AMENDED AND RESTATED EMPLOYMENT AGREEMENT
RE: J. XXXXXXX XXXXX
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement") is
entered into by and between Diversified Corporate Resources, Inc., a Texas
corporation (herein referred to as the "Company"), and J. Xxxxxxx Xxxxx
(herein referred to as the "Executive").
W I T N E S S E T H:
WHEREAS, the parties hereto previously entered into that certain
Employment Agreement Re: J. Xxxxxxx Xxxxx dated as of January 1, 1997 (the
"Prior Agreement"); and
WHEREAS, the Prior Agreement was amended by the certain First
Amendment to Employment Agreement Re: J. Xxxxxxx Xxxxx (the "First
Amendment"); and
WHEREAS this Agreement constitutes an amendment and restatement of
the Prior Agreement as amended by the First Amendment; and
WHEREAS, the Company desires to continue to employ the Executive and
the Executive desires to continue to be employed by the Company; and
WHEREAS, the purpose of this document is to set forth the terms and
conditions of such employment.
NOW THEREFORE, for and in consideration of the mutual advantages and
benefits accruing respectively to the parties hereto, the mutual promises
hereinafter made and the acts to be performed by the respective parties
hereto, the Company and the Executive do hereby contract and agree as follows:
1. EMPLOYMENT. The Company hereby employs the Executive as the Chief
Executive Officer of the Company, and the Executive hereby accepts such
employment, to perform the duties
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and render services as herein set forth. Such employment shall continue
during the term of this Agreement.
2. TERM. Except in the case of earlier termination as herein
specifically provided, the Executive's employment with the Company pursuant
to this Agreement shall be for the period beginning June 15, 2000 and ending
December 31, 2001 (the "Termination Date").
3. BASE COMPENSATION. As base compensation for the services of
Executive during the term hereof, the Company shall pay the Executive a
salary at an annual rate to be fixed from time to time by the Board of
Directors of the Company but in no event less than $250,000.00 plus any
additional compensation which the Board of Directors of the Company may from
time to time determine. The Executive's salary hereunder shall be paid in
equal semi-monthly installments (subject to reduction for such payroll and
withholding deductions as may be required by law), and may be paid, in whole
or in part, by one or more of the subsidiaries (the "Subsidiaries") of the
Company.
In addition to the Executive's base salary, the Executive shall be
entitled to each of the following (at the Company's expenses unless otherwise
indicated): (a) the right to receive an annual bonus pursuant to (i) the
Executive Stock Bonus Plan adopted by the Compensation Committee of the Board
of Directors of the Company (the "Compensation Committee") on December 8,
1999 and (ii) such other bonus plan(s) which the Board of Directors of the
Company may hereafter adopt with respect to the Executive, (b) health
insurance coverage now or hereafter in effect which shall provide for payment
of health, dental and related expenses incurred during the term of this
Agreement with respect to the Executive (including long-term disability
coverage paid for the Executive), the Executive's spouse or the Executive's
children, and which shall contain such benefits and options as shall be made
available to other executives of the Company and/or the Subsidiaries, (c) the
right to
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participate in any and all 401(k) plans and Section 125 plans now in effect
or hereafter adopted by the Company, (d) the right to participate in the
Executive Stock Option Plan adopted by the Compensation Committee on December
8, 1999, (e) an automobile allowance of $1,000.00 per month, (f) payment or
reimbursement of (i) an initiation fee of approximately $3,400 related to the
fee for the Executive to join a country club selected by the Executive, and
(ii) monthly dues payable with respect to such club membership in the initial
amount of $350.00 per month, and (f) the right to all fringe benefits
generally made available to other executives and/or employees of the Company.
In addition to the foregoing, the Executive shall be entitled to (a)
such vacation leave as shall be permitted by the Company's standard policies,
or (b) if such standard policies provide for a lesser amount of vacation
leave, minimum annual vacation leave of three (3) weeks per year with full
pay, and thirty (30) days per year of sick leave with full pay (this number
of days of sick leave may be extended if the Board of Directors of the
Company approves).
The Executive shall also be entitled to receive such fees and/or
compensation as shall be granted to the Executive by the Board of Directors
of the Company in connection with the Executive serving as a member of the
Board of Directors of the Company, and/or any and all of the subsidiaries of
the Company.
4. DUTIES AND SERVICES. During the term of this Agreement, the
Executive agrees to (a) do his utmost to enhance and develop the best
interests and welfare of the Company, (b) give his best efforts and skill to
advancing and promoting the growth and success of the Company, and (c)
perform such duties or render such services as the Board of Directors of the
Company may, from time to time, reasonably confer upon or impose on the
Executive. It is understood that the Executive shall report directly to the
Board of Directors of the Company.
5. TERMINATION.
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a. The Company may terminate the Executive's employment
pursuant to this Agreement at any time for "cause" as herein defined. The
term "cause" shall mean any of the following events: (i) the Executive's
conviction or plea of guilty to a crime involving moral turpitude, (ii) any
acts of dishonesty or theft on the part of the Executive which, in the
opinion of the Board of Directors of the Company, is detrimental to the best
interests of the Company, and (iii) intentional and material violation by the
Executive of any written policy of the Board of Directors of the Company
which is not corrected within ninety (90) days after receipt by the Executive
of a detailed written explanation from the Board of Directors of the Company.
Any decision by the Board of Directors of the Company to terminate the
Executive for cause must be approved by the favorable vote of seventy-five
percent (75%) of all members of the Board of Directors of the Company
excluding the Executive.
b. The Company may terminate the Executive as an employee
of the Company at any time during the term of this Agreement if a majority of
all of the members of the Board of Directors of the Company approves a
resolution authorizing such action and reflecting that such action is in the
best interests of the Company. However, unless the Executive's employment is
terminated for "cause" (as herein defined), any termination of the
Executive's employment shall not terminate the Company's obligations to pay
to the Executive the severance benefits as hereinafter set forth, or to
comply with the other requirements of this Agreement.
c. The Executive may terminate his employment with the
Company at any time by giving ninety (90) days written notice to the Company.
d. The Executive's employment by the Company shall
automatically terminate on the date of the Executive's death if the Executive
dies during the term of this Agreement.
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e. If the Executive is incapacitated by an accident,
sickness or otherwise, so as to render him mentally or physically incapable
of performing the services required of him pursuant to this Agreement,
Executive's employment by the Company shall terminate at such time as the
Board of Directors of the Company determines (with at least seventy-five
percent of the directors other than the Executive voting in favor) that the
Executive is so disabled and that this Agreement should be terminated by
reason of such disability. Notwithstanding the foregoing, the Executive shall
have the right to contest any determination of disability by the Board of
Directors of the Company. In the event that the Executive does contest such
determination, such matter shall be resolved by arbitration pursuant to
Section 13(c) of this Agreement.
6. SEVERANCE AND OTHER PAYMENTS.
a. If the Executive's employment pursuant to this Agreement
is terminated for "cause" (as herein defined) or due to the death or
disability (as determined pursuant to paragraph 5(e) of this Agreement) of
the Executive, the Company shall not be obligated to pay or provide any
severance compensation or benefits to the Executive.
b. If the Executive ceases to be employed by the Company
(either during the term of this Agreement or at any time subsequent to the
termination of this Agreement) for any reason other than pursuant to
Paragraphs 5(a), 5(c), 5(d) or 5(e) of this Agreement, the Company agrees to
pay to the Executive an amount equal to the base compensation which would
have been paid to the Executive during the period of time from the date of
the termination of the Executive's employment with the Company for a period
of twelve (12) months following the date the Executive ceases to be an
employee of the Company and the Subsidiaries (such time period is herein
referred to as the "Severance Period"). In addition to the foregoing
severance payment, the Executive and his family shall continue to participate
in the Company's group health plan, at no cost to the
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Executive, during the Severance Period. Notwithstanding the foregoing, in the
event of a Special Change in Control of the Company (as hereinafter defined)
and if the Executive's employment with the Company is terminated for any
reason other than Voluntary Termination (as hereinafter defined) or
termination for cause as provided for herein during the twenty-four (24)
month period beginning on the Effective Date of such Special Change in
Control, (i) the Severance Period shall be extended by six (6) months so that
the Severance Period shall be eighteen (18) months following the date the
Executive ceases to be an employee of the Company and the Subsidiaries (such
extended time period is herein referred to as the "Extended Severance
Period"), and (ii) the payments to the Executive hereunder with respect to
the Extended Severance Period shall be at such times and in such amounts as
would have been paid to the Executive during the Extended Severance Period
had the Executive's employment not been terminated.
c. If the Executive's employment is terminated during the
term of this Agreement, for any reason other than cause, the Executive (i)
shall be entitled to receive a prorata share (based upon the number of months
employed during the calendar year in which employment with the Company is
terminated) of any bonus or incentive compensation which the Executive would
otherwise have been entitled to receive had he remained employed for the
entirety of the calendar year involved, and (ii) shall have twelve (12)
months to exercise any stock options heretofore or hereafter granted to the
Executive by the Board of Directors of the Company.
d. Commencing in June, 2000, and continuing during the time
of Executive's employment with the Company and all of the Subsidiaries, the
Company shall fund an annuity or deferred compensation program for the
Executive in the gross amount of $3,000.00 per month (subject to tax
withholdings, etc.). All amounts heretofore and hereafter funded pursuant to
this deferred compensation arrangement shall be paid to the Executive, at the
date of termination of the
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Executive's employment with the Company, in the manner anticipated by the
deferred compensation program previously implemented by the Company for the
Executive. Notwithstanding the foregoing, in the event of a Special Change in
Control of the Company (as hereinafter defined) and if the Executive's
employment with the Company terminates for any reason other than Voluntary
Termination (as hereinafter defined) or termination for cause as provided for
herein during the twenty-four (24) month period beginning on the Effective
Date of such Special Change in Control, the Company's obligation to fund the
deferred compensation program shall extend until the expiration of the
Extended Severance Period.
7. WORKING CONDITIONS. The Company will provide the Executive with a
private office and secretarial services.
8. RELOCATION. In the event that the Board of Directors of the
Company relocates the primary office of the Executive outside of the Dallas,
Texas metropolitan area, the Company shall pay all moving expenses of the
Executive to the place of the new office. Absent the written consent of the
Executive, the Company shall not relocate the primary office of the Executive
to an office/location which is not the general corporate office of the
Company.
9. TRAVEL AND ENTERTAINMENT. The Executive is authorized to incur
reasonable business expenses on behalf of the Company, including, but not by
way of limitation, expenditures of entertainment, gifts and travel; if any
expenses are of a kind or a cost in excess of the written policies
established by the Board of Directors of the Company, such expenses must be
expressly authorized by the Board of Directors of the Company. The Company
agrees to reimburse the Executive for all such expenses upon the Executive's
presentation of an itemized account of such expenditures. In addition to the
foregoing, the Executive is entitled to incur, and to be reimbursed by the
Company
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for, various and sundry costs and expenses in connection with membership in,
and attendance at, meetings of one or professional organizations including,
but not by way of limitation, the CEO Club.
10. NON-COMPETITION AGREEMENT. In the event that the termination of
employment of the Executive pursuant to this Agreement is effectuated by the
Executive electing to terminate his employment pursuant to this Agreement,
and subject to the condition that the Company shall pay the severance
compensation as provided in Paragraph 6(b) of this Agreement, the Executive
agrees that the Executive shall not, for a one year period of time following
the date of termination of this Agreement, within Dallas, Dallas County,
Texas or within a radius of fifty (50) miles from any business location of
the Company and its subsidiaries in the continental United States on the
Termination Date, enter into or engage generally in direct competition with
the Company either as an individual on his own or as a partner or joint
venturer, or as an employee or agent for any person, or as an officer,
director, shareholder or otherwise of any entity other than the Company or an
affiliate of the Company.
11. NOTICES. All notices or other instruments or communications
provided for in this Agreement shall be in writing and signed by the party
giving same and shall be deemed properly given if delivered in person,
including delivery by overnight courier, or if sent by registered or
certified United States mail, postage pre-paid, addressed to such party at
the address listed below. Each party may, by notice to the other party,
specify any other address for the receipt of such notices, instruments or
communications. Any notice, instrument or communication sent by telegram
shall be deemed properly given only when received by the person to whom it is
sent.
12. CERTAIN CONDITIONS.
a. "Special Change in Control" means (i) any person or entity,
including a "group" as defined in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), other than the Company, a majority-owned subsidiary
thereof, or Executive and any
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affiliate of the Executive, becomes the beneficial owner (as
defined pursuant to Schedule 13(d) under the Exchange Act) of
the Company's securities having twenty-five percent (25%) or
more of the combined voting power of the then outstanding
securities of the Company that may be cast for the election of
directors of the Company, or (ii) as the result of, or in
connection with, any cash tender or exchange offer, merger or
other business combination, sales of assets or contested
election, or any combination of the foregoing transactions,
less than a majority of the combined voting power of the then
outstanding securities of the Company or any successor
corporation or entity entitled to vote generally in the
election of the directors of the Company, or such other
corporation or entity after such transaction, are beneficially
owned (as defined pursuant to Section 13(d) of the Exchange
Act) in the aggregate by the holders of the Company's
securities entitled to vote generally in the election of
directors of the Company immediately prior to such
transaction, or (iii) during any period of two consecutive
years, individuals who at the beginning of any such period
constitute the Board of Directors of the Company cease for any
reason to constitute at least a majority thereof, unless the
election, or the nomination for election by the Company's
shareholders, of each director of the Company first elected
during such period was approved by a vote of at least
two-thirds of the directors of the Company then still in
office who were directors of the Company at the beginning of
any such period.
b. The "Effective Date" of such Special Change in Control shall
be the earlier of the date on which an event described in
Section 12(a) (i), (ii), or (iii) occurs, or if earlier, the
date of the occurrence of (i) the approval by shareholders of
an agreement by the Company, the consummation of which would
result in an event described in Section 12(a) (i), (ii), or
(iii), or (ii) the acquisition of beneficial ownership (as
defined pursuant to Section 13(d) of the Exchange Act),
directly or indirectly, by any entity, person or group (other
than the Company, a majority-owed subsidiary of the Company,
or the Executive and any affiliate of the Executive) of
securities of the Company representing five percent (5%) or
more of the combined voting power of the Company's outstanding
securities, provided, however, that the events described in
Section 12(b)(i) and (ii) will be considered the Effective
Date of a Special Change in Control if they are followed
within six (6) months by an event described in Section 12(a)
(i), (ii), or (iii).
c. "Voluntary Termination" shall mean Executive's resignation
from the Company unless such resignation is as a direct
proximate result of (i) without Executive's express written
consent, the assignment to Executive of any duties materially
inconsistent with his position, duties, responsibilities and
status (including his removal from the
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Board of Directors) with the Company on the Effective Date of
the Special Change in Control, (ii) a reduction of Executive's
base compensation and bonus compensation (other than a
reduction in payments under the Company's incentive bonus
program based on a reduction in net profits of the Company)
to an amount that is greater than then percent (10%) lower
than such compensation on the Effective Date of the Special
Change in Control, (iii) relocation of Executive's principal
location of work to any location that is both (A) in excess of
fifty (50) miles from the location of Executive's principal
location of work on the Effective Date of the Special Change
in Control, and (B) in excess of the sum of the distance from
the Executive's principal residence on such Effective Date to
the location of the Executive's principal location of work on
such Effective Date, plus fifty (50) miles, (iv) failure by
the Company to 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, by agreement in form and substance reasonably
satisfactory to the Executive, expressly to assume and agree
to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform this
Agreement if no such succession had taken place, or (v) any
material breach of this Agreement as in effect on the
Effective Date of the Special Change in Control by the
Company.
13. MISCELLANEOUS.
a. Subject to the condition that this Agreement is not
assignable by either party without the prior written consent of the other
party, the terms and provisions of this Agreement shall inure to the benefit
of, and shall be binding on, the parties hereto and their respective heirs,
representatives, successors and assigns.
b. This Agreement supersedes all other agreements, either
oral or in writing, between the parties to this Agreement, with respect to
the employment of the Executive by the Company. This Agreement contains the
entire understanding of the parties and all of the covenants and agreement
between the parties with respect to such employment. Any such prior
agreements related to employment of the Executive by the Company are hereby
terminated without obligation
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for any payments due thereunder, except for unpaid obligations which accrued
and become payable prior to the termination of any such agreements.
c. Any controversy between the parties to this Agreement
involving the construction or application of any of the terms, covenants, or
conditions of this Agreement (including, but not by way of limitation, the
determination of any amounts payable under the terms of this Agreement) shall
be submitted to arbitration if either party to this Agreement shall request
arbitration by notice in writing to the other party. In such event, the
parties to this Agreement shall, within thirty (30) days after this Paragraph
13(c) is invoked, both appoint one person as an arbitrator to hear and
determine the dispute, and if such arbitrators shall be unable to agree
within fifteen (15) days after selection of the second of the two, then the
two arbitrators so chosen shall, within fifteen (15) days, select a third
impartial arbitrator whose decision shall be final and conclusive upon the
parties to this Agreement. The decision of the third arbitrator shall be
rendered within fifteen (15) days after selection. The expenses of
arbitration proceedings conducted pursuant to this Agreement shall be borne
by the party incurring the cost; the expenses of a third arbitrator shall be
borne equally by the Company and the Executive.
d. In the event of any litigation between the parties
related to the compliance with the terms and conditions of this Agreement,
the parties hereto acknowledge and agree that (i) such litigation proceedings
must be held in Dallas County, Texas, and (ii) the prevailing party in such
litigation proceedings shall be entitled to recover, from the nonprevailing
party, reasonable attorneys' fees and expenses incurred in connection with
the dispute involved.
e. This Agreement has been made under and shall be governed
by the laws of the State of Texas.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the 15th day of June, 2000, but actually executed this ____
day of ______________, 2000.
COMPANY:
DIVERSIFIED CORPORATE RESOURCES, INC.
By:
---------------------------------------
M. Xxx Xxxxxxx, President
Address: 00000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx 000
Xxxxxx, XX 00000
EXECUTIVE:
------------------------------------------
J. Xxxxxxx Xxxxx
Address: 0000 Xxxx Xxxx Xxxxx
Xxxxxx, Xxxxx 00000
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