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EXHIBIT 10.3
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into
as of the ____ day of ______, 199__ by and between New RES, Inc., a Delaware
corporation (the "Company"), and Xxxxx X. Xxxxx, III (the "Executive").
W I T N E S S E T H:
WHEREAS, the Company desires to employ the Executive, and the
Executive desires to be employed by the Company, on the terms and subject to
the conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties agree as follows:
1. Employment.
(a) The Company hereby employs the Executive as Executive
Vice President and the Executive hereby accepts such employment, on the terms
and subject to the conditions hereinafter set forth.
(b) Executive shall report directly to the Chief
Executive Officer of the Company, unless the Company's Board of Directors (the
"Board") directs otherwise. Executive agrees to perform such duties as are
assigned to him, consistent with his position as a senior executive, pursuant
to the direction of the Chief Executive Officer of Holdings or the Board.
(c) Attention and Effort. The Executive shall be required
to devote his full business time, attention and effort to the Company's
business and affairs and perform diligently his duties, all subject to the
direction of the Chief Executive Officer of Holdings and the Board. The
Executive agrees to use all of his skills and business judgment and render
services to the best of his ability to serve the interests of the Company.
Subject to the terms of the Non-Competition Agreement referred to in Section 6,
this shall not preclude Executive from serving on community and civic boards,
participating in industry associations, or otherwise engaging in other
activities which, in the Company's judgment, do not unreasonably interfere with
his duties to the Company.
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(d) Support Services. The Executive shall be entitled
to all of the administrative, operational and facility support customary for a
similarly situated executive. This support shall include, without limitation, a
suitably appointed private office, a secretary or administrative assistant, and
payment of or reimbursement for reasonable cellular telephone expenses,
business entertainment expenses, expenses of the Executive maintaining his
professional license and standing and any and all other business expenses
reasonably incurred on behalf of or in the course of performing duties for the
Company, all in accordance with the expense reimbursement policies established
from time to time by the Company. The Executive agrees to provide such
documentation of these expenses as may be reasonably required.
2. Term. Subject to the provisions for termination
hereinafter provided, the term of this Agreement (the "Term") shall begin on
the date hereof, and shall continue through the fourth anniversary of the date
hereof. Notwithstanding the foregoing, either the Executive or the Company, at
any time after the first anniversary of the date hereof, may terminate this
Agreement for any reason upon 90 days advance written notice to the other, in
which event the Term shall end on the date of such termination.
3. Compensation and Stock Options.
Throughout the Term, the Company shall pay or provide, as the
case may be, to the Executive the compensation and other benefits and rights
set forth in this Section 3.
(a) The Company shall pay to the Executive a minimum
"Base Salary," payable in accordance with the Company's usual pay practices
(and in any event no less frequently than monthly), of $400,000 per annum,
which Base Salary shall be subject to increase upon review annually by the
Company's Board of Directors.
(b) The Company, at the discretion of the Board, may pay
to the Executive bonus compensation for each fiscal year, or part thereof, that
he is employed by the Company or, alternatively, may allow the Executive to
participate in a Management Incentive Bonus Plan should one be adopted by the
Company.
(c) The Company shall (i) in addition to life insurance
available to Executive pursuant to Section 3(d) of this Agreement, reimburse
Executive for the cost, in the amount of up to Two Thousand Dollars ($2,000)
per year, of life
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insurance having a death benefit payment of, in the aggregate with the
above-referenced Company life insurance, not more than Two Million Dollars
($2,000,000), (ii) reimburse Executive for the costs, in the amount of up to
Two Thousand Dollars ($2,000) per year, of disability insurance for the
Executive if not otherwise provided to Executive pursuant to Section 3(d) of
this Agreement, and (iii) provide medical, hospitalization and dental insurance
for Executive, his spouse and eligible family members, subject to and in
accordance with the Company's policy, the proportions of the cost thereof to be
borne by the Company and the Executive to be in accordance with such policy.
(d) The Executive shall participate in all retirement and
other benefit plans of the Company generally available from time to time to
employees of the Company and for which the Executive qualifies under the terms
thereof (and nothing in this Agreement shall, or shall be deemed to, in any way
affect the Executive's rights and benefits thereunder except as expressly
provided herein).
(e) The Executive shall be entitled to such periods of
vacation and sick leave allowance each year as provided under the Company's
vacation and sick leave policy and as otherwise provided for executive
officers.
(f) The Executive shall be entitled to participate in any
equity or other employee benefit plan of the Company that is generally
available to senior executive officers, as distinguished from general
management, of the Company. The Executive's participation in and benefits
under any such plan shall be on the terms and subject to the conditions
specified in the governing document of the particular plan.
(g) The Company shall pay to the Executive, as deferred
compensation, the amount of $1,000,000 on the fourth anniversary of the date
hereof regardless of whether executive is, on such date, employed by the
Company (the "Deferred Compensation Payment"); provided, however, that
Executive shall not be entitled to the Deferred Compensation Payment if, prior
to the fourth anniversary of the date hereof, Executive shall have died.
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4. Permanent Disability.
(a) For purposes of this Agreement, the Executive's
"Permanent Disability" shall be deemed to have occurred one day after one
hundred twenty (120) days in the aggregate during any consecutive twelve (12)
month period, or one day after ninety (90) consecutive days, during which one
hundred twenty (120) or ninety (90) days, as the case may be, the Executive, by
reason of his physical or mental disability or illness, shall have been unable
to discharge fully his duties under this Agreement.
(b) If either the Company or the Executive, after receipt
of notice of the Executive's Permanent Disability from the other, disputes that
the Executive's Permanent Disability shall have occurred, the Executive shall
promptly submit to a physical examination by the chief of medicine of any major
accredited hospital in the Dallas, Texas area and, unless such physician shall
issue his written statement to the effect that, in his opinion, based on his
diagnosis, the Executive is capable of resuming his employment and devoting his
full time and energy to discharging fully his duties hereunder within thirty
(30) days after the date of such statement, such Permanent Disability shall be
deemed to have occurred on the day above specified.
5. Termination.
(a) The Executive's employment under this Agreement and
the Term shall be terminated immediately on the death of the Executive and may
be terminated by the Company:
(i) at any time after the Permanent Disability
of the Executive;
(ii) at any time for "Cause" (as defined below)
by action of the Board; or
(iii) at any time without Cause by action of the
Board.
For purposes hereof, Cause shall mean:
(A) Active participation by the Executive in
fraudulent conduct, a felony, an act or series of deliberate
acts which, in the reasonable judgment of the Board, results
or would likely result in
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material injury to the business, operations or business
reputation of the Company, or an act or series of acts of
dishonesty, recklessness or gross negligence or the
Executive's willful failure to perform any of his duties under
this Agreement;
(B) The Executive's breach of any provision of
this Agreement or of the Non-Competition Agreement referred to
in Section 6, which breach has not been cured (if it is of a
nature that can be cured) to the Board's reasonable
satisfaction within ten (10) days after the Company gives
written notice thereof to the Executive;
(C) Excessive absenteeism by the Executive;
provided that absenteeism (i) related to illness or otherwise
covered by Section 4 hereof, (ii) required to be permitted
under applicable federal or state laws, or (iii) permitted
under Company policy, shall not be deemed to be excessive; or
(D) The voluntary resignation of the Executive
without the prior consent of the Board.
(b) Termination by Death. If the Executive's employment
is terminated by death, the Executive's estate shall be entitled to receive (i)
life insurance benefits pursuant to any life insurance purchased by the
Company, (ii) a pro rata portion of the bonus applicable to the calendar year
in which such termination occurs, payable if, when and as such bonus is
determined under Section 3(b), and (iii) salary and other benefits accrued by
him hereunder up to and including the date of Executive's death, payable within
ninety (90) days after the date of death.
(c) Termination for Cause. If the Executive's employment
is terminated by the Company for Cause, the Company shall not have any other or
further obligations to the Executive under this Agreement (except (i) as may be
provided in accordance with the terms of retirement and other benefit plans
pursuant to Section 3(d), (ii) as to that portion of any unpaid Base Salary and
other benefits accrued and earned under this Agreement through the date of such
termination, and (iii) as to benefits, if any, provided by any insurance
policies in accordance with their terms). In addition, if the Executive's
employment is terminated by the Company for Cause, the Executive shall
immediately forfeit any and all unexercised stock rights and stock options and
other such unexercised incentives or awards previously granted to him by the
Company. The foregoing shall be in addition to, and not in lieu of, any
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and all other rights and remedies which may be available to the Company under
the circumstances, whether at law or in equity.
(d) Termination without Cause. If the Executive's
employment is terminated by the Company without Cause, the Executive shall be
entitled to receive (i) severance compensation equal to what would have been
his Base Salary under Section 3(a), payable at such times as his Base Salary
would have been paid if his employment had not been terminated, for the shorter
of one year or the remainder of what would have been the Term, as well as a pro
rata portion of the bonus applicable to the calendar year in which such
termination occurs, payable if, when and as such bonus is determined under
Section 3(b), (ii) other benefits accrued by him hereunder up to and including
the date of such termination, payable within ninety (90) days after the date of
such termination, and (iii) the benefits set forth in Section 3(c) and (d) for
the remainder of what would have been the Term (and subsequent to which
Executive will be entitled to any COBRA benefits which may be available to
him). A termination of this Agreement pursuant to the last sentence of Section
2 shall not constitute a Termination without Cause.
(e) Termination for Permanent Disability. If the
Executive's employment is terminated by the Company for Permanent Disability,
the Executive shall be entitled to receive (i) severance compensation equal to
what would have been his Base Salary under Section 3(a) for the shorter of six
months or the remainder of what would have been the Term, payable at such times
as his Base Salary would have been paid if his employment had not been
terminated, less any disability insurance benefits pursuant to any disability
insurance provided by the Company or purchased by Executive, the cost of which
is reimbursed by the Company, which are payable in respect of the period after
such termination, as well as a pro rata portion of the bonus applicable to the
calendar year in which such termination occurs, payable if, when and as such
bonus is determined under Section 3(b), and (ii) other benefits accrued by him
hereunder up to and including the date of termination for Permanent Disability,
payable within ninety (90) days after termination for Permanent Disability,
(f) Termination Pursuant to Section 2. If the
Executive's employment is terminated pursuant to the last sentence of Section
2, the Executive shall be entitled to receive his Base Salary under Section
3(a) through the date of termination, as well as other benefits accrued by him
hereunder up to and including the date of such termination, payable within
ninety (90) days after the date of the such termination.
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(g) Termination for Good Reason. The Executive's
employment under this Agreement and the Term may be terminated by the Executive
for "Good Reason" upon thirty (30) days' written notice to the Company. For
this purpose, "Good Reason" means (i) a termination by the Executive within
ninety (90) days following a change in the location of the office of the
Executive from the Washington, D.C. metropolitan area or (ii) there is a
material diminution in the Executive's title, authority or duties, as the same
exist on the date hereof, other than any such diminution that results from the
acquisition of the Company by Holdings and the fact that the Company thereafter
will be a wholly-owned subsidiary of Holdings. If the Executive shall
terminate this Agreement for "Good Reason," the Executive shall be entitled to
receive the same payments and benefits as he would be entitled to receive in
the case of a Termination without Cause.
(h) Upon the termination of Executive's employment for
any reason, the Executive shall be deemed to have resigned from all offices and
directorships held by the Executive in the Company and with any of its
affiliates.
6. Non-Competition Agreement
The Executive acknowledges the Company's reliance on and
expectation of the Executive's continued commitment to performance of his
duties and responsibilities during the Term. In light of such reliance and
expectation on the part of the Company, and for other good reasons, the
Executive and Holdings are entering into a Non-Competition Agreement, dated the
date hereof. Executive agrees to perform each and every obligation of
Executive therein contained.
7. Miscellaneous.
(a) The Company and the Executive agree that the existing
employment agreement between the Company and the Executive is hereby
terminated. The Executive represents and warrants that he is not a party to
any agreement, contract or understanding, whether employment or otherwise,
which would restrict or prohibit him from undertaking or performing employment
in accordance with the terms and conditions of this Agreement.
(b) The provisions of this Agreement are severable and if
any one or more provisions may be determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions and any partially
unenforceable provision
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to the extent enforceable in any jurisdiction nevertheless shall be binding and
enforceable.
(c) The rights and obligations of the Company under this
Agreement shall inure to the benefit of, and shall be binding on, the Company
and its successors and assigns, and the rights and obligations (other than
obligations to perform services) of the Executive under this Agreement shall
inure to the benefit of, and shall be binding upon, the Executive and his
heirs, personal representatives and assigns.
(d) All notices and other communications required or
permitted under this Agreement shall be in writing, and shall be deemed
properly given if delivered personally, mailed by registered or certified mail
in the United States mail, postage prepaid, return receipt requested. sent by
facsimile, or sent by Express Mail, Federal Express or other nationally
recognized express delivery service, as follows:
If to the Company or the Board:
New RES, Inc.
0000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: _________________
Attention: _________________
With a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxxxxxxx, Esq. and
Xxxxxxxxx X. Xxxxx, Esq.
If to the Executive:
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Notice given by hand, certified or registered mail, or by Express Mail, Federal
Express or other such express delivery service, shall be effective upon actual
receipt. Notice given by facsimile transmission shall be effective upon actual
receipt if received during the recipient's normal business hours, or at the
beginning of the recipient's next business day after receipt if not received
during the recipient's normal business hours. All notices by facsimile
transmission shall be confirmed promptly after transmission in writing by
certified mail or personal delivery.
Any party may change any address to which notice is to be
given to it by giving notice as provided above of such change of address.
(e) The failure of either party to enforce any provision
or provisions of this Agreement shall not in any way be construed as a waiver
of any such provision or provisions as to any future violations thereof, nor
prevent that party thereafter from enforcing each and every other provision of
this Agreement. The rights granted the parties herein are cumulative and the
waiver of any single remedy shall not constitute a waiver of such party's right
to assert all other legal remedies available to it under the circumstances.
(f) This Agreement supersedes all prior or
contemporaneous agreements and understandings between the parties and may not
be modified or terminated orally. No modification or attempted waiver shall be
valid unless in writing and signed by the party against whom the same is sought
to be enforced.
(g) This Agreement shall be governed by, and construed in
accordance with the provisions of, the law of Texas, without reference to
provisions that refer a matter to the law of any other jurisdiction. Each party
hereto hereby irrevocably submits itself to the non-exclusive personal
jurisdiction of the federal and state courts sitting in Dallas, Texas.
(h) Arbitration. (i) Except as provided herein, any
controversy, dispute or claim arising out of or relating to this Agreement, its
performance or the breach hereof (an "Arbitrable Dispute") which cannot be
settled by mutual agreement shall be finally settled by arbitration as follows:
Either party hereto (a "Party") who is aggrieved shall deliver a notice to the
other Party setting forth the specific points in dispute. Any points remaining
in dispute twenty (20) days after the giving of such notice shall be submitted
to arbitration before a single arbitrator appointed in accordance with
JAMS/Endispute's Comprehensive Arbitration Rules and Procedures
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(the "Rules"), modified only as herein expressly provided. The place of the
arbitration shall be the Dallas, Texas area. The arbitrator may enter a
default decision against any Party who fails to participate in the arbitration
proceedings. The arbitration shall be governed by the United States
Arbitration Act, 9 U.S.C. Section 1-16 (the "Act"). If there is any conflict
between either the Rules and the terms of this Section 7(h), or the Act and
this Section 7(h), then the terms of this Section 7(h) shall control. The
decision of the arbitrator on the points in dispute will be final, unappealable
and binding and judgment on the award may be entered in any court having
jurisdiction thereof. The prevailing party in any arbitration shall be
entitled to reimbursement of the reasonable costs and expenses incurred by such
party in connection therewith from the other party. The Arbitrator shall not
have the authority to award punitive damages. The Parties agree that this
clause has been included to rapidly and inexpensively resolve any disputes
between them with respect to this Agreement, and that this clause shall be
grounds for dismissal of any court action commenced by either Party with
respect to this Agreement, other than (x) actions to compel a party to comply
with these dispute resolution procedures; (y) actions specified in this Section
7(h), or (z) post-arbitration actions seeking to enforce an arbitration award.
The Parties shall keep confidential, and shall not disclose to any person,
except as may be required by law, the existence of any controversy hereunder,
the referral of any such controversy to arbitration or the status or resolution
thereof. The procedures specified in this Section 7(h) shall be the sole and
exclusive procedures for the resolution of an Arbitrable Dispute; provided,
however, that prior to the appointment of an arbitrator as provided for above,
a party, without prejudice to these procedures, may seek a temporary
restraining order, preliminary injunction, or other provisional judicial
relief, if in its sole judgment such action is necessary to avoid irreparable
damage or to preserve the status quo. Under no circumstances, however, shall
the court be authorized to award money damages. Any claim shall be time-barred
unless the asserting party commences an arbitration proceeding with respect to
such claim within the time limit for commencement of litigation specified by
applicable law for such claim.
(ii) The parties subject to this Agreement further agree that
the scope and meaning of this Section 7(h), including the issue of
whether a dispute is arbitrable, and the scope and meaning of any
other sections or provisions of this Agreement, shall be determined by
the Arbitrator and not by any judicial body, tribunal or forum and
that the decision of the Arbitrator in this and all other matters
presented to him or her for arbitration as provided in this Section
7(h) shall be final and binding.
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(iii) The Arbitrator is authorized to award injunctive
relief, including mandatory or prohibitory injunctions and restraining
orders after notice (including in the absence of a party), and
specifically including orders of specific performance to pay money,
and all such orders shall be immediately enforceable in any court of
competent jurisdiction.
(i) All payments required to be made by the Company
hereunder to the Executive shall be subject to the withholding of such amounts
relating to taxes and other government assessments as the Company may
reasonably determine it should withhold pursuant to any applicable law, rule or
regulation.
(j) Captions and section headings used herein are for
convenience and are not a part of this Agreement and shall not be used in
construing it.
(k) Where necessary or appropriate to the meaning hereof,
the singular and plural shall be deemed to include each other, and the
masculine, feminine and neuter shall be deemed to include each other.
IN WITNESS WHEREOF, the parties have executed this Agreement
on the day and year first set forth above.
NEW RES, INC.
By:
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Name:
President
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Xxxxx X. Xxxxx, III
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