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Exhibit 10.2
SECOND AMENDMENT TO EMPLOYMENT AGREEMENT
This Second Amendment to Employment Agreement (this "Amendment"), dated
and effective as of the 1st day of September, 1998, is by and between
HighwayMaster Corporation, a Delaware corporation ("Employer"), and Xxxxxxx X.
Xxxxxxxx, an individual residing in Dallas County, Texas ("Employee").
RECITALS
Employer and Employee entered into that certain Employment Agreement,
dated and effective as of the 4th day of February, 1994, as amended as of the
7th day of February, 1994 and amended as of the 13th day of December 1994 (the
"Employment Agreement"), and the parties wish to further amend the Employment
Agreement to reflect certain changes in the employment of Employee, such changes
having been approved by the Board of Directors of Employer at a meeting of the
Board of Directors held on September 15, 1998.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants set forth herein and in the Employment Agreement, Employer and
Employee, intending to be legally bound, hereby agree as follows:
1. Change of Title. Every occurrence of the title "President and Chief
Executive Officer" as it occurs in the Employment Agreement, as
previously amended, shall be deleted and replaced with the term
"Chairman of the Board".
2. Change of Duties. Section 2 of the Employment Agreement shall be
replaced in its entirety with the following:
2. Position and Responsibilities of Employee. Employee shall be
employed as the Chairman of the Board of Employer and shall be
stationed in Dallas County, Texas during the term of this Agreement.
Employee will devote substantially his full working time efforts in
furtherance of his employment responsibilities set forth in this
Agreement. In addition to performing duties normally assigned to the
Chairman of the Board of comparable corporations, Employee will perform
services of an executive nature to assist the management of the
Employer generally to the extent his expertise, knowledge, and business
relationships will be of benefit to Employer's management in the
furtherance of Employer's business. Such assistance to the management
of the Employer will be at the discretion of and pursuant to the
direction of the Chief Executive Officer of the Employer. Unless
specifically directed and authorized by the Chief Executive Officer of
the Employer or by the Board of Directors of the Employer, Employee
will not be authorized to execute or enter into contracts on the
Employer's behalf. The failure of Employee to perform any of the duties
set forth in this Section 2 shall not be grounds for Employer to
withhold payment of any of the compensation set forth in Section 3
below or to offset Employer's damages against the payments set forth
in Section 3 below. The failure of employee to perform its duties
under this Section 2 shall not entitle Employer to a cause of action
against Employee.
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3. Compensation. Section 3 of the Employment Agreement shall be replaced
in its entirety with the following:
3. Compensation. Employee shall receive a monthly salary of $33,333.33.
Employee shall be entitled to participate in the employee benefit plans
provided by Employer for all executive employees generally, including a
special monthly automobile allowance of five hundred dollars ($500.00).
Employee shall be entitled to four weeks paid vacation during each
calendar year. The payment of the monthly salary amount specified above
shall survive termination of this Agreement under the circumstances set
forth in Section 7 below, whereas the executive benefit plans and
vacation time accrual shall be effective and shall accrue to Employee's
benefit only for the time periods that Employee is actually employed as
a full-time employee of Employer except to the extent the terms of such
plans expressly provide for the continuation of benefits after such
time.
4. No Changes to Section 4.
5. Protective Covenants.
The first full paragraph of Section 5 shall be modified by adding the
following sentence, as the second to last sentence in the paragraph, immediately
after the definition of "Trade Secrets":
"Proprietary Information" and "Trade Secrets" shall also include such
Proprietary Information and Trade Secrets that Employee obtains while
on site at the HighwayMaster premises after the date of his termination
of employment.
Section 5(b) of the Employment Agreement shall be amended by adding the
following sentence:
This Covenant Not to Compete shall not prohibit Employee from
soliciting or contracting Qualcomm, AMSC, or any other competitor of
the Company for the purpose of sponsoring an automotive racing program
with which Employee may be involved. Although Employee may sign
autographs, entertain guests at racing-related events, and similarly
interact with customers and potential customers of competitors at
racing-related events, Employee will not actively engage himself in the
direct person-to-person sales efforts of such competitors.
6. Termination. Section 6 of the Employment Agreement shall be replaced in
its entirety as follows:
6. Termination. This Agreement may be terminated by either party on or
after December 1, 1998 upon written notice to the other party. However,
termination prior to certain dates set forth in Section 7 below shall
result in adjustments in payments and other matters as set forth in
Section 7 below. The provisions of Sections 5 and 7 hereof
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shall survive the termination of this Agreement to the extent necessary
or reasonably appropriate to effect the intent of the parties hereto as
expressed in such provisions.
7. Compensation Upon Termination. Section 7 of the Employment Agreement
shall be replaced in its entirety as follows:
7. Compensation Upon Termination.
(a) General. Upon the termination of Employee's employment
under this Agreement before the expiration of the stated term hereof
for any reason, Employee shall be entitled to (i) the salary earned by
him before the effective date of termination, as provided in Section
3(a) hereof, prorated on the basis of the number of full days of
service rendered by Employee during the year to the effective date of
termination, (ii) any accrued but unpaid vacation or sick leave
benefits in accordance with the accrual policies of the Employer, and
(iii) any authorized but unreimbursed business expenses. Under certain
conditions as set forth in subsections (b) and (c) below, Employee
shall be entitled to additional compensation upon termination.
(b) Termination by Employee. Upon termination of this
Agreement by Employee by written notice to Employer for any reason to
be effective prior to December 1, 1998, Employer shall pay to Employee
the sum of $200,000 on January 1, 1999. Upon termination of this
Agreement by Employee by written notice to Employer for any reason to
be effective on or after December 1, 1998 but prior to September 1,
1999 (or at any time upon death or permanent disability), Employer
shall pay to Employee an immediate lump sum payment which is equal to
the total remaining compensation which would have been payable to
Employee through September 1, 1999 pursuant to the first sentence of
Section 3 above if Employee's employment had not terminated; provided,
however, that if such termination is effective in 1998, such lump sum
payment will instead be due on January 1, 1999. Terms regarding vesting
and exercise of certain stock options of Employee are separately set
forth in the stock option agreement between Employee and Employer dated
as of September 18, 1998, that was executed concurrently with that
certain Second Amendment to Employment Agreement between Employer and
Employee dated effective as of September 1, 1998.
(c) Termination by Employer. Upon termination of this
Agreement by Employer prior to September 1, 1999 for any reason,
Employer shall pay to Employee an immediate lump sum payment which is
equal to the total remaining compensation which would have been payable
to Employee through September 1, 1999 pursuant to the first
sentence of Section 3 above; provided, however, that if such
termination is effective in 1998, such lump sum payment will instead be
due on January 1, 1999. Terms regarding vesting and exercise of certain
stock options of Employee are separately set forth in the stock option
agreement between Employee and Employer dated as of September 18, 1998,
that was executed concurrently with that certain Second Amendment to
Employment Agreement between Employer and Employee dated effective as
of September 1, 1998.
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(d) Release. Upon termination of this Agreement, Employer will
release (and does hereby release), and will cause each of the other
Releasors (as defined in Exhibit A) to release, each of the Released
Parties (as defined in Exhibit A) from any and all Claims (as defined
in Exhibit A) that arise on or before the termination of this Agreement
(other than those that arise pursuant to Section 5 after the date of
this Agreement or as a result of intentional fraud or criminal conduct
by Employee after the date of this Agreement). Employer will effect
such obligation by executing and delivering, and causing each of the
other Releasors (as defined in Exhibit A) a release in form and
substance similar to that attached as Exhibit A, but appropriately
modified to reflect the foregoing.
8. Term. Section 8 of the Employment Agreement shall be amended to read as
follows:
8. Term. The stated term of this Agreement and the employment
relationship created hereunder shall be and remain in effect for one
full year, commencing on the date hereof, unless sooner terminated in
accordance with Section 6 hereof.
9. Notices. The addresses for notice set forth in Section 13 of the
Employment Agreement shall be amended as follows:
HighwayMaster Corporation
0000 Xxxx Xxx Xxxxx
Xxxxxxxxxx, Xxxxx 00000
Xxxxxxx X. Xxxxxxxx
0000 Xxxx Xxx Xxxxx
Xxxxxxxxxx, Xxxxx 00000
10. Incorporation of Amendment. This Amendment shall be included with and
incorporated into the Employment Agreement for all purposes.
11. Mutual Release. The following shall be added to the Employment
Agreement as Section 18:
18. Mutual Release. In exchange for the promises in this Agreement,
the parties have caused to be fully executed and delivered releases in
the form attached hereto as Exhibits A and B, respectively.
12. Shareholder Voting. To the extent a vote of the shareholders of the
Company or its parent are required to implement the terms and intent of
this Amendment, such as by voting in favor of the change in the title
and position of Employee, Employee agrees to vote shares held by him in
favor of any resolutions which may be required to implement the terms
and intent of this Amendment.
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13. No Offset of Amounts Payable to Employee. The following shall be added
to the Employment Agreement as Section 19:
19. No Offset of Amounts Payable to Employee. Amounts payable by
Employer to Employee pursuant to this Agreement shall not be offset
with any amounts payable by Employee to Employer, regardless of whether
such amounts arise out of Employee's breach of this Agreement or any
other dispute.
14. Limitations. The following shall be added to the Employment Agreement
as Section 20:
20. Limitations. Employer hereby acknowledges that the benefits to be
received by it under this Agreement (other than those pursuant to
Section 5) are fully received at the date Employee executes and
delivers this Agreement. IT IS EXPRESSLY AGREED AND UNDERSTOOD THAT THE
SOLE AND EXCLUSIVE REMEDY FOR A BREACH OF THIS AGREEMENT BY EMPLOYEE
(OTHER THAN A BREACH OF SECTION 5 OR INTENTIONAL FRAUD) IS TERMINATION.
Furthermore, Employer hereby acknowledges that it shall not be entitled
to recover damages in excess of actual damages as a result of any
breach of Section 5 of this Agreement or any breach of this Agreement
caused by the intentional fraud of Employee and hereby waives any and
all rights to consequential, punitive, extraordinary, exemplary,
indirect, special, or other damages, however characterized, that exceed
actual damages.
15. Insurance and Indemnification. The following shall be added to the
Employment Agreement as Section 21:
21. Insurance and Indemnification. Employer hereby agrees to maintain
in full force and effect, during the Indemnity Term, indemnification
obligations and insurance that satisfy the requirements of this
Section. The indemnification obligations required by this Section must
(a) indemnify Employee against any and all claims that may be brought
against him as a result of being or having been an officer, director,
employee, or agent of, or having any other relationship (contractual or
otherwise) with any of the Releasing Parties; (b) have terms (e.g.,
rights to receive indemnification and expense reimbursement, standards
for receiving indemnification and expense reimbursement, etc.) that are
no less favorable to Employee than the terms of the indemnification
obligations that are currently in place; and (c) have terms (e.g.,
rights to receive indemnification and expense reimbursement, standards
for receiving indemnification and expense reimbursement, etc.)
that are no less favorable to Employee than the terms of the
indemnification obligations that hereafter benefit any officer,
director, employee, or agent of any of the Releasing Parties. The
insurance required by this Section must (a) insure Employee against any
and all claims that may be brought against him as a result of being or
having been an officer, director, employee, or agent of, or having any
other relationship (contractual or otherwise) with any of the Releasing
Parties; (b) have terms (e.g., amount, coverage, creditworthiness of
the insurer, etc.) that are no less favorable to Employee than the
terms of the insurance policies that are currently in place; and (c)
have terms (e.g., amount, coverage, creditworthiness of the insurer,
etc.) that are no less favorable to Employee than the terms of the
insurance policies that are hereafter obtained for the
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benefit of any officer, director, employee, or agent of any of the
Releasing Parties. "Indemnity Term" means the term of this Agreement
and thereafter for at least eight years and, to the extent any claim is
pending or threatened at the end of such eight-year period, until each
such claim is fully and finally resolved (through a final, unappealable
court order, arbitration award, settlement, or otherwise) in a manner
that conclusively determines the ultimate liability of Employee with
respect thereto. Employer shall promptly furnish evidence reasonably
satisfactory to Employee of its compliance with this Section. If
Employer fails to so furnish such evidence to Employee, Employee may,
at the expense of Employer, obtain such insurance. Employer will
promptly reimburse Employee for the cost of any such insurance plus pay
interest on the amount thereof at the highest lawful rate from the date
Employee requests such payment until Employee is fully paid.
In any instance where Employer is required to indemnify Employee
pursuant to this Section 21, Employee shall provide reasonably prompt
notice to Employer of any covered claim or threat of claim that
Employee knows about, and shall allow Employer to choose counsel,
manage litigation, and settle litigation to the extent of Employer's
indemnity.
16. Exhibits. The Employment Agreement is hereby amended to add as Exhibits
A, B, and C thereto Exhibits A, B, and C to this Amendment.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.
EMPLOYER:
HIGHWAYMASTER CORPORATION
By: /S/ XXXX X. XXXX
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Xxxx X. Xxxx.
President and CEO
EMPLOYEE:
/S/ XXXXXXX X. XXXXXXXX
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XXXXXXX X. XXXXXXXX
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