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EXHIBIT 2.4
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made and entered into as
of the 3rd day of September, 1996 by and between American Homestar Corporation,
a Texas corporation ("Employer"), and Xxxxxxx X. Xxxxxxx ("Employee").
W I T N E S S E T H:
WHEREAS, Employer desires to employ Employee as provided herein, and
Employee desires to accept such employment; and
WHEREAS, Employee shall, as an employee of Employer, have access to
confidential information with respect to Employer and its affiliates;
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. Employment. Employer hereby employs Employee and Employee hereby
accepts employment with Employer upon the terms and conditions hereinafter set
forth.
2. Duties. Subject to the power of the Board of Directors of
Employer to elect and remove officers, Employee shall serve Employer as
Regional Vice President (Carolina Region) of Associated Retailers Group, Inc.
(or in such other office as Employer may determine) and shall perform,
faithfully and diligently, the services and functions relating to such office
or otherwise reasonably incident to such office as may be designated from time
to time by the Board of Directors of Employer; provided, however, that all such
services and functions shall be reasonable and within the Employee's area of
expertise. Employee shall perform his duties principally from his office
located in North Carolina, with such limited travel to such other locations
from time to time as the Board of Directors of Employer may reasonably
prescribe. Subject to Section 4(a) below, Employee shall devote his full time,
attention, energies and business efforts to his duties hereunder and to the
promotion of the business and interests of Employer and its affiliates. The
foregoing provision shall not be construed to prohibit Employee's possible
investments; provided that such activities do not detract in any material
respect from the performance of Employee's duties hereunder.
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3. Term. The term of this Agreement shall commence as of the date
hereof and shall end on September 2, 1997, unless earlier terminated pursuant
to the terms hereof (the "Term").
4. Compensation. As compensation for his services rendered under
this Agreement, during the Term, Employee shall be entitled to receive the
following:
(a) Salary. Employee shall be paid an annual salary of
$100,000, payable in equal bi-monthly installments in arrears; provided,
however, if Employer and Employee agree that Employee may devote less
than his full time, attention, energies and business efforts to his
duties hereunder, then this Agreement shall be amended in writing to
reflect such status and Employee's compensation hereunder shall be
adjusted as agreed to by Employer and Employee.
(b) Benefits. Employee shall be entitled to and shall receive
such group benefits as Employer may provide to its employees at
comparable salaries and responsibilities of Employer.
(c) Expenses. Employer shall reimburse Employee for all
reasonable and necessary out-of-pocket travel and other expenses
incurred by Employee in rendering services required under this
Agreement, on a monthly basis upon submission of a detailed monthly
statement and reasonable documentation.
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5. Confidentiality.
(a) Acknowledgment of Proprietary Interest. Employee
recognizes the proprietary interest of Employer and its affiliates in
any Trade Secrets (as hereinafter defined) of Employer and its
affiliates. Employee acknowledges and agrees that any and all Trade
Secrets currently known by Employee or learned by Employee during the
course of his engagement by Employer or otherwise, whether developed by
Employee alone or in conjunction with others or otherwise, shall be and
is the property of Employer and its affiliates. Employee further
acknowledges and understands that his disclosure of any Trade Secrets
will result in irreparable injury and damage to Employer and its
affiliates. As used herein, "Trade Secrets" means all confidential and
proprietary information of Employer and its affiliates, now owned or
hereafter acquired, including, without limitation, information derived
from reports, investigations, experiments, research, work in progress,
drawing, designs, plans, proposals, codes, marketing and sales programs,
client lists, client mailing lists, financial projections, cost
summaries, pricing formula, and all other concepts, ideas, materials, or
information prepared or performed for or by Employer or its affiliates
and information related to the business, products or sales of Employer
or its affiliates, or any of their respective customers, other than
information which is otherwise publicly available; provided, however,
"Trade Secrets" does not include any information that is known or
readily obtainable by companies within the manufactured housing
industry.
(b) Covenant Not-to-Divulge Trade Secrets. Employee
acknowledges and agrees that Employer and its affiliates are entitled to
prevent the disclosure of Trade Secrets. As a portion of the
consideration for the employment of Employee and for the compensation
being paid to Employee by Employer, Employee agrees at all times during
the Term and thereafter to hold in strict confidence and not to disclose
or allow to be disclosed to any person, firm or corporation, other than
to persons engaged by Employer and its affiliates to further the
business of Employer and its affiliates, and not to use except in the
pursuit of the business of Employer and its affiliates, the Trade
Secrets, without the prior written consent of Employer, including Trade
Secrets developed by Employee.
(c) Return of Materials at Termination. In the event of any
termination or cessation of his employment with Employer for any reason
whatsoever, Employee will promptly deliver to Employer all documents,
data and other information pertaining to Trade Secrets. Employee shall
not take any documents or other information, or any reproduction or
excerpt thereof, containing or pertaining to any Trade Secrets.
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(d) Competition During Employment. Employee agrees that
during the Term, neither he, nor any of his affiliates, will directly or
indirectly compete with Employer or its affiliates in any way, and that
he will not act as an officer, director, employee, consultant,
shareholder, lender, or agent of any entity which is engaged in any
business of the same nature as, or in competition with, the businesses
being conducted by Employer and its affiliates (as used herein, a
business is engaged in competition with the business being conducted by
Employer and its affiliates if it is involved in the manufacture,
distribution or sale at retail of manufactured or modular housing in the
territory consisting of the States of Virginia, West Virginia, Maryland,
Delaware, Tennessee, North Carolina, South Carolina, Georgia, Florida,
Arkansas, Louisiana, Alabama, Texas, Kansas, Kentucky, Oregon, Idaho,
Washington, Pennsylvania, Nebraska, Colorado, Mississippi, Arizona, New
Mexico, Nevada, Oklahoma, Missouri, Utah, Montana and South Dakota, or
any other State where Employer or its affiliates conduct business during
the Term); provided, however, that this Section 5(d) shall not prohibit
Employee or any of his affiliates from purchasing or holding an
aggregate equity interest of up to 1%, so long as Employee and his
affiliates combined do not purchase or hold an aggregate equity interest
of more than 5%, in any business in competition with Employer and its
affiliates; and provided further, however, that Employee may retail a
park model unit that is not (i) subject to Housing and Urban Development
rules and regulations and (ii) larger than 385 square feet.
Furthermore, Employee agrees that during the Term, he will undertake no
planning for the organization of any business activity competitive with
the work he performs as an employee of Employer and Employee will not
combine or conspire with any other employees of Employer and its
affiliates for the purpose of the organization of any such competitive
business activity. Notwithstanding the above, Employee may engage or
participate in a manufactured housing subdivision project to the extent
provided in that certain Manufactured Housing Purchase Agreement, of
even date herewith, by and among Employer, Employee, HHI and Xxxxx X.
Xxxxxxx, III.
6. Prohibition on Disparaging Remarks. Employee shall, from the
date of this Agreement on, refrain from making disparaging, negative or other
similar remarks concerning Employer or any of its affiliates to any third
party. Similarly, Employer and its affiliates shall from the date of this
Agreement on, refrain from making disparaging, negative or other similar
remarks concerning Employee to any third party.
7. Termination. This Agreement and the employment relationship
created hereby shall terminate upon the occurrence of any of the following
events:
(a) On September 2, 1997;
(b) The death of Employee;
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(c) The "disability" (as hereinafter defined) of Employee;
(d) Written notice to Employee from Employer of termination
for "just cause" (as hereinafter defined);
(e) Written notice to Employee from Employer of termination
for any reason other "just cause;" or
(f) 60 days prior written notice to Employer from Employee of
termination.
For purposes of Section 7(c) above, the "disability" of Employee shall
mean his inability, because of mental or physical illness or incapacity, to
perform his duties under this Agreement for a continuous period of 120 days or
for 120 days out of a 150-day period.
For purposes of Section 7(d) above, "just cause" shall mean (a) the
failure or inability for any reason (other than disability) of Employee to
devote his full business time to the businesses of Employer and its affiliates
except as permitted hereby, (b) the commission by Employee of any act involving
moral turpitude or the commission by Employee of any act or the suffering by
Employee of any occurrence or state of facts, which renders Employee incapable
of performing his duties under this Agreement (other than disability), or
adversely affects or could be expected to adversely affect Employer's business
reputation, (c) Employee's being convicted of a felony, (d) any breach by
Employee of any of the material terms of, or the failure to perform any
material covenant contained in, this Agreement and following notice thereof
from Employer to Employee, Employee does not cure such breach or failure within
fifteen (15) days thereafter; provided, however, that Employee will not be
entitled to cure any breach or failure under this subclause (d) more than one
time in any consecutive three month period or (e) the violation by Employee of
reasonable instructions or policies established by Employer or its affiliates
with respect to the operation of their businesses and affairs or Employee's
failure to carry out the reasonable instructions of the Chief Executive
Officer, President or Board of Directors of Employer and following notice
thereof from Employer to Employee, Employee does not cure any such violation or
failure within fifteen (15) days thereafter; provided, however, that Employee
will not be entitled to cure any violation or failure under this subclause (e)
more than one time in any consecutive three month period.
Notwithstanding anything to the contrary in this Agreement, the
provisions of Sections 5 and 6 above shall survive any termination, for
whatever reason, of Employee's employment under this Agreement. In the event
of the termination of Employee's employment prior to September 2, 1997,
Employee shall be entitled only to the
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compensation earned by him as of the date of termination, except that if
Employee's employment is terminated pursuant to Section 7(e) above, Employee
shall be entitled to receive the salary then payable pursuant to Section 4(a)
until September 2, 1997.
8. Remedies. Employee recognizes and acknowledges that in the event
of any default in, or breach of any of, the terms, conditions or provisions of
this Agreement (either actual or threatened) by Employee, Employer's and its
affiliates remedies at law shall be inadequate. Accordingly, Employee agrees
that in such event, Employer and its affiliates shall have the right of
specific performance and/or injunctive relief in addition to any and all other
remedies and rights at law or in equity, and such rights and remedies shall be
cumulative.
9. Acknowledgments. Employee acknowledges and recognizes that the
enforcement of any of the provisions set forth in Section 5 and 6 above by
Employer and its affiliates will not interfere with Employee's ability to
pursue a proper livelihood. Employee recognizes and agrees that the
enforcement of this Agreement is necessary to ensure the preservation and
continuity of the business and good will of Employer and its affiliates.
10. Notices. Any notices, consents, demands, requests, approvals and
other communications to be given under this Agreement by either party to the
other shall be deemed to have been duly given if given in writing and
personally delivered or sent by facsimile transmission, courier service,
overnight delivery service or by mail, registered or certified, postage prepaid
with return receipt requested, as follows:
If to Employer: American Homestar Corporation
0000 Xxxxx Xxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx Xxxx, Xxxxx 00000
Attention: President
Fax No.: (000) 000-0000
If to Employee: Xxxxxxx X. Xxxxxxx
000 Xxxxx Xxxxx
Xxxxxxx Xxxx, Xxxxx Xxxxxxxx 00000
Notices delivered personally or by facsimile transmission, courier service or
overnight delivery shall be deemed communicated as of actual receipt; mailed
notices shall be deemed communicated as of three days after the date of
mailing.
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11. Entire Agreement. This Agreement contains the entire agreement
of the parties hereto and supersedes all prior agreements and understandings,
oral or written between the parties hereto. No modification or amendment of
any of the terms, conditions or provisions herein may be made otherwise than by
written agreement signed by the parties hereto.
12. Governing Law and Venue. THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE INTERPRETED, CONSTRUED, AND ENFORCED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO ITS CHOICE OF LAW
PRINCIPLES.
13. Parties Bound. This Agreement and the rights and obligations
hereunder shall be binding upon and inure to the benefit of Employer and
Employee, and their respective heirs, personal representatives, successors and
assigns. Employer shall have the right to assign this Agreement to any
affiliate or to its successors or assigns. The terms "successors" and
"assigns" shall include any person, corporation, partnership or other entity
that buys all or substantially all of Employer's assets or all of its stock, or
with which Employer merges or consolidates. The rights, duties or benefits to
Employee hereunder are personal to him, and no such right or benefit may be
assigned by him. The parties hereto acknowledge and agree that Employer's
affiliates are third-party beneficiaries of the covenants and agreements of
Employee set forth in Sections 5 and 6 above.
14. Estate. If Employee dies prior to the payment of all sums owed,
or to be owed, to Employee pursuant to Section 4 above, then such sums, as they
become due, shall be paid to Employee's estate.
15. Enforceability. If, for any reason, any provision contained in
this Agreement should be held invalid in part by a court of competent
jurisdiction, then it is the intent of each of the parties hereto that the
balance of this Agreement be enforced to the fullest extent permitted by
applicable law. Accordingly, should a court of competent jurisdiction
determine that the scope of any covenant is too broad to be enforced as
written, it is the intent of each of the parties that the court should reform
such covenant to such narrower scope as it determines enforceable.
16. Waiver of Breach. The waiver by any party hereto of a breach of
any provision of this Agreement shall not operate or be construed as a waiver
of any subsequent breach by any party.
17. Captions. The captions in this Agreement are for convenience of
reference only and shall not limit or otherwise affect any of the terms or
provisions hereof.
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18. Costs. If any action at law or in equity is necessary to enforce
or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees, costs and necessary disbursements in
addition to any other relief to which he or it may be entitled.
19. Other Obligations. Employee represents and warrants that he is
not subject to any agreement which would be violated or breached as a direct or
indirect result of Employee executing this Agreement or Employee becoming an
employee of Employer.
20. Affiliate. An "affiliate" of any party hereto shall mean any
person controlling, controlled by or under common control with such party.
21. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same instrument, but only one of which need be produced.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
AMERICAN HOMESTAR CORPORATION
By:
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Its:
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Xxxxxxx X. Xxxxxxx
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