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EXHIBIT 10.26
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("AGREEMENT") is made and entered into by
and between Aviation Group, Inc., a Texas corporation (the "COMPANY"), and
Xxxxxx X. Xxxxxx, an individual ("EMPLOYEE"), as of SEPTEMBER 29, 1997(the
"EFFECTIVE DATE").
W I T N E S S E T H:
In consideration of the mutual covenants herein contained, the
employment of Employee upon the terms, conditions and covenants set forth
herein and each act performed pursuant hereto, the parties hereto agree as
follows:
ARTICLE I
EMPLOYMENT AND DUTIES
1.1 Employment. For the term of employment as below stated, the
Company hereby employs Employee as its Vice-President - Chief Financial Officer
to perform such duties as the Chief Executive Officer of the Company shall from
time to time prescribe.
1.2 Employee's Resources. Employee shall devote substantially all of
his time, energy and capabilities to the performance of such duties and shall
not devote any material portion of his time or abilities to the planning,
organization, promotion, direction, management or conduct of any other business
activity, whether or not such other business activity is pursued for the gain,
profit or pecuniary advantage of Employee, without having first obtained the
consent of the Company. Employee further agrees that, without the prior consent
of the Company, Employee shall not during the term of this Agreement directly
or indirectly (i) invest in any business which is competitive with that of the
Company, (ii) attempt to influence customers or other business associates not
to do business with or not to continue to do business with the Company, or
(iii) take any other action inconsistent with the fiduciary responsibility of
an employee to his employer.
ARTICLE II
TERM OF EMPLOYMENT
2.1 Term. Subject to earlier termination as hereinafter provided, the
initial term of employment of Employee hereunder shall commence on the
Effective Date and shall end on the third anniversary of the Effective Date. As
used herein, the phrase "Term of Employment" shall mean said initial term of
employment as well as any renewal terms thereof.
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2.2 Termination. This Agreement may be terminated at any time during
the Term of Employment only by reason of and in accordance with the following:
(a) Death. If Employee dies during the term of this Agreement and
while in the employ of the Company, this Agreement shall automatically
terminate as of the date of Employee's death; and the Company shall have no
further obligation to Employee or his estate, except to pay to the estate of
Employee (i) any accrued, but unpaid, Salary (as hereinafter defined) and any
vacation or sick leave benefits which have accrued as of the date of death but
were then unpaid or unused, and (ii) any declared, accrued Bonus Compensation
(as hereinafter defined), if any.
(b) Disability. If, during the term of this Agreement, Employee shall
be prevented from performing his duties hereunder by reason of becoming totally
disabled, then the Company, on thirty (30) days' prior notice to Employee, may
terminate this Agreement. For purposes of this Agreement, Employee shall be
deemed to have become totally disabled when (i) he receives "total disability
benefits" under the Company's disability plan (whether funded with insurance or
self-funded by the Company), or (ii) the Board, upon the written report of a
qualified physician (after complete examination of Employee) designated by the
Board, shall have determined that Employee has become physically and/or
mentally incapable of performing his duties under this Agreement on a permanent
basis. In the event of termination pursuant to this Section, the Company shall
be relieved of all of its obligations under this Agreement, except to pay
Employee any accrued, but unpaid Salary, any vacation or sick leave benefits
which have accrued as of the date on which such permanent disability is
determined, but then remain unpaid, and any declared Bonus Compensation. The
provisions of the preceding sentence shall not affect Employee's rights to
receive payments under the Company's disability insurance plan, if any.
(c) Termination by the Company for Cause. Prior to the expiration of
the term of this Agreement, the Company may discharge Employee for cause and
terminate this Agreement without any further liability hereunder to Employee or
his estate, except to pay any accrued, but unpaid, Salary, any declared Bonus
Compensation, and any vacation benefits due to him. For purposes of this
Agreement, a "discharge for cause" shall mean termination of Employee upon
written notification to Employee limited, however, to one or more of the
following reasons:
(i) Fraud, misappropriation or embezzlement by Employee in connection
with the Company as determined by the affirmative vote of at least a majority
of the Board; or
(ii) Mismanagement, lack of performance, or neglect of Employee's
duties as determined solely by the Chief Executive Officer of Aviation Group,
Inc.; or
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(iii) Willful and unauthorized disclosure of information proprietary
or confidential to the Company; or
(iv) Employee's breach of any material term or provision of this
Agreement, after notice to Employee of the particular details thereof and a
period of thirty (30) days thereafter within which to cure such breach, if any,
and the failure of Employee to cure such breach within such thirty (30) day
period.
(d) Termination by Employee with Notice. Employee may terminate this
Agreement at any time upon thirty (30) days' notice to the Company, in which
event Employee shall be paid his then prevailing Salary prorated to the date of
termination, plus any accrued, but unused, vacation benefits.
(e) Severance. Severance will be paid to Employee, only if employee is
terminated under terms listed above in Article II, Section 2.2, Subsection
(ii). Employee shall receive severance pay equal to 90 days of regular pay if
employee is terminated for reasons listed in Article II, Section 2.2,
subsection (ii). If employee is terminated for any other reasons with cause
(other than the reasons listed in Article II, Section 2.2, Subsection (ii)),
then Employee is due no severance pay whatsoever.
ARTICLE III
COMPENSATION AND BENEFITS
3.1 Salary and Bonus. As compensation for the Employee's services to
the Company, and other duties and responsibilities herein contemplated,
Employee shall receive from the Company a salary, commencing on SEPTEMBER 29,
1997, and payable in equal monthly installments, equivalent to $90,000.00 per
year. Employee may also be entitled to receive from time to time bonuses and
additional compensation ("BONUS COMPENSATION") when, as, and if determined by
the Board.
3.2 Company hereby grants Employee an option to purchase fifteen
thousand (15,000) shares of the Company's common stock at a purchase price
equal to eighty five (85) per cent of the closing price of the Company's common
stock on the day that this employment agreement is executed by the Employee.
The full details of this offer shall be in accordance with applicable IRS
regulations regarding Employee Stock Options and, additionally, in accordance
with such policies regarding employee stock option grants which may be
established, modified, or revoked by the Company's Board of Directors.
3.3 Employment Benefits. In addition to the Salary and Bonus
Compensation payable to Employee hereunder, Employee shall be entitled to the
following benefits upon satisfaction by Employee of the eligibility
requirements therefor, subject to the following limitations:
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(a) Sick Leave Benefits and Disability Insurance. Unless this
Agreement is terminated pursuant to the provisions of Section 2.2(b) hereof,
Employee shall be paid sick leave benefits at his then prevailing Salary rate
during his absence due to illness or other incapacity, reduced by the amount,
if any, of worker's compensation, social security entitlements or disability
benefits, if any, under the Company's group disability insurance plan. The
Company, at its own expense, shall provide Employee with the maximum amount of
disability insurance benefits allowed for one in the position of Employee with
the Company under and consistent with any group disability insurance plan which
the Company, at its election, may adopt. Notwithstanding anything herein to the
contrary, Employee's sick leave days shall not exceed the number of sick leave
days provided to employees of similar tenure and position in the Company as
provided in the Company's policy manual, if any.
(b) Hospitalization. Accident. Major Medical and Dental Insurance. The
Company shall provide Employee with group hospitalization, group accident,
major medical, and dental insurance in amounts of coverage comparable to the
coverage, if any, provided other employees in similar positions with the
Company. Coverage will commence on employment date of SEPTEMBER 29, 1997.
(d) Vacations. Employee shall be entitled to a reasonable paid
vacation each year during the term of this Agreement as determined by the
Board, exclusive of holidays and weekends, which vacation shall be taken by
Employee in accordance with the business requirements of the Company at the
time and its personnel policies then in effect relative to this subject.
(e) Working Facilities. The Company shall provide, at its expense,
adequate facilities, equipment, supplies and personnel (including professional,
clerical, support and other personnel) for Employee's use in performing his
duties and responsibilities under this Agreement.
(f) Other Employment Benefits. As an employee of the Company, Employee
shall participate in and receive such other fringe benefits as may be in effect
from time to time for employees of similar tenure and position in the Company,
whether or not specifically enumerated herein and whether or not through any
written plan or arrangement, upon satisfaction by Employee of the eligibility
requirements therefor.
3.4 Reimbursement of Employee Expenses. Employee is authorized to incur
ordinary, necessary and reasonable expenses in connection with the performance
of his duties and responsibilities under this Agreement and for the promotion
of the business and activities of the
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Company during the term hereof, including, without limitation, expenses for
necessary travel and entertainment and other items of expenses required in the
normal and routine course of Employee's employment hereunder. The Company will
reimburse Employee from time to time for all such business expenses incurred
pursuant to and in conformity with the provisions of this Section provided that
Employee presents to the Company documentary evidence of such expenses
necessary to satisfy the reporting requirements of the Internal Revenue Code of
1986, as amended.
ARTICLE IV
RESTRICTIVE COVENANTS
4.1 Trade Secrets. Propriety and Confidential Information. Employee
recognizes and acknowledges that Employee will acquire during his employment
hereunder access to certain trade secrets and confidential and proprietary
information of the Company (including, but not limited to, financial data,
marketing and sales plans, customer and supplier lists, and technical and
commercial information relating to the Company's properties, customers and
suppliers). Employee acknowledges that the information he obtains through his
employment hereunder constitutes valuable, special, and unique property of the
Company and that the Company would suffer great loss and damage if he should
violate the covenants set forth in this Agreement. Employee acknowledges that
such covenants and conditions are reasonable and necessary for the protection
of the Company's business.
4.2 Solicitation of Employees. Employee agrees that during the Term of
Employment and until three years after the termination or expiration of the
Term of Employment, he will not, directly or indirectly, or by act in concert
with others, employ or attempt to employ or solicit for employment to any
business which is competitive with the Company, any of the Company's employees,
or seek to influence any employees of the Company to leave their employment
with the Company.
4.3 Nondisclosure of Trade Secrets Propriety and Confidential
Information. Employee agrees that without the prior written approval of the
Company, Employee shall not during the Term of Employment or following the
cessation of the Term of Employment for any reason disclose any of the
Company's trade secrets or confidential or proprietary information to any
person or firm, company, association, or other entity (except for authorized
personnel of the Company) for any reason or purpose whatsoever; provided,
however, that this Section shall not apply to the extent that Employee shall be
required to provide information pursuant to a valid, lawful subpoena or court
order so long as Employee shall have made his best efforts in good faith to
cause the court of relevant jurisdiction, to the greatest extent possible, to
limit the scope of such subpoena or order and protect the confidentiality of
the information so disclosed.
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4.4 Noncompetition Agreement. Employee covenants and agrees to refrain
for three years after any termination or expiration of his employment with the
Company from engaging in, or being employed by or performing consulting
services for any company or firm engaged in, the business of providing painting
and/or paint stripping services for aircraft, aircraft cleaning services,
ground handling services and/or light catering to the airline industry or any
other business in which the Company may be engaged at the time of such
employment termination or expiration.
4.5 Solicitation of Business of Company. Employee covenants and agrees
that during the Term of Employment Employee will not attempt to influence
customers, suppliers, and other business associates not to do business with or
not to continue to do business with the Company or its affiliates.
4.6 Survival of Covenants. Sections 4.2, 4.3 and 4.4 hereof shall
survive any expiration or termination of this Agreement and shall continue to
bind the parties hereto in accordance with the terms hereof. The covenants
contained in this Article IV shall be construed as covenants or agreements
independent of any other provision of this Agreement and the allegation or
existence of any claim or cause of action of Employee against the Company,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of the covenants contained herein.
4.7 Remedies. In the event of breach or threatened breach by Employee of any
provision of this Article IV, the Company shall be entitled to relief by
temporary restraining order, temporary injunction, permanent injunction, or
otherwise in addition to other legal and equitable relief to which it may be
entitled, including any and all monetary damages which the Company may incur as
a result of said breach, violation or threatened breach or violation. The
Company may pursue any remedy available to it concurrently or consecutively in
any order as to any breach, violation, or threatened breach or violation, and
the pursuit of one of such remedies at any time will not be deemed an election
of remedies or waiver of the right to pursue any other of such remedies as to
such breach, violation, or threatened breach or violation, or as to any other
breach, violation, or threatened breach or violation.
ARTICLE V
MISCELLANEOUS PROVISIONS
5.1 Notices. Whenever, in connection with this Agreement, any notice is
required to be given or any other act or event is to be done or occur on or by
a particular number of days, and the date thus particularized should be a
Saturday, Sunday, or bank holiday in the City of Dallas, Texas, such date shall
be postponed to the next day which shall not be a Saturday, Sunday, or bank
holiday in the City of Dallas, Texas. In the event a notice or other document
is required to be given hereunder to the Company or Employee, such notice or
other document shall either be personally delivered or be mailed to the party
entitled to receive the same by certified mail, return receipt requested, at
the appropriate address set forth below or at such other address as such party
shall designate in a written notice given in accordance with this Section:
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Company: Employee:
Aviation Group, Inc. Xxxxxx X. Xxxxxx
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Notice shall be deemed given on the date of actual delivery, if delivered in
person, or, if mailed, then on the date noted on the return receipt.
5.2 Binding Effect. The rights and obligations of the parties shall
inure to the benefit of and shall be binding upon their heirs, representatives,
successors and assigns as the case may be.
5.3 Severability. If any provision contained in this Agreement is
determined to be void, illegal or unenforceable, in whole or in part, then the
other provisions contained herein shall remain in full force and effect as if
the provision which was determined to be void, illegal, or unenforceable had
not been contained herein.
5.4 Waiver. Modification and Integration. The waiver by any party
hereto of a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach by any party. This instrument
contains the entire agreement of the parties concerning employment and
supersedes all prior and contemporaneous representations, understandings and
agreements, either oral or in writing, between the parties hereto with respect
to the employment of Employee by the Company and all such prior or
contemporaneous representations, understandings and agreements, both oral and
written, are hereby terminated. This Agreement may not be modified, altered or
amended except by written agreement of all the parties hereto.
5.5 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, AND ACTIONS HEREON SHALL BE
BROUGHT IN DALLAS COUNTY, TEXAS.
5.6 Counterpart Execution. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one and the same instrument.
5.7 Captions. The captions herein are inserted for convenience only
and shall not affect the construction of this Agreement.
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IN WITNESS WHEREOF, this Agreement is executed as of the date first set forth
above.
COMPANY:
AVIATION GROUP, INC., a Texas corporation
By: /s/ XXX XXXXXXX
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Name: Xxx Xxxxxxx
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Title: President & CEO
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EMPLOYEE:
/s/ XXXXXX X. XXXXXX
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Xxxxxx X. Xxxxxx
August 29, 1997
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