EMPLOYMENT AGREEMENT
THIS AGREEMENT, entered into the 23rd day of November, 1999, by and between
Xxxxxxx International, Inc a Delaware corporation (the "Company"), and XXXX X.
XXXXXX ("Marks") (DOB 9.21.1953) to be effective on the Effective Date (as
defined below):
WITNESSETH:
WHEREAS, the Company desires to receive the benefit of Xxxxxx'x knowledge,
experience, management ability, reputation and contacts in the hospitality
industry; and
WHEREAS, Xxxxxx is willing to remain in the employ of the Company on the terms
hereinafter provided;
NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained, the parties do hereby agree as follows:
1. Employment. The Company hereby agrees to employ Xxxxxx and Xxxxxx hereby
accepts employment and agrees to perform the services specified herein upon
the terms and conditions hereinafter set forth, and as set forth in the
employee handbook.
2. Term. Subject to the provisions of termination hereinafter set forth,
the term of this Agreement shall be effective as of November 23, 1999 (The
"Effective Date") and ending on November 23, 2002. (The "Initial Term")
3. Automatic Annual Renewal. This Agreement will be automatically renewed
annually up to age 62; commencing with a date one year after the date of this
Agreement, for successive three year terms, (the "Renewal Terms") unless
terminated by either party upon written notice submitted to the other, at
least 30 days prior to the end of the first year of the Initial Term or, at
least 30 days prior to the end of any subsequent year, or unless terminated
pursuant to Section 14 hereunder. Further renewals of the three year term
beyond age 62 will be at the Board of Director's discretion. The Renewal Terms
shall be on the same terms and conditions as the Initial Term under this
Agreement except the compensation terms which shall be governed by paragraph
6(i) below. The last day of the Initial Term or any Renewal Term in which
Termination Notice is received shall be referred to as the Termination Date.
In the event that notice is given by the Company of its intention not to renew
this Agreement, the Company can at it's option elect either to pay Xxxxxx the
remaining two years of the current term of this Agreement, in a lump sum, or
require that Xxxxxx continue in his capacity with the Company and continue to
pay his salary and other benefits in the usual way, or a combination of the
foregoing, with the continued employment of Xxxxxx for a period of less than
two years and an appropriate lump sum, representing the remaining portion of
the two year period of notice, payable on the Termination Date.
4. Duties. Xxxxxx has been elected and is engaged for the term of the
Agreement as the Chief Executive Officer of this Company. In such capacity,
Xxxxxx will, as reasonably requested by the Board of Directors of the Company
from time to time, carry out the functions of his office and furnish his best
advice, information, judgment and knowledge with respect to the business of
the Company and its subsidiaries, which are engaged in the hospitality
business and related businesses.
5. Extent of Service. Xxxxxx agrees to perform to the best of his abilities
such duties as hereinabove described and to devote full time, attention and
energy to the business of the Company and the Company's subsidiaries, which
are engaged in the hospitality business, as is necessary to fulfill such
duties.
6. Compensation. The compensation to be paid by the Company to Xxxxxx and
which Xxxxxx agrees to accept from the Company shall be as follows:
(i) A Salary at an initial annual rate of One Hundred and Ten Thousand
(110,000)Dollars, subject to an automatic annual 5% increase, and to such
increases as the Board of Directors of the Company may, in its sole
discretion, from time to time determine.
Such salary compensation shall be payable on a current basis in equal
installments not less frequently than monthly, subject to applicable
withholding.
(ii) An Automobile Allowance, initially at the rate of $650 per month,
subject to such increases as the Board of Directors of the Company may, in its
sole discretion, from time to time determine,
(iii) Participation in the Corporate Executive Bonus Plan, as implemented on
January 24, 1998, subject to any modifications as the Board of Directors of
the Company may, in its sole discretion, from time to time determine,
(iv) The retirement and other benefits accruing to Xxxxxx under the
"Retirement Only Continuation Fixed and Flexible Premium Life Insurance
Agreement", resolved by the Board of Directors of the Company on January 19,
1998 and entered into on April 22, 1998, between the Company and Xxxxxx,
(v) Participation in the Employee Stock Option plan, when one is
implemented, commensurate with other members of the Board of Directors, key
officers and executives of the Company.
7. Benefits. Xxxxxx shall be entitled to participate in such other employee
benefit programs, plans and policies, including but not limited to vacation,
sick, medical, dental, life and long term disability plans, as are maintained
by the Company and as may be established for the executive employees of the
Company from time to time on the same basis as other executive employees are
entitled thereto. It is understood that the establishment, termination or
change in any such executive employee benefit programs, plans or policies
shall be at the discretion of the Board of Directors of the Company to
exercise in its sole discretion, from time to time, and any such termination
or change in such program, plan or policy will not affect this Employment
Agreement so long as Xxxxxx is treated on the same basis as other executive
employees participating in such program, plan or policy, as the case may be.
Upon termination of employment, without regard to the manner in which the
termination was brought about, Xxxxxx'x rights in such employee benefit
programs, plans or policies shall be governed solely by the terms of the
program, plan or policy itself and not this Agreement.
8. Working Facilities. During the term of his employment, Xxxxxx shall be
furnished with a private office, secretarial services and such other
facilities and services as are commensurate with his position with the Company
and adequate for the performance of his duties under this Employment
Agreement.
9. Expenses. Xxxxxx is authorized to incur reasonable expenses for the
discharge of his duties hereunder in the promotion of the business of the
Company, including expenses for entertainment, travel and related items. The
Company shall reimburse Xxxxxx for all such expenses upon presentation by
Xxxxxx from time to time of itemized accounts of expenditures incurred in
accordance with customary Company policies.
10. Non-Competition. Xxxxxx understands that he has been exposed to, and will
further develop and be exposed to, confidential information and trade secrets
of the Company or its customers, including (without limitation), intimate
knowledge of customer requirements, business procedures, price lists,
financial data, records, customer lists and frequency and variety of work
associated with particular customers (hereinafter called "Confidential
Information"). Confidential Information has been and will continue to be
developed for commercial advantage and at the expense of the Company, and
maintenance by the Company of the proprietary nature and confidentiality of
Confidential Information to the fullest extent is important to the Company. As
part of the essence of the consideration hereof, Xxxxxx agrees that (i) during
the term of the employment of Xxxxxx under this Agreement and for a period of
one year immediately following termination of his employment with the Company
if such termination is by the Company with Cause, or by Xxxxxx without Good
Reason, Xxxxxx will not, for himself or on behalf of any other person or
persons, firm, partnership, company or corporation, engage in any other
business which is in competition with the Company, either as a principal,
partner, agent, employee, director or officer, within the cities in which the
Company operates hotels unless Xxxxxx has received written consent from the
Company, (except that this shall not be construed as preventing Xxxxxx from or
requiring him to obtain consent of the Company prior to purchasing less than
five percent (5%) of the outstanding shares of publicly traded stock of any
competitive business or enterprise in the trade area of the Company); (ii)
that during the term of the employment of Xxxxxx under this Agreement, and for
a period of one year immediately following termination of his employment by
the Company with Cause, or by Xxxxxx without Good Reason, Xxxxxx will not, for
himself or on behalf of or in conjunction with any other person or persons,
firm, partnership, company or corporation, call upon any client or clients of
the Company with whom his first contact occurred during his period of
employment or consultation with the Company or its predecessors for the
purposes of soliciting business from and/or diverting or taking away business
of such clients of the Company. In the event this section is determined by a
court of competent jurisdiction to exceed geographical, temporal or scope of
activity limitations permitted by applicable law, this section shall be
reformed by the court to the maximum permitted limitation.
11. Non Disclosure of Information. Xxxxxx recognizes and acknowledges that he
will have access to certain Confidential Information of the Company which is a
valuable, special and unique asset of the Company's business. He therefore
covenants and agrees, which covenant and agreement is of the essence of this
Agreement, that during or after the term of his employment, he will not reveal
to anyone not an employee, officer, agent or consultant of the Company at any
time the Confidential Information of the Company, and that upon termination of
his employment, he will return to the Company all records and documents (and
all copies thereof) and all other property belonging to the Company or
relative to its business.
12. Solicitation and Enticement of Employees. Xxxxxx agrees that during the
term of his employment by the Company and for a period of one (1) year after
termination of his employment with the Company, he will not solicit or entice
any other employee of the Company to leave the Company to go to work for any
other business or organization which is in direct or indirect competition with
the Company.
13. Successor Companies. Notwithstanding anything in this Agreement to the
contrary, Sections 10, 11 and 12 hereof shall not apply and shall be of no
force and effect in the event Xxxxxx is employed by any person who purchases
voting control of the Company purchases substantially all of the assets of the
Company, or is the survivor of any merger or other combination with the
Company.
14. Termination.
(a) Death. In the event Xxxxxx dies during the term of this Agreement, the
Company shall pay to his executors, administrators or heirs and amount equal
to the Xxxxxx'x salary and benefits for the remaining period of any term
hereunder (but in no event shall such sum be less than two (2) years! salary),
in a lump sum, which amount the Company will insure on the life of Xxxxxx, as
long as such insurance is available at commercially reasonable terms. If such
insurance is not available, the Company will pay such amounts to his
executors, administrators or heirs in monthly installments.
The Company shall thereafter have no further liability to his executors or
administrators or to any other person claiming under him for compensation in
accordance with the terms hereof, except that arising under the Retirement
-Only Continuation Fixed and Flexible Premium Life Insurance Agreement.
Benefits shall be payable in accordance with their respective terms as
provided in Section 6 hereof.
(b) Disability. In the event Xxxxxx should be prevented from performing his
duties hereunder by reason of illness or incapacity for a period of twelve
months during the term hereof, the Company shall have the right to terminate
the employment of Xxxxxx under this Agreement. The Company shall continue to
pay to Xxxxxx his compensation under Sections 6 and 7 above in relation to
such twelve months of disability prior to termination, and following
termination the Company will pay any amount of compensation remaining under
the term of this Agreement; but in no event shall such sum be less than two
(2) year's salary.
(c ) Termination by Company for Cause. The Company may terminate Xxxxxx'x
employment under this Agreement for Cause at any time. For purposes of this
Agreement, the Company shall have "Cause" to terminate Xxxxxx'x employment if
he (i) is convicted of one or more acts constituting a felony; or (ii) is
convicted of fraud or one or more acts constituting serious moral turpitude;
or (iii) misappropriates the Company's assets or engages in gross misconduct
materially injurious to the Company or its affiliates or subsidiaries; or (iv)
willfully refuses or grossly neglects to perform the duties reasonably
assigned to him by the Board of Directors of the Company. Upon any termination
of Xxxxxx'x employment under this section, the Company shall have no further
obligation under this Agreement to make payments to, or bestow any benefits
upon Xxxxxx after the date of the termination, other than compensation
payments or benefits accrued, due and payable to Xxxxxx prior to the date of
termination under Sections 6 and 7 above.
(d) Termination by Company Without Cause. In the event of the termination of
Xxxxxx'x employment under this Agreement by the Company without cause (except
as may be otherwise provided in this Section 14), any remaining amounts of
compensation due to Xxxxxx under Sections 6 and 7 for the remaining term of
this Agreement (but in no event less than two year's salary) shall be paid in
full, on the Termination Date, which date shall be no more than 30 (thirty)
days after the Company terminates Xxxxxx'x employment hereunder.
(e) Termination by Xxxxxx With Good Reason. Xxxxxx may terminate his
employment for Good Reason. For purpose of this Agreement," "Good Reason"
shall mean: (i) without Xxxxxx'x consent, the assignment to Xxxxxx of
substantial duties inconsistent with Xxxxxx'x position, duties,
responsibilities and status with the Company, or any removal of Xxxxxx from
his title's and offices, except in connection with the termination of Xxxxxx'x
employment for the cause or disability or as a result of Xxxxxx'x death; (ii)
any material change in this Agreement without Xxxxxx'x consent (iii) the
Company's requiring Xxxxxx to relocate anywhere other than the Dallas, Texas
area except for required travel on the Company's business travel obligations,
or, in the event Xxxxxx consents to such relocation out of the State of Texas
the failure by the Company to pay or reimburse Xxxxxx for all reasonable
moving expenses incurred by Xxxxxx relating to a change of Xxxxxx'x principal
residence in connection with such relocation and to indemnify Xxxxxx against
any loss (defined as the difference between the actual bona fide sale price of
such residence and the fair market value of such residence as determined by a
member of the Society of Real Estate Appraisers designated by Xxxxxx and
satisfactory to the Company) realized in the sale of Xxxxxx'x principal
residence in connection with any such change of residence. In the event of
termination under this Section 14(e), the Company shall pay to Xxxxxx the
balance of his compensation under Section 6 and any accrued entitlements under
Section 7 for the remaining term of this Agreement (but in no event less than
two year's salary) on the Termination Date.
(f) Change of Control. In the event of a Change of Control (as defined below),
Xxxxxx shall have the right during the 120-day period after consummation of
the Change of Control to terminate his employment and the Company shall
continue to make semi-monthly payments to him for a period of three (3) years
at the rate per year in effect under Sections 6 and 7 as of the date of
termination. For purposes of this Agreement," Change of Control" means:
(i) the acquisition by any individual, entity or group (within the meaning of
Section 13(d) (3) or 14(d) (2) or the Securities Exchange Act of 1934, as
amended (the Exchange Act")) (a "Person") (other than Merchant Capital
Holdings ("MCH"), any entity controlled by Xxxxxxxx Xxxx, Xxxxxx Xxxxxxxx or a
Person who is the beneficial owner of 10% or more of the combined voting power
of the outstanding voting securities of Xxxxxxx International as of the date
hereof) of beneficial ownership (within the meaning of Rule I 3d-3 promulgated
under the Exchange Act) of a majority of the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors; provided however that any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company shall not constitute a Change of
Control; or (ii) approval by the shareholders of the Company of
reorganization, merger of consolidation or sale or other disposition of all or
substantially all of the assets of the Company (a "Business Combination"), in
each case, unless, following such Business Combination, all or substantially
all of the individuals and entities who were the beneficial owners of the
outstanding voting securities of the Company immediately prior to such
Business Combination beneficially own, directly or indirectly, a majority of
the combined voting power of the then outstanding voting securities entitled
to vote generally in the election of directors of the corporation resulting
from such Business Combination (including without limitation a corporation
which as a result of such transaction owns the Company or all or substantially
all of the Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership
immediately prior to such Business Combination. In the event of such
termination following a Change of Control, Xxxxxx shall have no right to, and
the Company shall have no obligations to pay, any other or further sums,
except for the payment required pursuant to this Section 14(1) , for or in
relation to severance or other compensation relating to termination of his
employment with the Company
15. Specific Performance. The Company and Xxxxxx jointly and severally,
acknowledge that it would be impossible to calculate or ascertain accurately
and definitively the damages the Company would sustain from a breach by Xxxxxx
of the provisions of Sections 10, 11, and 12 hereof and that no adequate
remedy at law exists. Accordingly, in the event of a threatened breach by
Xxxxxx of said provisions, the Company shall be entitled to an injunction
restraining such prohibited activity. Nothing herein, however, shall be
construed as prohibiting the Company for such pursuing breach or threatened
breach, including the recovery of damages from Xxxxxx.
16. Stock Options upon purchase of Shares by Merchant Capital Holdings, Ltd.
The execution of this Agreement is required by Merchant Capital Holdings, Ltd,
("MCH") as part of its closing of the Stock Acquisition and Option Agreement
(the "SAOA") that it is entering into contemporaneously with the Company. As a
material inducement to Xxxxxx to agree to the Non Competition provisions in
paragraph 10 herein, and to enter into this Agreement, Xxxxxx will be issued
six year options, from the date at which MCH purchases each installment of
shares and receives options to purchase further shares in the Company, for
Xxxxxx to purchase shares in the Company equal to 50% of each installment of
options issued to MCH under the SAOA, at prices and under terms equal to the
MCH share options.
17. Option to Rescind this Agreement In the event that MCH do not complete the
purchase of one million shares as detailed in the SAOA by the deadline or any
agreed upon extension thereof, Xxxxxx, at his sole election, shall have the
right to rescind this Agreement.
18. Notices. Any notice required or permitted to be given under this Agreement
shall be sufficient if in writing and if sent by certified mail (return
receipt requested) to the addresses as follows:
If to Xxxxxx: If to the Company:
0000 Xxxxxxxxxxx Xxxxx 000 X. Xxxxxxxxx Xx.
Xxxxxxxxx, Xxxxx 00000 XxXxxxxx, XX 00000
or to such other address as any party may have furnished to the other in
writing in accordance herewith, except that notices of changes of address
shall be effective only upon receipt.
19. Assignment. The rights and obligations of the Company under this Agreement
shall injure to the benefit of and be binding upon its successors and assigns.
The rights and obligations of Xxxxxx under this agreement are of personal
nature and shall neither be assigned nor transferred in whole or in part by
Xxxxxx.
20. Governing Law. This Agreement shall be subject to and governed by the laws
of the State of Texas.
21. Non-Waiver. No waiver of or failure to assert any claim, right, benefit or
remedy hereunder shall operate as a waiver of any other claim, right, benefit
or remedy of the Company or Xxxxxx.
22. Amendment. This Agreement may be modified or amended only by written
instrument executed by the parties hereto.
23. Entire Agreement This Agreement sets forth the entire agreement between
the parties pertaining to the subject matter hereof and hereby supersedes and
cancels any and all previous agreements entered into between the parties
hereto or their parents, affiliates, or predecessors. Xxxxxx hereby disclaims
reliance on any promise of the Company or its parent, affiliates, or
predecessors, other than as set forth specifically herein.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date and
year first above written.
For the Company Xxxx X. Xxxxxx
______/Signature/________ ______/Signature/________
Xxxxxx Xxxxxxxx, Director
