EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "AGREEMENT") is entered into on this 12th
day of March 1998 between Xxxxxxxx-Xxxxxxxx, Inc., a Texas corporation (the
"COMPANY"), and Xxx X. Xxxxx ("XX. XXXXX").
RECITALS
This Agreement sets forth in definitive form the terms of Xx. Xxxxx'x
employment by the Company.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements of the parties contained herein, the Company and Xx. Xxxxx hereby
agree as follows:
1. EMPLOYMENT. The Company will employ Xx. Xxxxx and Xx. Xxxxx accepts
employment with the Company for a period of three years beginning on the date
of this Agreement (the "INITIAL PERIOD"). Xx. Xxxxx'x employment may continue
after the Initial Period but will then be terminable by either party at will,
with or without cause. The obligations of the Company and Xx. Xxxxx set forth
in that certain "Noncompetition, Property Rights and Trade Secrets Agreement"
and in that certain "Confidentiality Agreement" (each as defined in Section 8)
(referring to noncompetition, intellectual property rights and confidentiality,
respectively) and in Section 9 (referring to termination) will survive
termination of Xx. Xxxxx'x employment, regardless of reason.
2. RESIDENCE AND BUSINESS TRAVEL. Each of the parties agrees that the
primary location at which Xx. Xxxxx will be expected to render services
hereunder will be in Dallas, Texas or its environs, but that Xx. Xxxxx will,
from time to time, be expected to travel to other locations where the Company
transacts (or proposes to transact) business and undertake such other business
travel as is reasonably required in the discharge of his duties set forth below
and for the successful operation of the Company.
3. DUTIES. As of the date of this Agreement, Xx. Xxxxx is employed as
Executive Vice President and Managing Director - Yield Management Group of the
Company, reporting to the President and Chief Operating Officer of the Company.
In such capacity, Xx. Xxxxx shall be responsible for the performance,
management, supervision and function of the Yield Management Group of the
Company.
Xx. Xxxxx agrees that, to the best of his ability and experience, he will
at all times conscientiously (a) perform the foregoing duties and
responsibilities, or such other or additional duties and responsibilities,
and/or (b) hold such other or additional offices, as in either case may be
assigned to him from time to time by the Company's Chief Executive Officer, the
Company's President and Chief Operating Officer or the Company's Board of
Directors.
In discharging his duties, Xx. Xxxxx shall have such authority as is
reasonably necessary to perform such duties.
4. FULL-TIME EMPLOYMENT. Xx. Xxxxx'x employment will be on a full-time
basis, in accordance with policies of the Company applicable to executive
officers. In addition to such restrictions as are set forth in the
Noncompetition, Property Rights and Trade Secrets Agreement referenced herein,
Xx. Xxxxx will not engage in any other business or render any commercial or
professional services, directly or indirectly, to any other person or
organization, whether for compensation or otherwise, provided that Xx. Xxxxx
may (a) provide incidental assistance to family members on matters of family
business or with respect to their personal investments; (b) engage in
charitable activities on behalf of civic, educational or other nonprofit
organizations; and (c) subject to the approval of the Company's Chief Executive
Officer (which approval may be given or withheld in his or her sole
discretion), sit on the board of directors of corporations and other business
organizations; provided in each case that such activities do not conflict with
or interfere with Xx. Xxxxx'x obligations to the Company. Xx. Xxxxx may make
personal investments in non-publicly traded corporations, partnerships or other
entities that are not engaged in any business activities competitive with the
Company. Notwithstanding anything to the contrary contained in this Agreement,
Xx. Xxxxx may make personal investments in publicly traded corporations
regardless of the business they are engaged in, provided that Xx. Xxxxx does
not at any time own in excess of two percent (2%) of any class of the issued
and outstanding equity securities of any such corporation.
5. SALARY; POTENTIAL INCENTIVE COMPENSATION; ANNUAL REVIEW. Xx. Xxxxx'x
annual base salary for the Initial Period will be not less than $300,000. All
base salary will be payable on the Company's regular payroll dates, less
required withholdings.
If the Company's financial performance meets or exceeds the standards for
financial performance established for a fiscal year by the Company's Board of
Directors (i.e., the Company's "board plan"), then Xx. Xxxxx will be eligible
to receive, subject to such reasonably achievable incentive compensation
criteria as the Company's Board of Directors establishes from time to time,
incentive compensation (which may be in cash or other forms of consideration,
or both) of up to seventy percent (70%) of Xx. Xxxxx'x annual base salary on
terms no less favorable than those applicable to other executive officers of
the Company (e.g., its Chairman, Vice-Chairman, Chief Executive Officer and
Chief Financial Officer). Xx. Xxxxx acknowledges that the Company's Board of
Directors has complete and sole discretion to establish and revise the
Company's "board plan" and such reasonably achievable criteria; PROVIDED,
HOWEVER, that no such action may retroactively alter or limit the amount of any
incentive compensation actually and previously earned by Xx. Xxxxx.
The Company, acting through its Chief Executive Officer or its Chief
Operating Officer and President or his or her respective designee, shall
provide to Xx. Xxxxx, and provide Xx. Xxxxx the opportunity to participate in,
an employment performance review not less frequently than annually.
6. BENEFITS. Xx. Xxxxx will also be entitled to insurance, vacation and
other employee benefits commensurate with his position (and reasonably
consistent with the level of such benefits as are afforded other executive
officers of the Company) in accordance with the Company's policies in effect
from time to time with respect to executive officers. Xx. Xxxxx
EMPLOYMENT AGREEMENT - Page 2
acknowledges receipt of a summary of the Company's employee benefits policies
in effect as of the date of this Agreement.
7. REIMBURSEMENT OF NORMAL BUSINESS EXPENSES. The Company will, in
accordance with the Company's policies in effect from time to time, reimburse
Xx. Xxxxx for all out-of-pocket reasonable business expenses incurred by Xx.
Xxxxx in connection with the performance of his duties under this Agreement,
upon submission of the required documentation required pursuant to the
Company's standard policies and record-keeping procedures.
8. INTELLECTUAL PROPERTY. Simultaneously with the execution of this
Agreement, Xx. Xxxxx agrees to execute and deliver (if he has not done so
already) that certain Noncompetition, Property Rights and Trade Secrets
Agreement between him and the Company, a copy of which is attached to this
Agreement as ATTACHMENT A, and that certain Confidentiality Agreement between
him and the Company, a copy of which is attached to this Agreement as
ATTACHMENT B.
9. TERMINATION.
(a) BY THE COMPANY. Notwithstanding Section 1, the Company may
terminate Xx. Xxxxx'x employment at any time during the Initial Period, with
or without cause, upon written notice to Xx. Xxxxx.
(b) BY XX. XXXXX. During the Initial Period, Xx. Xxxxx may
terminate his employment upon written notice to the Company only if the
Company is in material breach of this Agreement; PROVIDED, HOWEVER, that such
termination will become effective only upon the expiration of 30 days
following such notice and then only if the breach remains uncured as of the
effective time of such termination. Such termination shall be deemed a
termination by the Company of Xx. Xxxxx'x employment under Section 9(a),
without cause, for which Xx. Xxxxx shall have the remedy set forth in Section
9(c).
(c) REMEDY. Upon termination of Xx. Xxxxx'x employment during the
Initial Period without cause pursuant to Section 9(a), or pursuant to Section
9(b), only, (at which time he shall cease to be an employee of the Company for
all purposes), the Company will (i) thereafter pay to Xx. Xxxxx on the
Company's regular payroll dates and less required withholdings, base salary
(but not bonuses or other incentive compensation, for periods before or after
such termination) at the rate paid to Xx. Xxxxx immediately prior to such
termination for the remaining balance of the Initial Period; and (ii) provide
Xx. Xxxxx, for a period coterminous with such payments, with major medical
health and dental insurance reasonably comparable to employee insurance
benefits then provided to the Company's executive officers in accordance with
the Company's employee insurance benefits policies.
If the Company terminates Xx. Xxxxx'x employment with cause, or if Xx.
Xxxxx terminates his employment in circumstances constituting a breach by him
of this Agreement, then none of the foregoing post-termination payments or
insurance benefits, or any other post-termination or severance payments or
benefits, shall be made or provided to Xx. Xxxxx.
EMPLOYMENT AGREEMENT - Page 3
For purposes of this Agreement, the term "cause" shall mean conduct
involving one or more of the following as determined by the Company in its
reasonable discretion: (i) the substantial, material and continuing failure of
Xx. Xxxxx, after reasonable notice thereof, to render services to the Company
or any subsidiary in accordance with the terms or requirements of this
Agreement; (ii) disloyalty, gross negligence, willful misconduct, dishonesty or
breach of fiduciary duty to the Company or any subsidiary that results in
direct or indirect material loss, damage or injury to the Company or any
subsidiary; (iii) the commission of an act of embezzlement or fraud; (iv)
deliberate disregard of the rules or policies of the Company that results in
direct or indirect material loss, damage or injury to the Company or any
subsidiary; (v) the unauthorized and intentional disclosure of any trade secret
or confidential information of the Company or any subsidiary; (vi) the
commission of an act that constitutes unfair competition with the Company or
any subsidiary or which induces any customer or supplier to terminate a
contract with the Company or any subsidiary, that results in direct or indirect
material loss, damage or injury to the Company or any subsidiary; (vii)
habitual drunkenness or an addiction to drugs; or (viii) commission of a crime
of moral turpitude.
The Company's obligation to make payments (and provide insurance
benefits), if any, pursuant to this Section 9(c) is subject to the condition
that Xx. Xxxxx execute and deliver to the Company a comprehensive, general
release of the Company (and its directors, officers, shareholders, employees,
agents and other representatives), in form satisfactory to the Company and its
counsel, releasing the Company from and against any claims, damages and the
like that the Company might or allegedly could otherwise be obligated to pay
Xx. Xxxxx as a result of the termination of Xx. Xxxxx'x employment with the
Company (including for claims of employment discrimination, wrongful
termination or breach of this Agreement).
(d) UPON DEATH. Except as otherwise provided for in this
Agreement, if Xx. Xxxxx dies during the term of this Agreement, then the
Company will pay his estate an amount equal to all earned and unpaid salary,
bonuses (if any) accrued and payable and accrued benefits, all as of the date
of his death.
(e) SURVIVAL. Xx. Xxxxx'x and the Company's obligations under
Sections 8, 9 and 10(h) of this Agreement and, to the extent that any
allowable expenses have not been reimbursed as of the time of such
termination, under Section 7 of this Agreement, will survive the termination
of Xx. Xxxxx'x employment with the Company.
10. MISCELLANEOUS.
(a) NOTICES. Any and all notice permitted or required to be given
under this Agreement must be in writing. Notices will be deemed given (i)
when personally received or when sent by facsimile transmission (to the
receiving party's facsimile number), (ii) on the first business day after
having been sent by commercial overnight courier with written verification of
receipt, or (iii) on the third business day after having been sent by
registered or certified mail from a location on the United States mainland,
return receipt requested, postage prepaid, whichever occurs first, at the
address set forth below or at any new address, notice of which will have been
given in accordance with this Section 10(a):
EMPLOYMENT AGREEMENT - Page 4
(i) If to the Company: Xxxxxxxx-Xxxxxxxx, Inc.
00000 Xxxxx Xxxxxx Xxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Chief Executive Officer
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxx Xxxxxxx Rain Xxxxxxx
(A Professional Corporation)
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
(ii) If to Xx. Xxxxx: Xxx X. Xxxxx
000 Xxxxxxx Xxxx
Xxxxxxx Xxxxxxx, Xxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxx Xxxxx
Attorney at Law
713 Xxxxx
X.X. Xxx 0000
Xxxxxxx Xxxxxxx, XX 00000
Attention:
Phone: (000) 000-0000
Fax: (000) 000-0000
(b) AMENDMENTS. This Agreement, including the Attachments hereto,
contains the entire agreement and supersedes and replaces all prior agreements
between the Company and Xx. Xxxxx concerning Xx. Xxxxx'x employment and
employment benefits. (PROVIDED, HOWEVER, that this Agreement does not so
supersede or replace any (i) agreements with respect to stock options
previously granted to Xx. Xxxxx or (ii) agreements between Xx. Xxxxx and the
Company, or among Xx. Xxxxx, the Company and others, establishing rights of
first refusal and/or similar rights with respect to such stock.) This
Agreement may not be changed or modified in whole or in part except by a
writing signed by the party against whom enforcement of the change or
modifications is sought.
(c) SUCCESSORS AND ASSIGNS. This Agreement will not be assignable
by either Xx. Xxxxx or the Company, except that the rights and obligations of
the Company under this Agreement may be assigned to a corporation which
succeeds the Company as the result of a
EMPLOYMENT AGREEMENT - Page 5
merger or other corporate reorganization and which continues the business of
the Company, or a subsidiary of the Company, provided that the Company
guarantees the performance by such assignee of the Company's obligations
hereunder.
(d) GOVERNING LAW. The laws of the State of Texas (without regard
to its choice of law principles that might apply the law of another
jurisdiction) will govern the validity of this Agreement, the construction of
its terms, and the interpretation and enforcement of the rights and duties of
the parties.
(e) NO WAIVER. The failure of any party to enforce any of the
provisions of this Agreement will not be construed to be a waiver of the right
of such party thereafter to enforce such provisions. The waiver by any party
of the right to enforce any of the provisions of this Agreement on any
occasion will not be construed to be a waiver of the right of such party to
enforce such provisions on any other occasion.
(f) SEVERABILITY. Xx. Xxxxx and the Company recognize that the
limitations contained in this Agreement are reasonably and properly required
for the adequate protection of the interests of the Company. If for any reason
a court of competent jurisdiction or an arbitrator in a binding arbitration
proceeding finds any provision of this Agreement, or the application thereof,
to be unenforceable, then the remaining provisions of this Agreement will be
interpreted so as best to reasonably effect the intent of the parties. The
parties further agree that the court or arbitrator shall replace any such
invalid or unenforceable provisions with valid and enforceable provisions
designed to achieve, to the extent possible, the business purposes and intent
of such unenforceable provisions.
(g) COUNTERPARTS. This Agreement may be executed in counterparts,
each of which will be an original as regards any party whose signature appears
thereon and all of which together will constitute one and the same instrument.
This Agreement will become binding when one or more counterparts hereof,
individually or taken together, bear the signatures of both parties reflected
hereon as signatories.
(h) DISPUTE RESOLUTION.
(i) ARBITRATION OF DISPUTES. Any dispute under this
Agreement shall be resolved by arbitration in Dallas, Texas and, except as
herein specifically stated, in accordance with the commercial arbitration
rules of the American Arbitration Association ("AAA RULES") then in effect,
except that depositions and documentary discovery shall be freely permitted.
However, in all events, these arbitration provisions shall govern over any
conflicting rules that may now or hereafter be contained in the AAA Rules.
Any judgment upon the award rendered by the arbitrator may be entered in any
court having jurisdiction over the subject matter thereof. The arbitrator
shall have the authority to grant any equitable and legal remedies that would
be available in any judicial proceeding instituted to resolve such dispute,
and may, in his or her discretion, award attorneys' fees, expenses and costs.
(ii) COMPENSATION OF ARBITRATOR. Any such arbitration will be
conducted before a single arbitrator who will be compensated for his or her
services at a rate to be
EMPLOYMENT AGREEMENT - Page 6
determined by the parties or by the American Arbitration Association, but
based upon reasonable hourly or daily consulting rates for the arbitrator if
the parties are not able to agree upon his or her rate of compensation.
(iii) SELECTION OF ARBITRATOR. The American Arbitration
Association will have the authority to select an arbitrator from a list of
arbitrators who are lawyers familiar with Texas contract law; PROVIDED,
HOWEVER, that such lawyers cannot work for a firm then performing services for
either party, that each party will have the opportunity to make such
reasonable objection to any of the arbitrators listed as such party may wish
and that the American Arbitration Association will select the arbitrator from
the list of arbitrators as to whom neither party makes any such objection. If
the foregoing procedure is not followed, then each party will choose one
person from the list of arbitrators provided by the American Arbitration
Association (provided that such person does not have a conflict of interest),
and the two persons so selected will select from the list provided by the
American Arbitration Association the person who will act as the arbitrator.
(iv) PAYMENT OF COSTS. Subject to the last sentence of
Section 10(h)(i) above, the Company and Xx. Xxxxx will each pay 50% of the
initial compensation to be paid to the arbitrator in any such arbitration and
50% of the costs of transcripts and other normal and regular expenses of the
arbitration proceedings.
(v) BURDEN OF PROOF. For any dispute submitted to
arbitration, the burden of proof will be as it would be if the claim were
litigated in a Texas judicial proceeding.
(vi) AWARD. Upon the conclusion of any arbitration
proceedings hereunder, the arbitrator will render findings of fact and
conclusions of law and a written opinion setting forth the basis and reasons
for any decision reached and will deliver such documents to each party to this
Agreement along with a signed copy of the award.
(vii) TERMS OF ARBITRATION. The arbitrator chosen in
accordance with these provisions will not have the power to alter, amend or
otherwise affect the terms of these arbitration provisions or the provisions
of this Agreement.
(viii) NATURE OF REMEDY. Except as specifically otherwise
provided below, arbitration will be the sole and exclusive remedy of the
parties for any dispute arising out of this Agreement.
(ix) EQUITABLE REMEDY. Notwithstanding the provisions of
this Section 10(h) and the arbitration provided for herein, actions initiated
or maintained by the parties for injunctive or similar equitable relief are
not subject to arbitration, and may be brought by the parties in any court
that has jurisdiction, and, should the party bringing any such action prevail,
all costs and expenses (including legal fees) shall be borne by the party
against whom such action was brought.
[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
EMPLOYMENT AGREEMENT - Page 7
IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the date first set forth above.
XXXXXXXX-XXXXXXXX, INC. EMPLOYEE
By: /s/ X.X. Xxxxxxxx /s/ Xxx X. Xxxxx
------------------------------ ---------------------------------
X.X. Xxxxxxxx Xxx X. Xxxxx
Chairman of the Board and
Chief Executive Officer
EMPLOYMENT AGREEMENT - Page 8
