EXHIBIT 10.42
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement"), is made and entered in as of
the 22 day of May, 2000 in Asheville, North Carolina by and between CII
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Technologies, Inc., a North Carolina corporation (the "Company"), and Xxxx X.
Xxxxxx ("Xx. Xxxxxx").
RECITALS
A. Xx. Xxxxxx has been serving in a part time capacity as the Company's
General Council since February 1, 2000 working primarily from his base
in Raleigh, North Carolina.
B. The Company wishes to have Xx. Xxxxxx perform his duties as General
Council on a full time basis upon the terms and subject to the
conditions set forth herein.
AGREEMENT
In consideration of the promises and the terms and conditions set forth in
this Agreement, the parties agree as follows:
1. Employment and Term. The Company agrees to employ Xx. Xxxxxx and Xx.
Xxxxxx agrees to work for the Company as its General Council on a full
time basis reporting directly to the CEO, Xxxxxxx X. Xxxxxxxxx, upon
the terms and subject to the conditions set forth in this Agreement
beginning on July 15, 2000 until such time as this Agreement is
terminated in accordance with Section 7.
2. Responsibilities.
. Establish and monitor legal budgets on a divisional, corporate,
and consolidated basis.
. Monitor individual invoices for outside legal services to the
Company or its subsidiaries.
. Establish and maintain directory of approved legal counsel and
outside legal counsel policies.
. Establish and/or conduct training programs and seminars to
educate key management on compliance with applicable laws.
. Provide or arrange for the provision of legal advice to corporate
management.
. Monitor and supervise the defense or prosecution of litigation
brought against or by the Company or its subsidiaries.
. Serve as a corporate officer for the Company or any of its
subsidiaries as the CEO and Board of Directors may deem
appropriate.
. Supervise the maintenance of corporate form, books and records
for the Company and its subsidiaries.
. Coordinate legal direction and administration primarily in the
following areas:
I. Environmental compliance and certification
II. Human resources
III. Intellectual property
IV. Real estate
V. Insurance
VI. Pre/post acquisition legal activities
VII. Antitrust
VIII. Geographic expansion of businesses
IX. Third party agreements and contracts
3. Location. The Company agrees that Xx. Xxxxxx may continue to perform
his services from Raleigh, North Carolina, either in his home office or
in such other office in Raleigh as he may find at no added expense to
the Company, with the Company equipment (or such replacements as the
Company may in the future approve) he has already been provided and
with Company provided fax, phone, and internet service and such other
resources as the Company may hereafter from time to time approve.
However, a minimum of 30 hours per month is to be spent working "on
site" at the Company Corporate office in Asheville, North Carolina
and/or other Company locations such as division facilities or
operations meetings so as to maintain familiarity with appropriate
personnel, policies, and activities of the Company.
4. Compensation.
Annual Base Salary: $175,000.00. The Annual Base Salary shall be paid
out on semi-monthly basis and may be adjusted upward form time to time
at the discretion of the Board of Directors.
Auto Allowance: $750.00 per month.
Discretionary Expenditure Allowance: $16,000 per year.
Executive Bonus Program: Participation in the Corporate Bonus Program
on the same terms as similar executives and at a level that affords an
opportunity to earn a bonus up to 50% of annual base salary provided
the Company meets its financial, working capital and customer service
objectives or such other objectives as may hereinafter be established
for corporate executives such as the CEO and CFO.
Benefits: Xx. Xxxxxx will be entitled to receive such other benefits on
the same terms as they are extended to the Company's corporate
executives including, but not limited to: vacation, holiday, and sick
leave; life, health
(including dental), and disability insurance; coverage under the
Company's D&O insurance; participation in the Company's 401K Plan.
Stock Options: Xx. Xxxxxx is eligible to participate in the stock
option plan maintained by the Company's parent, CIIT Holdings, Inc. in
accordance with the directions of the Board of Directors.
Malpractice "Tail" Insurance. The Company will reimburse Xx. Xxxxxx up
to a total of $4,250 for the cost of malpractice "tail" insurance
coverage relating to claims that may arise concerning his private law
practice before the date he completes withdrawal from private law
practice. Xx. Xxxxxx acknowledges that he will not require such
malpractice "tail" insurance until he has completed his withdrawal from
private law practice.
5. Equity Investment Opportunity. The Company will provide Xx. Xxxxxx the
opportunity, but not the obligation, to invest up to $50,000.00 but not
less than $10,000.00 in the securities of the Company's parent
consistent with the provisions of relevant securities agreements.
6. Business Expenses. The Company will reimburse Xx. Xxxxxx for all
reasonable out-of-pocket expenses incurred by him in the performance of
his duties under this Agreement. Such expenses will be reimbursed upon
receipt and approval of documented expense reports completed with all
expense receipts consistent with the Company's travel and entertainment
policy and procedures. The Company will also reimburse Xx. Xxxxxx for
the cost of maintaining his license to practice law in North Carolina,
including required seminar expenses and required membership in the
North Carolina State Bar Association.
7. Termination.
(a) By Death or Disability. This Agreement shall be terminated upon
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Xx. Xxxxxx'x death on condition that Company provided life insurance is
payable to Xx. Xxxxxx'x beneficiary(ies). This Agreement shall be
terminated by Xx. Xxxxxx'x inability to perform his duties due to
mental, physical or other disability for a period of ninety consecutive
business days, as determined in good faith by the Board of Directors,
on condition that Company provided disability insurance is payable to
Xx. Xxxxxx.
(b) By the Company for Cause. The Company may terminate this
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Agreement for Cause upon giving 15 business days written notice.
"Cause" for purposes of this Section 7(b) shall mean (i) material
breach by Xx. Xxxxxx of this Agreement if the action constituting the
material breach continues after receiving written notice of the breach
from the Company. If the material breach is such that it may be cured
within 14 days, then Cause for termination exists only if the breach
has not been cured within 14 days after receiving written notice
thereof; (ii) professional malpractice by Xx. Xxxxxx in the course of
providing legal services to the Company which is materially and
demonstrably injurious to the Company, (iii) the commission of any
willful act by Xx. Xxxxxx constituting dishonesty,
fraud, or immoral conduct which is materially harmful to the Company or
its reputation; (iv) any felony conviction of Xx. Xxxxxx; (v) any
refusal by Xx. Xxxxxx to attempt in good faith to implement a clear and
reasonable written directive of the CEO or Board of Directors that is
not inconsistent with the terms of this Agreement.
(c) By the Company without Cause. This Agreement may be terminated by
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the Company without Cause upon 30 days written notice provided,
however, that the Company shall continue to provide Xx. Xxxxxx with all
the Compensation he would otherwise be entitled to under this Agreement
(with the exception of bonus) if he remained employed according to its
terms, including Annual Base Salary, Auto Expense Allowance,
Discretionary Spending Allowance, and Benefits, for a period of one
year following the termination of this Agreement (the Severance Year).
Xx. Xxxxxx shall not be obligated to provide the Company any services
during the Severance Year. The Severance Year shall, however, be
considered to be a year of employment for purposes of vesting under the
Company's 401K Plan.
(d) By Xx. Xxxxxx with Cause. Xx. Xxxxxx may terminate this Agreement
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for Cause upon 15 business days written notice. "Cause" for purposes of
this Section 7(d) shall mean (i) the Company's failure to comply in any
material respect with this Agreement; or (ii) constructive termination.
"Constructive termination" shall mean (1) a reduction in Xx. Xxxxxx'x
Compensation including base salary, auto, and discretionary spending
allowances, bonus or benefits as set forth in this Agreement; (2) a
requirement not agreed to by Xx. Xxxxxx that Xx. Xxxxxx relocate from
Raleigh, N. C. (without limitation any requirement that Xx. Xxxxxx work
consistently more than 80 hours a month away from Raleigh, N. C. shall
be considered a requirement to relocate); (3) a material change in Xx.
Xxxxxx'x responsibilities not agreed to by Xx. Xxxxxx. If Xx. Xxxxxx
terminates this Agreement for Cause, the Company shall continue to
provide Xx. Xxxxxx with all the Compensation he would otherwise be
entitled to under this Agreement (with the exception of bonus) if he
remained employed according to its terms, including Annual Base Salary,
Auto Expense Allowance, Discretionary Expenditure Allowance, and
Benefits, for a period of one year following the termination of this
Agreement (the Severance Year). Xx. Xxxxxx shall not be obligated to
provide the Company any services during the Severance Year. The
Severance Year shall, however, be considered to be a year of employment
for purposes of vesting under the Company's 401K Plan.
(e) By Xx. Xxxxxx without Cause. Xx. Xxxxxx may terminate this
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Agreement without Cause upon 60 days written notice. Xx. Xxxxxx shall
not be entitled to any Compensation after the termination by Xx. Xxxxxx
without Cause becomes effective.
