(b) are hereinafter referred to as "Severance Pay," and shall be made
to the Employee without any obligation on his part to render services hereunder
after the effective date of the termination of Employee's employment, in full
settlement of all of the obligations of the Company hereunder. No Severance Pay
shall be paid to the estate or personal representative of the Employee in the
event of his death during the term of this Agreement.
(c) Except as set forth above, upon termination of Employee's
employment hereunder pursuant to this Section 4, the Company shall have no
further obligation to Employee or his personal representative with respect to
remuneration due under this Agreement, except for Base Salary earned but unpaid
at date of termination; provided however, Employee's covenants in Sections 5 and
6 of this Agreement shall survive the termination of Employee's employment
hereunder. If Employee fails to observe the requirements of Sections 5 or 6
hereof, then the Company shall have no obligation to pay any portion of the Base
Salary remaining unpaid to Employee and the Company shall have no obligation to
pay any portion of the Severance Pay. It is understood that Employee's coverage
under the Company's disability, accidental death or dismemberment and group life
insurance plans shall cease as of the date of termination.
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5. Ownership, Non-Disclosure, and Non-Use of Trade Secrets.
(a) The following terms used in this Section 5 shall have the
definitions set forth below:
(i) "Excluded Information" means any data or information that is
a Trade Secret hereunder (1) that has been voluntarily disclosed to
the public by the Company or has become generally known to the public
(except where such public disclosure has been made by or through the
Employee or by a third person or entity with the knowledge of the
Employee without authorization by the Company); (2) that has been
independently developed and disclosed by parties other than the
Employee or the Company to the Employee or to the public generally
without a breach of any obligation of confidentiality by any such
person running directly or indirectly to the Company; or (3) that
otherwise enters the public domain through lawful means.
(ii) "Trade Secrets" means information which derives economic
value, actual or potential, from not being generally known and not
being readily ascertainable to other persons who can obtain economic
value from its disclosure or use and which is the subject of efforts
that are reasonable under the circumstances to maintain its secrecy or
confidentiality. Trade Secrets may include either technical or
non-technical data, including without limitation, (1) any useful
process, machine, chemical formula, composition of matter, or other
device which (A) is new or which Employee has a reasonable basis to
believe may be new, (B) is being used or studied by the Company and is
not described in a printed patent or in any literature already
published and distributed externally by the Company, and (C) is not
readily ascertainable from inspection of a product of the Company; (2)
any engineering, technical, or product specifications including those
of features used in any current product of the Company or to be used,
or the use of which is contemplated, in a future product of the
Company; (3) any application, operating system, communication system,
or other computer software (whether in source or object code) and all
flow charts, algorithms, coding sheets, routines, subroutines,
compilers, assemblers, design concepts, test data, documentation, or
manuals related thereto, whether or not copyrighted, patented or
patentable, related to or used in the Business of the Company; or (4)
information concerning the customers, suppliers, products, pricing
strategies of the Company, personnel assignments and policies of the
Company, or matters concerning the financial affairs and management of
the Company or any parent, subsidiary, or affiliate of the Company;
provided however, that Trade Secrets shall not include any Excluded
Information.
(b) Employee acknowledges and agrees that all Trade Secrets, and all
physical embodiments thereof, are confidential to and shall be and remain the
sole and exclusive property of the Company and that any Trade Secrets produced
by the Employee during the period of Employee's employment by the Company shall
be considered "work for hire" as such term is defined in 17 U.S.C. Section 101,
the ownership and copyright of which shall be vested solely in the Company.
Employee agrees (i) immediately to disclose to the Company all Trade Secrets
developed in whole or part by Employee during the term of Employee's employment
by the Company, and (ii) at the request and expense of the Company, to do all
things and sign all documents or instruments
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reasonably necessary in the opinion of the Company to eliminate any ambiguity as
to the rights of the Company in such Trade Secrets including, without
limitation, providing to the Company Employee's full cooperation in any
litigation or other proceeding to establish, protect, or obtain such rights.
Upon request by the Company, and in any event upon termination of Employee's
employment by the Company for any reason, Employee shall promptly deliver to the
Company all property belonging to the Company including, without limitation, all
Trade Secrets (and all embodiments thereof) then in Employee's custody, control,
or possession.
(c) Employee agrees that all Trade Secrets of the Company received
or developed by Employee as a result of Employee's employment with the Company
will be held in trust and strictest confidence, that Employee will protect such
Trade Secrets from disclosure, and that Employee will make no use of such Trade
Secrets, except in connection with Employee's employment hereunder, without the
Company's prior written consent. The obligations of confidentiality contained in
this Agreement shall apply during Employee's employment by the Company and (i)
with respect to all Trade Secrets consisting of scientific or technical data, at
any and all times after expiration or termination (for whatever reason) of such
employment; and (ii) with respect to all other Trade Secrets, for a period of
two (2) years after such expiration or termination, unless a longer period of
protection is provided by law.
6. Noncompete; Nonsolicitation Covenants.
(a) The following terms used in this Section 6 shall have the
definitions set forth below:
(i) "Affiliate" means any person or entity directly or
indirectly controlling, controlled by, or under common control with
Employee. As used herein, the word "control" means the power to direct
the management and affairs of a person.
(ii) "Area" means the United States of America and Canada.
(iii) "Competing Enterprise" means any person or any business
organization of whatever form, engaged directly within the Area in the
Business of the Company.
(b) Employee covenants that Employee shall, during the term of this
Agreement, and for a period of nine (9) months following termination for any
reason of Employee's employment by the Company, observe the following separate
and independent covenants:
(i) Neither Employee nor any Affiliate will, without the prior
written consent of the Company, within the Area, either directly or
indirectly, (A) become financially interested in a Competing
Enterprise (other than as a holder of less than five percent of the
outstanding voting securities of any entity whose voting securities
are listed on a national securities exchange or quoted by the National
Association of Securities Dealers, Inc. automated quotation system),
or, (B) engage in or be employed by any
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Competing Enterprise as a consultant, officer, director, or Employee
or managerial employee.
(ii) Neither Employee nor any Affiliate will, without the prior
written consent of the Company, either directly or indirectly, on
Employee's own behalf or in the service or on behalf of others,
solicit, divert, or appropriate, or attempt to solicit, divert, or
appropriate, to any Competing Enterprise within the Area, any person
or entity whose account with the Company was serviced by or under
Employee's direction or supervision during the term of this Agreement.
(iii) Neither Employee nor any Affiliate will, without the
Company's prior written consent, either directly or indirectly, on
Employee's own behalf or in the service or on behalf of others,
solicit, divert, or hire away, or attempt to solicit, divert, or hire
away, to any Competing Enterprise, any person employed by the Company,
whether or not such employee is a full-time or a temporary employee of
the Company and whether or not such employment is pursuant to written
agreement and whether or not such employment is at will.
7. Remedies. Employee acknowledges and agrees that the Company is
engaged in the Business of the Company in and throughout the Area, and that by
virtue of the training, duties, and responsibilities attendant with Employee's
employment by the Company and the special knowledge of the business and
operations of the Company that Employee will have as a consequence of Employee's
employment by the Company, great loss and irreparable damage would be suffered
by the Company if the Employee should breach or violate any of the terms or
provisions of the covenants and agreements set forth herein. Employee further
acknowledges and agrees that each such covenant and agreement is reasonably
necessary to protect and preserve the interest of the Company. Therefore, in
addition to all the remedies provided at law or in equity, Employee agrees and
consents that the Company shall be entitled to a temporary restraining order and
a permanent injunction to prevent a breach of any of the covenants or agreements
of Employee contained herein and to collect from Employee reasonable attorney's
fees incurred by the Company in the enforcement hereof. The existence of any
claim, demand, action or cause of action of Employee against the Company shall
not constitute a defense to the enforcement by the Company of any of the
covenants or agreements herein whether predicated upon this Agreement or
otherwise, and shall not constitute a defense to the enforcement by the Company
of any of its rights hereunder.
8. General Provisions.
(a) In the event that any one or more of the provisions, or parts of
any provisions, contained in the Agreement shall for any reason be held to be
invalid, illegal, or unenforceable in any respect by a court of competent
jurisdiction, the same shall not invalidate or otherwise affect any other
provision hereof, and this Agreement shall be construed as if such invalid,
illegal, or unenforceable provision had never been contained herein.
Specifically, but without limiting the foregoing in any way, each of the
covenants of the parties to this Agreement contained herein shall be deemed and
shall be construed as a separate and independent covenant and should any part or
provision of any of such covenants be held or declared invalid by any court of
competent
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jurisdiction, such invalidity shall in no way render invalid or unenforceable
any other part or provision thereof or any other covenant of the parties not
held or declared invalid.
(b) This Agreement and the rights and obligations of the Company
hereunder may be assigned by the Company to any subsidiary of or successor to
the Company, and shall inure to the benefit of, shall be binding upon, and shall
be enforceable by any such assignee, provided that
any such assignee shall agree to assume and be bound by this Agreement. This
Agreement and the rights and obligations of Employee hereunder may not be
assigned by Employee.
(c) The waiver by the Company of any breach of this Agreement by
Employee shall not be effective unless in writing, and no such waiver shall
operate or be construed as a waiver of the same or another breach on a
subsequent occasion.
(d) This Agreement and the rights of the parties hereunder shall be
governed by and construed in accordance with the laws of the State of Texas.
(e) This Agreement embodies the entire agreement of the parties
relating to the employment of Employee by the Company. No amendment,
modification extension or renewal of this Agreement shall be valid or binding
upon the Company or Employee unless made in writing and signed by the parties.
All prior understandings and agreements relating to the employment of Employee
by the Company are hereby expressly terminated.
(f) Employee acknowledges and affirms that the employment agreement
between Employee and the Predecessor has been terminated and that (i) he is not
a party to any other employment agreement, (ii) he is not entitled to any
severance benefits arising out of or in connection with his employment by the
Predecessor which may cause the Company to incur any obligations either to
Employee or the Predecessor, and (iii) the only severance benefits to which he
will be entitled are those contained herein.
(g) Any notice, request, demand, or other communication required to
be given hereunder shall be made in writing and shall be deemed to have been
fully given if personally delivered or if mailed by overnight delivery (the date
on which such notice, request, demand, or other communication is received shall
be the date of delivery) to the parties at the following addresses (or at such
other addresses as shall be given in writing by any party to the other party
hereto):
If to Employee:
J. Xxxxxx Xxxxxx
0000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
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If to Company:
Wm. Cameron & Co. dba Xxxxxxx Xxxxxx Building Products
00000 Xxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxx, Chairman and Chief Executive Officer
Telecopy: (000) 000-0000
(h) This Agreement may be executed in two or more counterparts, each
of which shall be deemed to be an original, and it shall not be necessary for
the same counterpart of this agreement to be signed by all of the undersigned in
order for the agreements set forth herein to be binding upon all of the
undersigned in accordance with the terms hereof.
IN WITNESS WHEREOF, the Company and Employee have each executed and
delivered this Agreement as of the date first above written.
COMPANY:
WM. CAMERON & CO. dba Xxxxxxx Xxxxxx
Building Products
By: /s/ Xxxxxx X. Xxxx
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Xxxxxx X. Xxxx
Chairman and CEO
EMPLOYEE:
/s/ J. Xxxxxx Xxxxxx
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J. Xxxxxx Xxxxxx
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