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EXHIBIT 10.05
EMPLOYMENT AGREEMENT
This Agreement resulting in a contract having an Effective Date of March 1,
1996 is executed in the City of Xxxxxx, Xxxxxx County Texas, by Airfair
Publishing, Inc., BEI Holdings, Inc. (hereafter "BEI") , Inventory
Merchandising Services, Inc., (hereafter "IMS") and successor companies
thereto, collectively hereafter referred to as "Employer" and Xxxxxx X. Xxxx
(hereafter referred to as "Employee"). This Agreement presents their mutual
promises and forebearances as set forth below:
1. AGREEMENT - Employer agrees to employ Employee for an indefinite
period from the Effective Date of this Agreement, until such period is
terminated as provided in Art. 19 hereof. Employee's compensation and other
aspects specific to Employee are set forth in Attachment "A" hereto, which is
expressly incorporated in its entirety in this Agreement. Employee's
responsibilities include those expressly assigned and such other duties
expressed or implied from the following.
2. FULL TIME ATTENTION TO THE BUSINESS - Employee shall devote his or
her entire time, attention and ability to the business of Employer during the
term of this Agreement. This obligation shall continue in full force
regardless of the corporate entity for which Employee is asked to perform
services. Employee shall ensure that he or she and any staff supervised adhere
to the provisions of this Agreement and all Company policy, especially that
regarding confidentiality of Company information, noninterference,
noncircumvention and obligations not to compete, as well as the provisions of
this Agreement.
3. CONFIDENTIALITY AND TRADE SECRETS - Employee agrees that Employer
has certain proprietary records, material and information, such as customer or
client lists, customer/client identity and prospective customer/client
identities, methods of doing business, all of which can be trade secrets, and
work product, as well as other information concerning Employer's business
practices and methodologies, including information relative to doing business
with the foregoing, including without limitation the operations, economics,
trade secrets, financing and other important factors regarding trade, barter,
media, magazine and other publishing, cruises, accommodations and travel,
especially with respect to airline personnel and their families, all of which
are considered as confidential and proprietary and are valuable business and
property rights and agrees that any information disclosed to Employee by
Employer, whether written, oral, physical or otherwise, which information is
not previously known to Employee, before employment, without obligation of
confidence, will not be used or disclosed to others by Employee, except as may
be necessary to fulfill the purpose for which it has been disclosed by Employer
or if expressly permitted by Employer. Employee understands that some of this
protected information may be generated by Employee as a consequence of his or
her employment hereunder.
3.1 Employee agrees the above information is either trade secret or
confidential and shall remain the exclusive property of the Employer, and the
Employee does hereby agree that he or she will remove any physical or
intangible indicia of the above information from the possession of the
Employer, during the course of his or her employment, unless
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expressly authorized. During the course of Employee's employment status and
for a period of three (3) years thereafter, he or she will not divulge said
information in any format to any entity, including persons, corporations,
partnerships, etc. other than Employer, nor use such information for herself or
himself, or on behalf of any other entity for any purpose, including the
noncircumvent, noninterfere, noncompete aspects set forth below.
4. NONCOMPETITION - Employee agrees that, during the course of his or
her employment and for a period of three (3) years after the termination of his
or her employment for any reason whatsoever, with or without cause, he or she
will not solicit as clients or customers entities which are already agents,
representatives, clients or customers of Employer or for which Employer seeks
or sought up to the point of termination to establish customer/client status,
or act as or become a principal, agent, stockholder, owner, director, officer,
or investor in any other relationship or capacity whatsoever in the same or
similar business of Employer if located within the territorial limits of the
United States of America or Mexico.
4.1 Employee shall not compete, whether as an owner, stockholder,
employee, partner, officer, director or Employee with Employer within the
continental United States with Employer by contacting any clients or customers
of Employer or current or future offices, conducting business on behalf of
Employer, in providing hotel, cruise, magazine and other publications, travel,
barter, corporate non cash, trade or media buying or selling services
(hereafter "services") or in any business similar to Employer's for three (3)
years from the end of Employee's status as such under this AGREEMENT and as set
forth below:
4.2 Employee shall not use nor disclose to any person, firm,
association, or corporation, directly or indirectly, the name or address of any
present or future customer or customers or clients of Employer hereto or
otherwise known to Employer and given herewith to Employee.
5. NONCIRCUMVENT - Employee (and on behalf of any Employees he or she
may have after leaving Employer's employ), agrees that during the period of
employment herein and for a period of three (3) years from the date of
termination that he or she will not take any action of any nature whatsoever to
divert any customer, client or future/prospective customer or client of
Employer to do business with another entity other than Employer or to divert
a prospective advantage to Employer, that Employee knows about, not to inure
to Employer's benefit.
6. NONINTERFERENCE - Employee for himself or herself and any
Employees, including those of their corporation or other controlled entity,
agree that during the term of employment and for a period of three (3) years
after the date of termination of this employment that he or she will not become
involved in any manner with any prospective or actual client or customer of
Employer other than to progress Employer's business, nor will he or she
interfere with any of Employer's contractual or potential contractual
relationships with any entity Employee learns of from its employment with
Employer pursuant to this Agreement, whether obtained by virtue of Employee's
actions or otherwise. Nor shall Employee cause or attempt to cause such
existing or prospective client or customer to deal with Employee or any other
entity so that the resources of such client or customer are improperly diverted
from Employer. Noninterference, as used herein, is contractual and
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does not require the severe level of interference, as would be required to
support a tortuous interference claim.
6.1 Specifically, it is meant by prospective and current clients,
vendors and customers, those that Employee learned were in such category
through his or her employment with Company, such knowledge not necessarily
being considered trade secret, but part of the confidentiality and non use
obligation of Employee imposed by Par. 3 of this Agreement.
7. LIQUIDATED DAMAGES AS A SUPPLEMENT TO NONDISCLOSURE, NONCOMPETE,
NONINTERFERE AND NONCIRCUMVENT OBLIGATIONS - It is agreed by the parties hereto
that it would be difficult and impracticable to prove the damages resulting
from Employee's breach of any of his or her covenants hereunder, such as those
not to compete, noncircumvention, confidentiality and noninterference.
Accordingly, any breach of these specific covenants shall require the payment
to Employer by Employee of the sum of One Hundred and Fifty Thousand Dollars
($150,000.00) for past violations and in addition Employer may seek and obtain
relief from a court of appropriate jurisdiction to enjoin (injunction), as it
is admitted by Employee that breach of these covenants would be irreparable.
This provision for liquidated damages shall not limit the right of Employer to
obtain and recover any other damages for breach of any other terms or
provisions of this Agreement.
8. INJUNCTION - Injunction or other remedy available at law or equity
in such court of appropriate jurisdiction can be obtained by Employer for any
breach of confidentiality, noncircumvention, noncompete and noninterference
hereunder with the express agreement by Employee that any bond required to be
posted therefor will be sufficient in the amount of no more than One Thousand
($1,000.00) U.S. Dollars. Consequently for these reasons and those set forth
in Par. 7 hereof, Employee agrees that, in the event of any breach by Employee
of any of the covenants set forth in this Agreement regarding these specific
provisions, in addition to money damages from such breach, Employer may apply
to any court of competent jurisdiction for the entry of an immediate temporary
restraining order (TRO) or an injunction restraining breach of said covenant by
Employee with a bond not to exceed One Thousand ($1,000.00) U.S. Dollars as
set forth above.
8.1 Employee agrees that in the event any of the restrictions set
forth herein become operative, he or she will be able to engage in another
business not requiring a breach hereof for the purpose of obtaining such
livelihood.
9. OPTION TO LIQUIDATED DAMAGES - At its sole option, in the event of
a breach of a material provision of any of the noncompete obligations herein,
Employer will grant Employee or any of its Employees or their principals the
right to so compete at a cost of Three Hundred Fifty Thousand Dollars
($350,000.00) to be paid in advance for such activity taking place any time
during the (3) three years after termination.
10. VALUE OF EMPLOYER'S INFORMATION; REMEDIES FOR BREACH - The
parties hereto agree that the services of Employee are unique and extraordinary
and that Employer has and will give Employee, under this contractual obligation
of confidence,
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continued access to proprietary, confidential and valuable information.
Moreover, Employee expects through his or her efforts hereunder to generate new
information of this nature on behalf of Employer and which is not to be used by
Employee after employee status termination hereunder since it is subject to the
same restructure as if the information was obtained by Employer without the
participation of Employee.
10.1 Employee will be, in the course of his or her employment,
servicing particular actual, prospective and potential vendors, clients and
customers on a unique and extraordinary personal basis, thereby putting
Employee in a position to cause irreparable damage to Employer if Employee
improperly exploits, in breach of this Agreement, any personal relationship
with such customer/clients, etc. as a result thereof. Accordingly, the damages
and injunction aspects are as set forth above.
11. NO WAIVER - It is further agreed that the failure of Employer to
insist upon strict adherence to one or more or all of the covenants and
restrictions herein shall not be construed as a waiver of such covenants or
restrictions, nor any others, nor shall such course of action deprive employer
of the right thereafter to require strict compliance with same.
12. SEVERABILITY - In the event that any portion of this Agreement
shall be held to be invalid or unenforceable for any reason, it is agreed that
such invalidity shall not affect any other portion of this Agreement and that
the remaining covenants and restrictions or portions thereof shall remain in
full force and effect, including that situation if the invalidity or
unenforceability is due to the adjudged unreasonableness of a particular time
or area restrictions covered by such covenants by an unappealable court
decision, said covenants and restrictions of this Agreement shall nevertheless
be effective for such period of time and for such area as may be actually or
arguably determined to be reasonable by a court of competent jurisdiction.
13. ENFORCEMENT, VENUE AND CONTROLLING LAW AND SITUS - The laws of
the State of Texas are applicable to the substantive aspects of this Agreement.
Employee agrees that he or she will only challenge this Agreement in the Courts
of Xxxxxx County, State of Texas and expressly agrees that the Agreement is to
be at least partially performed in Xxxxxx County. Employee also agrees that
execution of this Agreement establishes sufficient minimum contacts to
establish jurisdiction for extra territorial service of process under Texas
law and Employee hereby consents to extra territorial service of process from
Texas courts and under Texas law and further agrees that entering into this
Agreement constitutes doing business in Texas and establishes venue in Xxxxxx
County, Texas.
13.1 The parties hereto also agree that for this Agreement and any
other entered into by the parties, a facsimile document and facsimile
signature is effective as an original.
14. SURVIVAL - The expiration of the time periods for Employee's
obligations does not terminate this Agreement or the right of Employer or
Employee to assert its remedies hereunder for breach. The termination of
employment hereunder does not terminate this Agreement or right of Employer or
Employee to assert any of their remedies hereunder for breach. In particular
the obligations of confidentiality, noncircumvent,
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noninterference and noncompete, and the provisions herein regarding enforcement
of those obligations do not terminate upon termination of employment.
15. INDEMNIFICATION AND HOLD HARMLESS - Employee agrees to indemnify
and hold Employer harmless from any claims, liabilities, suits, administrative
actions or damages asserted against Employer and arising from the acts or
contracts or omissions of Employee with respect to Employee's breach of any
provision herein after the Effective Date of this contract, or any acts of
Employee prior to the date of employment, which includes all costs of
litigation, including reasonable attorney fees in the event that Employee is
made a party to a suit brought against it by Employer for any breach of this
Agreement, as well as for any suits brought against Employer by third parties
for any negligence or deliberate failure caused by Employee's failure to
exercise its good faith obligations as an Employee to carry out its duties with
at least workmanlike standards of performance.
16. EMPLOYEE WARRANTY - Employee represents and warrants that: there
is no contractual conflict between his or her activities or relationships prior
to assuming the duties of this employment except obligations of confidence and
which Employee will not unauthorizedly reveal to Employer, which existence of
which shall be promptly disclosed to Employer.
17. WARRANT OF UNDERSTANDING - Employee warrants that he or she has
carefully read all the terms herein stated and agrees that the same are
necessary for the reasonable and proper protection and operation of Employer's
business, that each and every covenant is reasonable with respect to such
matter covered and the lengths of time involved, and that irrespective of all
other covenants and restrictions, hereinabove provided, shall be operative
during the full period of and throughout the geographical area of Employer's
business.
18. ASSIGNMENT OF INTELLECTUAL PROPERTY RIGHTS - If Employee creates
any significant intellectual property relating to any business of Employer's
during the course of his or her employment hereunder or six months thereafter,
he or she agrees, especially in the case of inventions and copyrighted works,
to promptly disclose such invention and other intellectual property to
Employer. In the case of all intellectual property rights pertaining to such
intellectual property developed by Employee during the course of his or her
employment and thereafter to the extent necessary. Employee also agrees during
the course of his or her employment not to assert any claims to such
intellectual property rights nor to use them without permission of Employer.
19. TERMINATION - The employment status of Employee can be terminated
at the will of either party upon notice to the other party upon thirty (30)
days notice. Except that if Employee commits any acts which inherently
constitute major and material injury to Employer, such as: breaches any of the
noncompetition, noncircumvent, noninterfere and confidentiality provisions set
forth in Pars. 3-9, above, as well as: nonperformance of the Employee's
material duties, failure to carry out material instructions of Employer, any
material violation of Employer's company policy (such as engaging in sexual
harassment), violation of criminal laws or other defalcation, material
violation of the common law duties owed an employer by an employee (other than
expressly set forth in this Agreement) and
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any action constituting a conflict of interest, these will be considered for
cause and termination can be effected immediately without notice. The
continuing obligations and rights provided under this Agreement shall survive
any termination of employment status.
19.1 With respect to those matters set forth immediately above
expressly restrictive to material violation of the common law duties owed an
employer by an employee not otherwise set forth in this Agreement),
nonperformance of the Employee's material duties and failure to carry out
material instructions of Employer, Employee's act or failure to act shall not
be considered material until written notice regarding such act or omission has
been expressly communicated to Employee and Employee has had adequate time to
cure such act or omission and has not done so.
20. EFFECT OF TERMINATION ON COMPENSATION AND RETURN OF ALL PHYSICAL
ITEMS RECEIVED FROM EMPLOYER - In the event of termination of employment under
this Agreement, Employee shall be entitled to the compensation earned up to the
date of termination. Employee shall also ensure that all physical items, both
written, printed and otherwise, belonging to Employer which are in Employee's
physical possession or control shall be returned forthwith after termination to
Employer.
21. ENTIRE AGREEMENT - This Agreement is the entire agreement between
the parties hereto. It may not be changed except by written agreement duly
executed by the parties hereto.
22. APPLICABILITY OF CONSIDERATION - The parties hereto agree that
the consideration for this Agreement relating to employment is also largely
applicable to the noncompete, nondisclose, noninterfere, and noncircumvent
provisions hereof.
23. EXCEPTIONS: - Notwithstanding the foregoing provisions, for any
termination by Employer or by Employee because of material reduction of
responsibilities, which is regarded by Employee as constructive discharge,
except termination for cause, as defined in Par. 19 above, all the provisions
regarding noncompete and noninterference shall expire immediately after such
termination. However, the provisions regarding noncircumvention, nonuse and
nondisclosure of proprietary confidential information (Pars. 3, 5 and 6 hereof)
shall remain in effect and can be enforced as provided in this Agreement.
23.1 In the event of such termination without cause, Employee shall be
immediately entitled to one month salary at the highest compensation rate
during employment for each full year of employment, which commenced on
September 1, 1991. In the event of a partial year, them compensation shall be
based on a percentage of such month's salary based on the percentage of the
year worked.
23.2 With respect to Par. 20 hereof, Employee shall be entitled to
receive immediately upon such termination without cause, all nonsalary
compensation such as bonuses, overrides, commissions and the like accrued by
Employee to date of termination.
23.3 The provisions of Paragraph 15 above are deleted in their
entirety. And Employer hereby indemnifies and holds harmless Employee against
any claim or suit
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initiated against Employee by third parties, while Employee is operating in
good faith in the execution of his or her responsibilities hereunder as an
Employee.
AGREED by the parties hereto as evidenced by their signatures on the date
indicated below.
BEI HOLDINGS, INC.
INVENTORY MERCHANDISING SERVICES, INC.
AIRFAIR PUBLISHING, INC. OR SUCCESSORS IN INTEREST, collectively
EMPLOYER
BY: DATE:
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TITLE: DATE:
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EMPLOYEE
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EXHIBIT A TO EMPLOYMENT AGREEMENT OF XXXXXX X. XXXX
1. JOB TITLE: President/Chief Operating Officer, Airfair Publishing, Inc.
President/Chief Operating Officer, BEI Holdings, Inc.
Senior Vice President, Inventory Merchandising Services, Inc.
2. JOB DUTIES: Employee's responsibilities include those expressly assigned
and such other duties expressed or implied from the following. Employee shall
perform the duties customarily associated with such capacity and from time to
time and at such place or places as the Company shall designate are appropriate
and necessary in connection with such employment. Employee shall duly,
punctually and faithfully perform and observe any and all rules, regulations
which the Company may now or shall hereafter establish governing the conduct of
its business.
3. COMPENSATION PACKAGE:
A. BASE SALARY: $84,000 per year with 7% annual increases payable in
accordance with the Company's payroll policies.
B. BONUSES: 2% of both company's Pre-Tax Net Income after Corporate
Allocation based upon audited financial statements. This bonus to be
calculated on an annual basis, with quarterly draws of up to 50% of bonus
due from each quarter's net income.
C. RESTRICTED STOCK GRANTS AND STOCK OPTIONS: Employee has been
granted 150,000 shares of common stock in BEI Holdings, Inc. prior to the
dividend of shares in Airfair Publishing, Inc. to BEI shareholders. Also
another 500,000 shares of common stock in Airfair Publishing, Inc. will be
granted. All aforementioned shares are to be subject to a restricted
stock grant agreement, which, among other things, will require certain
periods of employment with the Company before the stock can be sold.
D. AUTO ALLOWANCE - Company agrees to pay up to $420 per month for two
years commencing in April, 1996.
4. INTEGRATION: This agreement replaces and supersedes any and all previous
agreements between the Employer and Employee.
