XXXXXXXXXX.XXX, INC.
0000 XXXXXXX XXXXXXX, XXXXX 000
XXXXXX, XXXXX 00000
April 26, 2001
Xxxxxxx X'Xxxx
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxx 00000
Dear Xx. X'Xxxx:
Reference is made to the Employment Agreement dated as of February 18,
1998 (the "Employment Agreement"), between you and Great Western Directories,
Inc., a Texas corporation ("Great Western"). Great Western is a wholly-owned
subsidiary of XxxxxXxxxx.xxx, Inc. (the "Company"). This letter agreement
supersedes the Employment Agreement and the Employment Agreement shall
terminate and be of no further force and effect as of the date hereof.
Accordingly, we are pleased to provide the terms for your continued service
as Chairman of the Board of Directors (the "Board"), on the terms set forth
below. This letter agreement will become effective on the date hereof (the
"Effective Date").
POSITION: You will remain as Chairman of the Board and the
Company will use its best efforts to cause you
to be re-elected as a director at any meeting of
the shareholders during the Term of this
Agreement. You shall devote such time,
attention, and energy to the business of the
Company as are reasonably necessary for you to
perform your duties as Chairman of the Board. In
no event shall you take any action inconsistent
with your relationship and responsibilities as a
Company director, or which is intended, or may
be reasonably expected, to harm the reputation,
business, prospects, or operations of the
Company. As of the Effective Date, you shall
resign from all positions with the Company other
than Chairman of the Board and a member of the
Board, including your position as Chief
Executive Officer of the Company.
TERM: Effective Date through February 18, 2002 (the
"Term").
COMPENSATION: $80,000 per year, payable in equal bi-weekly
installments, subject only to such payroll and
withholding deductions as may be required by law
and other deductions applied generally to other
directors of the Company for any director
benefit
plans.
BENEFITS: You shall receive the benefits that are awarded
under the Company's benefit plans during the
Term.
COMPLIANCE WITH COMPANY Reference is made to the Amended and Restated Loan
AGREEMENTS Agreement, dated March 30, 2000, among the Company
and the financial institutions whose names
appear as lenders on the signature pages thereof
(the "Bank Agreement"). Reference is also made
to certain 5% Convertible Debentures due
February 23, 2006 issued by the Company (the
"Debentures" and together with the Bank
Agreement, the "Company Agreements"). In order
not to trigger (i) a "Change of Control", as
such term is defined in the Bank Agreement, (ii)
a "Change in Control Transaction", as such term
is defined in the Debentures or (iii) any other
default under applicable provisions of the
Company Agreements, you hereby agree that during
the Term you shall not (A) resign from the Board
or (B) sell more than 30% of the capital stock
of the Company that you hold as the "beneficial
owner" (as defined in Rule 13d-3 promulgated
under the Securities Exchange Act of 1934, as
amended), directly or indirectly, as of the
closing dates of the Company Agreements. Your
agreements under this paragraph shall be
terminated automatically to the extent that (i)
a "Change of Control", as such term is defined
in the Bank Agreement, (ii) a "Change in Control
Transaction", as such term is defined in the
Debentures and (iii) all other applicable
provisions of the Company Agreements, are
amended or terminated such that it would not
result in a "Change of Control" or "Change in
Control Transaction", as the case may be, or
default under the Company Agreements if you
resign as Chairman of the Board or sell shares
of the capital stock of the Company.
CONFIDENTIAL INFORMATION, You recognize and acknowledge that you have had and
NON-COMPETITION AND NON- will continue to have access to certain
SOLICITATION: confidential information and trade secrets of the
Company ("Confidential Information"). Such
Confidential Information includes, but is not
limited to: customer names; contracts; products
purchased by customers; production capabilities
and processes; customer account and credit data;
referral sources; computer programs and
software; information relating to confidential
or secret designs, processes, formulae, plans,
devices, or materials of the Company; business
and marketing plans, confidential information
and trade secrets relating to the distribution
and marketing of the Company's products and
services; patents
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pending; confidential characteristics of the
Company's products and services; customer
comments; troubleshooting requirements; product
and service development; market development;
manuals written by the Company; management,
accounting, and reporting systems, procedures,
and programs; contracts, leases, marketing
agreements, sales, executive compensation
information, plans, and programs; marketing and
financial analysis, plans, research, programs,
and related information and data; forms,
agreements, and legal documents; regulatory and
supervisory reports; correspondence; statements;
corporate books and records; and other similar
information.
You acknowledge and agree that this Confidential
Information constitutes valuable, special, and
unique property of the Company.
You will not, at any time during or after the
Term or your affiliation with Company, disclose
any Confidential Information to any person,
firm, partnership, association, company,
corporation or other entity (collectively, a
"Person") for any reason or purpose.
The foregoing restrictions shall not apply to
(a) any information in your possession before
its disclosure to you by the Company; or (b)
information that is or shall lawfully be
published or become part of the public domain
through no act or omission on your part. The
Confidential Information disclosed to you under
this letter agreement is not within the
foregoing exceptions merely because such
information is embraced by more general
information in the public domain or in your
possession, or merely because portions thereof
are in the public domain or in your possession.
You hereby further agree that during the Term,
you will not, for yourself, or on behalf of any
other Person, engage in the sale or marketing of
yellow page publishing services or
telecommunication services in any city in which
the Company provides such services during the
Term; provided, however, that the foregoing
restrictions shall not apply to the provision of
Internet infrastructure services (including,
without limitation, online directories, content,
e-commerce, advertising and web site
production).
You hereby further agree that during the Term
and for a period of one (1) year thereafter, you
will not, for yourself, or on behalf of any
other Person, directly or indirectly induce or
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attempt to influence any executive, officer,
director, consultant, agent, vendor, customer or
other Person related to the Company to terminate
his, her or its employment or association in any
manner whatsoever with the Company; provided,
however, that the foregoing restrictions shall
not apply to any such Person who terminates his,
her or its association with the Company on his,
her or its own initiative without any direct or
indirect solicitation by or encouragement from
you.
You understand and hereby acknowledge that, due
to the unique nature of the products and
services provided by the Company and the need
for sales personnel to have a relatively high
degree of technical knowledge concerning these
products and services, your association with the
Company will give you distinct and substantial
advantages for potential sales and management
activities concerning such products and
services. You further understand and hereby
acknowledge that because of the definition of
products and services covered by this letter
agreement, the highly specialized nature of
those products and services, the limited size
and number of business entities in the business
of developing and/or selling those products and
services, and the much more numerous
opportunities for you to work in your trade with
respect to products and services not covered by
this letter agreement, the limitations as to
time and geographic area contained in the two
immediately preceding paragraphs hereof are
reasonable and are not unduly onerous on you.
You therefore hereby agree that the limitations
as to time, geographic area, and scope of
activity contained in the two immediately
preceding paragraphs hereof do not impose a
greater restraint than is necessary to protect
the Confidential Information, goodwill, and
other business interests of the Company. You
also hereby agree that in light of the facts
acknowledged above, the substantial investment
of the Company in acquiring and developing its
business and providing special training to you,
and the certain and substantial harm that the
Company would suffer if you were to engage in
any of the activities described in the two
immediately preceding paragraphs hereof, the
Company's need for the protection afforded by
the two immediately preceding paragraphs hereof
is greater than any hardship you might
experience by complying with their terms. You
also hereby agree that, if any provision of the
covenants set forth in the two immediately
preceding paragraphs hereof is found to be
invalid in part or whole, the Company may elect,
but shall not be required, to have such
provision reformed, whether as to time,
geographic area, scope of activity, or
otherwise, as and to the
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extent required for its validity under
applicable law, and, as so reformed, such
provisions shall be enforceable.
You hereby acknowledge that a violation or
attempted violation on your part of any
provision under the headings "Compliance with
Company Agreements" and "Confidential
Information, Non-Competition and
Non-Solicitation" hereof will cause irreparable
damage to the Company. Accordingly, in the event
of your breach or threatened breach of any of
the provisions under the heading "Confidential
Information, Non-Competition and Non-
Solicitation" hereof, you hereby agree that the
Company shall be entitled as a matter of right
to an injunction, out of any court of competent
jurisdiction, restraining any violation or
further violation of such agreements by you or
your agents, without showing any evidence of
actual monetary loss resulting from such breach,
including, but not limited to, restraining you
from using or disclosing, in whole or in part,
such Confidential Information or trade secrets;
rendering any services to any Person to whom any
of such information may have been disclosed or
is threatened to be disclosed; and/or violating
the non-competition or non-solicitation
provisions. Nothing herein shall be construed as
prohibiting the Company from pursuing any other
remedies available to it for such breach or
threatened breach, including the recovery of
damages and attorneys' fees from you.
TERMINATION: This letter agreement shall terminate on the
occurrence of the earliest of: (i) the end of
the Term, (ii) your death or disability, (iii) a
Change of Control Event (as defined below), or
(iv) Termination for Cause (as defined below).
You will be entitled to that part of the
compensation and benefits described herein
through the day of termination of this letter
agreement. Termination of this letter agreement
shall not relieve you of any continuing
obligations which by the terms hereof expressly
survive such termination including, without
limitation, the confidentiality and
non-solicitation restrictions under the heading
"Confidential Information, Non-Competition and
Non-Solicitation" hereof and the return of
property restrictions under the heading "Return
of Property" hereof. For purposes of this
paragraph, a "Change of Control Event" shall
mean the occurrence of any of the following: i)
a merger, consolidation, reorganization, sale of
stock or other transaction involving the Company
or its stockholders (whether as a single
transaction or a series of related transactions,
a "Transaction") in which the holders of a
majority of the outstanding shares of the
Company's capital stock immediately prior to
such
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Transaction, will not be the holders of a
majority of the outstanding shares of the
Company's capital stock, or of the entity or
entities surviving the Company, immediately
after such Transaction, or (ii) a sale of all,
or substantially all, of the Company's assets.
For purposes of this paragraph, "Termination for
Cause" shall mean the occurrence of any of the
following (i) your violation in any material
respect of any provision of this letter
agreement, (ii) your commission of acts of fraud
or dishonesty against the Company, (iii) your
conviction of a crime other than a routine
traffic violation or (iv) your violation of any
Company policies as outlined in any Company
policy handbook. The Company shall deliver a
letter to you specifying the basis for a
Termination for Cause.
RETURN OF PROPERTY: All data, drawings, documents, contracts,
computerized data, information printouts, and
tapes, tape recordings, documents, data,
accounting records, personnel files, computer
terminals, equipment, and other records and
written material prepared or compiled by you or
furnished to you during your association with
the Company shall be the sole and exclusive
property of the Company, and none of such data,
drawings or other records and written material,
or copies thereof, shall be retained by you upon
termination of this letter agreement. This
Company property shall not be removed from
Company premises without the Company's prior
written consent.
Upon termination of this letter agreement or
whenever requested by the Company, you
immediately shall deliver to the Company all of
the Company property or any of the Company's
documents in your possession or under your
control, including, but not limited to, all
documents or data, Confidential Information,
accounting records, computer terminals, data,
discs, printouts and tapes and accounting
machines provided by the Company. No copies of
any such data shall be retained by you.
NOTICES: Any notice required or permitted to be given under
this letter agreement shall be in writing and
addressed to you at 0000 Xxxxxxxx Xxxxx,
Xxxxxxxx, Xxxxx 00000, and to the Company, at
0000 Xxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx
00000, Attention: Xxxxxxx X. Xxxxx, or to such
other address as either party shall designate by
written notice to the other. Notices may be sent
by messenger or by registered or certified mail,
postage prepaid, addressed to the party or parties
to be notified, with return receipt requested.
Notices sent by messenger shall be deemed
received upon their actual receipt of the party
to whom they are directed. Notices sent by
registered or certified
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mail shall be deemed received on the third day
following their deposit with the United States
Postal Service.
MISCELLANEOUS: The rights and obligations of the Company under
this letter agreement shall inure to the benefit
of and shall be binding upon the successors and
assigns of the Company. This letter agreement
shall be binding upon you and your agents,
heirs, executors, administrators and legal
representatives. Your rights and obligations
hereunder shall not be assignable by you.
This letter agreement shall be governed by and
construed in accordance with the laws of the
State of Texas, without giving effect to the
choice of law provisions thereof.
This letter agreement may be executed in
multiple counterparts, each of which shall be
deemed an original and all of which shall
constitute one instrument.
This letter agreement contains the entire
agreement of the parties pertaining to the
subject matter hereof and supersedes all prior
agreements, understandings, negotiations and
discussions, whether oral or written, and there
are no other warranties, representations,
covenants or agreements among the Company and
you in connection with the subject matter hereof.
The waiver by the Company of a breach of any
provision of this letter agreement by you shall
not operate or be construed as a waiver by the
Company of any subsequent breach by you.
If a court of competent jurisdiction shall
adjudge to be invalid any clause, sentence,
subparagraph, paragraph or section of this
letter agreement, such judgment or decree shall
not affect, impair, invalidate, or nullify the
remainder of this letter agreement, but the
effect thereof shall be confined to the clause,
sentence, subparagraph, paragraph, or section so
adjudged to be invalid.
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Please indicate your acceptance of the terms of this letter agreement by
your signature below. Once signed by both parties, this letter agreement
shall be binding on both parties.
Sincerely,
XxxxxXxxxx.xxx, Inc.
By: /s/ Xxxxxxx X. Xxxxx
--------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President and Chief
Financial Officer
Accepted and Agreed to
as of the date set forth above:
/s/ Xxxxxxx X'Xxxx
------------------
Xxxxxxx X'Xxxx
