1
EXHIBIT 10.29
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), effective as of July 1,
1998 (the "Effective Date"), is made and enter into by and between FWT, Inc., a
Texas corporation ("Company"), and Xxxxxxx X. Xxxxxx ("Executive"). Company and
Executive are sometimes collectively referred to as the "Parties," and
individually referred to as a "Party."
PRELIMINARY STATEMENTS
A. On the terms and subject to the conditions set forth in this
Agreement, Company desires to retain the services of Executive in the capacities
and with the responsibilities and duties set forth in this Agreement in order to
ensure Executive's attention and dedication to Company, all of which the board
of directors of Company (the "Board") believes will be in the best interests of
Company and its shareholders.
B. Executive desires to commit himself to so serve Company.
C. In order to effect the foregoing, Company and Executive desire to
enter into this Agreement.
NOW THEREFORE, in consideration of these preliminary statements and the
respective covenants and agreement of the Parties set forth in this Agreement,
and for other good, valid and binding consideration, the receipt and sufficiency
of which are hereby acknowledged, the Parties, intending to be legally bound,
agree as follows:
STATEMENT OF AGREEMENT
1. Employment. On the terms and subject to the conditions set forth
in this Agreement, Company hereby agrees to employ Executive and Executive
hereby accepts such employment.
2. Term. The term of this Agreement, and Executive's employment
hereunder, shall commence as of the Effective Date and expire on June 30, 2001
(such time period, the "Term"), unless earlier terminated as set forth in this
Agreement.
3. Positions and Duties. Executive shall serve as Vice
President-Finance of Company or such other office and title as may be determined
by the Board or Chief Executive Officer of Company, and shall have such
additional positions, if any, from time to time as may be assigned to Executive
by the Board or Chief Executive Officer of Company. Executive shall report and
be responsible to the Chief Executive Officer of Company. Executive shall devote
substantially all working time and efforts to the business and affairs of
Company.
4. Place of Performance. Company shall maintain its principal office
within the Dallas-Fort Worth metropolitan area, and Executive shall fulfill the
responsibilities set forth in
1
2
this Agreement at such principal office, except for required travel in the
course of Company's business.
5. Compensation and Related Matters.
(a) Salary. During the Term of this Agreement, Company shall
pay to Executive an annual base salary of no less than one hundred fifty
thousand dollars ($150,000) (such amount as may be adjusted, the "Base Salary"),
such Base Salary to be payable in accordance with Company's ordinary payroll
practices. The Base Salary shall be reviewed by the compensation committee of
the Board within ninety (90) days after the completion of each of Company's
fiscal years commencing with the fiscal year ended April 30, 1998. Executive
shall receive a documented evaluation by the compensation committee of the
Board, and any recommendation to modify the Base Salary; provided, however, that
the Base Salary shall not be less than the amount set forth in this Section
5(a).
(b) Bonus. In addition to the Base Salary, Executive shall be
entitled to receive a bonus (the "Bonus") computed and payable with respect to
each of Company's fiscal years ending April 30 (individually, a "Calculation
Period"), commencing with the Calculation Period ended April 30, 1998. The Bonus
shall be calculated in accordance with clauses (ii) through (v):
(i) As used in each formula set forth in clauses
(ii) through (v) below, "A" equals the percentage which will be multiplied by
the Base Salary to arrive at the dollar amount of the Bonus for a particular
Calculation Period and "B" equals the percentage of Targeted EBITDA actually
achieved by Company for such Calculation Period.
(ii) if Company's actual EBITDA is greater than or
equal to seventy-five percent (75%), but less than one hundred percent (100%),
of Targeted EBITDA for any Calculation Period, the Bonus for such Calculation
Period shall be a percentage of the Base Salary for such Calculated Period
determined in accordance with the following formula:
A=50%+(2x(B-75%))
(iii) if Company's actual EBITDA is greater than or
equal to one hundred percent (100%), but less than one hundred ten percent
(110%), of Targeted EBITDA for any Calculation Period, the Bonus for such
Calculation Period shall be a percentage of the Base Salary for such Calculated
Period determined in accordance with the following formula:
A=100%+(B-100%)
(iv) if Company's actual EBITDA is greater than or equal
to one hundred ten percent (110%), but less than one hundred twenty-five percent
(125%), of Targeted EBITDA for any Calculation Period, the Bonus for such
Calculation Period shall be a percentage of the Base Salary for such Calculated
Period determined in accordance with the following formula:
2
3
A=110%+(1.8333x(B-110%))
(v) if Company's actual EBITDA is greater than one
hundred twenty-five percent (125%) of Targeted EBITDA for any Calculation
Period, the Bonus for such Calculation Period shall be a percentage of the Base
Salary for such Calculated Period determined in accordance with the following
formula:
A=137.5%+(B-125%)
(vi) The Bonus shall be due and payable as soon as
practicable following delivery of Company's financial statements for the
Calculation Period for which the Bonus is payable, but in no event later than
ninety (90) days following the end of the Calculation Period for which the Bonus
is payable. Any Bonus to which Executive is entitled under this Agreement shall
be payable on the date specified in this paragraph even though the Term of
Executive's employment with Company may terminate prior to the date such Bonus
is payable hereunder.
(vii) For purposes of this Agreement, a "Prorated Bonus"
equals the Bonus for a Calculation Period calculated in accordance with this
Section 5(b) multiplied by a fraction, the numerator of which is the number of
days in such Calculation Period occurring prior to the Date of Termination (as
defined below), and the denominator of which is 365.
(viii) As used in this Section 5(b), "Targeted EBITDA"
shall mean an amount recommended by the management of Company and approved by a
majority vote of the compensation committee of the Board; provided, however, in
no event shall the Targeted EBITDA for any Calculation Period exceed the EBITDA
target for the same Calculation Period established pursuant to the terms of that
certain Financial Advisory Agreement, dated November 12, 1997, between Company
and Xxxxx Capital Corp.
(ix) As used in this Section 5(b), "EBITDA" shall mean
Company's consolidated net income as reflected on Company's consolidated income
statement for a Calculation Period filed with the Securities and Exchange
Commission, and in any case prepared and audited in accordance with generally
accepted accounting principles, (A) plus, the sum of, but without duplication
and only to the extent deducted in determining consolidated net income for such
Calculation Period, (1) all income tax expense, (2) all interest expense
(including imputed interest with respect to capital leases), (3) all
amortization expense, (4) all depreciation expense and (5) any items of
extraordinary loss, and (B) minus, any items of extraordinary gain.
(c) Vehicle Allowance. During the Term of this Agreement,
Executive shall receive from Company an automobile allowance in the amount of
$500.00 per month.
(d) Expenses. During the Term of this Agreement, Company
shall, upon submission of reasonable documentation of any expense incurred in
accordance with the standard policies and procedures established by Company,
reimburse Executive for all reasonable expenses incurred by Executive on
Company's behalf.
3
4
(e) Relocation Cost. Company shall pay the reasonable
relocation costs of Executive. These relocation costs shall include moving
expenses for Executive, his family and their belongings and any cost incident to
the sale of Executive's previous primary residence.
(f) Other Benefits. During the Term of this Agreement,
Executive shall be entitled to participate in all of Company's benefit plans and
arrangements available to the most senior executive officers of Company
(including any health insurance, life insurance, dental insurance, long-term
disability insurance, 401(k) and cafeteria plans). All of such benefits shall be
provided in accordance with the past practices and policies of Company in effect
prior to the Effective Date. All such benefits which are not provided to other
executive officers of Company generally consist of payment of certain life
insurance premiums with respect to policies owned by Executive or his family
members and certain health and long term disability insurance benefits.
(g) Vacations. Executive shall be entitled to three weeks of
vacation in each calendar year. In addition Executive shall also be entitled to
all paid holidays given by Company to its senior executives.
(h) Services Furnished. Company shall furnish Executive with
office space, secretarial and support staff assistance and such other
facilities, equipment, services and resources as shall be reasonably required
for the optimal performance of his duties hereunder.
(j) SARs. Concurrent with the execution of this Agreement,
Company will enter into a Stock Appreciation Rights Agreement with Executive, in
substantially the form of Exhibit A hereto (the "SAR Agreement").
6. Termination. Prior to the expiration of the Term of this
Agreement, this Agreement and Executive's employment hereunder may be terminated
as follows:
(a) Death. The occurrence of Executive's death; provided,
however, that the occurrence of death as a direct result of Executive's
performance of the duties set forth in this Agreement shall not terminate this
Agreement and Company's obligations hereunder.
(b) Disability. The deemed Disability of Executive. For
purposes of this Agreement, "Disability" means the inability of Executive to
perform the duties set forth in this Agreement as a result of Executive's
incapacity due to physical or mental illness, which incapacity cannot be
reasonably accommodated, for one hundred and twenty (120) consecutive days or
for one hundred eighty (180) days in any twelve month period.
(c) Cause. The occurrence of any act constituting Cause. For
purposes of this Agreement, "Cause" means (i) the conviction of, the indictment
for, or the entering of a guilty plea or a plea of no contest with respect to, a
felony, (ii) embezzlement, misappropriation of funds or fraudulent conduct by
Executive, (iii) gross negligence of Executive in the performance of his duties
to Company, (iv) failure or refusal by Executive to comply in all material
respects, within a period of 30 days after written notice to Executive,
4
5
with a lawful and reasonable directive of the Board or the Chief Executive
Officer of the Company, or (v) the appropriation (or attempted appropriation) of
a material business opportunity of Company, including securing or attempting to
secure any personal profit in connection with any transaction entered into on
behalf of Company.
(d) Good Reason. The occurrence of any act constituting Good
Reason. For purposes of this Agreement, "Good Reason" shall mean the occurrence
of, without Executive's consent, any of the following: (i) the relocation of
Company's principal offices in violation of Section 4; or (ii) any failure by
Company to comply with any material provision of this Agreement.
(e) Notice of Termination. The termination of this Agreement
and Executive's employment hereunder by any Party shall be communicated by a
Notice of Termination to the other Party. For purposes of this Agreement, a
"Notice of Termination" shall mean a written notice that sets forth (i) the
specific termination provision in this Agreement relied upon and (ii) in
reasonable detail the facts and circumstances claimed to provide a basis of
termination of this Agreement and Executive's employment hereunder.
(f) Date of Termination. "Date of Termination" shall mean (i)
if this Agreement and Executive's employment hereunder are terminated pursuant
to Section 6(a), the date of Executive's death, (ii) if this Agreement and
Executive's employment hereunder are terminated pursuant to Section 6(b), thirty
(30) days after the delivery of the Notice of Termination to Executive;
provided, however, that Executive shall not have returned to the performance of
his duties on a full-time basis during such thirty (30) day period, (iii) if
this Agreement and Executive's employment hereunder are terminated pursuant to
Sections 6(c) or 6(d), the date specified in the Notice of Termination, and (iv)
if this Agreement and Executive's employment hereunder are terminated for any
other reason, the date on which a Notice of Termination is given.
7. Compensation upon Termination; Disability.
(a) Compensation upon Death (Termination). If this Agreement
and Executive's employment hereunder are terminated pursuant to Section 6(a),
then Executive shall receive no further compensation or benefits after the Date
of Termination; provided, however, that Executive shall receive a Prorated Bonus
for that portion of a Calculation Period occurring prior to the Date of
Termination.
(b) Compensation upon Death (Continuation). If Executive's
death occurs as a direct result of Executive's performance of the duties set
forth in this Agreement, then Executive's estate shall continue to receive for
the entire Term of this Agreement all compensation and benefits provided for in
this Agreement, including the Base Salary and Bonus.
(c) Compensation During Disability. If this Agreement and
Executive's employment hereunder are terminated pursuant to Section 6(b), then
Executive shall receive no further compensation or benefits after the Date of
Termination; provided, however, that
5
6
Executive shall receive a Prorated Bonus for that portion of a Calculation
Period occurring prior to the Date of Termination; further provided, however,
that during any period prior to the Date of Termination pursuant to Section
6(b), Executive shall continue to receive all compensation and benefits provided
for in this Agreement, including the Base Salary and Bonus, if applicable.
(d) Compensation upon Termination for Cause; Resignation. If
this Agreement and Executive's employment hereunder are terminated by Company
pursuant to Section 6(c) or by Executive for other than Good Reason, then
Executive shall receive no further compensation or benefits after the Date of
Termination; provided, however, in the event that this Agreement and Executive's
employment hereunder are terminated by Executive for other than Good Reason,
Executive shall receive a Prorated Bonus for that portion of a Calculation
Period occurring prior to the Date of Termination.
(e) Compensation upon Termination without Cause; for Good
Reason. If this Agreement and Executive's employment hereunder are terminated by
Company without Cause or by Executive for Good Reason, Executive shall continue
to receive for the entire Term of this Agreement all compensation and benefits
provided for in this Agreement, including the Base Salary and Bonus.
8. Noncompetition; Nondisclosure.
(a) Noncompetition. Executive agrees not to engage in any
Competitive Activity (as defined below) during any period with respect to which
Executive is receiving compensation or benefits of any kind or character from
Company; provided, however, if this Agreement and Executive's employment
hereunder are terminated by Company pursuant to Section 6(c) or by Executive for
other than Good Reason, then Executive agrees not to engage in any Competitive
Activity (as defined below) for a period of two (2) years following such Date of
Termination. For purposes of this Section, "Competitive Activity" shall mean
activity, without the written consent of the Board, consisting of Executive's
participation in the management of, or as a director, consultant or advisor to,
any other business operation if such operation (a "Competitive Operation") is
then in competition with a principal business operation of Company.
(b) Nondisclosure. Executive agrees not to disclose at any
time to any person not employed on a full-time basis by Company or its
affiliates or not engaged to render services to Company or its affiliates,
except with the prior written consent of an officer authorized to act in the
matter by the Board, any proprietary and confidential information obtained by
Executive while in the employ of Company; provided, however, that this provision
shall not preclude Executive from the use or disclosure of (i) information known
generally to the public, (ii) information which was rightfully in Executive's
possession prior to the date hereof, (iii) information rightfully acquired from
a third party able to convey it lawfully, (iv) information not generally
considered confidential by persons engaged in the principal business of Company
or (v) information required by law or court order to be disclosed.
6
7
(c) Termination of Noncompetition. If this Agreement and
Executive's employment hereunder are terminated by Company without Cause or by
Executive for Good Reason, Executive may elect, at any time after the Date of
Termination, to terminate Company's obligations to provide compensation or
benefits under this Agreement, in which event Executive shall be released from
the obligation under this Section 8(a).
9. Director and Officer Indemnification and Insurance. At all times
during the Term, Company shall indemnify Executive to the fullest extent
permitted by applicable law and shall maintain reasonable and customary
directors and officers liability insurance coverage with a reputable and
creditworthy carrier in an amount not less than ten million dollars
($10,000,000) per occurrence.
10. Notices. For the purposes of this Agreement, notices, demands and
all other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered or (unless otherwise
specified) mailed by United States certified mail, return receipt requested,
postage prepaid, addressed as follows:
If to Executive: Xxxxxxx X. Xxxxxx
[address]
[address]
If to Company: FWT, Inc.
000 Xxxxxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: Chief Executive Officer
With a copy to: Xxxxx Communications Fund, L.P.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxx
or to such other address as one Party may have furnished to the other Party in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
11. Prohibition on Assignment. No Party may assign, transfer or
convey its rights or delegate its duties under this Agreement. Any attempted
assignment or delegation shall be void.
12. Modification and Amendments. No provision of this Agreement may
be modified, waived or discharged unless such modification, waiver or discharge
is agreed to in writing signed by each Party.
13. No Waiver. No waiver by either Party at any time of any breach
by the other Party of, or compliance with, any condition or provision of this
Agreement to be performed by
7
8
such other Party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time.
14. Governing Law. THE VALIDITY, INTERPRETATION, CONSTRICTION AND
PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
TEXAS WITHOUT REGARD TO ITS CONFLICTS OF LAW PRINCIPLES.
15. Validity. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
17. Entire Agreement. This Agreement and the SAR Agreement sets
forth the entire agreement of the Parties in respect of any subject matter
contained herein and supercedes all prior severance or other agreements,
promises, covenants, arrangements, communications, representations or warranties
whether oral or written, by any officer, Executive or representative of any
Party; and any prior agreements of the Parties in respect of the subject matter
contained herein is hereby terminated and cancelled.
IN WITNESS WHEREOF, each Party has executed, or has caused a duly
authorized officer to execute, this Agreement as of the Effective Date.
COMPANY: FWT, INC.
By: /s/ XXXXXXX X. XXXXXXXX
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
----------------------------------
Title: President, CEO, Director
----------------------------------
/s/ XXXXXXX X. XXXXXX
EXECUTIVE: -----------------------------------------
Xxxxxxx X. Xxxxxx, in his individual capacity
8
