CONFIDENTIAL AND
LEGALLY PRIVILEGED
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into as of the 1st day of January 1997, by
and between XXXXX SERVICES CORPORATION, a Delaware corporation maintaining its
principal office at Xxx Xxxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx (the "Company")
and Xxxxxxx Xxxxxxxx, an individual now residing at 000 Xxxxx Xxxxxx Xxxxx, Xxx
Xxxxxxxx, Xxxxxxx 00000 (the "Employee").
WITNESSETH THAT:
WHEREAS, the Employee is currently serving in an executive capacity as a
Vice President of the Company and the Company desires to ensure that the
Employee will continue to be available to provide business development services
for the Company in Latin America; and
WHEREAS, to induce the Employee to provide such services, the Company is
offering to provide the Employee with the compensation, benefits and security
provided for in this Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto agree as follows:
1. Employment/Capacity/Term/Release.
(a) The Company agrees to and does hereby employ the Employee, and the
Employee agrees to and hereby does enter into the employ of the Company upon the
terms and conditions set forth in this Agreement. Such employment shall be in an
executive capacity as Senior Vice President - Business Development, Latin
America of the Company.
(b) This Agreement and such employment shall commence on January 1,
1997 and shall continue through December 31, 1999 (the "Initial Term"), and from
year to year thereafter (the "Extended Term"). As used in this Agreement, the
phrase "term of this Agreement" shall be deemed to include the period subsequent
to the date hereof and prior to the Termination Date.
(c) Upon the termination of this Agreement and the Employee's
employment, the Employee shall execute and deliver to the Company a general
release of claims in form and substance acceptable to the Company.
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2. Time and Effort/Absences.
During the "term of this Agreement", the Employee shall devote his
entire time and attention during normal business hours to the development of new
business on behalf of the Company and its subsidiaries in Latin America and
elsewhere as directed by the Company, subject to the supervision of the Board of
Directors and the President and Chief Executive Officer of the Company, and he
shall not engage in any other business activity whether or not such business
activity is pursued for gain, profit, or other pecuniary advantage, but this
restriction shall not be construed to restrict the Employee (i) from performing
services as a member of the Board of Directors, Board of Trustees or the like of
any non-profit entity for which the Employee receives no compensation, provided
that, such services do not unreasonably interfere with the ability of the
Employee to perform the services and discharge the responsibilities required of
him under this Agreement, and (ii) from investing his assets in such form or
manner as will not require any services on the part of the Employee in the
operation of the business of the entity in which such investments are made. The
Employee shall be excused from rendering his services during reasonable vacation
periods and during other reasonable temporary absences as authorized from time
to time by the Board of Directors or the President and Chief Executive Officer
of the Company.
3. Corporate Offices.
If elected, the Employee will serve, without additional compensation,
as an officer and director (or in either capacity) of the Company its parent and
subsidiaries.
4. Salary/Bonus/Other Benefits.
In consideration of the services and duties to be rendered and
performed by the Employee during the "term of this Agreement", the Company
agrees to pay and provide for the Employee the compensation and benefits
described below:
(a) An annual salary, payable in equal monthly or bi-weekly
installments, in the amount of Two Hundred Eighty-Five Thousand Dollars
($285,000) or in such greater amount as may from time to time be fixed, in its
sole discretion, by the Board of Directors of the Company.
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(b) An annual discretionary incentive bonus in such amount as may from
time to time be determined by the Board of Directors of the Company.
(c) Other Benefits. It is intended that the Company shall continue to
provide the Employee with benefits at least as favorable as benefits provided on
behalf of other executives of the Company who furnish services of comparable
significance, as they may exist from time to time. Such benefits presently
include participation in (i) Group Life Insurance, Supplemental Executive Group
Life Insurance, Medical and Dental Insurance, Xxxxx Stock Option Plan, Executive
Pension Plan, Xxxxx Select Plan and Xxxxx 401(k) Plan, and (ii) an automobile
allowance in the amount of $700.00 per month. Provided, however, any such
participation shall be in accordance with the provisions of any such plans and
nothing contained in this Agreement is intended to or shall be deemed to affect
adversely any of the Employee's rights as a participant under any such plans.
However, nothing herein shall prevent the Company from modifying or
discontinuing any benefit or benefit plan on a consistent and non-discriminatory
basis applicable to all such executives.
5. Expenses.
The Employee shall be reimbursed for out-of-pocket expenses incurred
from time to time on behalf of the Company in the performance of his duties
under this Agreement, upon the presentation of such supporting documents and
forms as the Company shall reasonably request.
6. Medical Leave, Reasonable Accommodation, Termination for Medical
Incapacity and Disability Benefits.
The Company agrees to provide the Employee with a medical leave of
absence not to exceed six (6) months in duration in any twelve (12) month period
if the Employee has a medical condition that precludes the Employee from being
fully functional in his or her position. The term "fully functional" means able
to travel to and from work, be at work, perform satisfactorily all essential
functions of the position as identified herein, and otherwise meet the demands
of the position and the conditions of employment without significant risk of
substantial harm to self or others. Any leave entitlement granted by Federal,
state or local law shall run concurrently with the commencement of this six
month period of leave, whether such leave is taken all at once, intermittently
or on a reduced time basis. Nothing herein is intended to diminish any
entitlement
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granted by law. If appropriate, the Company will support the Employee's
application for disability benefits.
If the Employee is not able to return to the position in a fully
functional capacity at the conclusion of six months of medical leave in a twelve
month period, this Agreement may be terminated by the Board of Directors of the
Company at its sole discretion, without prior notice.
Unless otherwise prohibited by law, the Employees agrees that the
Employee will furnish for review by a medical professional designated by the
Company, copies of the Employee's medical records pertaining to any medical
condition for which the Employee requests a medical leave of more than twelve
(12) weeks in duration, return to work from any such leave, work restrictions,
modification or accommodation; or the Employee or the Company believes that the
Employee has a medical condition that may be causing or contributing to
performance or conduct deficiencies. The Employee also agrees to authorize any
health care professional from whom the Employee is receiving diagnostic
evaluation, treatment or other medical care to discuss the Employee's medical
condition with the medical professional designated by the Company to receive and
review the Employee's medical records. The Employee further agrees that he or
she will undergo, at the sole expense of the Company, any medical specialty
evaluation if requested to do so by the Company.
The Company agrees to provide the Employee with medically necessary
accommodation if it likely will enable the employee to be fully functional in
the position and is reasonable, feasible and will not impose undue hardship on
Company operations. The term "medically necessary" means that the accommodation
has risk-avoiding or therapeutic value in accordance with scientifically valid
medical principles and practice and that the Employee requires similar
accommodation when performing comparable non-work functions.
The inability of the Employee to be fully functional in his position
for medical reasons shall not constitute a breach of this Agreement by the
Employee. If this Agreement is terminated by the Company because the Employee is
not fully functional in his position for medical reasons, as provided for in
this paragraph, the Company shall be obligated to continue the salary of the
Employee as provided in Paragraph 4.(a) for a period equal to the greater of (a)
twelve (12) months, or (b) such longer period as may be determined by the Board
of Directors of the Company, in each case, reduced
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by any disability insurance benefits provided for the benefit of the Employee at
the expense of the Company.
7. Death/Death Benefit.
In the event of the death of the Employee during the "term of this
Agreement", this Agreement shall terminate and the Employee's salary shall
continue to be paid to his designated beneficiary or, if none, to his personal
representative, through the last day of the month in which such death occurs.
8. Severance Payment
If this Agreement and the employment of the Employee is terminated at
any time (i) by the Employee for Good Reason (as defined in Paragraph 9), or
(ii) by the Company for any reason other than for Cause (as hereinafter
defined), the Company will be obligated to pay to the Employee a lump-sum cash
payment in an amount equal to the product of (i) and (ii); where (i) shall equal
the sum of (A) the Employee's then existing annual salary and (B) the Employee's
then existing annual incentive bonus during the twelve (12) month period ending
with the close of the month in which such termination of employment occurs (the
"Date of Termination"), but not less than $60,000, which represents his 1996
incentive award, divided by twelve (12); and where (ii) shall be the lesser of,
(x) thirty-six (36), or (y) the number of months until the Employee's Retirement
(the "Severance Payment"). Termination of the Employee's employment on account
of his or her disability, death or retirement (as hereinafter defined) will not
be considered a termination of the Employee's employment by the Company and will
not require the Company to pay and provide any Severance Payment. No Severance
Payment will be required if the employment of the Employee is terminated by the
Company for Cause (as hereinafter defined) or by the Employee (other than for
Good Reason as defined in Paragraph 9). The Severance Payment provided herein is
provided in order to reinforce and encourage the continued loyalty, attention,
and dedication of the Employee to the Company's business and affairs without the
concerns which normally arise from the possibility of a loss of employment
security. As used herein, the terms "Retirement" and "Cause" shall have the
following meanings, respectively:
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(a) Retirement.
Termination of the Employee's employment on account of "Retirement"
shall mean termination on or after the Employee's normal retirement date in
accordance with the terms of the Xxxxx 401(k) Plan; and
(b) Cause
Termination by the Company of the Employee's employment for "Cause"
shall mean termination as a result of (i) the willful and continued failure by
the Employee to perform substantially the services contemplated by this
Agreement (other than any such failure resulting from the Employee's incapacity
due to physical or mental illness) after a written demand for substantial
performance is delivered to the Employee by a member or representative of the
Board of Directors of the Company which specifically identifies the manner in
which it is alleged that the Employee has not substantially performed such
services, or (ii) the willful engaging by the Employee in gross misconduct which
is materially and demonstrably injurious to the Company; provided that, no act,
or failure to act, on the Employee's part shall be considered "willful" unless
done, or omitted to be done, in bad faith and without reasonable belief that
such action or omission was in, or not opposed to, the best interests of the
Company. Anything in this Agreement to the contrary notwithstanding, the
Employee's employment may not be terminated for Cause unless and until there
shall have been delivered to the Employee a copy of a resolution of the Board of
Directors of the Company finding that in the good faith opinion of the Board the
Employee was guilty of the conduct set forth in clause (i) or (ii) of this
subparagraph (b) and specifying the particulars thereof in detail.
9. Termination by the Employee for Good Reason.
The termination by the Employee of this Agreement and his employment
for "Good Reason" shall be deemed justifiable termination of his employment and
shall excuse the Employee from the obligation to render services as provided in
Paragraph 2 hereof. Upon such termination, the Employee shall be entitled to a
Severance Payment in accordance with the provisions of Paragraph 8 hereof. As
used herein, the phrase "Good Reason" shall mean:
(a) a change in the Employee's status, title or position(s) as an
officer of the Company in the executive capacity set forth in this Agreement
which, in his or her reasonable
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judgment, does not represent a promotion from or enhancement of his status,
title and position, or the assignment by the Board of Directors of the Company
to the Employee of any duties or responsibilities which, in his reasonable
judgment, are inconsistent with such status, title or position, or any removal
of the Employee from or any failure to reappoint or reelect him to such
position, provided, however, none of the foregoing shall apply where there is
justifiable termination by the Company of this Agreement and the Employee's
employment for Cause or on account of disability. Retirement or death of the
Employee or the termination by the Employee of his employment other than for
Good Reason;
(b) a reduction in the Employee's annual salary or a failure by the
Company to pay to the Employee any installment of the annual salary required by
Paragraph 4, which failure continues for a period of twenty (20) days after
written notice thereof is given by the Employee to the Company;
(c) the failure by the Company, upon written notice from the Employee,
to obtain the assumption of this Agreement in form and substance to the
reasonable satisfaction of the Employee by any successor of the Company (other
than by merger or consolidation for which no separate assumption is necessary)
as referred to in Paragraph 12; or
(d) any refusal by the Company to allow the Employee to attend to
matters or engage in activities not directly related to the business of the
Company which is permitted by this Agreement.
10. Notice of Termination.
Any purported notice of termination of the Employee's employment shall
be communicated in writing and delivered to the other party as provided in
Paragraph 12. below (hereinafter a "Notice of Termination").
11. Confidentiality and Limited Covenant Not to Compete.
In connection with the performance of the Employee's duties hereunder,
the Employee will be in a position of trust and confidence, he will develop or
receive confidential, restricted or unpublished information involving trade
secrets, customer-related information, vendor-related information, copyrights,
lists, data and other information, strategic planning or operating data,
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computer programs, financial, pricing, operating or training data or other
confidential business techniques, processes, methods or information which is not
generally known to the public (collectively referred to as "proprietary
information"). He will receive or have access to "proprietary information" which
was obtained and developed through the investment of substantial amounts of
money, time and effort by the Company. He acknowledges and agrees that
disclosure of this proprietary information or its use for the benefit of any
other person or entity would be injurious to the Company. He also acknowledges
and agrees that unless he agrees to maintain the confidentiality of such
"proprietary information" and to limit its use solely to the Company, he would
not have been granted employment or, if already employed, his employment would
cease immediately. Regardless of the cessation of his employment for any reason,
the Employee's obligation to continue to maintain the confidentiality of the
"propriety information" shall continue for a period of one (1) year following
such cessation of employment.
The Employee agrees to deliver to the Company, at its request, or in
any event, upon cessation of Employee's employment with the Company (for
whatever reason and at whatever time) (a) all memoranda, notes, records, files
or other documentation, whether made or compiled by the Employee alone or in
conjunction with others (regardless of whether such persons are employed by the
Company); (b) all "proprietary information" and other information of the Company
which is in the Employee's control or possession; and (c) copies of such
information, as well as other corporate property. Regardless of cessation of the
Employee's employment by the Company, and without any fee, the Employee will
assist the Company in protecting all rights the Company may have to such
"proprietary information."
The Employee recognizes that, as a direct consequence of the
materials, information and training provided to him by the Company, the access
he is granted to "proprietary information" and the opportunities that he will
have while employed by the Company to cultivate the loyalty and goodwill of the
Company's customers, suppliers, vendors and other persons, it is important that
the Employee refrain from engaging in activities which could result in damage to
the Company's business.
The Employee further recognizes that the Company has invested
considerable time and money to train its employees in the services provided by
the Company and to develop the special
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skills required to perform such services. Therefore, the Employee will not,
during the term of his employment with the Company and for a period of one (1)
year immediately thereafter, solicit, entice, hire or otherwise seek to
persuade, either directly or through any other entity, any officer, employee,
consultant or agent of the Company or its subsidiaries, to discontinue such
relationship for any reason. During such period, the Employee will not solicit
business with any customers of the Company or its subsidiaries, nor will he seek
to entice or persuade any sources of referral, vendors or other entities, who
are then doing business with the Company or its subsidiaries to reduce,
discontinue or curtail any services provided to the Company or its subsidiaries
in any respect.
To avoid the use of "proprietary information", the Employee agrees to
refrain from engaging in competing employment either directly or indirectly on
his own behalf or as an agent, consultant or employee of any partnership,
corporation or other entity, in those areas of Latin America and the United
States where the Employee had been responsible for developing new business on
behalf of the Company and its subsidiaries for a period of one (1) year after
his employment ceases (regardless of the reason for cessation of such
employment).
The Employee recognizes and agrees that ascertaining damages in the
event of his breach or violation of any covenant or undertaking contained in
this Agreement would be difficult, if not impossible, and further recognizes
that the various rights and duties created in this Agreement are essential for
the operation of the Company's business. Consequently, irreparable injury would
result from any violation of this Agreement by the Employee. Since it would be
difficult, if not impossible, to compensate fully the Company by monetary
damages in the event of the Employee's breach (although the Company retains the
right to commence a civil action seeking monetary damages), the Employee agrees
that the Company, in addition to and without limiting any other remedy or right
it may have, shall have the immediate right to obtain a preliminary, and
subsequently, a final injunction against the Employee, to be issued by a court
of competent jurisdiction, enjoining the Employee from engaging in any breach or
violation of this Agreement. An injunction shall be issued without posting a
bond that otherwise might be required. If an injunction is issued or if monetary
damages are awarded against the Employee, he will reimburse the Company for the
legal fees and court costs incurred in obtaining such relief (including all
appeals and other proceedings).
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12. Binding Effect.
This Agreement shall be binding upon and inure to the benefit of:
(a) Any successors or assigns of the Company, whether by way of a
merger or consolidation, or liquidation of the Company, or by way of the Company
selling all or substantially all of the assets of the Company to a successor
entity; and
(b) The Employee's estate, his executors, administrators, heirs and
beneficiaries.
13. Notices.
Any notice or other communication required under this Agreement shall
be in writing, shall be deemed to have been given and received when delivered in
person, or, if mailed, shall be deemed to have been given when deposited in the
United States mail, first class, registered or certified, return receipt
requested, with proper postage prepaid, and shall be deemed to have been
received on the third business day thereafter, and shall be addressed as
follows:
If to the Company, addressed to:
Xxxxx Services Corporation
Xxx Xxxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: President and Chief Executive Officer
With a copy to its: General Counsel
If to the Employee, addressed to:
Xxxxxxx Xxxxxxxx
000 Xxxxx Xxxxxx Xxxxx
Xxx Xxxxxxxx, Xxxxxxx 00000
or such other address as to which any party hereto may have notified the other
in writing.
14. Governing Law.
This Agreement shall be governed by and interpreted in accordance with
the laws of the State of New York, without regard to its conflict or choice of
laws provisions to preserve the parties' intent, and the enforceability of this
Agreement.
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15. Entire Agreement.
This Agreement contains the entire arrangement or understanding
between the Employee and the Company relating to the employment of the Employee
by the Company. No provision of the Agreement may be modified or amended except
by any instrument in writing by or for both parties hereto. All references to
paragraphs refer to paragraphs of this Agreement.
16. Waiver.
Failure of either party hereto to insist upon strict compliance by the
other party with any term, covenant or condition hereof shall not be deemed a
waiver of such term, covenant or condition, nor shall any waiver or
relinquishment or failure to insist upon strict compliance of any right or power
hereunder at any one or more times be deemed a waiver or relinquishment of such
right or power at any other time or times.
17. Assignment by Employee.
The rights and benefits of the Employee under this Agreement are
personal and no such right or benefit shall be subject to voluntary or
involuntary alienation, assignment or transfer; provided, however, that nothing
in this Paragraph shall preclude the Employee from designating a beneficiary or
beneficiaries to receive any benefit payable on his death.
18. Severability.
If for any reason any provision of this Agreement shall be held
invalid, such invalidity shall not affect any other provision of this Agreement
not held so invalid, and all other provisions shall to the full extent
consistent with law continue in full force and effect. If any such provision
shall be held invalid in part, such invalidity shall in no way affect the
remaining portion of such provision not held so invalid, and the remaining
portion of such provision, together with all other provisions of this Agreement,
shall to the full extent consistent with law continue in full force and effect.
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19. Headings.
The headings of paragraphs are included solely for convenience of
reference and shall not control the meaning or interpretation of any of the
provisions of this Agreement.
XXXXX SERVICES CORPORATION
Dated: 3/3, 1997 By /s/ R. Xxxxxxx Xxxxx
-----------------------------
President and Chief
Executive Officer
Dated: Feb. 18, 1997 By /s/ Xxxxxxx Xxxxxxxx
-----------------------
Xxxxxxx Xxxxxxxx,
Employee
