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EXHIBIT 10.7
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "AGREEMENT") is made this 12th day of
November, 1997, by and between FWT, Inc. (the "COMPANY"), and Xxx X. Xxxxx (the
"EXECUTIVE").
PRELIMINARY STATEMENTS
A. On and subject to the terms and conditions herein provided, the
Company desires to retain the services of the Executive in the capacities and
with the responsibilities and the titles set forth herein in order to ensure the
attention and dedication to the Company of the Executive as the Company's
President and Chief Executive Officer, all of which the Company's Board of
Directors (the "BOARD") believes will be in the best interests of the Company
and its stockholders.
B. The Executive desires to commit himself to so serve the Company.
C. In order to effect the foregoing, the Company and the Executive wish
to enter into an employment agreement on the terms and conditions set forth
herein.
Accordingly, in consideration of these preliminary statements and the
respective covenants and agreements of the parties herein contained, and for
other good, valid and binding consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be legally bound
hereby, agree as follows:
STATEMENT OF AGREEMENT
1. Employment. The Company hereby agrees to employ the Executive, and
the Executive hereby accepts such employment on the terms and conditions set
forth herein.
2. Term. The employment of the Executive by the Company shall commence
on the date hereof and end on December 31, 2000 (the "TERM"), unless earlier
terminated as provided herein.
3. Positions and Duties. The Executive shall serve as the President and
Chief Executive Officer of the Company and shall have such additional positions,
if any, from time to time as may be assigned to the Executive by the Board. The
Executive shall report and be responsible to the Board of the Company. The
Executive shall devote substantially all his working time and efforts to the
business and affairs of the Company. At all times that Executive is employed as
the Chief
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Executive Officer of the Company under this Agreement, Executive shall also hold
a seat on the Board, and the Company hereby agrees to use its best efforts to
cause its shareholders to vote all shares of voting capital stock of the Company
entitled to vote for directors of the Company to cause Executive to, at all such
times, hold such seat on the Board.
4. Place of Performance. The Company maintains its principal office in
Fort Worth, Texas where Executive shall fulfill his responsibilities hereunder
except for required travel in the course of the Company's business.
5. Compensation and Related Matters.
(a) Salary. During the term of this Agreement, the Company shall pay
to the Executive an annual base salary of Two Hundred Thousand Dollars
($200,000) ("BASE SALARY"), such Base Salary to be payable in
accordance with the Company's ordinary payroll practices.
(b) Bonus. In addition to his Base Salary, the Executive shall be
entitled to receive a bonus ("Bonus") computed and payable with
respect to each fiscal year ending April 30 (a "Calculation Period")
commencing with the Calculation Period ending April 30, 1998, based on
the ratio of the Company's actual EBITDA (as defined below) for such
Calculation Period to the Targeted EBITDA (as defined below) for such
Calculation Period in accordance with the following:
(i) 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
Executive's Bonus for such Calculation Period shall be a
percentage of Executive's Base Salary determined in
accordance with the following formula:
A=50 + (2 x (B-75%)
(ii) if Company's actual EBITDA is greater than or equal to one
hundred percent (100%), but less than one ten hundred percent
(110%) of Targeted EBITDA for any Calculation Period, the
Executive's Bonus for such Calculation Period shall be a
percentage of Executive's Base Salary determined in
accordance with the following formula:
A=100 + (B-100%)
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(iii) 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 Executive's Bonus for such Calculation Period
shall be a percentage of Executive's Base Salary determined
in accordance with the following formula:
A=110+(1.8333 x (B-110%)
(iv) if Company's actual EBITDA is greater than one hundred twenty
five percent (125%) of Targeted EBITDA for any calculation
period, the Bonus shall be a percentage of Executive's Base
Salary determined in accordance with the following formula:
A=137.5 + (B-125%)
As used in each formula set forth in clauses (i) through (iv)
above, "A" equals the percentage of the Executive's Base Salary
which is the amount of the Bonus and "B" equals the percentage of
Targeted EBITDA actually achieved by the Company for such
Calculation Period.
The Bonus shall be due and payable as soon as practicable following
delivery of the Company's financial statements for the Calculation
Period for which the Bonus is payable, but in no event later than sixty
(60) 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
through the Term or Executive's employment with the Company may
terminate prior to the date such Bonus is payable hereunder.
As used in this Section 6(b), Targeted EBITDA shall mean (i) with
respect to the Calculation Period ending April 30, 1998, $21,700,000,
and (ii) with respect to each Calculation Period ending thereafter, an
amount determined by a majority vote of the Compensation Committee of
the Board of Directors of the Company which will consist of Xxxxxxx
Xxxxxxx, Xxxxxx X. Xxxxx and Xxx X. Xxxxx; 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 the Financial Advisory Agreement between the Company and
Xxxxx Capital Corp. As used in this Section 5, EBITDA shall mean the
consolidated net income for such Calculation Period which would be
reflected on a consolidated income statement of the Company for such
Calculation Period prepared 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 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, (5) all financial
advisory fees, management fees, consulting fees, bonuses and similar
fees and amounts paid or payable by
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the Company and its Subsidiaries with respect to such Calculation
Period (including without limitation all of the foregoing payable to
Xxxxx Communications Fund, L.P.), (6) other non-cash items reducing
consolidated net income and (7) any items of extraordinary loss, and
(B) minus, any items of extraordinary gain.
(c) Vehicle Allowance. During the term of Executive's
employment hereunder, Executive shall receive from the Company an
automobile allowance in the amount of $700.00 per month.
(d) Expenses. During the term of the Executive's employment
hereunder, the Company shall, upon submission of reasonable
documentation of such expense incurrence in accordance with the
standard policies and procedures established by the Company, reimburse
the Executive for all reasonable expenses incurred by the Executive on
the Company's behalf.
(e) Other Benefits. During the term of the Executive's
employment hereunder, the Executive shall be entitled to participate in
all of the Executive benefit plans and arrangements available to the
most senior executive officers of the Company (including, without
limitation, the Company's health insurance, life insurance, dental
insurance, long-term disability insurance, 401(k) and cafeteria plans,
if any, payment of all country club dues at Woodhaven Country Club (or
such other country club selected by Executive). All of such benefits
shall be provided in accordance with the past practices and policies of
the Company in effect with respect to Executive prior to the date of
this Agreement. All such benefits which are not provided to other
executive officers of the Company generally consist of payment of
country club dues, payment of certain life insurance premiums with
respect to policies owned by the Executive or his family members and
certain health and long term disability insurance benefits.
(f) Vacations. The Executive shall be entitled to four weeks
of vacation in each calendar year. In addition the Executive shall also
be entitled to all paid holidays given by the Company to its senior
executives.
(g) Services Furnished. The Company shall furnish the
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.
(h) SARS. Concurrent with the execution of this Agreement, the
Company will enter into a Stock Appreciation Rights Agreement with the
Employee, in substantially the form of Exhibit A hereto.
6. Termination. Prior to the expiration of the Term, the Executive's
employment hereunder may be terminated under the following circumstances:
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(a) Death. The Executive's death.
(b) Disability. If, as a result of the Executive's incapacity
due to physical or mental illness which incapacity cannot be reasonably
accommodated, the Executive shall have been absent from his duties
hereunder on a full-time basis for an entire period of six (6)
consecutive months, and within thirty (30) days after written notice of
termination is given (which notice may be given before or after the end
of such six-month period) Executive shall not have returned to the
performance of his duties hereunder on a full time basis.
(c) Cause. The occurrence of any act constituting "CAUSE." For
purposes of this Agreement, "CAUSE" means (i) commission by Executive
of a felony, (ii) embezzlement or fraudulent conduct by Executive,
(iii) willful or wanton, and gross negligence of Executive in the
performance of his duties to the Company, or (iv) failure or refusal by
Executive to comply in all material respects, within a period of 30
days after notice to Executive, with a lawful and reasonable directive
of the Board.
(d) Termination by the Executive.
(i) The Executive may terminate his employment
hereunder (A) for Good Reason (as defined below) or (B) if his
health should become impaired to an extent that makes his
continued performance of his duties hereunder hazardous to his
physical or mental health despite reasonable accommodation
therefor, provided that the Executive shall have furnished the
Company with a written statement from a qualified physician to
such effect and, provided further that, at the Company's
request, the Executive shall submit to an examination by a
physician or other health professional selected by the Company
and such physician or other health professional shall have
concurred in the conclusion of the Executive's physician.
(ii) For purposes of this Agreement, "GOOD REASON"
shall mean, without the Executive's consent, of any of the
following:
(A) a change in Executive's title;
(B) a material reduction in the nature or status
of the Executive's responsibilities;
(C) the relocation of the Company's principal
executive offices to any place other than
Tarrant County, Texas, or the Company's
requiring the Executive to perform his
duties other than in compliance with Section
4 hereof;
(D) (i) FWT Acquisition, Inc. ceases, for any reason,
to hold at least seventy percent (70%) of the
issued and outstanding capital stock of
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the Company of every class on a fully diluted
basis, (ii) the sale, assignment, transfer or
other disposition by the Company and its
subsidiaries of substantially all of their assets
considered as a whole, (iii) a merger or
consolidation involving the Company in which the
Company is not the surviving entity, (iv) Xxxxx
Communications Fund, L.P. or any affiliate of
Xxxxx Communications Fund, L.P. shall cease, for
any reason to hold at least seventy percent (70%)
of the outstanding capital stock of FWT
Acquisition, Inc. of every class on a fully
diluted basis, or (v) a merger or consolidation
involving FWT Acquisition, Inc. in any
transaction in which FWT Acquisition, Inc. is not
the surviving entity.
(E) any failure by the Company to comply with any
material provision of this Agreement.
(e) Notice of Termination. Any termination of the Executive's
employment by the Company or by the Executive (other than termination
pursuant to subsection (a) hereof) shall be communicated by written
Notice of Termination to the other party hereto. For purposes of this
Agreement, a "NOTICE OF TERMINATION" shall mean a written notice which
shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated.
(f) "DATE OF TERMINATION" shall mean (i) if the Executive's
employment is terminated by his death, the date of his death, (ii) if
the Executive's employment is terminated pursuant to subsection (b)
hereof (relating to disability), thirty (30) days after Notice of
Termination is given (provided that the Executive shall not have
returned to the performance of his duties on a full-time basis during
such thirty (30)-day period), (iii) if the Executive's employment is
terminated pursuant to subsection (c) hereof (relating to Cause), the
date specified in the Notice of Termination, and (iv) if the
Executive's employment is terminated for any other reason, the date on
which a Notice of Termination is given.
7. Compensation Upon Termination or During Disability.
(a) During any period that the Executive fails to
perform his duties hereunder as a result of incapacity due to
physical or mental illness, which incapacity cannot be
reasonably accommodated, the Executive shall continue to
receive all compensation and benefits provided for herein for
such period until his employment is terminated pursuant to
Section 6(b) hereof, and shall receive the Prorated Bonus (as
herein defined) for the portion of the Calculation Period
during which his employment is terminated occurring prior to
termination. As used herein "PRORATED BONUS" means for any
portion of a Calculation Period, the Bonus for such
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Calculation Period multiplied by a fraction, the numerator of
which is the number of days in such portion of such
Calculation Period and the denominator of which is 365.
(b) If the Executive's employment is terminated
pursuant to Section 6(a) or 6(c) hereof then he shall receive
no further compensation hereunder after the Date of
Termination; provided, that Executive shall receive the
Prorated Bonus for the portion of the Calculation Period
during which his employment is terminated with respect to the
portion of such Calculation Period occurring prior to
termination.
(c) If the Executive's employment is terminated for
any other reason (or such other country club selected by
Executive), then he shall receive all compensation and
benefits set forth in Section 5 hereof payable as provided
herein for the remainder of the Term, including, without
limitation, all Bonus.
(d) If the Executive's employment is terminated
hereunder for any reason or if the Executive terminates his
employment for Good Reason, the Company will cause, at the
Company's sole expense, a corporate membership to Woodhaven
Country Club to be issued in the name of the Executive.
8. Noncompetition; Nondisclosure.
(a) The Executive agrees that he will not engage in
any Competitive Activity (as defined below) during any period
with respect to which he is receiving payments or benefits of
any kind or character from the Company. For purposes of this
Section, "COMPETITIVE ACTIVITY" shall mean activity, without
the written consent of the Board, consisting of the
Executive's participation in the management of or as an
Executive of or advisor to any other business operation if
such operation (a "COMPETITIVE OPERATION") is then in material
competition with a principal business operation of the
Company.
(b) The Executive agrees not to disclose, while in
the Company's employ or during any period with respect to
which he is receiving payments or benefits of any kind or
character from the Company to any person not employed on a
full-time basis by the Company or its affiliates, or not
engaged to render services to the 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 him while in the employ
of the Company, provided, however, that this provision shall
not preclude the Executive from the use or disclosure of (i)
information known generally to the public, (ii) information
which was rightfully in the 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
business conducted by the Company or (v) information required
by law or court order to be disclosed.
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(c) In the event Executive is terminated without
Cause or terminates his employment for Good Reason, Executive
may, from and after such date of Termination, elect to no
longer receive payment of compensation or benefits under this
Agreement, in which event Executive shall be released from his
obligations under this Section 8.
9. Director and Officer Indemnification and Insurance. At all
times during the term hereof, the Company shall indemnify the 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 equal to at least $10 million 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 the Executive: Xxx X. Xxxxx
0000 Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxx 00000
If to the Company: FWT, Inc.
X.X. Xxx 0000
Xx. Xxxxx, Xxxxx 00000
Attn: Xxx X. Xxxxx and Xxxxxx X. Xxxxx
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 any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
11. Prohibition on Assignment. Neither the Company nor Executive shall
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 waiver, modification or discharge is
agreed to in writing signed by the Executive and the Company's duly authorized
executive officer.
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13. No Waiver. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by 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, construction 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 sets forth the entire agreement of
the parties hereto in respect of any subject matter contained herein and
supersedes 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 hereto; and
any prior agreement of the parties hereto in respect of the subject matter
contained herein is hereby terminated and cancelled.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the
date and year first above written.
FWT, INC.
By:
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Name:
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Title:
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EXECUTIVE:
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Xxx X. Xxxxx
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