EXHIBIT 10.2
EMPLOYMENT AGREEMENT
THIS AGREEMENT, effective January 15, 1999, is by and between Xxxxx X.
Xxxxxxxx (the Employee) and CHEX SERVICES, INC., a Minnesota corporation (the
Company).
RECITALS:
A. Employee is presently employed by the Company in the capacity of
President
B. Employee possesses certain unique skills, talents, contacts, judgment
and knowledge of the Company's business, strategies, ethics and objectives.
C. In order to provide for continuity in the executive management of the
Company, which continuity is deemed to be vital to the continued growth and
success of the Company, and in order that the Company may continue to avail
itself of the unique skills, talents, contacts, judgment and knowledge of
Employee, the Company desires to enter into an employment contract with
Employee.
D. Employee desires to be assured of a secure tenure with the Company,
duties and responsibilities commensurate with Employee's experience and
background, and salary, bonus, incentive compensation and other benefits and
perquisite at levels that reflect Employee's past and future contributions to
the Company. .
In consideration of the foregoing premises and the parties' mutual
covenants and undertakings contained in this Agreement, the Company and Employee
agree as follows:
ARTICLE I.
DEFINITIONS
Capitalized terms used in this Agreement shall have their defined meaning
throughout the Agreement. The following terms shall have the meanings set forth
below, unless the context clearly requires otherwise.
1.1 "Agreement" means this Employment Agreement, as from time to time
amended.
1.2 "Base Salary" means the total annual cash compensation payable on a
regular periodic basis, without regard to voluntary or mandatory deferrals, as
set forth on paragraph 3.1 of this Agreement.
1.3 "Beneficiary" means the person or persons designated in writing to the
Company by Employee to receive benefits payable after Employee's death pursuant
to paragraph 3.8 of this Agreement In the absence of such designation or in the
event that all of the person so designated predecease Employee, Beneficiary
means the executor, administrator or personal representative of Employee's
estate.
1.4 "Board" means the Board of Directors of the Company.
1.5 "Bonus Compensation" means annual cash compensation as determined
pursuant to paragraph 3.2.
1.6 "Cause" has the meaning set forth at paragraph 4.2 of this Agreement.
1.7 "Company" means all of the following, jointly and severally: (a) Chex
Services, inc. (b) any Subsidiary; and (c) any Successor.
1.8 "Confidential Information" means information that is proprietary to the
Company or proprietary to others and entrusted to the Company, whether or not
trade secrets. Confidential Information includes, but is not limited to,
information relating to business plans and to business as conducted or
anticipated to be conducted, and to past or current or anticipated products
Confidential Information also includes, without limitation, information
concerning research, development, purchasing, accounting, marketing, selling and
services. All information that Employee has a reasonable basis to consider
confidential is Confidential Information, whether or not originated by Employee
and without regard to the manner in which Employee obtains access to this and
any other proprietary information.
1.9 "Date of Termination" has the meaning set forth at paragraph 4.6(b) of
this Agreement.
1.10 "Disability" means the unwillingness or inability of Executive to
perform Executive's duties under this Agreement because of incapacity due to
physical or mental illness, bodily injury or disease for a period of eighteen
(18) months.
1.11 "Employee" means Xxxxx X. Xxxxxxxx,
1.12 "Good Reason" has the meaning set forth at paragraph 4.3 of this
Agreement.
1.13 "Notice of Termination" has the meaning set forth at paragraph 4.6(a)
of this Agreement.
1.14 "Plan" means any bonus or incentive compensation agreement, plan,
program, policy or arrangement sponsored, maintained or contributed to by the
Company, to which the Company is a party or under which employees of the company
are covered, including, without limitation, any stock option, restricted stock
or any other equity-based compensation plan, annual or long-term incentive
(bonus) plan, and any employee benefit plan, such as a thrift, pension, profit
sharing, deferred compensation, medical, dental, disability, accident, life
insurance, automobile allowance, perquisite, fringe benefit, vacation, sick or
parental leave, severance or relocation plan or policy or any other agreement,
plan, program, policy or arrangement intended to benefit employees or executive
officers of the Company.
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1.15 "Subsidiary" means any corporation at least a majority of whose
securities having ordinary voting power for the election of directors (other
than securities having such power only by reasons of the occurrence of a
contingency) is at the timed owned by the Parent Corporation, the Company and/or
one (1) or more Subsidiaries.
1.16 "Successor" has the meaning set forth at Paragraph 7.2 of this
Agreement.
ARTICLE II.
EMPLOYMENT, DUTIES AND TERM
2.1 Employment. Upon the terms arid conditions set forth in this Agreement,
the Company hereby employs Employee and Employee accepts such employment, as
President of the Company. Except as expressly provided herein, termination of
this Agreement by either party or by mutual agreement of the parties shall also
terminate Employee's employment by the Company.
2.2 Duties. During the term of this Agreement, and excluding any periods of
vacation, sick, disability or other leave to which Employee is entitled,
Employee agrees to devote reasonable attention and time during normal business
hours to the business and affairs of the Company and, to the extent necessary to
discharge the responsibilities assigned to Employee hereunder and under the
Company's bylaws, as amended from time to time, to use Employee's reasonable
best efforts to perform faithfully and efficiently such responsibilities. During
the term of this Agreement, it shall not be a violation of this Agreement for
Employee to serve on corporate, civic, or charitable boards or committees,
deliver lectures, or fulfill speaking engagements based upon the unique
experience or expertise of Employee, and management person investments, so long
as such activities do not significantly interfere with the performance of
Employee's responsibilities as an employee of the Company in accordance with
this Agreement. It is expressly understood and agreed that to the extent that
any such activities have been conducted by Employee prior to the date of this
Agreement, the continued conduct of such activities (or the conduct of
activities similar in nature and scope thereto) subsequent to the date of this
Agreement shall not thereafter be deemed to interfere with the performance of
Employee's responsibilities to the Company. Employee shall comply with the
Company's policies and procedures; provided, that to the extent such policies
and procedures are inconsistent with this Agreement, the provisions of this
Agreement shall control.
2.3 Certain Proprietary Information. If Employee possesses any proprietary
information of another person or entity as a result of prior employment or
relationship, Employee shall honor any legal obligation that Employee has with
that person or entity with respect to such proprietary information.
2.4 Term. Subject to the provisions of Article IV, the term of employment
of Employee under this Agreement shall continue until January 15, 2005.
2.5 Return of Proprietary Property. Employee agrees that all property in
Employee's possession belonging to Company, including without limitation, all
documents, reports, manuals,
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memoranda, computer print--outs, customer lists, credit cards, keys,
identification, products, access cards, automobiles and all other property
relating in any way to the business of the Company are the exclusive property of
the Company, even if Employee authored, created or assisted in authoring or
creating, such property. Employee shall return to the Company all such documents
and property immediately upon termination of employment or at such earlier time
as the Company may reasonably request
ARTICLE III.
COMPENSATION, BENEFITS AND EXPENSES
3.1 Base Salary. Subject to paragraph 4.7(a), during the term of Employee's
employment under this Agreement and for as long thereafter as required pursuant
to Article IV, the Company shall pay Employee a Base Salary according to the
following schedule:
(i) for the period January 15, 1999 through July 15, 1999, an
annualized salary of Ninety-six Thousand Dollars ($96,000);
(ii) for the period July 15, 1999 through January 14, 2000, an
annualized salary of One Hundred Twenty Thousand Dollars ($120,000);
(iii) for the period beginning January 15, 2000, an annual salary of
One Hundred Fifty Thousand Dollars ($150,000) or such higher rate as may from
time to time be approved by the Board, but in any event shall increase at least
five percent (5 %) per annum, such Base Salary to be paid in accordance with the
Company's regular payroll practices. As Employee's Base Salary is increased from
time to time during the term of Employee's employment under this Agreement, the
increased amount shall become the Base Salary for the remainder of the term and
any extensions of Employee's Term of employment under this Agreement and for so
long thereafter as required pursuant to Article IV, subject to any subsequent
increases.
3.2 Bonus Compensation. At the conclusion of each fiscal year during
Employee's employment under this Agreement the Board of Directors shall
determine an appropriate bonus for Employee based upon the preceding year's
results.
3.3 Other Compensation and Benefits. During the term of Employee's
employment under this Agreement and for as long thereafter as required pursuant
to Article IV, the Company shall continue in full force and effect all Plans in
which Employee is participating as of the date of this Agreement or in which
Employee becomes entitled to participate after the date of Agreement (or Plans
providing Employee with at least substantially similar benefits) other than as a
result of the normal expiration of any such Plan in accordance with its term as
in effect as of the date of this Agreement or the date as of which Employee
first becomes entitled to participate in such Plan, as the case may be, and
shall not take or omit to take any action that would adversely affect Employee's
continued participation in any such Plans on at least as favorable a basis to
Employee as is the case on the date of this Agreement or the date as of which
Employee first becomes entitled to participate in such Plan, as the case may be,
or which would materially reduce Employee's
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benefits in the future under any such Plans or deprive Employee of any material
benefit enjoyed by Employee as of the date of this Agreement or the date as of
which Employee first becomes entitled to participate in such Plan, as the case
may be. Employee shall be entitled to participate in or receive benefits under
any Plan made available by the Company in the future to its executives and key
management employees, subject to an on a basis consistent with the terms,
conditions and overall administration of such Plans. Nothing paid to Employee
under any Plan presently in effect or made available in the future shall be
deemed to be in lieu of the Base Salary, bonuses, incentives or compensation of
any other nature otherwise payable to Employee.
3.4 Vacation. For the 1999 calendar year and each subsequent calendar year
that begins during the term of Employee's employment under this Agreement and
for each calendar year thereafter as required pursuant to Article IV of this
Agreement, Employee shall be entitled to thirty (30) paid vacation days. The
time or times at which such vacation days are to be taken shall be reasonably
determined by Employee consistent with Employee's duties and obligations under
this Agreement. Any such vacation days with respect to a calendar year that are
unused as of the last day of such calendar year shall be forfeited.
3.5 Business Expenses. During the term of Employee's employment under this
Agreement and as for as long thereafter as required pursuant to Article W, the
Company shall, in accordance with, and to the extent of, its uniform policies in
effect from time to time, bear all ordinary and necessary business expenses
incurred by Employee in performing Employee's duties as an executive officer of
the Company, including, without limitation, all travel and living expenses while
away from home on business in the service of the Company, home telephone
expenses, social and civic club membership and participation expenses and
entertainment expenses, provided that Employee accounts promptly for such
expenses to the Company in the manner reasonably prescribed from time to time by
the Company.
3.6 Automobile. During the first year of this Agreement Employee shall
receive five hundred dollars ($500) per month in car allowance. Beginning with
the second year of this Agreement and continuing until such time as the Board
determines to increase it, Employee shall receive seven hundred dollars ($700)
per month in car allowance.
3 .7 Office and Facilities. During the term of Employee's employment under
this Agreement, the Company shall furnish Executive with office space, at least
equivalent in size, quality, furnishings and in other respects to the office
space provided as of the date of this Agreement, and full-time secretarial
service, together with such other reasonable facilities and services as are
suitable, necessary and appropriate.
3.8 Death Benefits. If Employee dies during the term of Employee's
employment under this Agreement, the Company shall pay to Executive's
Beneficiary a monthly benefit in the amount of Three Thousand and No/lOO Dollars
($3,000.00) for a period of twenty-four (24) consecutive months commencing with
the month first following the month during which Executive dies.
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3.9 Grant of Option& Simultaneously with the execution of this Agreement,
Employee shall be granted options to purchase fifty thousand (50,000) shares of
the Company's common stock at the book value of forty-three cents ($43) per
share exercisable at any time through January 15, 2005.
3.10 Board Seat. During the term of Executive's employment under this
Agreement he shall be assured a seat on the Board of Directors of the Company.
ARTICLE IV.
EARLY TERMINATION
4.1 Early Termination. Subject to the respective continuing obligations of
the parties pursuant to Article V. this Article IV sets forth the terms for
early termination of Employee's employment under this Agreement.
4.2 Termination by the Company for Cause. The Company may terminate this
Agreement for Cause. For purposes of this Agreement, "Cause" means (a) an act or
acts of personal dishonesty taken by Employee and intended to result in
substantial personal enrichment of Employee at the expense of the Company, (b)
repeated violations by Employee of his obligations under paragraph 2.2 which are
demonstrably willful and deliberate on Employee's part and which are not
remedied within a reasonable period after Employee's receipt of notice of such
violations from the Company or (c) the Willful engaging by employee in illegal
conduct that is materially and demonstrably injurious to the Company For
purposes of this paragraph 4.2, no act, or failure to act, on Employee's part
shall be considered "dishonest" "willful" or ~deliberate" unless done, or
omitted to be done, by Employee in bad faith and without reasonable belief that
Employee's action or omission was in, or no opposed to, the best interest of the
Company. Any act, or failure to act, based upon authority given pursuant to a
resolution duly adopted by the Board or based upon the advice of counsel for the
Company shall be conclusively presumed to be done, or omitted to be done, by
Employee in good faith and in the best interests of the Company.
Notwithstanding the foregoing, Employee shall not be deemed to have been
terminated for Cause unless and until there shall have been delivered to
Employee a copy of a resolution duly adopted by the affirmative vote of not less
than three-quarters of the entire membership of the Board at a meeting of the
Board called and held for the purpose (after reasonable notice to Employee and
an opportunity for Employee, together with Employee's counsel, to be heard
before the Board), finding that in the good faith opinion of the Board, Employee
was guilty of the conduct set forth above in this paragraph 4.2 and specifying
the particulars thereof in detail
4.3 Termination by Executive for Good Reason. Employee may terminate
Employee's employment under this Agreement for Good Reason in accordance with
the ensuing provisions of this paragraph 4.3.- Termination by Employee for "Good
Reason" shall mean termination of employment based on any one or more of the
following:
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(a) An adverse change in Employee's status or position as an executive
officer of the Company, including, without limitation, any adverse change in
Employee's status or position as a result of a material diminution in Employee's
duties, responsibilities or authority as of the date of this Agreement (or any
status or position to which Employee may be promoted after the date hereof) or
the assignment to Employee of any duties or responsibilities which, in
Employee's reasonable judgment, are inconsistent with Employee's status or
positions (except in connection with the termination of Employee's employment
for Cause in accordance with paragraph 4.2 hereof or Disability or death in
accordance with paragraph 4.4 hereof);
(b) A reduction by the Company in Employee's Base Salary as in effect as of
the date of this Agreement or as the same may be increased from dine to time or
a change in the eligibility requirements of performance criteria under any Plan
under which Employee is covered as of the date of this Agreement, which
adversely affects Employee;
(c) Without replacement by a Plan providing benefits to Employee equal to
or greater than those discontinued, the failure by the Company to continue in
effect, within its maximum stated term, any Plan in which Employee is
participating as of the date of this Agreement or the taking of any action by
the Company that would adversely affect Employee's participation or materially
reduce Employee's benefits under any Plan;
(d) The taking of any action by the Company that would materially adversely
affect the physical conditions existing as of the date of this Agreement in or
under which Employee performs his employment duties;
(e) The Company's requiring Employee to be based anywhere other than where
Employee's office is located as of the date of this Agreement, except for
required travel on the Company's business to an extent substantially consistent
with the business travel obligations which Employee undertook on behalf of the
Company prior to the date of this Agreement;
(f) The failure by the Company to obtain from any successor to assent to
this Agreement contemplated by paragraph 7.2; or
(g) Any refusal by the Company to continue to all Employee to attend to
matters or engage in activities not directly related to the business of the
Company which, prior to the date of this Agreement or any time thereafter but
prior to such refusal, Employee was permitted by the Board to attend to or
engage in.
Notwithstanding any other provision of this Agreement to the contrary, any
termination by Employee of his employment for any reason during the thirty (30)
day period immediately following the first anniversary of the date of this
Agreement or a Change-of-Control of the Company, as mended, shall be a
termination for Good Reason
4.4 Termination in the Event of Death or Disability. The term of Employee's
employment under this Agreement shall terminate in the event of Executive's
death or disability.
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4.5 Termination by Mutual Agreement The parties may terminate Employee's
employment under this Agreement at any time by mutual written agreement.
4.6 Notice of Termination; Date of Termination; Offer of Continued
Employment. The provisions of this paragraph 4.6 shall apply in connection with
any early termination of Employee's employment under this Agreement pursuant to
this Article IV.
(a) For purposes of this Agreement, a "Notice of Termination" shall mean a
notice which shall indicate the specific termination provisions in this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide the basis for such termination. Any purported
termination by the Company or by Employee pursuant to this Article IV (other
than a termination by mutual agreement pursuant to paragraph 4.5 or death) shall
be communicated by written Notice of Termination to the other party hereto~
(b) For purposes of this Agreement, "Date of Termination" shall mean (1) if
Employee's employment is terminated due to death, the last day of the month
first following the month during which Employee's death occurs; (2) if
Employee's employment is to be terminated for Disability, thirty (30) calendar
days after Notice of Termination is given; (3) if Employee's employment is
terminated by the Company for Cause or by Employee for Good Reason, the date
specified in the Notice of Termination; (4) if Employee's employment is
terminated by mutual agreement of the parties, the date specified in such
agreement; or (5) if Employee's employment is terminated for any other reason,
the date specified in the Notice of Termination, which in no event shall be a
date earlier than ninety (90) calendar days after the date on which a Notice of
Termination is given, unless an earlier date has been expressly agreed to by
Employee in writing either in advance of, or after, receiving such Notice of
Termination; provided, however, if within thirty (30) calendar days after giving
of a Notice of Termination the recipient of the Notice of Termination shall be
the date on which the dispute is finally determined, whether by mutual written
agreement of the parties, by final and binding arbitration or by final judgment,
order or decree of a court of competent jurisdiction (the time for appeal
therefrom having expired or no appeal having been perfected). During the
pendency of any such dispute and until the dispute is resolved in the manner
provided in the immediately preceding sentence, the Company will continue to pay
Employee all compensation and benefits to which he was entitled pursuant to
Article II immediately prior to the time the Notice of Termination is given.
(c) If this Agreement is terminated other than by reason of (1) the
expiration of the term hereof as described at paragraph 2,3, (2) Employee's
Disability or death, (3) Employee's termination for Cause pursuant to paragraph
4.2 which termination for Cause has been agreed to by Employee or has been
determined in a proceeding as provided in paragraph 7.3 to have been proper or
(4) by mutual agreement of the parties pursuant to paragraph 4.5, Employee may,
but shall not be required to, not later than ten (10) days after the Date of
Termination, provide a written offer of continued employment with the Company in
accordance with the terms of this Agreement which terms shall, in the ease of a
termination by Employee for Good Reason pursuant to paragraph 4.3, include the
Company taking any xx.xx steps as may be necessary to eliminate in a manner
reasonably satisfactory to Employee any conditions which created such good
reason for such termination. Within ten (10) days of its receipt of such offer,
the Company shall provide
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Employee with a written acceptance or rejection of such offer: Failure of the
Company to so accept or reject such offer within such period shall be deemed to
be a rejection of such offer. The parties hereby acknowledge that Employee's
failure to provide such offer to the company shall in no way impair, affect or
constitute a waiver of Employee's right to enforce the Company's obligations
under this Agreement and the Company shall not assert such failure as a defense
in any action or proceeding by Employee or enforce the Company's obligation
under this Agreement.
4.7 Compensation upon Termination, Death or During Disability.
(a) During any period that Employee fails to perform Employee's duties
hereunder as a result of incapacity due to physical or mental illness, Employee
shall continue to receive all Base Salary and other compensation and benefits to
which Employee is otherwise entitled under this Agreement and any Plan until
Employee's Date of Termination.
(b) if Employee's employment under this Agreement is terminated on account
of Disability or death, the Company shall, within ten (10) calendar days
following the Date of Termination, pay any amounts due to Employee for Base
Salary through the Date of Termination, together with any other unpaid arid pro
rata amounts to which Employee is entitled as of the Date of termination
pursuant to Article 111 hereof, including, without limitation, amounts which
Employee is entitled under any Plan in accordance with the terms of such Plan,
and further, including without limitation, a pro rata portion (prorated through
the Date of Termination) of any annual or long-term bonus or incentive payments
(for performance periods in effect at the Date of Termination) to which Employee
would have been entitled had Employee remained continuously employed through the
end of such performance periods and continued to perform Employee's duties in
the same manner as performed immediately prior to the Employee's death or
Disability.
(c) If Employee's employment under this Agreement is terminated by the
Company for Cause or by Employee for other than Good Reason, the Company shall
pay Employee the Base Salary through the Date of Termination and any amounts to
which the Employee is entitled under any Plan in accordance with the terms of
such Plan..
(d) If Employee's employment under this Agreement is terminated by the
mutual agreement of the parties under paragraph 4.5, the Company shall provide
Employee with the payments and benefits specified in the agreement.
(e) If, in breach of this Agreement, the Company terminated Employee's
employment hereunder (it being understood that a purported termination for
Disability or for Cause which is disputed and finally determined not to have
been proper shall be a termination by the Company in breach of this Agreement)
or if Employee terminates his employment hereunder for Good Reason for the
unexpired term of this Agreement as determined in accordance with paragraph 2.3,
unless earlier terminated pursuant to paragraph 4.4 or paragraph 4.5, the
Company shall, as damages for such breach:
(1) continue to pay amounts due to Employee for Base Salary in
accordance with paragraph 3.1 at the annual rate in effect thereunder
immediately prior to the Date of
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Termination (but determined without regard to any purported reduction in
Base Salary which gave rise to such termination of employment) in the same
manner as if Employee had remained continuously employed throughout the
period described above;
(2) cause Employee's continued participation in all Plans in
accordance with paragraph 3 .2 of this Agreement as if Employee remained
continuously employed with the Company through the period described above
for all purposes, including without limitation grants, awards, accruals and
vesting thereunder; provided, that, if such continued participation is not
permissible under applicable law, the Company shall provide Employee with
benefits substantially similar to those to which Employee would have been
entitled~ under those Plans in which Employee's continued participation is
not permissible;
(3) continue to (i) provide Employee with paid vacation in accordance
with paragraph 3.3 of this Agreement, (ii) bear business expenses of
Employee in accordance with paragraph 3 .4 with respect to matters
reasonably undertaken by Employee on behalf of the Company, (iii) provide
Employee with Automobile in accordance with paragraph 3.5 of this
Agreement, and (iv) provide Employee with offices and facilities in
accordance with paragraph 3.6 of this Agreement and in the same manner as
if Employee bad remained continuously employed throughout the period
described above; and
(4) pay any death benefits to which Employee is or became entitled
pursuant to paragraph 3.8 of this Agreement.
without regard to whether any such compensation or benefits referred to in
clauses (1) through (4) of this subparagraph (e) constitute excess
parachute payments for purposes of Section 280G of the internal Revenue
Code of 1986, as amended.
(f) Employee shall not be required to mitigate the Company's payment
obligations pursuant to this paragraph 4.7 by making any efforts to secure other
employment for which Employee is reasonably qualified by education, experience
or background, and Employee's commencement of employment with another employer
shall not reduce the obligations of the Company pursuant to paragraph 4.7
hereof.
ARTICLE V.
CONFIDENTIAL INFORMATION
5.1 Prohibitions Against Use. Employee will not during or subsequent to the
termination of Employee's employment under this agreement use or disclose, other
than in connection with Employee's employment with the Company, any Confidential
Information to any person not employed by the Company or not authorized by the
Company to receive such Confidential Information, without the prior written
consent of the Company. Employee will use reasonable and prudent care to
safeguard and protect and prevent the unauthorized use and disclosure of
Confidential Information. The obligations contained in this paragraph 5.1 will
survive for as long as the Company in its sole judgment considers the
information to be
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Confidential Information. The obligations under this paragraph 5. 1 will not
apply to any Confidential Information that is now or becomes generally available
to the public through no fault of Executive or to Executive's disclosure of any
Confidential Information required by law or judicial or administrative process.
ARTICLE VI.
NON-COMPETITION
6.1 Non-Competition Subject to paragraph 6.2 and 6.3, Employee agrees that
during the term of this Agreement and for a period of one (1) year following
termination of employment for any reason, Employee will not directly or
indirectly, alone or as a partner, officer, director, shareholder or employee of
any other firm or entity, engage in any commercial activity in competition with
any part of the Company's business as conducted daring the term of the Agreement
or as of the date of such termination of employment or with any part of the
Company's contemplated business with respect to which Employee has Confidential
Information as governed by Article V. For purposes of this clause (a),
"shareholder" shall not include beneficial ownership of less than five percent
(5 %) of the combined voting power of all issued and outstanding voting
securities of a publicly held corporation whose stock is traded on a major stock
exchange or quoted on NASDAQ.
6.2 Early Termination. Notwithstanding paragraph 6.1, if Employee's
employment terminates under circumstances which entitle him to receive damages
for breach of this Agreement pursuant to paragraph 4.7(e) and the Company fails
to provide Employee with any compensation or benefits due him pursuant to
paragraph 4.7(e) and does not remedy such failure within ten (10) days after
receipt of notice of such failure from Employee, the restrictions set forth in
paragraph 6. 1 shall cease to apply to Employee for the remainder of the period
to which such restrictions would otherwise apply notwithstanding any subsequent
remedy of such failure by the Company.
6.3 Employer's Option to Revise. At its sole option, the Company may, by
written notice to Employee within thirty (30) days after the effective date of
the termination of Employee's employment, waive or limit the time and/or
geographic area in which Executive is prohibited from engaging in competitive
activity.
ARTICLE VII.
GENERAL PROVISIONS
7.1 No Adequate Remedy. Notwithstanding paragraph 4.7, the parties declare
that it is impossible to accurately measure in money the damages which will
accrue to either party by reason of a failure to perform any of the obligations
under this Agreement. Therefore, if either party shall institute any action. or
proceeding to enforce the provisions hereof, other than a claim by Executive for
a payment pursuant to paragraph 4.7, the party against whom such action or
proceeding is brought hereby waives the claim or defense that such party has an
adequate remedy at Law, and
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such party shall not assert in any such action or proceeding the claims or
defense that such party has an adequate remedy at law.
7.2 Successors and Assigns.
(a) This Agreement shall be binding upon and inure to the benefit of any
Successor of the Parent Corporation, the Company and each Subsidiary, and any
such Successor shall absolutely and unconditionally assume all of the Company's
and any Subsidiary's obligations hereunder. Upon Executive's written request,
the Company will seek to have any Successor, by agreement in form and substance
satisfactory to Executive, assent to the fulfillment by the Company of their
obligations under this Agreement. Failure to obtain such assent at least three
(3) business days prior to the dine a person or entity becomes a Successor (or
where the Company does not have at least three (3) business days' advance notice
that a person or entity may become a Successor, within one (1) business day
after having notice that such person or entity may become or has become a
Successor) shall constitute Good Reason for termination by Employee of
employment pursuant to paragraph 4.3. For purposes of this Agreement.,
"Successor" shall mean. any corporation, individual, group, association,
partnership, firm, venture or other entity or person that, subsequent to the
date hereof, succeeds to the actual or practical ability to control (either
immediately or with the passage of time), all or substantially all of the Parent
Corporation's and/or the Company's business and/or assets, directly or
indirectly, by merger, consolidation, recapitalization, purchase, liquidation,
redemption, assignment, similar corporate transaction, operation of law or
otherwise.
(b) This Agreement and all rights of Employee hereunder shall inure to the
benefit of and be enforceable by Employee's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If Employee should die while any amounts would still be payable to
Employee hereunder if Employee had continued to live, all such amounts unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement of Employee's devisee, legatee, or other designee or, if there be no
such designee, to Employee's estate. Employee may not assign this Agreement, in
whole or in any part, without the prior written consent of the Company.
7.3 Disputes. Any dispute, controversy or claim for damages arising under
or in connection with this Agreement shall, in Employee's sole discretion, be
settled exclusively by such judicial remedies as Employee may seek to pursue or
by arbitration in Minneapolis, Minnesota by a panel of three (3) arbitrators in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrators' award in any court having
jurisdiction; provided, however, that Employee shall be entitled to seek
specific performance of Employee's right to be paid until the Date of
Termination during the pendency of any dispute or controversy arising under or
in connection with this Agreement.. The Company shall bear all costs and
expenses, including attorney's fees, arising in connection with any arbitration
proceeding pursuant to this paragraph 7.3. The Company shall be entitled to seek
an injunction or restraining order iii a court of competent jurisdiction to
enforce the provisions of Article V and VI.
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7.4 No offsets. In no event shall any amount payable to Employee pursuant
to this Agreement be reduced for purposes of offsetting, either directly or
indirectly, any indebtedness or liability of Employee to the Company.
7.5 Notices. All notices, requests and demands given to or made pursuant
hereto shall, except as otherwise specified herein, be in writing and be
personally delivered or mailed postage prepaid, registered or certified U.S.
mail, to any part as its address set forth on the last page of this Agreement.
Either party may, by notice hereunder designate a. changed address. Any notice
hereunder shall be deemed effectively given and received: (a) if personally
delivered, upon delivery; or (b) if mailed, on the registered date or the date
stamped on the certified mail receipt
7.6 Withholding. To the extent required by any applicable Law, including,
without limitation, any federal or state income tax or excise tax law or laws,
the Federal Insurance Contributions Act, the Federal Unemployment Tax Act or any
comparable federal, state or local laws, the Company retains the right to
withhold such portion of any amount or amounts payable to Employee under this
Agreement as the Company (on the written advice of outside counsel) deems
necessary.
7.7 Captions. The various headings or captions in this Agreement are for
convenience only and shall not affect the meaning or interpretation of this
Agreement.
7.8 Governing Law. The validity, interpretation, construction, performance,
enforcement and remedies of or relating to this Agreement, and the rights and
obligations of the parties hereunder, shall be governed by the substantive laws
of the State of Minnesota (without regard to the conflict of laws rules or
statutes of any jurisdiction), and any and every legal proceeding arising out of
or in connection with this Agreement shall be brought in the appropriate courts
of the State of Minnesota, each of the parties hereby consenting to the
exclusive jurisdiction of said courts for this purpose.
7.9 Construction. Wherever possible, each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under applicable Law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable Law, such provision shall be ineffective only to the extent of such
prohibition or invalidity without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
7.10 Waivers. No failure on the part of either party to exercise, and no
delay in exercising, any right or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right or remedy granted hereby or by any related document or by law.
7.11 Modification. This Agreement may not be modified or amended except by
written instrument signed by the parties hereto.
7.12 Entire Agreement. This Agreement constitutes the entire agreement and
understanding between the parties hereto in reference to all the matters herein
agreed upon.
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7.13 Counterparts. This Agreement may be executed in one (1) or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one (1) and the same instrument.
7.14 Survival. The parties expressly acknowledge and agree that the
provisions of this Agreement which by their express or implied terms extend
beyond the termination of Executive's employment hereunder (including without
limitation, the provisions of paragraph 3.9 relating to death benefits) and 4.7
(relating to compensation) or beyond the termination of this Agreement
(including, without limitation, the provisions of paragraph 5. 1 (relating to
confidential information) and Article VI (relating to non-competition)), shall
continue in full force and effect notwithstanding Employee's termination of
employment hereunder or the termination of this Agreement, respectively.
IN WITNESS WHEREOF, the parties hereto have caused this Employment Agreement to
be duly executed and delivered as of the day and year first above written.
EMPLOYEE COMPANY
CHEX SERVICES, INC.
a Minnesota Corporation
/s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxx X. Xxxxxxx
--------------------- ----------------------------
Xxxxx X. Xxxxxxxx Xxxxx X. Xxxxxxx
for the Board of Directors
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