EMPLOYMENT AGREEMENT
This Agreement is made as of the 1st day of October, 1998 between AMX
Corporation, a Texas corporation, with offices at 00000 Xxxxxxxxxx Xxxxx,
Xxxxxx, Xxxxx 00000 (the "Company"), and J. Xxxxxx Xxxxx, an individual
residing at 0000 Xxxx Xxxx, Xxxxxx, Xxxxx 00000 (the "Employee").
RECITALS
The Employee has served in an executive capacity for the Company and the
Company desires to continue to employ the Employee and the Employee desires to
provide such services upon the terms and conditions hereinafter set forth.
WITNESSETH:
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the parties hereto, each intending to be legally bound hereby,
agree as follows:
1. EMPLOYMENT. The Company hereby employs the Employee as its President
and Chief Executive Officer, and the Employee accepts such employment for the
term of employment specified in Section 3 below (the "Employment Term"). During
the Employment Term, the Employee shall have the duties, responsibilities and
authority which normally attend the office of President and Chief Executive
Officer of a corporation similar in size and character to the Company. In this
connection, the Employee shall be responsible for ensuring that the policies
stipulated by the Board of Directors are implemented. The Employee shall not be
required to relocate outside of the Dallas, Texas area; provided, however, that
the Employee may be required to undertake reasonable travel in order to
discharge his responsibilities hereunder.
2. PERFORMANCE. The Employee agrees to devote his best efforts and
substantially all of his business time to the performance of his duties
hereunder during the Employment Term; provided, however, that the Employee shall
be entitled to pursue other business interests outside of normal business hours
so long as the pursuit of such interests does not unreasonably interfere with
the performance by the Employee of his responsibilities hereunder or violate any
of the other provisions of this Agreement.
3. EMPLOYMENT TERM. The Employment Term shall begin on the date of this
Agreement and continue until the third anniversary of such date.
4. COMPENSATION.
(a) SALARY. During the Employment Term, the Company shall pay the
Employee an annual base salary, payable in accordance with normal payroll
practice, subject to withholding and other applicable taxes, at the annualized
rate of $200,000 per year. The Employee's salary shall be subject to review on
an annual basis by the Compensation Committee of the Board of Directors of the
Company; provided, however, that in no event shall the Employee's base salary be
decreased.
(b) DISCRETIONARY BONUS. The Employee shall be eligible to
participate in such bonus plan as may be approved from time to time by the
Compensation Committee of the Board of Directors of the Company.
(c) ADDITIONAL BENEFITS. In addition to the other compensation
payable to the Employee hereunder, and to the benefits set forth on SCHEDULE 1
attached hereto, during the
Employment Term the Company shall provide the Employee with such other
benefits as may be approved by the Company's Board of Directors, and will
also permit the Employee to participate in any and all group life insurance
plans and medical and dental health benefit plans and the like and all other
incentive plans maintained by or on behalf of the Company.
5. EXPENSES. The Employee shall be reimbursed by the Company for all
reasonable expenses incurred by him in connection with the performance of his
duties hereunder.
6. AGREEMENT NOT TO COMPETE. The Employee agrees that during the
Non-Competition Period (defined below) he will not in any capacity, either
separately, jointly, or in association with others, directly or indirectly,
as an officer, director, consultant, agent, employee, owner, partner,
distributor, dealer, representative, stockholder or otherwise, engage or have
a financial interest in any business located anywhere in the Restricted Area
(as herein defined) which competes with the Company or with any affiliate of
the Company (excepting only the ownership of not more than 5.0% of the
outstanding securities of any class listed on an exchange or regularly traded
in the over-the-counter market). "Restricted Area" means the entire world.
An entity or individual shall be deemed to compete with the Company or one of
the Company's affiliates as of a particular time if the entity or individual
then manufactures, produces, markets, distributes or sells any product or
service which is directly competitive with, or which may be purchased in
replacement or substitution of, any product or service which was being
manufactured, produced, marketed, distributed, sold or actively developed by
the Company or such affiliate during the Employment Term, and which is then
still being manufactured, produced, marketed, distributed, sold or actively
developed by the Company or such affiliate. A product or service shall be
deemed to be under active development by the Company or its affiliate as of a
particular date only if the Company or such affiliate has devoted significant
resources to the development thereof and intends to market, distribute or
sell such product or service within the next 18 months of such date. The
"Non-Competition Period" is (a) the period during which the Employee is
employed hereunder plus (b) a period of two years thereafter. The Employee
further agrees that during the Non-Competition Period he will not in any
capacity, either separately, jointly or in association with others, directly
or indirectly, solicit or otherwise contact any of the Company's or its
affiliates' customers, distributors, dealers or representatives as shown by
the Company's or its affiliates' records, that were customers, distributors,
dealers or representatives of the Company or its affiliates at any time
during the two years immediately preceding the date of termination of the
Employee's employment hereunder if such solicitation or contact is for the
specific purpose of selling products or services that compete with any
products or services that the Company or its affiliates had available for
sale to its customers, distributors, dealers, representatives or prospects
during the two years immediately preceding the end of the Non-Competition
Period. If a court determines that the foregoing restrictions are too broad
or otherwise unreasonable under applicable law, including with respect to
time or space, the court is hereby requested and authorized by the parties
hereto to revise the foregoing restrictions to include the maximum
restrictions allowed under the applicable law. The Employee expressly agrees
that breach of the foregoing would result in irreparable injuries to the
Company and its affiliates, that the remedy at law for any such breach will
be inadequate and that upon breach of this provision, the Company and its
affiliates, in addition to all other available remedies, shall be entitled as
a matter of right to injunctive relief in any court of competent jurisdiction
without the necessity of proving the actual damage to the Company or its
affiliates. For purposes of this Section 6 and Section 7, an affiliate of
the Company shall include any person or entity directly or indirectly
controlling (within the meaning of Rule 12b-2 under the Securities Exchange
Act of 1934), or directly or indirectly controlled by, or under direct or
indirect common control with the Company and specifically includes PHAST
Corporation, a Delaware corporation, and Access Technology Ltd., a United
Kingdom corporation.
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7. SECRET PROCESSES AND CONFIDENTIAL INFORMATION. For the Employment
Term and thereafter, (a) the Employee will not divulge, directly or indirectly,
other than in the regular and proper course of business of the Company or its
affiliates or as required by law, any confidential knowledge or information with
respect to the operation or finances of the Company or its affiliates or with
respect to confidential or secret processes, techniques, machinery, customers,
plans and products manufactured or sold by the Company or its affiliates
(collectively, "Confidential Information") and (b) the Employee will not use,
directly or indirectly, any Confidential Information for the benefit of anyone
other than the Company or its affiliates; provided, however, that the Employee
has no obligation, express or implied, to refrain from using or disclosing to
others any such knowledge or information which is or hereafter shall become
available to the public other than through disclosure by the Employee. All new
processes, techniques, know-how, inventions, plans, products, patents and
devices developed, made or invented by the Employee, alone or with others, while
an employee of the Company or its affiliates, are hereby assigned to the Company
and shall become and be the sole property of the Company unless released in
writing by the Company. Notwithstanding the foregoing, if the Employee is
required to disclose or divulge Confidential Information pursuant to any
subpoena or other judicial process he will promptly so notify the Company, and
if so requested by the Company or its affiliates, will assist the Company or its
affiliates in seeking a protective order with respect thereto. If the Company
cannot or chooses not to obtain such a protective order, the Employee will
divulge only such Confidential Information as he is advised by his counsel is
required to be disclosed, and will use his best efforts to ensure that the
balance of such Confidential Information will be kept confidential.
8. TERMINATION.
(a) TERMINATION AT END OF TERM. Unless affirmatively extended by
written agreement of the Company and the Employee, the employment of the
Employee hereunder shall terminate at the end of the Employment Term.
(b) TERMINATION BY THE COMPANY WITH CAUSE. The Company shall have
the right at any time to terminate the Employee's employment hereunder by
written notice upon the occurrence of any of the following (any such termination
being referred to as a termination for "Cause"):
(i) the commission by the Employee of any deliberate and
premeditated act that materially and adversely affects the business,
financial condition or results of operations of the Company;
(ii) Employee's habitual drunkenness, use of illegal substances or
drugs or the use, possession, distribution or being under the
influence of alcohol or illegal substances or drugs in the workplace
(the only exception is that Employee may consume alcohol reasonably
and responsibly, if he so chooses, at legitimate business events and
functions where alcohol is legally available);
(iii) the conviction by the Employee of a felony;
(iv) the willful failure or refusal of the Employee to perform his
duties hereunder, which failure or refusal continues for 45 days after
written notice thereof from the Company to the Employee; or
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(v) the breach by the Employee of any terms of this Agreement,
which breach continues for 45 days subsequent to written notice from
the Company to the Employee of the breach.
(c) TERMINATION BY COMPANY FOR DEATH OR DISABILITY. The Company
shall have the right at any time to terminate the Employee's employment
hereunder by 30 days written notice upon the Employee's inability to perform his
duties hereunder by reason of any mental, physical or other disability which has
existed for a period of at least six consecutive months (for purposes hereof,
"disability" has the same meaning, as is defined for such term in the Company's
disability policy), as determined by an independent physician. The Employee's
employment hereunder shall also terminate upon the death of the Employee.
(d) TERMINATION BY COMPANY WITHOUT CAUSE. The Company shall have
the right at any time, upon vote of a majority of the Board of Directors, by
30 days written notice to Employee to terminate the Employee's employment for
any other reason without Cause.
(e) TERMINATION BY EMPLOYEE FOR GOOD REASON. The Employee shall
have the right, upon written notice to the Company, at any time to terminate
his employment hereunder if any one or more of the following events shall
have occurred, which event shall have remained unremedied by the Company for
a period of 30 days following written notice thereof from the Employee,
specifying in reasonable detail the alleged event (any such termination being
referred to herein as a termination for "Good Reason"):
(i) the Company shall require that the Employee relocate outside of
the Dallas, Texas area;
(ii) the Company shall substantially diminish the responsibilities of
the Employee (other than in connection with the Employee's
unavailability by reason of disability or otherwise); or
(iii) the Company shall materially breach any of its obligations
under this Agreement.
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9. EFFECT OF TERMINATION OF EMPLOYMENT.
(a) WITH CAUSE OR VOLUNTARY TERMINATION. If the Employee's
employment is terminated with Cause or if the Employee voluntarily terminates
his employment (other than for Good Reason), all benefits shall cease at the
time of such termination; provided, however, that the Employee shall be entitled
to continue to participate in the Company's medical benefit plans, at his own
expense, to the extent required by law.
(b) DEATH OR DISABILITY. If the Employee's employment is terminated
by the death or disability of the Employee (pursuant to Section 8(c)), the
Employee's compensation provided in Section 4 shall be paid to the Employee or,
in the event of the death of the Employee, the Employee's estate, as follows:
(i) the Employee's base salary specified in Section 4(a) shall
continue to be paid in monthly installments for twelve months
following such termination; and
(ii) the Employee's additional benefits specified in Section 4(c)
shall terminate at the time of such termination; provided, however,
that in the event of disability the Employee shall be entitled to
continue receiving such benefits so long as he receives salary from
the Company.
(c) WITHOUT CAUSE OR FOR GOOD REASON. If the Employee's employment
is terminated by the Company without Cause (pursuant to Section 8(d)), or the
Employee terminates his employment for Good Reason (pursuant to Section 8(e)),
then the Employee shall be entitled to the following benefits in complete
discharge of the Company's obligations hereunder:
(i) the Employee's salary specified in Section 4(a) shall continue
to be paid in monthly installments for twelve months; and
(ii) the Employee's additional benefits specified in Section 4(c)
shall terminate at the time of such termination; provided, however,
that the Employee shall be entitled to participate in the Company's
medical benefit plans, at the Company's expense, for twelve months
following the date of such termination.
10. INSURANCE. The Company may purchase insurance on the life of the
Employee, and if it does so, the Employee shall cooperate fully by performing
all the requirements of the life insurer which are necessary conditions
precedent to the issuance of the life insurance policy issued by it.
Notwithstanding the foregoing, if at the time of termination for any reason
(other than death), the Company is maintaining a life insurance policy on the
Employee which has a cash surrender value, then to the extent permitted under
such policy the Employee may purchase such policy from the Company by paying to
the Company the cash surrender value thereof.
11. NOTICE. Any notices required or permitted hereunder shall be in
writing and shall be deemed to have been given when personally delivered or when
mailed, certified or registered mail, postage prepaid, to the addresses set
forth above or to such other addresses as the parties may hereafter give notice
provided herein.
12. QUALIFYING SHARES. From time to time the Employee may be asked to be
the record holder of one or more shares of one or more subsidiaries of the
Company for the purpose of
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satisfying various regulatory requirements. The Employee acknowledges that
he shall have no beneficial interest in such shares and agrees that upon
request of the Company he will transfer such shares to the Company for $1.
13. GENERAL.
(a) PRIOR AGREEMENTS. This Agreement supersedes and replaces all
prior agreements between the Company and the Employee, written or oral, relating
to the terms of the Employee's employment by the Company including, but not
limited to, that certain Employment Agreement dated March 30, 1995.
(b) GOVERNING LAW. The terms of this Agreement shall be governed by
the laws of the State of Texas.
(c) ASSIGNABILITY. The Employee may not assign his interest in or
delegate his duties under this Agreement. The covenants and obligations of the
Employee hereunder shall redound to the benefit of the Company's successors and
assigns.
(d) BINDING EFFECT. This Agreement shall be binding upon and inure
to the benefit of the Company, its successors and assigns.
(e) ENTIRE AGREEMENT; MODIFICATION. This Agreement constitutes the
entire agreement of the parties hereto with respect to the subject matter hereof
and may not be modified or amended in any way except in writing by the parties
hereto.
(f) DURATION. Notwithstanding the term of employment hereunder, this
Agreement shall continue for so long as any obligations remain under this
Agreement.
[Rest of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have
hereunto executed this Agreement the day and year first written above.
AMX CORPORATION
Attest:
By: /s/ J. Xxxx Xxxxxxx
-------------------------- ----------------------------------------
Secretary Name: J. Xxxx Xxxxxxx
----------------------------------
Title: Chairman, Compensation Committee
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Witness: EMPLOYEE
/s/ Xxx Xxxxx
------------------------------ -----------------------------------
J. Xxxxxx Xxxxx
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SCHEDULE 1
SPECIFIC EMPLOYMENT BENEFITS
(a) Four weeks of paid vacation a year, which may not be accrued;
(b) Reimbursement for life insurance premiums of approximately $1,200 per year.
(c) Payment of bar association dues and continuing legal education expenses.
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