EXHIBIT 10.30
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement ("Agreement"), dated as of
November 5, 1996 (the "Effective Date"), is executed by and between Irata, Inc.,
a Texas corporation with offices at 0000 Xxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx
00000 (the "Company"), and Xxxx X. Xxxxxxxxx residing at 0000 Xxxxx Xxxx. #000,
Xxxxxxxxx, Xxxxx 00000 ("Executive").
The Company desires to retain Executive as Finance Vice-President-Finance
and Chief Financial Officer of the Company and to perform executive management
services for the Company, and Executive desires to assume such offices and
perform such services, on the terms and conditions hereinafter set forth.
1. Term. The Company agrees to employ Executive, and Executive agrees
to serve in the capacity described in Section 2 below, on the terms and
conditions set forth in this Agreement, for an initial period of years one (1)
year commencing upon the Effective Date, and from month to month thereafter
until terminated in accordance with the provisions herein contained (the
"Employment Period"). Either the Company or the Executive may terminate this
Agreement after the expiration of the first twelve months of employment by
written notice to the other party in accordance with provisions hereof at least
forty-five days prior to the date fixed for termination by such notice.
2. Duties and Services. During the Employment Period, Executive shall
be employed in the business of the Company as its Vice-President-Finance and
Chief Financial Officer. In performance of his duties, Executive shall be
subject to the direction of the President of the Company and its Board of
Directors, and Executive agrees to his employment as described in this
Section 2. Excepting disabilities, illness, and vacation as provided as in
Section 3(e) below, Executive agrees to devote such time necessary or desirable
to perform his duties under this Agreement and to achieve the Company's plans
and goals as established by the President and Board with Executive from time to
time ("Company's Business Plan"). In performing his duties to the Company
hereunder, Executive shall be available for reasonable travel as the needs of
the business require. Provided that Executive is performing in full and in a
timely manner the material aspects of his duties and responsibilities to the
Company, Executive shall have the right to devote time to the business known as
Xxxxxx Associates, Inc.
3. Compensation and Other Benefits.
(a) Annual Base Salary. As compensation for his services hereunder,
the Company shall pay to Executive, during the Employment Period, an annual base
salary ("Annual Base Salary") equal to Eighty Thousand Dollars ("$80,000.00).
Executive's Annual Base salary shall be payable every two weeks in twenty-six
(26) equal installments.
(b) Incentive Compensation. To provide an incentive to Executive to
render his very best efforts on behalf of the Company and to achieve the goals
for the Company contained in its Business Plan, the Company shall establish a
bonus pool for the benefit of Executive in the sum of no less than Twenty-four
Thousand Dollars ($24,000.00) (the "Incentive Pool") per each year of the
Employment Period. The Board shall establish an "Incentive Award Program" to
award to Executive annually incentive compensation ("Incentive Compensation") in
the sum of no less than Twenty-four Thousand Dollars ($24,000.00) from the
Incentive Pool based on Executive's performance and achievement of the Company's
Business Plan. Incentive Compensation, as earned and paid under the Incentive
Award Program, shall be deemed fully
vested upon award.
(c) Additional Bonuses/Incentive Programs. Executive shall have the
right to participate in such other bonus or incentive programs established by
the Company from time to time as an incentive to its senior executives, managers
and key employees ("Other Bonus Plans"). Such participation shall be on the
terms and conditions set forth in such Other Bonus Plans.
(d) Other Benefits. Executive shall be entitled to participate in all
group health and insurance programs and all other fringe benefit or retirement
plans or additional compensation which the Company may hereafter, in its sole
and absolute discretion, elect to make available to its senior executives,
managers, and key employees generally, provided Executive meets the general
qualifications therefor as established for such benefit. Nothing in this
Subsection (d) shall obligate the Company to establish any such programs or
plans just for Executive.
(e) Vacation. Executive shall be entitled to three (3) weeks of
paid vacation per year during the Employment Period.
(f) Directors and Officers Liability Insurance. The Company shall
take out and maintain directors and officers liability insurance with coverage
in an amount of not less than Two Million Dollars ($2,000,000.00) and providing
for reimbursement of attorneys' fees and costs in the sum of not less than Three
Hundred Thousand Dollars ($300,000.00). Proof of such insurance shall be
provided to Executive prior to the commencement of the Employment Period. If
such insurance has not been obtained prior to the commencement of the Employment
Period, Executive shall have the right to terminate this Agreement immediately
upon written notice to the Company or may elect to commence the Employment
Period if such insurance is forthcoming within a reasonable period of time and
will relate back to the commencement of the Employment Period. If such
insurance is not obtained after the Employment Period commences, Executive may
at any time give ten (10) days prior written notice of his intent to terminate
this Agreement. Upon such notice of termination, this Agreement shall be null
and void and neither party shall have any further rights or obligations
hereunder except as otherwise provided in this Agreement.
(g) Stock Option. Contemporaneously with the commencement of the
Employment Period and subject to the vesting schedule set forth below, the
Company shall grant to Executive pursuant to the Company's Employee Stock Option
Plan an option ("Option") to acquire Sixty Thousand (60,000) shares of the
Company's common stock, $.10 par value ("Company's Stock"), at a purchase price
equal to 50 cents per share. Executive's Option shall be deemed fully vested
and exercisable as follows:
(i) On the Effective Date Executive shall be vested with respect to
11,000 shares and shall be vested with an additional 8,333 shares on January 31,
1997, and an additional 8,333 shares at the end of each three month period
thereafter until the Executive is fully vested with respect to the Options. On
August 1, 1997, Executive's Option shall be exercisable as to the Thirty-six
Thousand (36,000) shares that are then fully vested; and
(ii) Thereafter, an additional Eight thousand, three hundred thirty-
three (8,333) shares shall be deemed both fully vested and exercisable on
October 31, 1997 and at the end of each ninety (90) day period thereafter until
all Sixty thousand (60,000) shares shall be deemed both fully vested and shall
then be exercisable.
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The Company will use best efforts to register Executive's Option as
part of or at the same time as Company registers Company's Employee Stock Option
Plan. If such registration has not been filed with the applicable regulatory
authorities on or about August 1, 1997, then Executive shall have the right
thereafter to demand registration of Executive's Option. Any registration shall
be at the Company's cost and expense.
(h) Change in Control. In the event of a "change in control" (as
defined in Exhibit "A" hereto: (i) Executive's Option shall be deemed fully
vested and exercisable as to all Sixty Thousand (60,000) shares of Company's
Stock notwithstanding any vesting schedule or exercise schedule set forth in
Section 3(g) above, and (ii) Executive's right to receive any unpaid portion of
his Annual Base Salary for the first twelve month term or any unpaid Incentive
Compensation shall survive any termination of his employment by reason of such
change in control.
(i) Review of Compensation and Benefits. No later than sixty (60)
days prior to the expiration of the first twelve (12) month period of the
Employment Period, the parties shall meet to discuss the current terms and
conditions of Executive's employment. The parties shall negotiate in good faith
Executive's Annual Base Compensation, Incentive Compensation and other benefits.
Any changes to this Agreement shall be set forth in writing and signed by the
parties. In the event that the parties are unable to agree on new or different
terms and conditions of employment, so long as the Agreement is not terminated
by notice in accordance with the provisions of Section 1 hereof, the Agreement
shall continue in full force and effect on the same terms and conditions.
4. Expenses.
(a) General Business Expenses. In performing his duties to the
Company hereunder, Executive shall be available for reasonable travel. The
Executive shall be entitled to reimbursement for all reasonable travel and other
out-of-pocket expenses necessarily incurred in the performance of his duties
hereunder upon submission and approval of written statements and bills in
accordance with the then-regular procedures of the Company.
(b) Commuting and Living Expenses. In addition to the foregoing
general business expense reimbursements, for the first twelve months of
employment hereunder, Executive shall be entitled to commuting and local living
expenses in an amount not to exceed Two Thousand Dollars ($2,000.00) per month
to reimburse Executive dollar-for-dollar for his out-of-pocket costs for
commuting between Houston, Texas, and Dallas, Texas. Such expenses shall
include hotel, car rental, meals, parking, telephone and laundry. Such expenses
shall be reimbursed no less than twice monthly, based on such receipts provided
by Executive. Expenditures in an amount less than Twenty-Five Dollars ($25.00)
shall not require a receipt.
5. Representations and Warranties of Executive. Executive represents
and warrants to the Company that (a) Executive is under no contractual or other
restriction or obligation which is inconsistent with the execution of this
Agreement, the performance of his duties hereunder, or the other rights of the
Company hereunder and (b) Executive is under no physical or mental disability
that would hinder his performance of duties under this Agreement.
6. Non-Competition. In view of the unique and valuable service it is
expected Executive will render to the Company, Executive's knowledge of the
customers, trade secrets, and other proprietary information relating to the
business of the Company and its customers and
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suppliers and similar knowledge regarding the Company it is expected Executive
will obtain, and in consideration of the compensation to be received hereunder
and of the shares of Company's Stock being sold to Executive, Executive agrees
that he will not during the Employment Period, and for a two year period
thereafter "Participate in" (hereinafter defined in this Section 6) any other
business or organization, if such business or organization is now or shall then
be competing with to the business of the Company in the geographic markets
served by the Company. The provisions of this Section 6 will not be deemed
breached merely because Executive owns not more than five percent (5%) of the
outstanding common stock of a competing corporation if, at the time of its
acquisition by Executive, such stock is listed on the New York Stock Exchange or
the American Stock Exchange or a regional securities exchange, is reported on
NASDAQ or NMS, or is regularly traded in the over-the-counter market by a member
of a national securities exchange. The term "Participate in" shall mean:
"directly or indirectly, for his own benefit or for, with, or through any other
person, firm, or corporation, own, manage, operate, control, loan money to, or
participate in the ownership, management, operation, or control of, or be
connected as a director, officer, employee, partner, consultant, agent,
independent contractor, or otherwise with, or acquiesce in the use of his name
in connection with a competing business or organization." Executive will not
directly or indirectly reveal the name of, solicit or interfere with, or
endeavor to entice away from the Company any of its suppliers, customers, or
employees. For a two (2) year period after the termination of this Agreement,
Executive will not directly or indirectly employ any person who was an employee
of the Company within a period of one (1) year after such person leaves the
employ of the Company.
All parties recognize that the services to be rendered under this
Agreement by each Executive are special, unique, and of extraordinary character,
and that in the event of the breach by Executive of the terms and conditions of
this Agreement to be performed by him, that the Company shall be entitled, if it
so elects, to institute and prosecute proceedings in any court of competent
jurisdiction, either in law or in equity to obtain damages for any breach of the
covenants herein contained, or to enforce a specific performance thereof by
Executive, but nothing herein contained shall be construed to prevent such
remedy in the courts, in case of any breach of this Agreement by Executive, as
the Company may elect to invoke. Executive agrees to waive and hereby waives
any requirement for the securing of any bond in connection with the obtaining of
such injunction or other equitable relief.
All parties recognize that the covenant not to compete required by the
Company of the Executive constitutes a restraint of the future employment,
business and trade rights of such Executive and as such, is enforceable only to
the extent necessary to protect and preserve to the Company the valuable
goodwill and proprietary rights of the Company as they now exist and as they may
be developed in the future by Executive and others on behalf of the Company.
The Parties, in preparing this Agreement, and Executive, in considering its
terms and conditions, recognize that the business of the Company and thus its
protectable and valuable good will and proprietary rights are not restricted to
a single geographical area but extend to many different markets. Many Employees
of the Company will have responsibilities restricting their activities on behalf
of the Company to the single small geographical market area surrounding their
place of employment. The Company and Executive have entered into the employment
or consulting relationship with the expectation that as the skills and
responsibilities of Executive increase, such Executive may develop relationships
in other markets which will constitute a part of the growing goodwill of the
Company. The obligation of Executive not to compete has been limited to those
markets of the Company where Executive has had some contact with the product,
process of service offered by the Company in that market. The restriction or
restraint on such Executive's business activities is similarly limited in time
to the expiration of two years after termination of the employment relationship
with the Company. Accordingly, the Company and Executive agree that
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the restrictive covenant not to compete is limited to that necessary to protect
the goodwill and proprietary rights of the Company. Executive agrees that the
restrictions contained herein will not, in all likelihood, constitute a serious
hardship in securing future employment. The Company agrees that in the event of
an unexpected undue hardship to Executive resulting from application of the
provisions hereof, it shall make every reasonable effort to minimize the
inconvenience to Executive as far as is consistent with the protection of the
goodwill and proprietary rights of the Company.
In the event any court shall finally hold that any provision stated in
this Agreement constitute unreasonable restrictions upon Executive, the parties
hereby agree that the provisions hereof shall not be rendered void, but shall
apply as to time and territory or to such other extent as such court may
judicially indicate constitutes a reasonable restriction under the
circumstances. In so holding, if the court shall fail to indicate an
alternative restriction of time or territory, then the parties hereby expressly
agree to submit this matter to arbitration with the American Arbitration
Association, for the purposes of determining a reasonable restriction under the
circumstances as will protect the goodwill of the Company and will not
unreasonable restrict Executive.
7. Patents, etc. Any interest in patents, patent applications,
inventions, technological innovations, copyrights, copyrightable works,
developments, discoveries, designs and processes which Executive now or
hereafter, during the period he is employed by the Company under this Agreement
or otherwise, and for six (6) months thereafter may own, conceive of, or develop
and either relating to the fields in which the Company may then be engaged or
contemplates (as demonstrated by the records of the Company) being engaged or
conceived of or developed utilizing the time, material, facilities, or
information of the Company ("Such Inventions") shall belong to the Company. As
soon as Executive owns, conceives of, or develops any Such Inventions, he agrees
immediately to communicate such fact in writing to the Secretary of the Company,
and without further compensation, but at the Company's expense, forthwith upon
request of the Company, Executive shall execute all such assignments and other
documents (including applications for patents, copyrights, trademarks, and
assignments thereof) and take all such other action as the Company may
reasonably request in order (a) to vest in the Company all Executive's right,
title and interest in and to Such Inventions, free and clear of liens,
mortgages, security interests, pledges, charges and encumbrances arising from
the acts of Executive ("Liens") (Executive to take such action, at his expense,
as is necessary to remove all such Liens if caused by Executive's acts and not
operation of law) and (b) if patentable or copyrightable, to obtain patents or
copyrights (including extensions and renewals) therefor in any and all countries
in such name as the Company shall determine.
8. Confidential Information. All confidential information which
Executive may now possess, may obtain during or after the Employment Period, or
may create prior to the end of the period he is employed by the Company under
this Agreement or otherwise relating to the business of the Company or of any
customer or supplier of the Company shall not be published, disclosed, or made
accessible by him to any other person, firm, or corporation either during or
after the termination of his employment or used by him except during the
Employment Period in the business and for the benefit of the Company. Executive
shall return all physical evidence of such confidential information to the
Company prior to or at the termination of his employment. As used in this
Section 8, "confidential information" shall mean any information except that
information available to competitors or which is generally available to the
public or which was in the possession of Executive prior to the Employment
Period.
9. Life Insurance. If requested by the Company, Executive shall submit
to such
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physical examinations and otherwise take such actions and execute and deliver
such documents as may be reasonably necessary to enable the Company, at its
expense and for its own benefit, to obtain life insurance on the life of the
Executive.
10. Termination. Notwithstanding anything herein contained, if on or
after the Effective Date and prior to the end of the Employment Period:
(a) Grounds for Termination. Either (i) Executive shall be physically
or mentally incapacitated or disabled or otherwise unable fully to discharge his
duties hereunder for a period of three (3) months, as mutually determined by the
Board of Directors and Executive's attending physician(s), (ii) Executive shall
be convicted of a crime of moral turpitude or a felony, (iii) Executive shall
breach any fiduciary duty to the Company, or (iv) Executive shall breach any
material term of this Agreement and fail to correct such breach within ten (10)
days after notice by the Company to Executive of his commission of the same,
then, and in each such case, the Company shall have the right to give notice of
termination of Executive's services hereunder as of a date (not earlier than ten
(10) days from such notice) to be specified in such notice, and this Agreement
shall terminate on the date so specified. Nothing contained in this Section 10
shall be deemed to limit any other right the Company may have to terminate
Executive's employment hereunder upon any ground permitted by law.
(b) Termination on Death. If Executive shall die, then this Agreement
shall terminate on the date of Executive's death, whereupon his estate shall be
entitled to receive his Annual Base Salary, prorated to the date on which
termination shall take effect, and all Incentive Compensation awarded under
Paragraph 3.6 in full. Furthermore, Executive's Option shall vest in full as of
the date of death and be fully exercisable by his estate from the later of the
date of death or August 1, 1997 until the earlier of twelve months after the
date of death or expiration of the Option.
(c) Effect on Compensation. In the event of termination by the
Company of Executive's employment during the first twelve months of employment
hereunder for all other reasons other than voluntary termination by the
Executive, by reason of death or "for cause" (as defined herein), (i) Executive
shall be entitled to receive as severance compensation in one lump sum payment
any unpaid portion of his total Annual Base Salary for the entirety of the first
twelve months of the Employment Period and the full amount of any unpaid
Incentive Compensation awarded under Section 3(b) above; and (ii) Executive's
Option shall be deemed fully vested and shall become exercisable on the later of
the date of termination or August 1, 1997 for a term expiring ninety days
thereafter. All other compensation and benefits upon termination shall be paid
to Executive in accordance with such Company plans and policies governing such
compensation and benefits. Such payment shall be Executives sole remedy.
(d) Effect on Compensation upon Termination for Cause or Voluntary
Termination. In the event of termination "for cause," or voluntary
termination, Executive shall be entitled to receive his Annual Base Salary,
prorated through the effective date of such termination, plus any unpaid
Incentive Compensation already awarded and any portion of Executive's Option
vested to date which shall be exercisable for a period of ninety days after the
later of the date of termination or August 1, 1997. Any portion of Executive's
Option not fully vested by the termination date shall be deemed terminated, null
and void as to the portion not so vested. All other compensation and benefits
shall be paid to Executive in accordance with such Company plans and policies
governing such compensation and benefits. For the purposes of this Agreement,
termination "for cause" shall mean termination pursuant to the grounds specified
in Sections 10(a)(ii), (iii) and (iv) above.
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11. Survival. The covenants, agreements, representations, and
warranties contained in or made pursuant to this Agreement shall survive
Executive's termination of employment as provided herein.
12. Entire Agreement; Modification. This Agreement sets forth the
entire understanding of the parties with respect to the subject matter hereof,
supersedes all existing agreements between them concerning such subject matter,
and may be modified only by a written instrument duly executed by each party.
13. Notice. All notices and other communications provided for in this
Agreement shall be in writing and shall be deemed to have been duly given when:
(i) delivered personally and evidenced by a signed receipt for such delivery;
(ii) mailed by United States registered mail or certified mail, return receipt
requested, postage prepaid, addressed as set forth below; or (iii) mailed by a
nationally recognized courier service (e.g., Federal Express, DHL, etc.) and
addressed as set forth below. Notice shall be deemed given when indicated as
received or refused on the applicable receipt. Any address set forth below may
be changed by a party by written notice given in accordance with this Section.
If to Executive: Xxxx X. Xxxxxxxxx
0000 Xxxxx Xxxx. #000
Xxxxxxxxx, Xxxxx 00000
If to Company: Irata, Inc.
0000 Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: Xxx Xxxx, Corporate Secretary
14. Waiver. Any waiver by either party of a breach of any provision of
this Agreement shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term
of this Agreement on one or more occasions shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. Any waiver must be in writing,
signed by both parties.
15. Binding Effect. Executive's rights and obligations under this
Agreement shall not be transferable by assignment or otherwise. Such rights
shall not be subject to commutation, encumbrance, or the claims of Executive's
creditors, and any attempt to do any of the foregoing shall be void. The
provisions of this Agreement shall be binding upon and inure to the benefit of
Executive and his heirs and personal representatives, and shall be binding upon
and inure to the benefit of the Company and its successors and assigns.
16. No Third-Party Beneficiaries. This Agreement does not create, and
shall not be construed as creating, any rights enforceable by any person not a
party to this Agreement.
17. Headings. The headings in this Agreement are solely for the
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
18. Counterparts; Governing Law. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. It shall be
governed by and construed in accordance with the laws
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of the State of Texas, without giving effect to the conflict of laws.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the Effective Date.
IRATA, INC., a Texas corporation
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
------------------------------------
Xxxx Xxxxxxxxx
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EXHIBIT "A"
CHANGE IN CONTROL
A "Change in Control" shall be deemed to have occurred if at any time
during the Employment Period any of the following events occur:
(a) The Company is merged, consolidated or reorganized into or with
another person or legal entity ("Acquiring Entity") and as a
result of such merger, consolidation or reorganization less than
fifty-one percent (51%) of the combined voting power of the then-
outstanding securities of the Acquiring Entity immediately after
such transaction are held in the aggregate by the holders of the
voting securities of the Company immediately prior to such
transaction; or
(b) The Company sells all or substantially all of its assets or all of
its outstanding securities to an Acquiring Entity in whom less
than fifty-one percent (51%) of the combined voting power of the
then-outstanding voting securities are held in the aggregate by
the holders of the voting securities of the Company immediately
prior to such sale; or
(c) The Company files a report on Schedule 13D or Schedule 14D-1 (or
any successor schedule, form or report), each as promulgated
pursuant to the Securities Exchange Act of 1934 (the "Exchange
Act"), disclosing that any person (as the term "person" is used in
Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) has
become the beneficial owner (as the term "beneficial owner" is
defined under Rule 13d-3 or any successor rule or regulation
promulgated under the Exchange Act) of securities representing ten
percent (10%) or more of the outstanding stock of the Company; or
(d) The Company files a report or proxy statement with the Securities
and Exchange Commission pursuant to the Exchange Act disclosing in
response to Item 1 of Form 8-K thereunder or Item 5(f) of Schedule
14A thereunder (or any successor schedule, form or report or item
therein) that a change in control of the Company has or may have
occurred or will or may occur in the future pursuant to any then-
existing contract or transaction; or
(e) There is a significant adverse change in the nature or scope of
the authorities, powers, functions or duties attached to the
position of Executive; or
(f) The Company files for bankruptcy protection.
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