EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), is made effective
the 1st day of June, 1999 (the "Effective Date"), by and between
Xxxxxxx Companies, Inc., an Oklahoma corporation (the "Company")
and Xxxxxxx X. Xxxxxxxx (the "Executive").
In consideration of their mutual obligations contained in this
Agreement, the Company hereby employs the Executive and the
Executive hereby accepts employment with the Company as of the
Effective Date upon the following terms and conditions:
1. Term of Agreement and Employment. The term of this
Agreement and of the Executive's employment (collectively, the
"Employment Period") shall be for a period of sixty (60) months
commencing on the Effective Date or for a shorter period if the
Agreement and the Executive's employment are terminated earlier as
provided in Section 9.
2. Position and Duties of Executive. During the
Employment Period, the Executive shall devote his full professional
and business-related time, skills and best efforts to the regular
duties of the position of Executive Vice President, Business
Development for the Company or to such other appropriate position
and/or reasonable duties as may be assigned to him as a corporate
officer of the Company from time to time by the Board of Directors
(the "Board") and/or the Chairman and Chief Executive Officer of
the Company. Unless otherwise agreed to in advance in writing by
the Company, during the Employment Period, the Executive shall not
be employed by others or be engaged in self-employment or in any
professional or business-related activities which are or may be
detrimental to or in conflict or competition with the business of
the Company.
3. Annual Base Salary. During the Employment Period, the
Company shall pay the Executive a base salary of $400,000 per each
fiscal year, in installments consistent with the Company's regular
payroll practices applicable to senior executive officers. The
Company shall review such base salary annually and may in its
discretion increase such base salary.
4. Annual Incentive Bonus. In addition to the base salary
described in Section 3, the Executive will be eligible for a target
annual incentive bonus of 65% of his annual base salary, with a
potential maximum annual incentive bonus of 130% of his annual base
salary. Any annual incentive bonus for fiscal 1999 or subsequent
years shall be awarded in the discretion of the Compensation
Committee using substantially the same performance goals as are
applicable to other senior executive officers.
5. Company Common Stock Options. The Company shall grant
the Executive a stock option to purchase 200,000 shares of Company
Stock pursuant to the Xxxxxxx Companies, Inc. 1999 Stock Incentive
Plan. The exercise dates and price and the other terms and
conditions of the 200,000 stock options shall be as described in
the Non-Qualified Stock Option Agreement under Xxxxxxx Companies,
Inc. 1999 Stock Incentive Plan which is being executed
contemporaneously with this Agreement.
6. Company Restricted Stock Award. The Company shall
grant the Executive an award of 20,000 shares of restricted Company
Stock pursuant to the Xxxxxxx Companies, Inc. 1990 Stock Incentive
Plan. The terms and conditions of the stock award shall be as
described in the Restricted Stock Award Agreement for the Xxxxxxx
Companies, Inc. 1990 Stock Incentive Plan which is being executed
contemporaneously with this Agreement. In connection with the
grant of the Restricted Stock, the Executive shall make an election
within thirty (30) days of the Effective Date to include in gross
income the value of the Restricted Stock on the date of grant
pursuant to Section 83(b) of the Internal Revenue Code of 1986, as
amended (the "Code"). Upon notification from the Executive that he
has made such election, the Company shall pay to the Executive an
additional payment in an amount necessary to cause the net amount
of such payment that is retained by the Executive after the
calculation and deduction of any and all federal, state and local
income taxes and employment taxes on such payment to be equal to
the Executive's income taxes attributable to the Restricted Stock
and the Executive's election under Section 83(b) of the Code in
connection with the Restricted Stock.
7. Vacation and Other Paid Leave Programs and
Welfare, Pension, Incentive and Other Benefit Plans. During the
Employment Period, the Executive shall be entitled to participate
in and be covered by all vacation and other paid and unpaid leave
programs and welfare, pension, incentive and other plans as may be
adopted and maintained from time to time by the Company as
applicable to its senior executive officers, including the Xxxxxxx
Companies, Inc. 1999 Stock Incentive Plan, the Xxxxxxx Companies,
Inc. 1990 Stock Incentive Plan and the Xxxxxxx Companies, Inc.
Executive Deferred Compensation Plan.
8. Expenses.
(a) Initial Relocation Expenses. In connection
with the Executive's initial relocation to Oklahoma City, Oklahoma,
or other corporate offices of the Company, the Company shall
provide the Executive with the relocation package for new senior
executive officers outlined in the Company's current relocation
policy. In addition, the Company will pay the Executive (i) up to
a maximum of $48,000, at the rate of up to $2,000 per month, for a
period of up to two years from the date of this Agreement to enable
Executive to secure a furnished apartment in or near the city in
which the Company's corporate offices are located and (ii) a
monthly transportation allowance (the "Transportation Allowance")
of $700 per month for up to thirty-six months from the date of this
Agreement. The Company will also pay all reasonable costs
associated with the move of the Executive's personal belongings to
a permanent residence in or near the city in which the Company's
corporate offices are located. The Company will also make an
additional payment to the Executive in an amount necessary to
offset any and all federal, state and local income taxes and
employment taxes which the Executive shall be required to pay in
connection with the Transportation Allowance.
(b) Ongoing Business Expenses. The Company
shall reimburse the Executive for all reasonable and necessary
business expenses incurred by the Executive relating to the conduct
of business of the Company, including expenses incurred in
connection with the Executive's travel to and from the Company's
corporate offices, upon presentation of an itemized account and
appropriate supporting documentation, all in accordance with the
Company's policies applicable to its senior executive officers.
9. Termination of Agreement and Employment. This
Agreement and the Executive's employment may be terminated earlier
than sixty (60) months following the Effective Date under the
following circumstances:
(a) Death or Disability. This Agreement and the
Executive's employment shall terminate automatically upon the
Executive's death. If, because of physical or mental illness, the
Executive has been substantially unable to perform the essential
duties of his position (with or without "reasonable accommodation,"
as defined under the Americans With Disabilities Act) for a period
in excess of six (6) months ("Disability"), the Company may
terminate this Agreement and the Executive's employment for
Disability.
(b) Cause. If the Executive (i) is convicted of
a felony, (ii) engages in an act of personal dishonesty which is
intended to result in personal enrichment of the Executive at the
expense of the Company, or (iii) "willfully" fails to follow a
direct, reasonable and lawful order of the Board and/or the
Chairman and Chief Executive Officer, within the reasonable scope
of the Executive's duties, and such failure, if curable, is not
cured within thirty (30) days, the Company may terminate this
Agreement and the Executive's employment for Cause. For purposes
of this Section 9(b), no act, or failure to act, by the Executive
shall be deemed "willful" unless done, or omitted to be done, by
the Executive not in good faith and without reasonable belief that
the Executive's action or omission was in the best interest of the
Company. Cause shall not exist under this Section 9(b) unless and
until the Company has delivered to Executive a copy of a resolution
duly adopted by not less than three-fourths (3/4ths) of the Board
(excluding, if applicable, the Executive) at a meeting of the Board
called and held for such purpose (after reasonable notice to the
Executive and an opportunity for the Executive, together with his
counsel, to be heard before the Board), finding that in the good
faith opinion of the Board, the Executive was guilty of the conduct
set forth above and specifying the particulars of such conduct in
detail.
(c) Without Cause. The Company may terminate
this Agreement and the Executive's employment at any time without
Cause.
(d) Good Reason. The Executive may terminate
this Agreement and his employment for ?Good Reason? by providing a
Notice of Termination (as defined in Section 9(f)) to the Company
within one hundred and twenty (120) days after the Executive has
actual knowledge of the occurrence, without the written consent of
the Executive, of one of the events set forth below. The
Executive?s Date of Termination shall be fifteen (15) days after
the Notice of Termination, unless the basis for Good Reason has
been cured by the Company prior to such date:
(i) the assignment of the Executive to a
position materially and adversely inconsistent with
the Executive's then current position with the
Company or a material and adverse alteration in the
nature of the Executive's duties and/or
responsibilities, reporting obligations, titles or
authority;
(ii) a reduction by the Company in the
Executive's then current base salary described in
Section 3;
(iii) the Company's failure to provide any
material employee benefits due to be provided to the Executive
(other than any such failure which affects all senior executive
officers); or
(iv) the Company's requiring the Executive to
close or relocate his secondary office outside the Chicago
metropolitan area or relocate his permanent residence outside the
Chicago metropolitan area;
(v) the failure of any successor to the
Company to assume this Agreement pursuant to Section 14(a).
The Executive's right to terminate this Agreement and his
employment for Good Reason shall not be affected by his incapacity
due to physical or mental illness. Executive's continued
employment during the one hundred and twenty (120) day period
referred to above in this paragraph (d) shall not constitute
consent to, or a waiver of rights with respect to, any act or
failure to act constituting Good Reason hereunder.
(e) Voluntary Termination. The Executive may
terminate this Agreement and his employment at any time voluntarily
(a "Voluntary Termination"). A Voluntary Termination is any
termination of employment by the Executive other than termination
due to death, Disability, with or without Cause or for Good Reason.
(f) Notice of and Date of Termination. Any
termination of this Agreement and the Executive's employment under
Section 9 of this Agreement by the Company or the Executive, other
than termination due to death, shall be communicated by a Notice of
Termination to the other party in accordance with Section 18. For
purposes of this Agreement, a "Notice of Termination" means a
written notice which indicates the specific termination provision
in Section 9 relied upon and sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination
of the Agreement. The Executive's "Termination Date" shall be the
date the Notice of Termination is deemed given pursuant to Section
18, except in the event of a termination due to the Executive's
death, when the Termination Date shall be the date of death, or in
the event of a termination by the Executive for Good Reason, when
the Termination Date shall be as provided in Section 9(d).
10. Obligations of the Company Upon Termination. In
the event this Agreement and the Executive's employment are
terminated pursuant to Section 9, the Company shall provide the
Executive with the payments and benefits set forth below. The
Executive acknowledges and agrees that the payments set forth in
this Section 10 and the other agreements and plans referenced in
this Agreement, constitute the sole and liquidated damages for a
termination of this Agreement and his employment under Section 9.
The Company's obligation to make the payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall
not be affected by any setoff or counterclaim which the Company may
have against the Executive except that the Company shall have the
right to deduct any amounts owed by the Executive to the Company
due to the Executive's misappropriation of Company funds or
property from the payments set forth in this Section 10.
(a) Termination Because of Disability or for
Cause by the Company or Due to Death or a Voluntary Termination by
the Executive. If this Agreement and the Executive's employment
are terminated because of Disability or for Cause by the Company or
due to the death or through a Voluntary Termination by the
Executive:
(i) the Company shall pay the Executive (or
his beneficiary or legal representative, if applicable) his then
current base salary described in Section 3 and his accrued, unused
vacation pay through the Termination Date, as soon as practicable
following the Termination Date;
(ii) the Company shall reimburse the Executive
(or his beneficiary or legal representative, if applicable) for
reasonable business expenses incurred, but not paid, prior to the
Termination Date; and
(iii) the Executive (or his beneficiary or
legal representative, if applicable) shall receive any other rights,
compensation and/or benefits as may be due to the Executive following
such termination to which he is entitled in accordance with the terms
and provisions of any agreements referenced herein or plans or
programs of the Company.
(b) Termination By the Company without Cause or
by the Executive for Good Reason. If this Agreement and the
Executive's employment are terminated by the Company without Cause
or by the Executive for Good Reason:
(i) the Company shall pay the Executive (A)
his then current base salary described in Section 3 and accrued,
unused vacation pay through the Termination Date, as soon as
practicable following the Termination Date, and (B) continued then
current monthly base salary described in Section 3 for a period of
twenty-four (24) months following the Termination Date;
(ii) the Company shall maintain in full force
and effect for the continued benefit of the Executive, for a period
of twenty-four (24) months following the Termination Date, the welfare
programs in which the Executive, his spouse and his dependents were
participating immediately prior to the Termination Date at the level
in effect and upon substantially the same terms and conditions
(including without limitation contributions required by the Executive
for such benefits) as existed immediately prior to the Termination Date;
provided, that if the Executive, his spouse or his dependents cannot
continue to participate in the Company programs providing such
benefits, the Company shall arrange to provide Executive, his
spouse and his dependents with comparable benefits from a third party
insurer; provided, that if the Executive becomes reemployed with
another employer and is eligible to receive medical or other welfare
benefits under another employer provided plan, the medical and other
welfare benefits described herein shall be secondary to those provided
under such other plan during such applicable period. If, at
the end of the 24 month period, the Executive is receiving medical
and dental benefits from the Company and is not eligible to receive such
benefits under another employer-provided plan, the Executive and/or
the Executive's family shall be entitled to continued medical and
dental benefits under the Company programs providing such benefits
during the 24 month period at the Executive's own expense pursuant
to Title I, Part 6 of the Employee Retirement Income Security Act
of 1974, as amended ("COBRA"), and for such purpose, the end of such 24
month period shall be considered the date of the "qualifying event"
as such term is defined by COBRA.
(iii) the Company shall reimburse the
Executive for reasonable business expenses incurred, but not paid,
prior to the Termination Date; and
(iv) the Executive shall receive any other
rights, compensation and/or benefits as may be due to the Executive
following such termination to which he is entitled in accordance
with the terms and provisions of any other agreements, plans or
programs of the Company.
11. Change of Control. Contemporaneously with this
Agreement, the parties have entered into a "Change of Control
Employment Agreement."
12. Confidential Information, Ownership of Documents
and Other Property, and Non-Competition.
(a) Confidential Information. The Executive
shall hold in a fiduciary capacity for the benefit of the Company
all trade secrets and confidential information, knowledge or data
relating to the Company and its businesses and investments and its
affiliates, which shall have been obtained by the Executive during
Executive's employment by the Company and which is not generally
available public knowledge (other than by acts by the Executive in
violation of this Agreement). Except as may be required or
appropriate in connection with his carrying out his duties under
this Agreement, the Executive shall not, without the prior written
consent of the Company or as may otherwise be required by law or
any legal process, or as is necessary in connection with any
adversarial proceeding against the Company (in which case Executive
shall use his reasonable best efforts in cooperating with the
Company in obtaining from a court of competent jurisdiction a
protective order against disclosure) communicate or divulge any
such trade secrets, information, knowledge or data to anyone other
than the Company and those designated by the Company or on behalf
of the Company in the furtherance of its business or to perform his
duties hereunder.
(b) Ownership of Documents and Other Property.
All documents (including databases, records, files, models, and the
like) and all other property relating to the Company's business and
its affiliates as to which the Executive has access or control
shall be and remain the property of the Company and shall not be
removed from the Company's premises without its written consent,
unless such removal is in the furtherance of the Company's business
or is in connection with the Executive's carrying out his duties
under this Agreement. All such documents and other property shall
be returned to the Company promptly after the Employment Period
ends, or otherwise promptly after removal if such removal occurs
following the Employment Period.
(c) Non-Competition. For twenty-four (24)
months following the termination of the Employment Period other
than if such termination is by the Company without Cause, by the
Executive for Good Reason or for Disability, the Executive will not
(i) be a greater than 1% investor in an entity which competes with
the Company or any of its subsidiaries or other affiliates (the
"Designated Entities") in any of their business or (ii) be a
consultant to, employed by or otherwise act on behalf of an entity
which competes with the Company or any of the Designated Entities
in any of their businesses, in either case, within the Standard
Metropolitan Statistical Areas in which the Company or any of the
Designated Entities conduct any of their business operations or are
actively soliciting business as of the termination of the
Employment Period.
(d) Injunctive Relief. In the event of a breach
or threatened breach of this Section 12, the Executive agrees that
the Company shall be entitled to injunctive relief in a court of
appropriate jurisdiction to address any such breach or threatened
breach pending arbitration under Section 13 of this Agreement.
(e) Continuing Operation. The expiration or
termination of this Agreement or of Executive's employment shall
have no effect on the continuing operation of this Section 12.
13. Arbitration; Legal Fees and Expenses. The
parties agree that Executive's employment and this Agreement relate
to interstate commerce, and that any disputes, claims or
controversies between Executive and the Company which may arise out
of or relate to the Executive's employment relationship or this
Agreement shall be settled by arbitration. This agreement to
arbitrate shall survive the termination of this Agreement. Any
arbitration shall be in accordance with the Rules of the American
Arbitration Association and shall be undertaken pursuant to the
Federal Arbitration Act. Arbitration will be held in Oklahoma
City, Oklahoma unless the parties mutually agree on another
location. The decision of the arbitrator(s) will be enforceable in
any court of competent jurisdiction. The parties agree that
punitive, liquidated or indirect damages shall not be awarded by
the arbitrator(s). Nothing in this agreement to arbitrate,
however, shall preclude the Company or the Executive from obtaining
injunctive relief from a court of competent jurisdiction
prohibiting any on-going breaches by the Executive or the Company
of this Agreement including, without limitation, violations of
Section 12. If any contest or dispute shall arise between the
Company and Executive regarding any provision of this Agreement,
the Company shall reimburse Executive for all legal fees and
expenses reasonably incurred by Executive in connection with such
contest or dispute, but only if Executive is successful in respect
of one or more of Executive's material claims or defenses brought,
raised or pursued in connection with such contest or dispute. Such
reimbursement shall be made as soon as practicable following the
resolution of such contest or dispute to the extent the Company
receives reasonable written evidence of such fees and expenses.
14. Successors and Assignability.
(a) The Company's Successors and Assignability.
No rights or obligations of the Company under this Agreement may
be assigned or transferred except that the Company will require any
successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to expressly assume and agree
to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such
succession had taken place.
(b) The Executive's Successors and
Assignability. No rights or obligations of the Executive under
this Agreement may be assigned or transferred by the Executive
other than his rights to payments or benefits hereunder, which may
be transferred only by will or the laws of descent and
distribution. Upon the Executive's death, this Agreement and all
rights of the Executive hereunder shall inure to the benefit of and
be enforceable by the Executive's beneficiary or legal
representative, to the extent any such person succeeds to the
Executive's interests under this Agreement.
15. Severability. In the event that any provision of
this Agreement shall be deemed to be illegal or unenforceable for
any reason, such provision shall be deemed modified or deleted in
such a manner so as to make this Agreement as so modified legal and
enforceable to the fullest extent permitted under applicable laws.
16. Entire Agreement; Amendment and Waiver. This
Agreement and the other agreements referenced herein constitute the
entire agreement between the parties hereto with regard to the
subject matter hereof, and there are no agreements, understandings,
specific restrictions, warranties or representations relating to
said subject matter between the parties other than those set forth
herein or herein provided for. Any provision of this Agreement may
be amended or the observance thereof may be waived only by written
consent signed by both parties. Such amendment or waiver shall be
binding upon the Company and the Executive and their successors and
assigns.
17. Counterparts. This Agreement may be executed in
one or more counterparts, each of which will take effect as an
original and all of which shall evidence one and the same
Agreement.
18. Notices. All notices required under this
Agreement shall be in writing and shall be deemed given when
delivered personally to the other party, when delivered by
facsimile transmission or when delivered by registered or certified
mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive:
At his last known address evidenced on
the Company's payroll records
fax: 000-000-0000
If to the Company:
Xxxxxxx Companies, Inc.
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxx Xxxx, XX 00000-0000
fax: 000-000-0000
Attention: General Counsel
or to such other address as either party shall have furnished to
the other in writing in accordance herewith.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement to become effective as of the date first above written.
XXXXXXX COMPANIES, INC.
By: XXXXX X. XXXXXXXXX
Xxxxx X. Xxxxxxxxx,
Senior Vice President -
Human Resources
XXXXXXX X. XXXXXXXX
Xxxxxxx X. Xxxxxxxx
