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EXHIBIT 10.24
EMPLOYMENT AGREEMENT
BETWEEN
XXXXX OF XXXX NEVADA CORPORATION
AND
X. XXXXXXXX XXXXXXX
THIS AGREEMENT IS SUBJECT TO
ARBITRATION UNDER THE TEXAS
GENERAL ARBITRATION ACT
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EMPLOYMENT AGREEMENT
BETWEEN
XXXXX OF XXXX NEVADA CORPORATION
AND
X. XXXXXXXX XXXXXXX
Agreement dated December 9, 1997, but effective September 2, 1997 by
and between Xxxxx of Xxxx Nevada Corporation, a Nevada corporation ("Company"),
and X. XxXxxxxx Xxxxxxx ("Executive").
Whereas, Company desires to retain Executive as President and Chief
Operating Officer, and,
Whereas, Company wishes to assure itself of the services of Executive
for the period provided in this Agreement, and Executive is willing to serve in
the employ of the Company for said period, upon the terms and conditions
hereinafter provided;
Now, therefore, in consideration of the mutual covenants herein
contained, the parties hereto hereby agree as follows:
SECTION 1. EMPLOYMENT
1.1 Employment. The Company shall employ Executive, and Executive
shall serve the company in the capacity of the President and Chief Operating
Officer of the Company during the term of employment set forth in Section 1.3
of this Agreement.
If, without cause (as defined in Section 4.4), at any time during the
term of employment Executive shall cease to be vested by the Company with the
title of President and Chief Operating Officer, as described in Section 1.2
below, Executive shall have the right, by written notice to the Company, to
terminate his services hereunder, effective as of the last day of the month of
the receipt of the Company of any such written notice, and Executive shall have
no further obligation under this Agreement. Termination of Executive's
services under this paragraph shall be treated as an event of termination under
Section 4.1 of this Agreement.
1.2 Duties. Executive shall during the term of his employment
hereunder, subject to the control only of the Company's Chief Executive Officer
("CEO") and the Board of Directors, shall perform such executive and/or
administrative duties consistent with the office of President and Chief
Operating Officer of the Company, as from time to time may be assigned to him
by the CEO. Specific areas of executive responsibility shall be assigned or
withdrawn at the discretion of the CEO. Nothing herein shall promise or imply
that all departments or disciplines of the Company will have direct reporting
responsibility to Executive. During the period of his employment hereunder and
except for illness, reasonable vacation periods and reasonable leaves
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of absence, Executive shall devote all his business time, attention, skill and
efforts to the faithful performance of his duties hereunder.
1.3 Term. Executive shall commence employment with the Company on
or before September 2, 1997. This Agreement shall be effective and the period
of Executive's employment under this Agreement shall commence as of the date
Executive commences employment with the Company, and shall continue through the
third anniversary from the date thereof (the "Expiration Date"), unless sooner
terminated pursuant to the terms of this Agreement. In the event that
Executive continues in the full-time employ of the Company after the end of the
term of this Agreement, such continued employment shall be subject to the terms
and conditions of this Agreement, on a month to month basis.
SECTION 2. COMPENSATION
2.1 Basic Compensation. The Company shall pay to the Executive
$400,000 as basic compensation for each year during the term of this Agreement,
or such additional amounts approved by the Company's Board of Directors. The
basic compensation provided by this Section 2.1 is hereinafter referred to as
the "Basic Compensation." In no case shall Basic Compensation be decreased
under this Agreement, either from the $400,000 stated above or from any
subsequent increases. Executive's Basic Compensation shall be payable in
accordance with the Company's customary payroll practices, but in no event less
often than monthly.
2.2 Incentive Compensation. The Company shall recommend to the
Stock Option and Compensation Committee of Xxxxx of Xxxx Limited, a Bermuda
corporation ("HoT-Bermuda"), that Executive receive, in addition to Executive's
Basic Compensation, an award (the "Award") under the Xxxxx of Xxxx 1997 Cash
Bonus Performance Plan (the "Bonus Plan") to pay to Executive incentive
compensation (hereinafter the "Incentive Compensation") consisting of a sum
based on a percentage of Adjusted Pretax Earnings (as defined below) of
HoT-Bermuda and its Affiliates (as defined below) for each fiscal year of the
Company during his employment hereunder, such sum to be computed as provided
below. Under the Award, (i) no Incentive Compensation shall be payable to
Executive for any fiscal year unless the Adjusted Pretax Earnings for such
fiscal year exceeds $30 million, and (ii) for each fiscal year of the Company
during the term of this Agreement in which Adjusted Pretax Earnings for such
fiscal year exceeds $30 million, Executive shall receive a bonus equal to the
sum of (A) $100,000, plus (B) three percent (3%) of the excess of Adjusted
Pretax Earnings for such fiscal year over $30 million. For purposes of this
Agreement, the term "Adjusted Pretax Earnings" shall mean with respect to any
fiscal year ending period of the Company, the audited consolidated earnings
before all income taxes of HoT-Bermuda and its Affiliates, less extraordinary
income and capital gains, and plus extraordinary expenses and capital losses,
as such terms are defined by generally accepted accounting principles. With
respect to the fiscal year ending February 28, 1998 and the Company's fiscal
year during which the Expiration Date occurs, Executive's Incentive
Compensation under the Award shall equal to the product of (i) the Incentive
Compensation he would have received for the entire fiscal year, multiplied by
(ii) a fraction, the numerator of which is the number of days during such
fiscal year in which Executive was an employee of the Company or its
Affiliates, and the denominator of which is the number of days in such fiscal
year. All other provisions of the Award shall be subject to the terms and
conditions of the Bonus Plan
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and such other terms and conditions prescribed by the HoT-Bermuda Stock Option
and Compensation Committee. In the event the Stock Option and Compensation
Committee fails to grant the Award under the Bonus Plan, Executive shall
nevertheless be entitled to receive Incentive Compensation under this Agreement
based upon the terms and conditions as the Award described above; provided that
(x) the Company shall pay such compensation to Executive within 120 days after
the last day of each fiscal year end of the Company and (y) no Incentive
Compensation shall be payable to Executive if Executive is not employed by the
Company or any Affiliate (as defined below) of the Company on the last day of
the fiscal year of the Company or on the Expiration Date, unless Executive's
employment with the Company and its Affiliates terminates during such fiscal
year by reason of an event of termination (as defined in Section 4.1 hereof).
The term "Affiliate" or "Affiliates" shall mean any subsidiary of the existing
ultimate parent company, HoT-Bermuda (or any subsidiary of such subsidiary).
2.3 Elections with Respect to Compensation. By written notice to
the Board of Directors or to the Compensation Committee or other appropriate
committee of the Board of Directors (the "Committee") given by the Executive
prior to the last day of any calendar year during the term hereof, Executive
may, with respect to the calendar year or years during the term hereof next
succeeding the calendar year in which such notice is given, elect thereby to
defer payment to him of such portion of his Basic Compensation and/or Incentive
Compensation for such succeeding year or years as may be designated by
Executive which compensation has not at the date of giving of such notice been
fully earned by, or allocated to, Executive. Any amounts so deferred by
Executive shall bear interest thereon (compounded annually at the end of each
calendar year) from the date on which the deferred compensation is finally
determined until paid at the rate of interest published as "Prime Rate" in the
"Money Rates" section of The Wall Street Journal, and such amounts with
interest thereon are hereinafter called "Deferred Compensation." The aggregate
of all such Deferred Compensation shall be paid to Executive or, in the event
of his death, his designated beneficiary, or if there is no such designation,
his estate, in equal monthly installments for a period of up to ten years, as
determined by the Committee in its sole discretion, until the full amount
thereof shall be paid, provided that if there is less than an equal annual
installment due at any time, such lesser amount shall constitute the last
annual installment to be made hereunder. Said payments shall commence on the
first day of the month next succeeding the earlier of (i) Executive's attaining
the age of 65 years, or (ii) the termination of Executive's full-time
employment with the Company for any reason whatsoever, or (iii) the date of
Executive's death. Executive's right to such Deferred Compensation shall be
nonforfeitable, and termination of his employment with the Company for any
cause whatsoever shall not in any way diminish the amount of Deferred
Compensation payable to him or alter the method and the time for payment
thereof or the persons to whom same shall be paid.
2.4 Reimbursement of Relocation Costs. (a) The Company will pay
all reasonable costs and expenses relating to Executive's relocation from
Connecticut to El Paso, Texas, including but not limited to: (i) moving
expenses for home furnishings and two automobiles; (ii) transportation,
including airfare, and lodging relating to the relocation of Executive's family
from Connecticut; (iii) reasonable travel expenses for Executive and his spouse
for house hunting trips; (iv) reimbursement for the difference between the
proceeds from the sale of Executive's home in Darien, Connecticut and
Executive's cost basis in such home of $767,000 (the "Darien Premises Loss");
provided that the amount of such deficiency to be reimbursed by the Company
shall not
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exceed sixty thousand dollars ($60,000); and (v) a relocation allowance of two
thousand dollars ($2,000) to cover incidental relocation costs (the costs and
expenses identified in clauses (i) through (v) above are collectively referred
to as the "Reimbursed Payments").
(b) If any of the Reimbursed Payments actually paid by the Company to
Executive is subject to tax imposed by the Internal Revenue Code of 1986, as
amended (the "Tax"), after giving effect to all allowable tax credits,
deductions, exclusions and offsets, the Company shall promptly pay to Executive
an additional amount (the "Gross-Up Payment"), such that the net amount
retained by Executive, after deduction of any Tax on the Reimbursed Payments
and any federal, state and local income tax and Tax upon the payment provided
for by this Section 2.4(b), shall be equal to the Reimbursed Payments. In the
event any Gross-Up Payment is made by Company in respect of the Darien Premises
Loss and Executive's Tax liability is at any time reduced by reason of the
Darien Premises Loss, Executive shall repay to the Company that portion of the
Gross-Up Payment attributable to such Darien Premises Loss not to exceed the
amount of such reduction in Tax liability.
2.5 Benefits. During the term of his employment hereunder,
Executive shall be entitled to participate in or receive benefits under the
Company's employee benefit plans and arrangements which are available to senior
executive officers of the Company or its Affiliates, including, (i) at no cost
to Executive, group health, life, dental and disability insurance covering
Executive and (ii) group health and dental insurance coverage of Executive's
family at the then prevailing rates. Additionally, the waiting period
applicable to Company's group health insurance coverage shall be waived such
that coverage thereunder shall be provided as of the date Executive commences
his employment with the Company.
SECTION 3. BENEFITS PAYABLE UPON DEATH OR DISABILITY
3.1 Compensation During Period of Disability. In the event of the
disability (as hereinafter defined) of Executive, the Company shall, subject to
the provisions of Section 5 hereof, continue to pay Executive the compensation
provided in Section 2 hereof during the period of his disability in excess of
any disability benefits payable to Executive under the Company's employee
benefit plans; provided, however, that in the event Executive is disabled for a
continuous period of 12 calendar months, this Agreement shall be deemed to be
terminated as of the expiration of such 12-month period. From and after the
date this Agreement is terminated pursuant to this Section 3.1, Executive shall
receive such disability insurance benefits after termination of this Agreement
directly from the insurance company in accordance with the terms and provisions
of the insurance coverage. Termination of this Agreement pursuant to this
Section 3.1 shall not be deemed an "event of termination" under Section 4.1,
and the Executive shall not be entitled to the benefits payable under Section
4.2. As used in this Agreement, the term "disability" shall mean the complete
inability of Executive to perform his duties under this Agreement as determined
by an independent physician selected with approval of the Company and
Executive.
3.2 Duties of Executive During Period of Disability. During the
period Executive shall be entitled to receive payments under Section 3.1 above,
to the extent he is physically and mentally able to do so, he shall furnish
information and assistance to the Company and comply
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with the provisions of Section 5 hereof, and, in addition, upon reasonable
request in writing on behalf of the CEO or the Board of Directors, from time to
time, he shall make himself available to the Company to undertake reasonable
assignments consistent with the dignity, importance and scope of his prior
position and his physical and mental health. Executive must comply with the
same conditions during his disability while employed by the Company as would be
required by Section 5 if his employment were terminated in accordance with
Section 4 hereof.
3.3 Death. The employment of Executive under this Agreement shall
terminate upon the death of Executive during the term of his employment
hereunder. In the event of the death of the Executive prior to the payment of
all benefits provided for under this Agreement, any then accrued but unpaid
benefits shall be paid to a beneficiary designated in writing by the Executive
from time to time. If there is no such designation, any accrued but unpaid
benefits will be paid to the Executive's estate. In the event that Executive's
employment under this Agreement ceases prior to the end of a calendar month as
a result of his death, the Company shall pay Executive or his legal
representatives, as the case may be, in addition to any other amounts payable
by the Company hereunder, a lump cash sum which shall in no event be less than
the Basic Compensation to which Executive would have been entitled, had he
remained in the Company's employ until the end of the calendar month during
which his employment terminates.
SECTION 4. PAYMENTS TO EXECUTIVE UPON
TERMINATION OF EMPLOYMENT
4.1 Termination. Upon occurrence of an event of termination (as
hereinafter defined) during the period of Executive's employment under this
Agreement, the provisions of this Section 4 shall apply. As used in this
Agreement, an "event of termination" shall mean any one or more of the
following:
(i) The termination by the Company of Executive's full-time
employment hereunder for any reason other than a termination on
account of disability, or on account of his death while in the employ
of the Company (in which event benefits shall be payable as provided
in Section 3) and other than for cause (as defined in Section 4.4); or
(ii) Executive's resignation from the Company's employ, pursuant to
the provisions of the next sentence, upon any (A) liquidation or
dissolution of the Company; (B) occurrence of a Triggering Event (as
defined in Section 8.2) and Executive's election to terminate this
Agreement for Good Reason (as defined in Section 8.2) in accordance
with the terms and conditions of Section 8.2 or (C) other material
breach of this Agreement by the Company. Upon the occurrence of any
event described in Clauses (A), (B) or (C) above, Executive shall have
the right to elect to terminate his employment under this Agreement
by resignation upon not less than 60 days' prior written notice given
within a reasonable period of time not to exceed, except in case of a
continuing breach, six calendar months after the event giving rise to
said right to elect.
4.2 Payment of Salary. Upon occurrence of an event of termination
under Section 4.1, the Company shall pay Executive, or in the event of his
subsequent death, his designated
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beneficiary, or if there is no such designation to his estate, subject to the
provisions of Section 5, below, as severance pay or liquidated damages, or
both, for the periods below described:
(i) Payments, each in an amount equal to the monthly rate of Basic
Compensation then being paid to Executive under this Agreement, except
as described in Section 4.3 below. Payments shall commence on the
first day of the month following the occurrence of the event of
termination, referred to in Section 4.1 of this Agreement and shall
continue monthly until the date this Agreement would have expired but
for the event of termination.
(ii) In the event the Stock Option and Compensation Committee fails
to grant the Award under the Bonus Plan, an amount payable after the
close of the fiscal year of the Company equal to the amount of
Incentive Compensation payable to Executive under Section 2.2. Such
payment, if any, shall be equal to the product of (i) the Incentive
Compensation he would have received for the entire fiscal year,
multiplied by (ii) a fraction, the numerator of which is the number of
days during such fiscal year in which Executive was an employee of the
Company or its Affiliates, and the denominator of which is the number
of days in such fiscal year.
4.3 Right of Offset. The parties to this agreement anticipate
that if an event of termination should occur, resulting in payments of salary
as described in Section 4.2 above, the Executive might find employment or
otherwise undertake activities which result in earnings or revenues during the
period in which payments of salary are received from the Company. It is the
intent of the parties that the amount of payments of salary otherwise payable
by the Company shall be reduced on a dollar for dollar basis by any form of
other compensation received by the Executive or accruing to the benefit of the
Executive as a direct result of his personal services. All such forms of
compensation are defined as "Replacement Earnings". In such circumstances, the
Company will make reduced payments of salary. The reduction period will
begin with the first day that Executive has Replacement Earnings. Reductions
will continue as long as there are Replacement Earnings and are variable with
each payment of salary.
It is anticipated that Executive might become self employed or may
enter into a business enterprise as a proprietor, partner, shareholder of other
form of owner. Under these circumstances the Executive agrees to accept the
burden of proof for establishing a proper accounting of personal service
compensation under generally accepted accounting principles.
Executive has the burden of advising Company of the amount, timing and
nature of all forms of Replacement Earnings. Executive must give notice to
Company within five business days of the commencement of or any increase in
Replacement Earnings. Executive hereby authorizes Company to verify details of
Replacement Earnings using any means that is reasonable in the circumstances.
Other than for collection of advances or notes which Executive has
signed as subject to payroll reduction and other than for recovery of
unreported or underreported Replacement Earnings described above, the Company
shall in no event be entitled to set off or credit against
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sums payable to Executive under this Agreement any amount due or claimed to be
due by Executive to the Company.
4.4 Termination for Cause or Executive Breach. Executive may be
discharged by the Company prior to the expiration of the term of this Agreement
for cause (which for all purposes of this Agreement shall be limited to (i) a
final conviction of Executive by a court of competent jurisdiction for fraud,
theft or embezzlement, (ii) misconduct that is materially injurious to the
Company or any Affiliate of the Company or (iii) any material breach of this
Agreement by Executive or action by Executive involving willful malfeasance or
gross negligence, or any failure of Executive to act involving material
nonfeasance and which Executive has not cured to the reasonable satisfaction of
the Board of Directors of the Company within a period of 60 days following
receipt by Executive of notice of such act or omission). This Agreement and
the employment of Executive hereunder shall terminate at the election of the
Company effective upon notice to Executive following the date such judgment
becomes final or the date of expiration of such 60- day period (in the event
Executive fails to cure the default within such period), whichever is
applicable, and such termination shall not be deemed an "event of termination"
under Section 4.1, and the Executive shall not be entitled to the benefits
payable under Section 4.2.
SECTION 5. CONFIDENTIALITY
5.1 Confidentiality and Disclosure. Both during the term of this
Agreement and thereafter and without regard to when or for what reason, if any,
such employment shall terminate:
(a) Executive agrees to regard and preserve as confidential all
knowledge and information pertaining to the business of the Company obtained by
him from any source whatever as a result of his employment with the Company and
which is not a matter of public knowledge.
(b) Executive shall not, except on behalf of the Company, make
use of any of the Company's confidential records, documents, contracts,
customer lists, writings, data or other information, whether or not the same is
in written or other recorded form.
Without limiting the generality of the foregoing, it is hereby agreed
that the prohibitions contained hereinabove shall be operative with respect to
any information or knowledge which may now or hereafter be deemed a trade
secret of the Company or information which relates to the Company's personnel;
present operations or future planning with respect to suppliers or customers,
the contents of any Company manual, practice or procedure, operating, revenue,
expense or other statistics; private or public debt or equity financing or
concerning any banking, accounting or financial matters; current or future
advertising or promotion plans or programs; applications to or matters pending
or under the jurisdiction of any regulatory agency or court, including those
that are only threatened; any system, program, procedure or administrative
operations, including those pertaining to any matter relative to computer
operations of any type; information of the type mentioned above or of any other
type regarding Affiliates of the Company; present or future plans for the
extension of the present business or the commencement of new business by the
Company.
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5.2 Acknowledgment of Confidential Information. Executive
hereby acknowledges that he possesses information and knowledge of the type
described in Section 5.1 concerning the Company which is not a matter of public
knowledge, the release or dissemination of which would cause irreparable harm
to the Company, and that the performance of his obligations under this Section
are required for the reasonable protection of this Company.
5.3 Failure to Comply. If Executive, for any reason other than
death or disability, shall, without the written consent of the Company, fail to
comply with any provision of Section 5.1, his rights to any future payments or
other benefits hereunder shall terminate, and the Company's obligations to make
such payments or other benefits hereunder shall terminate, and the Company's
obligations to make such payments and provide such benefits shall cease (except
as otherwise provided in Section 2.5); provided, however, that no failure to
comply with any provision of Section 5.1 above shall be deemed to have occurred
unless and until Executive has received written notice on behalf of the Board
of Directors of the Company, specifying the conduct alleged to constitute such
failure, and has thereafter continued to engage in such conduct after a
reasonable opportunity and a reasonable period (but in no event less than 60
days after receipt of such notice) to refrain from such conduct. Despite the
relief provided in preceding sentence, Executive acknowledges that the
Company's remedy at law for the breach of the provisions provided in this
Section will be inadequate. Accordingly, in the event of the breach or
threatened breach by Executive of Section 5.1, the Company shall be entitled to
injunctive relief in addition to any other remedy it might have. In no event
shall Executive be under any obligation to repay to the Company any amounts
theretofore paid to him hereunder.
SECTION 6. SOURCE OF PAYMENTS
All payments provided in Sections 2, 3 and 4 shall be paid in cash
from the general funds of the Company, and no special or separate fund shall be
established and no other segregation of assets shall be made to assure payment.
Executive shall have no right, title or interest whatever in or to any
investments which the Company may make. Nothing contained in this Agreement,
and no action taken pursuant to its provisions, shall create or be construed to
create a trust of any kind, or a fiduciary relationship between the Company and
Executive or any other person. To the extent that any person acquires a right
to receive payments from the Company hereunder, such right shall be no greater
than the right of an unsecured creditor of the Company.
SECTION 7. DECISIONS BY COMPANY
Any powers granted to the Board of Directors of the Company hereunder
may be exercised by a Committee, appointed by the Board of Directors of
the Company, and such Committee if appointed, shall have general
responsibility for the administration and interpretation of this Agreement.
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SECTION 8. CONSOLIDATION, MERGER OR SALE OF ASSETS
8.1 Consolidation, Merger or Sale of Assets. Nothing in this
Agreement shall preclude the Company from consolidating or merging into or
with, or transferring all or substantially all of its assets to, another
corporation or party which assumes this Agreement and all obligations and
undertakings of the Company hereunder.
8.2 Election by Executive. In the event of a merger or
consolidation of the Company with, or transfer of all or substantially all of
its assets to, any corporation or other party other than one in which is an
Affiliate (each, a "Triggering Event"), Executive, for Good Reason (as defined
below), may at any time, but no later than six calendar months after the
consummation of such merger or consolidation or transfer of assets, elect,
pursuant to Section 4.1, to cancel and terminate this Agreement. Any stock
purchase transaction or series of transactions in which the existing single
largest holder of common stock, Xx. Xxxxxx X. Xxxxx, or his successors or
assigns, or any group of persons which includes Xx. Xxxxxx X. Xxxxx, or his
successors or assigns, is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Securities Exchange Act of 1934) of the single largest portion
of the total common stock outstanding or any reorganization of then affiliated
entities, with no change in shareholders of the ultimate parent company, shall
not be deemed to be a Triggering Event. Such election shall specify the date
upon which Executive elects that this Agreement shall terminate to come to an
end, which date shall be no sooner than 60 days after the date of such notice.
Thereafter, this Agreement shall terminate and come to an end on the date
specified in the notice aforesaid, and such termination shall be deemed to be
an event of termination under Section 4.1. For purposes hereof, "Good Reason"
shall mean (A) a substantial adverse change in Executive's status or
position(s) as an executive officer of the Company or its Affiliates as in
effect immediately prior to the Triggering Event, including, without
limitation, any adverse change in Executive's status or position(s) as a result
of a material diminution in duties or responsibilities (other than, if
applicable, any such change directly attributable to the fact that the Company
is no longer publicly owned) or the assignment to Executive of any duties or
responsibilities which, in Executive's reasonable judgment, are inconsistent
with such status or position(s) or any removal of Executive from or any failure
to reappoint or reelect Executive to such position(s) (except in connection
with the termination of Executive's employment for cause (as referred to in
Section 4.4) or incapability, as a result of Executive's death, or by Executive
other than for Good Reason); or (B) a reduction by the Company or its
Affiliates in Executive's Basic Compensation as in effect immediately prior to
the Triggering Event.
SECTION 9. NON-COMPETITION, NON-SOLICITATION
In consideration for the job security and other benefits to Executive
provided by this Agreement, Executive agrees as follows:
(a) Unless termination of employment occurs pursuant to an event
of termination as provided in Section 4.1, it is agreed: that during the term
of employment, or, in the event of termination of Executive's employment by the
Company for cause (as defined in Section 4.4), during the period ending on the
Expiration Date, Executive shall not, without the prior written approval of
the Board of Directors of the Company, directly or indirectly, own, manage,
operate,
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join, control or participate in or be connected with, anywhere in the world, as
an officer, employee, agent, consultant, sales representative, partner,
stockholder, or director of any business enterprise which is, directly or
indirectly, in competition with the business of the Company or any Affiliate of
the Company, as the business of the Company or any said Affiliate may be
constituted during the term of employment or at the termination thereof. In
the instance that Executive's employment terminates pursuant to or as a result
of an event of termination as provided in Section 4.1, Executive will not
compete, as described in the preceding sentence, with the Company or any
Affiliate thereof for so long thereafter as he receives benefits under Section
4.2 of this Agreement.
(b) If Executive terminates his employment by himself (other
than under the circumstances set forth in Section 1.4 or in Section 4.1), in
breach of this Agreement during the term of employment, Executive shall not,
during the period ending on the Expiration Date, without the prior written
approval of the Board of Directors of the Company, directly or indirectly, own,
manage, operate, join, control or participate in or be connected with, anywhere
in the world, as an officer, employee, agent, consultant, sales representative,
partner, stockholder or director of any business enterprise which is, directly
or indirectly in competition with the Company or any Affiliate of the Company,
as the business of the Company or any Affiliate may be constituted during the
term of employment or at termination thereof.
(c) Executive recognizes and admits that Company has valuable
rights and expectations to engage throughout the world in the conduct of its
business, and that the covenant encompassing the entire world in this Section
as well as the time limitations contained herein, are reasonably necessary for
the protection of the Company's business. Executive further recognizes that
the Company's remedy at law for a breach by him of the provisions of this
Section will be inadequate. Accordingly, in the event of this breach or
threatened breach by Executive of this Section, the Company shall be entitled
to injunctive relief in addition to any other remedy it may have.
(d) Unless termination of employment occurs pursuant to an event
of termination as provided in Section 4.1, it is further agreed: that during
the term of employment and upon either (i) the expiration of this Agreement
or (ii) a termination of Executive's employment by the Company for cause (as
defined in Section 4.4) or (iii) the termination of his employment by Executive
by his own action in breach of this Agreement during the term of employment,
Executive shall not, for a period of twelve (12) months following the said
expiration or termination, without the prior written approval of the Board of
Directors of the Company, solicit any employee of the Company or any of its
Affiliates to terminate him or his relationship with the Company or its
Affiliates or influence or induce such an employee to seek employment with any
competitor of the Company or its Affiliates.
SECTION 10. INDEMNIFICATION
10.1 Indemnification. The terms of the Indemnity Agreement dated
September 2, 1997, are hereby incorporated into this Agreement by reference.
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SECTION 11. GENERAL
11.1 Entire Agreement. This Agreement, the Indemnity Agreement,
together with any awards of stock options or stock awards under the Stock
Option Plan and any awards under the Bonus Plan, constitutes the full agreement
and understanding of the parties hereto regarding the employment of Executive
with the Company and its Affiliates and all prior agreements or understandings
are merged herein, except that this Agreement shall not effect or operate to
reduce any benefit or compensation inuring to Executive of a kind elsewhere
provided and not expressly provided for in this Agreement.
11.2 Nonassignability. Neither this Agreement nor any right or
interest hereunder shall be assignable by Executive, his beneficiaries or legal
representatives without the Company's prior written consent; provided, however,
that nothing in this Section 11.2 shall preclude (i) Executive from designating
a beneficiary to receive any benefit payable hereunder upon his death, or (ii)
the executors, administrators or other legal representatives of Executive or
his estate from assigning any rights hereunder to the person or person entitled
thereto.
11.3 No Attachment. Except as required by law, no right to receive
payments under this Agreement shall be subject to anticipation, commutation,
alienation, sale, assignment, encumbrance, charge, pledge or hypothecation in
favor of any third party, or to execution, attachment, levy or similar process
or assignment by operation of law in favor of any third party, and any attempt,
voluntary or involuntary, to effect any such action shall be null, void and of
no effect.
11.4 Binding Agreement. This Agreement shall be binding upon and
inure to the benefit of Executive and the Company and their respective heirs,
legal representatives and permitted successors and assigns.
11.5 Amendment of Agreement. Except for increases in Basic
Compensation made as provided in Section 2.1, this Agreement may not be
modified or amended except by an instrument in writing signed by the parties
hereto.
11.6 Waiver. No term or condition of this Agreement shall be deemed
to have been waived, nor shall there be any estoppel against the enforcement of
any provision of this Agreement, except by written instrument of the party
charged with such waiver or estoppel. No such written waiver shall be deemed a
continuing waiver unless specifically stated therein, and each such waiver
shall operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or as to any act
other than that specifically waived.
11.7 Severability. If, for any reason, any provision of this
Agreement is held invalid, such invalidity shall not affect any other provision
of this Agreement not held so invalid, and each such other provision shall, to
the full extent consistent with law, continue in full force and effect. If any
provision of this Agreement shall be held invalid in part, such invalidity
shall in no way affect the rest of such provision not held so invalid, and the
right of such provision, together with all other provisions of this Agreement,
shall, to the full extent consistent with law continue in full force and
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effect. If this Agreement is held invalid or cannot be enforced, the to the
full extent provided by law any prior agreement or understanding between the
Company (or any predecessor thereof) and Executive shall be deemed restated as
if this Agreement had not been executed.
11.8 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.
11.9 Governing Law. This Agreement has been executed and delivered
in the State of Texas, and its validity, interpretation, performance and
enforcement shall be governed by the laws of Texas.
11.10 Arbitration. Any controversy or claim arising out of or
related not this Agreement, or breach thereof, shall be settled by
arbitration in accordance with the rules of the American Arbitration
Association, and judgment upon the award rendered by the Arbitrator may be
entered in any court having jurisdiction thereof.
11.11 Attorney's Fees. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, including any
action through arbitration in accordance with Section 11.10 above, the
prevailing party shall be entitled to reasonable attorney's fees, costs, and
necessary disbursements in addition to any other relief to which he or it may
be entitled.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
December 9, 1997, but effective September 2, 1997.
XXXXX OF XXXX NEVADA CORPORATION
By:
----------------------------
Xxxxxx X. Xxxxx
Chairman of the Board/
Chief Executive Officer
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X. XxXxxxxx Xxxxxxx
SUBSCRIBED AND SWORN to before me on this 9th day of December, 1997.
--------------------------------
Notary Public in and for the
Commonwealth of Massachusetts
My Commission Expires:
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