EXHIBIT 10.64
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") by and between F.Y.I.
Incorporated, a Delaware corporation (the "Company"), and Xxxxxx X. Xxxxxx
("Employee") is hereby entered into and effective as of January 1, 2000.
This Agreement hereby supersedes any other employment agreements or
understandings, written or oral, between the Company and Employee.
R E C I T A L S
The following statements are true and correct:
As of the date of this Agreement, the Company is engaged primarily in
the business of providing document and information management outsourcing
solutions.
Employee is employed hereunder by the Company in a confidential
relationship wherein Employee, in the course of his employment with the
Company, has and will continue to become familiar with and aware of
information as to the Company's customers, specific manner of doing business,
including the processes, techniques and trade secrets utilized by the
Company, and future plans with respect thereto, all of which has been and
will be established and maintained at great expense to the Company; this
information is a trade secret and constitutes the valuable goodwill of the
Company.
Therefore, in consideration of the mutual promises, terms, covenants
and conditions set forth herein and the performance of each, it is hereby
agreed as follows:
A G R E E M E N T S
1. EMPLOYMENT AND DUTIES.
(a) The Company hereby employs Employee as Chairman of the Board
and Chief Development Officer. As such, Employee shall have
responsibilities, duties and authority reasonably accorded to and expected of
a Chairman of the Board and Chief Development Officer and will report
directly to the Board of Directors of the Company (the "Board"). Employee
hereby accepts this employment upon the terms and conditions herein contained
and, subject to paragraph 1(b), agrees to devote his working time, attention
and efforts to promote and further the business of the Company.
(b) Employee shall not, during the term of his employment
hereunder, be engaged in any other business activity pursued for gain, profit
or other pecuniary advantage except to the extent that such activity (i) does
not interfere with Employee's duties and responsibilities hereunder and (ii)
does not violate paragraph 3 hereof. The foregoing limitations shall not be
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construed as prohibiting Employee from serving on the boards of directors of
other companies or making personal investments in such form or manner as will
require his services, other than to a minimal extent, in the operation or
affairs of the companies or enterprises in which such investments are made
nor violate the terms of paragraph 3 hereof.
2. COMPENSATION. For all services rendered by Employee, the
Company shall compensate Employee as follows:
(a) BASE SALARY. The base salary payable to Employee shall be
$300,000 per year, payable on a regular basis in accordance with the
Company's standard payroll procedures but not less than bi-monthly.
(b) INCENTIVE BONUS PLAN. Employee shall be eligible for a bonus
opportunity of up to 50% of his annual base salary in accordance with the
Company's Incentive Bonus Plan as modified from time to time. The bonus
payment and the Company's targeted performance shall be determined by the
Board or the compensation committee thereof. For 2000, Employee has already
been awarded Warrant No. 21 as payment in full for any 2000 Bonus opportunity.
(c) EXECUTIVE PERQUISITES, BENEFITS AND OTHER COMPENSATION.
Employee shall be entitled to receive additional benefits and compensation
from the Company in such form and to such extent as specified below:
(i) Payment of all premiums for coverage for Employee and his
dependent family members under health, hospitalization, disability,
dental, life and other insurance plans that the Company may have in
effect from time to time, and not less favorable than the benefits
provided to other Company executives.
(ii) Reimbursement for all business travel and other
out-of-pocket expenses reasonably incurred by Employee in the
performance of his services pursuant to this Agreement. All
reimbursable expenses shall be appropriately documented in reasonable
detail by Employee upon submission of any request for reimbursement,
and in a format and manner consistent with the Company's expense
reporting policy.
(iii) Four (4) weeks paid vacation for each year during the
period of employment or such greater amount as may be afforded officers
and key employees generally under the Company's policies in effect from
time to time (prorated for any year in which Employee is employed for
less than the full year).
(iv) An automobile allowance in the amount of $500 per month.
(v) The Company shall reimburse Employee up to $300 per month
for club dues actually incurred by Employee, PROVIDED that such club is
used at least 50% of the time for business purposes.
(vi) The Company shall provide Employee with other executive
perquisites as may be available to or deemed appropriate for Employee by
the Board and participation in all other Company-wide employee benefits
as available from time to time, which will include participation in the
Company's Incentive Compensation Plan.
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(vii) The Company shall provide Employee with reasonable
assistance in personal tax planning from Xxxxxx Xxxxxxxx LLP.
(viii) Participation in the Company's 401(k) Plan and
Non-Qualified Plan.
(ix) The Company shall, under Employee's direction, establish a
Supplemental Retirement Plan/Survivor Protection Plan to be placed inside
the Company's Non-Qualified Plan and provide Employee with such benefit.
3. NON-COMPETITION AGREEMENT.
(a) Subject to Section 3(a), Employee will not, during the period
of his employment by or with the Company, and for a period of two (2) years
immediately following the termination of his employment under this Agreement,
for any reason whatsoever, directly or indirectly, for himself or on behalf
of or in conjunction with any other person, company, partnership,
corporation, business or entity of whatever nature:
(i) engage, as an officer, director, shareholder, owner,
partner, joint venturer, or in a managerial capacity, whether as an
employee, independent contractor, consultant or advisor, or as a sales
representative, in any business selling any products or services in
direct competition with the Company, within 100 miles of (i) the
principal executive offices of the Company or (ii) any place to which the
Company provides products or services or in which the Company (including
the subsidiaries thereof) is in the process of initiating business
operations during the term of this covenant (the "Territory");
(ii) call upon any person who is, at that time, within the
Territory, an employee of the Company (including the subsidiaries
thereof) in a managerial capacity for the purpose or with the intent of
enticing such employee away from or out of the employ of the Company
(including the subsidiaries thereof), provided that Employee shall be
permitted to call upon and hire any member of his immediate family;
(iii) call upon any person or entity which is, at that time, or
which has been, within one (1) year prior to that time, a customer of the
Company (including the subsidiaries thereof) within the Territory for the
purpose of soliciting or selling products or services in direct
competition with the Company within the Territory;
(iv) call upon any prospective acquisition candidate, on
Employee's own behalf or on behalf of any competitor, which candidate was
either called upon by the Company (including the subsidiaries thereof) or
for which the Company made an acquisition analysis, for the purpose of
acquiring such entity; or
(v) disclose customers, whether in existence or proposed, of
the Company (or the subsidiaries thereof) to any person, firm,
partnership, corporation or business for any reason or purpose
whatsoever.
Notwithstanding the above, the foregoing covenant shall not be deemed
to prohibit Employee from acquiring as an investment not more than three
percent (3%) of the capital stock
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of a competing business, whose stock is traded on a national securities
exchange or over-the-counter.
(b) Because of the difficulty of measuring economic losses to the
Company as a result of a breach of the foregoing covenant, and because of the
immediate and irreparable damage that could be caused to the Company for
which it would have no other adequate remedy, Employee agrees that the
foregoing covenant may be enforced by the Company in the event of breach by
him by injunctions and restraining orders without the necessity of posting
any bond therefor.
(c) It is agreed by the parties that the foregoing covenants in
this paragraph 3 impose a reasonable restraint on Employee in light of the
activities and business of the Company (including the Company's subsidiaries)
on the date of the execution of this Agreement and the current plans of the
Company (including the Company's subsidiaries); but it is also the intent of
the Company and Employee that such covenants be construed and enforced in
accordance with the changing activities, business and locations of the
Company (including the Company's subsidiaries) throughout the term of this
covenant, whether before or after the date of termination of the employment
of Employee, subject to the following paragraph. For example, if, during the
Term of this Agreement, the Company (including the Company's subsidiaries)
engages in new and different activities, enters a new business or established
new locations for its current activities or business in addition to or other
than the activities or business enumerated under the Recitals above or the
locations currently established therefor, then Employee will be precluded
from soliciting the customers or employees of such new activities or business
or from such new location and from directly competing with such new business
within 100 miles of its then-established operating location(s) through the
term of this covenant.
It is further agreed by the parties hereto that, in the event
that Employee shall cease to be employed hereunder, and shall enter into a
business or pursue other activities not in competition with the Company
(including the Company's subsidiaries), or similar activities or business in
locations the operation of which, under such circumstances, does not violate
clause (i) of this paragraph 3, and in any event such new business,
activities or location are not in violation of this paragraph 3 or of
Employee's obligations under this paragraph 3, if any, Employee shall not be
chargeable with a violation of this paragraph 3 if the Company (including the
Company's subsidiaries) shall thereafter enter the same, similar or a
competitive (i) business, (ii) course of activities or (iii) location, as
applicable.
(d) The covenants in this paragraph 3 are severable and separate,
and the unenforceability of any specific covenant shall not affect the
provisions of any other covenant. Moreover, in the event any court of
competent jurisdiction shall determine that the scope, time or territorial
restrictions set forth are unreasonable, then it is the intention of the
parties that such restrictions be enforced to the fullest extent which the
court deems reasonable, and the Agreement shall thereby be reformed to such
extent.
(e) All of the covenants in this paragraph 3 shall be construed as
an agreement independent of any other provision in this Agreement, and the
existence of any claim or cause of action of Employee against the Company,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of such covenants. It is
specifically agreed that the period of two (2) years following Employee's
employment set forth
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at the beginning of this paragraph 3, during which the agreements and
covenants of Employee made in this paragraph 3 shall be effective, shall be
computed by excluding from such computation any time during which Employee is
in violation of any provision of this paragraph 3.
4. PLACE OF PERFORMANCE.
(a) Employee's place of employment is the Company's headquarters in
Dallas, Texas. Employee understands that he may be requested by the Board to
relocate from his present residence to another geographic location in order
to more efficiently carry out his duties and responsibilities under this
Agreement or as part of a promotion or other increase in duties and
responsibilities. In the event that Employee is requested to relocate and
agrees to do so, the Company will pay all relocation costs to move Employee,
his immediate family and their personal property and effects. Such costs may
include, by way of example, but are not limited to, pre-move visits to search
for a new residence, investigate schools or for other purposes; temporary
lodging and living costs prior to moving into a new permanent residence;
duplicate home carrying costs; all closing costs on the sale of Employee's
present residence and on the purchase of a comparable residence in the new
location; and added income taxes that Employee may incur, as a result of any
payment hereunder, to the extent any relocation costs are not deductible for
tax purposes. The general intent of the foregoing is that Employee shall not
personally bear any out-of-pocket cost as a result of the relocation, with an
understanding that Employee will use his best efforts to incur only those
costs which are reasonable and necessary to effect a smooth, efficient and
orderly relocation with minimal disruption to the business affairs of the
Company and the personal life of Employee and his family.
(b) Notwithstanding the above, if Employee is requested by the
Board to relocate and Employee refuses, such refusal shall not constitute
"good cause" for termination of this Agreement under the terms of paragraph
5(c).
5. TERM; TERMINATION; RIGHTS ON TERMINATION. The term of this
Agreement shall begin on the date hereof and continue through December 31,
2001 (the "Term"). This Agreement and Employee's employment may be
terminated earlier in any one of the following ways:
(a) DEATH. The death of Employee shall immediately terminate
the Agreement with no severance compensation due to Employee's estate.
(b) DISABILITY. If, as a result of incapacity due to physical
or mental illness or injury, Employee shall have been absent from his
full-time duties hereunder for four (4) consecutive months, then thirty
(30) days after receiving written notice (which notice may occur before
or after the end of such four (4) month period, but which shall not be
effective earlier than the last day of such four (4) month period), the
Company may terminate Employee's employment hereunder provided Employee
is unable to resume his full-time duties at the conclusion of such notice
period. Also, Employee may terminate his employment hereunder if his
health should become impaired to an extent that makes the continued
performance of his duties hereunder hazardous to his physical or mental
health or his life, provided that Employee shall have furnished the
Company with a written statement from a qualified doctor to such effect
and provided, further, that, at the
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Company's request made within thirty (30) days of the date of such
written statement, Employee shall submit to an examination by a doctor
selected by the Company who is reasonably acceptable to Employee or
Employee's doctor and such doctor shall have concurred in the
conclusion of Employee's doctor. In the event this Agreement is
terminated as a result of Employee's disability, Employee shall
receive from the Company, in a lump-sum payment due within ten (10)
days of the effective date of termination, the base salary at the rate
then in effect for whatever time period is remaining under the Term of
this Agreement or for one (1) year, whichever amount is greater.
(c) GOOD CAUSE. The Company may terminate the Agreement ten
(10) days after written notice to Employee for good cause, which shall
be: (1) Employee's material and irreparable breach of this Agreement; (2)
Employee's gross negligence in the performance or intentional
nonperformance (continuing for ten (10) days after receipt of the written
notice) of any of Employee's material duties and responsibilities
hereunder; (3) Employee's dishonesty, fraud or misconduct with respect to
the business or affairs of the Company which materially and adversely
affects the operations or reputation of the Company; (4) Employee's
conviction of a felony crime; or (5) chronic alcohol abuse or illegal
drug abuse by Employee. In the event of a termination for good cause, as
enumerated above, Employee shall have no right to any severance
compensation.
(d) WITHOUT CAUSE. At any time after the commencement of
employment, the Company may, without cause, terminate this Agreement and
Employee's employment, effective thirty (30) days after written notice is
provided to the Employee. Should Employee be terminated by the Company
without cause, Employee shall receive from the Company, in a lump-sum
payment due on the effective date of termination, the base salary at the
rate then in effect for two (2) years ("Severance Pay"). Further, any
termination without cause by the Company shall operate to shorten the
period set forth in paragraph 3(a) and during which the terms of
paragraph 3 apply to one (1) year from the date of termination of
employment.
(e) CHANGE IN CONTROL. Refer to paragraph 12 below.
(f) TERMINATION BY EMPLOYEE FOR GOOD REASON. Employee may
terminate his employment hereunder for "Good Reason." As used herein,
"Good Reason" shall mean the continuance of any of the following after
ten (10) days' prior written notice by Employee to the Company,
specifying the basis for such Employee's having Good Reason to terminate
this Agreement:
(i) the assignment to Employee of any duties materially and
adversely inconsistent with Employee's position as specified in paragraph
1 hereof (or such other position to which he may be promoted), including
status, offices, responsibilities or persons to whom Employee reports as
contemplated under paragraph 1 of this Agreement, or any other action by
the Company which results in a material and adverse change in such
position, status, offices, titles or responsibilities;
(ii) Employee's removal from, or failure to be reappointed or
reelected to, Employee's position under this Agreement, except as
contemplated by paragraphs 5(a),
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(b), (c) and (e); or
(iii) any other material breach of this Agreement by the Company
that is not cured within the ten (10) day time period set forth in
paragraph 5(f) above, including the failure to pay Employee on a timely
basis the amounts to which he is entitled under this Agreement.
In the event of any termination by the Employee for Good Reason, as
determined by a court of competent jurisdiction or pursuant to the provisions
of paragraph 16 below, the Company shall pay all amounts and damages to which
Employee may be entitled as a result of such breach, including interest
thereon and all reasonable legal fees and expenses and other costs incurred
by Employee to enforce his rights hereunder. In addition, Employee shall be
entitled to receive Severance Pay for two (2) years. Further, none of the
provisions of paragraph 3 shall apply in the event this Agreement is
terminated by Employee for Good Reason.
(g) TERMINATION BY EMPLOYEE WITHOUT CAUSE. If Employee resigns
or otherwise terminates his employment without Good Reason pursuant to
paragraph 5(f), Employee shall receive no severance compensation.
Upon termination of this Agreement for any reason provided in clauses (a)
through (g) above, Employee shall be entitled to receive all compensation
earned and all benefits vested and reimbursements due through the effective
date of termination. Additional compensation subsequent to termination, if
any, will be due and payable to Employee only to the extent and in the manner
expressly provided above or in paragraph 16. All other rights and
obligations of the Company and Employee under this Agreement shall cease as
of the effective date of termination, except that the Company's obligations
under paragraph 9 herein and Employee's obligations under paragraphs 3, 6, 7,
8 and 10 herein shall survive such termination in accordance with their terms.
6. RETURN OF COMPANY PROPERTY. All records, designs, patents,
business plans, financial statements, manuals, memoranda, lists and other
property delivered to or compiled by Employee by or on behalf of the Company
(including the Company's subsidiaries) or its representatives, vendors or
customers which pertain to the business of the Company (including the
Company's subsidiaries) shall be and remain the property of the Company and
be subject at all times to its discretion and control. Likewise, all
correspondence, reports, records, charts, advertising materials and other
similar data pertaining to the business, activities or future plans of the
Company (including the Company's subsidiaries) which is collected by Employee
shall be delivered promptly to the Company without request by it upon
termination of Employee's employment.
7. INVENTIONS. Employee shall disclose promptly to the Company
any and all significant conceptions and ideas for inventions, improvements
and valuable discoveries, whether patentable or not, which are conceived or
made by Employee, solely or jointly with another, during the period of
employment or within one (1) year thereafter, and which are directly related
to the business or activities of the Company (including the Company's
subsidiaries) and which Employee conceives as a result of his employment by
the Company. Employee hereby assigns and agrees to assign all his interests
therein to the Company or its nominee. Whenever requested to do so by the
Company, Employee shall execute any and all
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applications, assignments or other instruments that the Company shall deem
necessary to apply for and obtain letters patent of the United States or any
foreign country or to otherwise protect the Company's interest therein.
8. TRADE SECRETS. Employee agrees that he will not, during or
after the term of this Agreement with the Company, disclose the specific
terms of the Company's (including the Company's subsidiaries) relationships
or agreements with its significant vendors or customers or any other
significant and material trade secret of the Company (including the Company's
subsidiaries), whether in existence or proposed, to any person, firm,
partnership, corporation or business for any reason or purpose whatsoever,
except as is disclosed in the ordinary course of business.
9. INDEMNIFICATION. In the event Employee is made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by the
Company against Employee), by reason of the fact that he is or was performing
services under this Agreement, then the Company shall indemnify Employee
against all expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement, as actually and reasonably incurred by Employee
in connection therewith. In the event that both Employee and the Company are
made a party to the same third-party action, complaint, suit or proceeding,
the Company agrees to engage competent legal representation, and Employee
agrees to use the same representation, provided that if counsel selected by
the Company shall have a conflict of interest that prevents such counsel from
representing Employee, Employee may engage separate counsel and the Company
shall pay all attorneys' fees of such separate counsel. Further, while
Employee is expected at all times to use his best efforts to faithfully
discharge his duties under this Agreement, Employee cannot be held liable to
the Company for errors or omissions made in good faith where Employee has not
exhibited gross, willful and wanton negligence and misconduct or performed
criminal and fraudulent acts which materially damage the business of the
Company.
10. NO PRIOR AGREEMENTS. Employee hereby represents and warrants
to the Company that the execution of this Agreement by Employee and his
employment by the Company and the performance of his duties hereunder will
not violate or be a breach of any agreement with a former employer, client or
any other person or entity. Further, Employee agrees to indemnify the
Company for any claim, including, but not limited to, attorneys' fees and
expenses of investigation, by any such third party that such third party may
now have or may hereafter come to have against the Company based upon or
arising out of any non-competition agreement, invention or secrecy agreement
between Employee and such third party which was in existence as of the date
of this Agreement.
11. ASSIGNMENT; BINDING EFFECT. Employee understands that he has
been selected for employment by the Company on the basis of his personal
qualifications, experience and skills. Employee agrees, therefore, he cannot
assign all or any portion of his performance under this Agreement. Subject
to the preceding two (2) sentences and the express provisions of paragraph 12
below, this Agreement shall be binding upon, inure to the benefit of and be
enforceable by the parties hereto and their respective heirs, legal
representatives, successors and assigns.
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12. CHANGE IN CONTROL.
(a) Unless he elects to terminate this Agreement pursuant to (c)
below, Employee understands and acknowledges that the Company may be merged
or consolidated with or into another entity and that such entity shall
automatically succeed to the rights and obligations of the Company hereunder.
(b) In the event of a pending Change in Control wherein the
Employee has not received written notice at least fifteen (15) business days
prior to the anticipated closing date of the transaction giving rise to the
Change in Control from the successor to all or a substantial portion of the
Company's business and/or assets that such successor is willing as of the
closing to assume and agree to perform the Company's obligations under this
Agreement in the same manner and to the same extent that the Company is
hereby required to perform, such Change in Control shall be deemed to be a
termination of this Agreement by the Company and the amount of the lump-sum
severance payment due to Employee shall be six (6) times Employee's annual
salary immediately prior to the Change in Control and the non-competition
provisions of paragraph 3 shall not apply whatsoever. Payment shall be made
either at closing of the transaction if notice is served at least five (5)
days before closing or within ten (10) days of Employee's written notice.
(c) In any Change in Control situation in which Employee has
received written notice from the successor to the Company that such pending
successor is willing to assume the Company's obligations hereunder or
Employee receives notice after the Change in Control that Employee is being
terminated, Employee may nonetheless, at his sole discretion, elect to
terminate this Agreement by providing written notice to the Company at any
time prior to closing of the transaction and up to one (1) year after the
closing of the transaction giving rise to the Change in Control. In such
case, the amount of the lump-sum severance payment due to Employee shall be
six (6) times Employee's annual salary immediately prior to the Change in
Control and the non-competition provisions of paragraph 3 shall all apply.
Payment shall be made either at closing if notice is served at least five (5)
days before closing or within ten (10) days of written notice by Employee.
(d) For purposes of applying paragraph 5 under the circumstances
described in (b) and (c) above, the effective date of termination will be the
later of the closing date of the transaction giving rise to the Change in
Control or Employee's notice as described above, and all compensation,
reimbursements and lump-sum payments due Employee must be paid in full by the
Company at such time. Further, Employee will be given sufficient time in
order to comply with the Securities and Exchange Commission's regulations to
elect whether to exercise and sell all or any of his vested options to
purchase Common Stock of the Company, including any options with accelerated
vesting under the provisions of the Company's 1995 Stock Option Plan, as
amended or any warrants, such that he may convert the options or warrants to
shares of Common Stock of the Company at or prior to the closing of the
transaction giving rise to the Change in Control, if he so desires.
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(e) A "Change in Control" shall be deemed to have occurred if:
(i) any person, other than the Company or an employee benefit
plan of the Company, acquires directly or indirectly the Beneficial
Ownership (as defined in Section 13(d) of the Securities Exchange Act of
1934, as amended) of any voting security of the Company and immediately
after such acquisition such person is, directly or indirectly, the
Beneficial Owner of voting securities representing 50% or more of the
total voting power of all of the then-outstanding voting securities of
the Company;
(ii) the individuals (A) who, as of the effective date of the
Company's registration statement with respect to its initial public
offering, constitute the Board of Directors of the Company (the
"Original Directors") or (B) who thereafter are elected to the Board
of Directors of the Company and whose election, or nomination for
election, to the Board of Directors of the Company was approved by a
vote of at least two-thirds (2/3) of the Original Directors then still
in office (such directors becoming "Additional Original Directors"
immediately following their election) or (C) who are elected to the
Board of Directors of the Company and whose election, or nomination
for election, to the Board of Directors of the Company was approved by
a vote of at least two-thirds (2/3) of the Original Directors and
Additional Original Directors then still in office (such directors
also becoming "Additional Original Directors" immediately following
their election), cease for any reason to constitute a majority of the
members of the Board of Directors of the Company;
(iii) the stockholders of the Company shall approve a merger,
consolidation, recapitalization or reorganization of the Company, a
reverse stock split of outstanding voting securities, or consummation of
any such transaction if stockholder approval is not sought or obtained,
other than any such transaction which would result in at least 75% of the
total voting power represented by the voting securities of the surviving
entity outstanding immediately after such transaction being Beneficially
Owned by at least 75% of the holders of outstanding voting securities of
the Company immediately prior to the transaction, with the voting power
of each such continuing holder relative to other such continuing holders
not substantially altered in the transaction; or
(iv) the stockholders of the Company shall approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or a substantial portion of the
Company's assets (i.e., 50% or more of the total assets of the Company
(including the Company's subsidiaries)).
(f) Employee must be notified in writing by the Company at any time
that the Company or any member of its Board anticipates that a Change in
Control may take place.
(g) If any portion of the severance benefits, Change in Control
benefits or any other payment under this Agreement, or under any other
agreement with, or plan of the Company, including but not limited to stock
options, warrants and other long-term incentives (in the aggregate "Total
Payments") would be subject to the excise tax imposed by Section 4999 of the
Code, as amended (or any similar tax that may hereafter be imposed) or any
interest or penalties with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the "Excise Tax"), then Employee shall be entitled under
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this paragraph to an additional amount (the "Gross-Up Payment") such that
after payment by Employee of all of Employee's applicable Federal, state and
local taxes, including any Excise Tax, imposed upon such additional amount,
Employee will retain an amount equal to the Excise Tax imposed on the Total
Payments.
For purposes of this paragraph Employee's applicable Federal, state
and local taxes shall be computed at the maximum marginal rates, taking into
account the effect of any loss of personal exemptions resulting from receipt
of the Gross-Up Payment.
All determinations required to be made under this Agreement, including
whether a Gross-Up Payment is required under this paragraph, and the
assumptions to be used in determining the Gross-Up Payment, shall be made by
the Company's current independent accounting firm, or such other firm as the
Company may designate in writing prior to a Change in Control (the
"Accounting Firm"), which shall provide detailed supporting calculations both
to the Company and Employee within twenty business days of the receipt of
notice from Employee that there will likely be a Change in Control, or such
earlier time as is requested by the Company. In the event that the
Accounting Firm is serving as accountant or auditor for the party effecting
the Change in Control or is otherwise unavailable, Employee may appoint
another nationally recognized accounting firm to make the determinations
required hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of the Accounting Firm
with respect to such determinations described above shall be borne solely by
the Company.
Employee agrees (unless requested otherwise by the Company) to use
reasonable efforts to contest in good faith any subsequent determination by
the Internal Revenue Service that Employee owes an amount of Excise Tax
greater than the amount determined pursuant to this paragraph; PROVIDED, that
Employee shall be entitled to reimbursement by the Company of all fees and
expenses reasonably incurred by Employee in contesting such determination.
In the event the Internal Revenue Service or any court of competent
jurisdiction determines that Employee owes an amount of Excise Tax that is
either greater than the amount previously taken into account and paid under
this Agreement, the Company shall promptly pay to Employee the amount of such
shortfall. In the case of any payment that the Company is required to make
to Employee pursuant to the preceding sentence (a "Later Payment"), the
Company shall also pay to Employee an additional amount such that after
payment by Employee of all of Employee's applicable Federal, state and local
taxes, including any interest and penalties assessed by any taxing authority,
on such additional amount, Employee will retain an amount equal to the total
of Employee's applicable Federal, state and local taxes, including any
interest and penalties assessed by any taxing authority, arising due to the
Later Payment.
13. COMPLETE AGREEMENT. This Agreement is not a promise of future
employment. Employee has no oral representations, understandings or
agreements with the Company or any of its officers, directors or
representatives covering the same subject matter as this Agreement. This
written Agreement is the final, complete and exclusive statement and
expression of the agreement between the Company and Employee and of all the
terms of this Agreement, and it cannot be varied, contradicted or
supplemented by evidence of any prior or contemporaneous oral or written
agreements, including without limitation Employee's Amended and Restated
Employment Agreement dated January 1, 1999, which is superseded and replaced
in its entirety by this Agreement. This written Agreement may not be later
modified except by a further writing signed by a duly authorized officer of
the Company and Employee, and no term of this
11
Agreement may be waived except by writing signed by the party waiving the
benefit of such term.
14. NOTICE. Whenever any notice is required hereunder, it shall be
given in writing addressed as follows:
To the Company: F.Y.I. Incorporated
0000 XxXxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
with a copy to: Xxxxxx X. Xxxxxxxxx, Esq.
F.Y.I. Incorporated
0000 XxXxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
with a copy to: Xxxxxxx X. Xxxxxx, Esq.
Xxxxx Xxxxxxx & Xxxx LLP
0000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
To Employee: Xxxxxx X. Xxxxxx
0000 Xxxxxx Xxxxx Xxxx., #00-X
Xxxxxx, Xxxxx 00000
Notice shall be deemed given and effective three (3) days after the deposit
in the U.S. mail of a writing addressed as above and sent first class mail,
certified, return receipt requested, or when actually received. Either party
may change the address for notice by notifying the other party of such change
in accordance with this paragraph 14.
15. SEVERABILITY; HEADINGS. If any portion of this Agreement is
held invalid or inoperative, the other portions of this Agreement shall be
deemed valid and operative and, so far as is reasonable and possible, effect
shall be given to the intent manifested by the portion held invalid or
inoperative. The paragraph headings herein are for reference purposes only
and are not intended in any way to describe, interpret, define or limit the
extent or intent of the Agreement or of any part hereof.
16. ARBITRATION. Any unresolved dispute or controversy arising
under or in connection with this Agreement shall be settled exclusively by
arbitration, conducted before a panel of three (3) arbitrators in Dallas,
Texas, in accordance with the rules of the American Arbitration Association
then in effect. The arbitrators shall not have the authority to add to,
detract from, or modify any provision hereof nor to award punitive damages to
any injured party. The arbitrators shall have the authority to order
back-pay, severance compensation, vesting of options (or cash compensation in
lieu of vesting of options), reimbursement of costs, including those incurred
to enforce this Agreement, and interest thereon in the event the arbitrators
determine that Employee was terminated without disability or good cause, as
defined in paragraphs 5(b) and 5(c),
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respectively, or that the Company has otherwise materially breached this
Agreement. A decision by a majority of the arbitration panel shall be final
and binding. Judgment may be entered on the arbitrators' award in any court
having jurisdiction. The costs of any arbitration proceeding shall be borne
by the party or parties not prevailing in such proceeding determined by the
arbitrators.
[BALANCE OF SHEET INTENTIONALLY LEFT BLANK]
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17. GOVERNING LAW. This Agreement shall in all respects be
construed according to the laws of the State of Delaware.
EMPLOYEE:
/s/Xxxxxx X. Xxxxxx
-----------------------------
Xxxxxx X. Xxxxxx
F.Y.I. INCORPORATED
By:/s/Xx X. Xxxxxx, Xx.
--------------------------
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