EXHIBIT 10.2
EXECUTIVE EMPLOYMENT AGREEMENT - XXXXXXX XXXXXXXXX
THIS EXECUTIVE EMPLOYMENT AGREEMENT ("Agreement") made as of the ___ day
of ______________, 1997 by and between PRECEPT INVESTORS, INC., a Nevada
corporation with offices at 0000 Xxxxxxx Xxxxxxx Xxxxxxx, Xxxxxx, Xxxxx 00000
(the "Company"), and XXXXXXX XXXXXXXXX, residing at 0000 X.00xx Xxxxxx,
Xxxxxxxxx, Xxxxxxx 00000 ("Executive").
WHEREAS, pursuant to the Agreement and Plan of Reorganization dated as of
November 16, 1997, the Company acquired substantially all of the assets of
U.S. Transportation Systems, Inc. ("USTS") in a transaction that fulfilled
the requirements of Section 368(a)(1)(C) of the Internal Revenue Code of
1986, as amended (the "Reorganization").
WHEREAS, prior to the Reorganization, Executive served as Chairman and
Chief Executive Officer of USTS.
WHEREAS, following the Reorganization, the Company will continue the
business in which USTS engaged prior to the Reorganization.
WHEREAS, the Company desires that Executive serve in a senior executive
capacity in the Company.
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, the parties hereto, intending to be legally bound,
agree as follows:
I. EMPLOYMENT. The Company hereby employs Executive to perform those duties
generally described in this Agreement, and Executive hereby accepts such
employment upon the terms and conditions hereinafter set forth.
1. TERM. The term of this Agreement shall commence on ________________
and continue for a period of five (5) years, ending on ____________________. The
period during which Executive is employed hereunder is referred to herein as
the "Employment Period".
2. DUTIES. Executive is hereby employed as Vice Chairman of the Board
of the Company. Executive shall perform such services as are reasonably
determined by the Board of Directors ("Board"). Specifically, Executive shall
be responsible for identifying, evaluating and negotiating mergers and
acquisitions of transportation-related businesses. During the Employment
Period, Executive shall devote all of Executive's normal business time,
attention and energies to the performance of Executive's duties, and faithfully
and diligently serve and further the interests of the Company according to the
best of Executive's ability, provided, however, that Executive shall also serve
as Trustee of the USTS Liquidating Trust, a trust created in connection with the
liquidation of USTS pursuant to the Reorganization. Executive shall not be
required to relocate from his current places of residence and employment in
Florida and New York.
3. COMPENSATION.
a. SALARY. For all services rendered to the Company by
Executive during the term of this Agreement, the Company shall pay Executive
an annual salary of Two Hundred Forty Thousand Dollars ($240,000.00).
Executive's annual salary shall be increased each year in accordance with the
Company's overall compensation pool and in accordance with Executive's
performance of his duties. Executive's salary shall be payable in equal
installments and at the same time and frequency as other senior executive
management of the Company are paid. All salary payments shall be subject to
withholding and other applicable taxes.
b. BONUS. Executive shall be entitled to receive cash
bonuses based on his performance in accordance with standard Company
practices applicable to senior executive management.
c. HEALTH, MEDICAL, DISABILITY AND LIFE INSURANCE BENEFITS.
Executive shall be entitled to receive such health, medical, disability and
life insurance benefits as are made available to senior executive management
of the Company. In addition, the Company will pay the premiums (heretofore
paid by USTS) associated with the current personal life insurance policy
covering the Executive's life (approximately $50,000 per year for the next
three years), with gross proceeds payable to the Xxxxxxxxx Family Trust. The
Company will also pay for and maintain during the term of this Agreement an
additional insurance policy on the life of Executive with coverage equal to
one year's annual base salary of the Executive as such salary may exist from
year to year.
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The proceeds of such policy shall, upon the death of Executive, be payable to
the Xxxxxxxxx Family Trust or to such other beneficiary designated by
Executive.
d. VACATIONS/SICK LEAVE. Executive shall be entitled to such
paid vacation and paid sick leave as are generally provided to the Company's
senior executive management.
e. EXECUTIVE BENEFIT PLANS. Executive shall be entitled to
inclusion in the Company's Stock Option Plan, as in effect from time to time,
as well as any other plans adopted by the Company in which executive officers
of the Company are eligible to participate.
f. REIMBURSEMENT OF EXPENSES. Executive shall be entitled to
reimbursement of all reasonable business expenses actually incurred by Executive
in the discharge of Executive's duties hereunder, including expenses for
entertainment, travel, attendance at conventions, employee training and similar
items, upon submission to the Company with satisfactory documentation thereof.
g. AUTOMOBILE. The Company acknowledges that Executive will
require the use of an automobile to effectively discharge his duties hereunder.
Accordingly, the Company agrees to provide Executive with an automobile suitable
for the performance of such duties and to pay all maintenance, repair, insurance
and other costs and charges in connection therewith.
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4. TERMINATION OF EMPLOYMENT.
a. TERMINATION FOR CAUSE. The Company may terminate this
Agreement, without liability, for "Cause" (as defined below) by delivering to
Executive thirty (30) days' advance written notice of termination setting forth
the reasons for such termination. As used herein, the term "Cause" shall
include the following: (i) material and willful or gross misconduct by
Executive in the performance of his duties hereunder, the consequences of which
are materially adverse to the Company, monetarily or otherwise; (ii) the willful
failure by Executive to perform or observe any substantial lawful obligation of
such employment that is not remedied within thirty (30) days after the receipt
of written notice thereof from the Board of Directors; (iii) Executive is unable
to perform his duties assigned to him under this Agreement for more than ninety
(90) consecutive calendar days as a result of his becoming Disabled (defined
hereinafter). "Disabled" shall mean the inability of the Executive, for medical
reasons certified by a physician selected by the Company and reasonably
satisfactory to the Executive, to substantially perform his duties hereunder;
(iv) a finding by a court of competent jurisdiction that Executive is guilty of
fraud or dishonesty; or (v) Executive fails to perform the reasonable duties
assigned to him under this Agreement in a manner which is consistent with the
standards and policies established by the Company and/or the reputation of the
Company in the community. Upon delivery of such notice of termination, all
obligations of the Company hereunder
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shall cease. The Company shall, upon such termination, assign to the
Executive its interest in any life or other insurance policies carried by the
Company for the benefit of Executive. In addition, the Company shall provide
Executive with the same insurance coverage, or access to insurance coverage,
required by "COBRA" regardless of whether the Company is legally required to
provide such coverage on the termination date of Executive's employment.
b. BY DEATH. This Agreement shall terminate automatically upon
the death of Executive, and all obligations of the Company hereunder, other than
those set forth in Section 5(d) below, shall cease.
c. Notwithstanding anything to the contrary in this Agreement,
no termination shall be effective unless and until the Company first delivers
written notice to Executive setting forth the grounds for termination and
Executive fails to cure such alleged grounds within thirty (30) days of his
receipt of such notice.
d. Upon the termination of this Agreement, the Company shall
immediately pay Executive (or his executors, personal representatives or heirs)
all amounts owed to Executive through the date of termination.
5. COVENANT NOT TO COMPETE. Executive shall not engage in any
employment activity in a competitive industry within a 100-mile radius of any
Company operation for a period of two (2) years following the termination of his
employment. Executive shall not, during the Employment Period, directly or
indirectly (on his own
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behalf or as an agent, employee, officer, director, partner, shareholder, or
other owner), loan money or credit to, own any interest in, engage in, or
otherwise participate in a business directly competitive with the Company's
present operations and business throughout the continental United States.
Executive acknowledges that his covenant not to compete is essential to this
Agreement, that the Company would not have entered into this Agreement
without this section being included in it, and that this section is
reasonable and does not place any undue hardship on Executive, and that
Executive has been amply and generously compensated for agreeing to the terms
of this Covenant. Executive acknowledges and agrees that the Company's remedy
at law for any breach of his obligations under this section would be
inadequate, and agrees and consents that temporary and permanent injunctive
relief may be granted in any proceeding which may be brought to enforce any
provisions of this section without the necessity of proof of actual damages.
With respect to any such provisions finally determined by a court of
competent jurisdiction to be unenforceable, such court shall have
jurisdiction to reform this Agreement and such provision so that it is
enforceable to the maximum extent permitted by law, and the parties shall
abide by such court's determination. If such unenforceable provision cannot
be reformed, such provision shall be deemed to be severed from this
Agreement, but every other provision of this Agreement shall remain in full
force and effect.
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6. INDEMNIFICATION. The Company shall indemnify Executive to the
fullest extent authorized by the Texas Business Corporation Act. The Company
shall obtain and maintain coverage for Executive under any insurance policy now
in force or hereinafter obtained during the term of this Agreement insuring
officers and directors of the Company against liability.
7. NOTICES. Any notice or other written instrument required or
permitted to be given, made or sent hereunder shall be in writing, signed by the
party giving or making the same, and shall be sent by registered or certified
mail or through courier delivery service to the other party hereto at his or its
respective address hereinabove set forth. Any party hereto shall have the right
to change the place to which any such notice or writing shall be sent by a
similar notice sent in like manner to the other party hereto.
8. WAIVER OF BREACH. The waiver by the Company or the Executive of
a breach by the other of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach. No waiver shall be valid unless
in writing and signed by an authorized officer of the Company.
9. ASSIGNMENT. The Company and Executive acknowledge that the
relationship established hereby is unique and personal and that neither the
Company nor Executive may assign or delegate any of their respective rights
and/or obligations hereunder without the prior written consent of the other
party except as follows:
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In the event of a future disposition of (or including) the properties
and business of the Company, substantially as an entirety, by merger,
consolidation, sale of assets, or otherwise, then the Company shall be obligated
to assign this Agreement and all of its rights and obligations hereunder to the
acquiring or surviving corporation, and such acquiring or surviving corporation
shall assume in writing all of the obligations of the Company hereunder;
provided, however, that the Company (in the event and so long as it remains in
business as an independent going enterprise) shall remain liable for the
performance of its obligations hereunder in the event of an unjustified failure
of the acquiring corporation to perform its obligations under this Agreement.
10. SEVERABILITY. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision.
11. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original.
12. GOVERNING LAW. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of New York applicable to
contracts made and to be performed therein.
13. ARBITRATION. Any controversy or claim arising out of, or
relating to, this Agreement or its breach shall be settled by arbitration in the
City of New York in accordance with the then governing rules of the American
Arbitration Association. Such arbitration shall be conducted by a single
arbitrator. Judgment
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upon the award rendered may be entered and enforced in any court of competent
jurisdiction.
14. COMPLETE AGREEMENT. This document contains the entire agreement
between the parties and supersedes any prior representations or agreements
respecting the subject matter hereof. No alteration, addition or other change
to this Agreement shall be binding unless in writing signed by the party to be
bound.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
ATTEST: PRECEPT INVESTORS, INC.
By:
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Name: Xxxxx X. Xxxxx
Title: Chief Executive Officer
WITNESS: EXECUTIVE:
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Xxxxxxx Xxxxxxxxx
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