1
Exhibit 10.29
EMPLOYMENT AGREEMENT
(XXX X. XXXX)
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
the 17th day of June, 1997 by and between Xxx X. Xxxx ("Employee") and F.Y.I.
Incorporated, a Delaware corporation (the "Company"). This Agreement hereby
supersedes any other employment agreements or understandings, written or oral,
between the Company and Employee.
R E C I T A L S
The following statements are true and correct:
As of the date of this Agreement, the Company is engaged primarily in
the document management services business (the "Business").
Employee is employed hereunder by the Company in a confidential
relationship wherein Employee, in the course of his employment with the
Company, has and will continue to become familiar with and aware of information
as to the Company's customers, specific manner of doing business, including the
processes, techniques and trade secrets utilized by the Company, and future
plans with respect thereto, all of which has been and will be established and
maintained at great expense to the Company; this information is a trade secret
and constitutes the valuable goodwill of the Company.
Therefore, in consideration of the mutual promises, terms, covenants
and conditions set forth herein and the performance of each, it is hereby
agreed as follows:
A G R E E M E N T S
1. Employment and Duties.
(a) The Company hereby employs Employee as a Senior Vice
President. As such, Employee shall have responsibilities, duties and authority
reasonably accorded to and expected of a Senior Vice President and will report
directly to the President of the Company. Employee hereby accepts this
employment upon the terms and conditions herein contained and, subject to
paragraph 1(b), agrees to devote his working time, attention and efforts to
promote and further the business of the Company.
(b) Employee shall not, during the term of his employment
hereunder, be engaged in any other business activity pursued for gain, profit
or other pecuniary advantage except to the extent that such activity does not
interfere with Employee's duties and responsibilities hereunder. The foregoing
limitations shall not be construed as prohibiting Employee from making personal
2
investments in such form or manner as will neither require his services in the
operation or affairs of the companies or enterprises in which such investments
are made.
2. Compensation. For all services rendered by Employee, the
Company shall compensate Employee as follows:
(a) Base Salary; Annual Bonus. The base salary payable to
Employee shall be $150,000 per year, payable on a regular basis in accordance
with the Company's standard payroll procedures but not less than monthly
(pro-rated for any year in which Employee is employed for less than the full
year). For 1997 and subsequent years, it is the Company's intent to develop a
written Incentive Bonus Plan setting forth the criteria under which Employee
and other officers and key employees will be eligible to receive year-end bonus
awards. Employee shall be eligible for a bonus opportunity of up to 50% of
Employee's annual base salary in accordance with this Incentive Bonus Plan,
pro-rated for any year in which Employee was employed for less than the full
year. The award of any bonus shall be based on the total performance of the
business unit managed and shall be payable in various increments based on the
performance of the business unit versus targeted goals. The incremental
payments and the Company's targeted performance shall be determined by the
Board of Directors (the "Board") or the compensation committee thereof.
(b) Other Compensation. Employee shall be entitled to receive
additional benefits and compensation from the Company in such form and to such
extent as specified below:
(i) Payment of all premiums for coverage for Employee and
Employee's dependent family members under health, hospitalization,
disability, dental and other insurance plans that the Company may have
in effect from time to time.
(ii) Reimbursement for all business travel and other
out-of-pocket expenses reasonably incurred by Employee in the
performance of his services pursuant to this Agreement and a $500 per
month car allowance (determined on a pre-tax basis). All reimbursable
expenses shall be appropriately documented in reasonable detail by
Employee upon submission of any request for reimbursement, and in a
format and manner consistent with the Company's expense reporting
policy.
(iii) Four (4) weeks paid vacation for each year during the
period of employment or such greater amount as may be afforded
officers and key employees generally under the Company's policies in
effect from time to time (pro-rated for any year in which Employee is
employed for less than the full year).
(iv) The Company shall provide Employee with other
executive perquisites as may be available to or deemed appropriate for
Employee by the Board and participation in all other Company-wide
employee benefits as available from time to time, which may include
participation in the Company's 1996 Long-Term Incentive Compensation
Plan.
(v) Employee shall be granted options (the "Options") to
acquire 65,000 shares of Common Stock at the fair market value on the
date hereof. The Options shall become exercisable as to 40% of the
underlying shares one year following the date hereof
3
and as to the remainder, 20% of the underlying shares of Common Stock
on each of the next three (3) anniversaries of the date hereof. The
Options shall expire on the tenth anniversary of the date of grant.
(vi) The Company shall pay Employee a lump sum payment not
to exceed $30,000 to cover Employee's relocation expenses, upon
completing the relocation. If the employee leaves the Company,
voluntarily, prior to two years from the date of this Agreement,
employee shall reimburse the Company for 100% of the relocation
payment.
3. Place of Performance.
(a) Employee understands that he may be requested by the Board of
Directors of the Company (the "Board") to relocate from his then current
residence to another geographic location in order to more efficiently carry out
his duties and responsibilities under this Agreement or as part of a promotion
or other increase in duties and responsibilities. In such event, if Employee
agrees to relocate, the Company will pay relocation costs up to $30,000 to move
Employee, his immediate family and their personal property and effects. Such
costs may include, by way of example, but are not limited to, pre-move visits
to search for a new residence, investigate schools or for other purposes;
temporary lodging and living costs prior to moving into a new permanent
residence; duplicate home carrying costs; and closing costs on the sale of
Employee's present residence and on the purchase of a comparable residence in
the new location. The general intent of the foregoing is to assist Employee
with the cost of the relocation, with an understanding that Employee will use
his best efforts to incur only those costs which are reasonable and necessary
to effect a smooth, efficient and orderly relocation with minimal disruption to
the business affairs of the Company and the personal life of Employee and his
family.
(b) Notwithstanding the above, if Employee is requested by the
Board to relocate and Employee refuses, such refusal shall not constitute "good
cause" for termination of this Agreement under the terms of paragraph 4(c).
4. Term; Termination; Rights on Termination. The term of this
Agreement shall begin on the date hereof and continue for one (1) year (the
"Term"). This Agreement and Employee's employment may be terminated in any one
of the following ways:
(a) Death. The death of Employee shall immediately terminate the
Agreement with no severance compensation due to Employee's estate.
(b) Disability. The Company will make efforts to reasonably
accommodate Employee as required by applicable state or federal disability
laws. However, the parties irrebutably presume that, given Employee's
position, it would be an undue hardship to the Company if Employee is absent
for more than three (3) consecutive months. Therefore, if as a result of
incapacity due to physical or mental illness or injury, Employee shall have
been absent from his full-time duties hereunder for three (3) consecutive
months, then thirty (30) days after receiving written notice (which notice may
occur before or after the end of such three (3) month period, but which shall
not be effective earlier than the last day of such three (3) month period), the
Company may terminate Employee's employment hereunder provided Employee is
unable to
4
resume his full-time duties at the conclusion of such notice period. Also,
Employee may terminate his employment hereunder if his health should become
impaired to an extent that makes the continued performance of his duties
hereunder hazardous to his physical or mental health or his life, provided that
Employee shall have furnished the Company with a written statement from a
qualified doctor to such effect and provided, further, that at the Company's
request made within thirty (30) days of the date of such written statement,
Employee shall submit to an examination by a doctor selected by the Company who
is reasonably acceptable to Employee or Employee's doctor and such doctor shall
have concurred in the conclusion of Employee's doctor. In the event this
Agreement is terminated as a result of Employee's disability, Employee shall
receive from the Company, in a lump-sum payment due within ten (10) days of the
effective date of termination, the base salary at the rate then in effect for
whatever time period is remaining under the Term of this Agreement or for six
(6) months, whichever amount is greater.
(c) Good Cause. The Company may terminate the Agreement five (5)
days after written notice to Employee for good cause, which shall be: (i)
Employee's breach of this Agreement; (ii) Employee's negligence in the
performance or nonperformance (continuing for five (5) days after receipt of
the written notice) of any of Employee's material duties and responsibilities
hereunder; (iii) Employee's dishonesty, fraud or misconduct with respect to the
business or affairs of the Company that adversely affects the operations or
reputation of the Company; (iv) Employee's conviction of a felony crime; or (v)
chronic alcohol abuse or illegal drug abuse by Employee. In the event of a
termination for good cause, as enumerated above, Employee shall have no right
to any severance compensation.
(d) Without Cause. At any time after the commencement of
employment, the Company may, without cause, terminate this Agreement and
Employee's employment, effective ten (10) days after written notice is provided
to Employee. Employee may only be terminated without cause by the Company
during the Term hereof if such termination is approved by the Board of
Directors of the Company. Should Employee be terminated by the Company without
cause, Employee shall receive from the Company, in a lump-sum payment due on
the effective date of termination, the base salary at the rate then in effect
for whatever time period is remaining under the Term of this Agreement or for
six (6) months, whichever amount is greater.
(e) Termination by Employee for Good Reason. Employee may
terminate his employment hereunder for "Good Reason." As used herein, "Good
Reason" shall mean the continuance of any of the following after fifteen (15)
days' prior written notice by Employee to the Company, specifying the basis for
such Employee's having Good Reason to terminate this Agreement:
(i) Employee's removal from, or failure to be reappointed
or reelected to, Employee's position under this Agreement, except as
contemplated by paragraphs 4(a), (b) and (c); or
(ii) Any other material breach of this Agreement by the
Company, including the failure to pay Employee on a timely basis the
amounts to which he is entitled under this Agreement.
5
In the event of any dispute with respect to the termination by the Employee for
Good Reason, such dispute shall be resolved pursuant to the provisions of
paragraph 16 below. In the event that it is determined that Good Reason did
exist, the Company shall pay all amounts and damages to which Employee may be
entitled as a result of such breach, including interest thereon and all
reasonable legal fees and expenses and other costs incurred by Employee to
enforce his rights hereunder. Should Employee terminate his employment for
Good Reason, Employee shall receive from the Company, in a lump-sum payment due
on the effective date of termination, the base salary at the rate then in
effect for whatever time period is remaining under the Term of this Agreement
or for six (6) months, whichever amount is greater.
(f) Termination by Employee Without Cause. If Employee resigns
or otherwise terminates his employment without Good Reason pursuant to
paragraph 4(e), Employee shall receive no severance compensation.
Upon termination of this Agreement for any reason provided in clauses (a)
through (f) above, Employee shall be entitled to receive all compensation
earned and all benefits and reimbursements vested or due through the effective
date of termination. Additional compensation subsequent to termination, if
any, will be due and payable to Employee only to the extent and in the manner
expressly provided above or in paragraph 16. All other rights and obligations
of the Company and Employee under this Agreement shall cease as of the
effective date of termination, except that the Company's obligations under
paragraph 10 herein and Employee's obligations under paragraphs 5, 6, 7, 10 and
11 herein shall survive such termination in accordance with their terms.
5. Return of Company Property. All records, designs, patents,
business plans, financial statements, manuals, memoranda, lists and other
property delivered to or compiled by Employee by or on behalf of the Company or
their representatives, vendors or customers which pertain to the business of
the Company shall be and remain the property of the Company, as the case may
be, and be subject at all times to their discretion and control. Likewise, all
correspondence, reports, records, charts, advertising materials and other
similar data pertaining to the business, activities or future plans of the
Company that is collected by Employee shall be delivered promptly to the
Company without request by it upon termination of Employee's employment.
6. Inventions. Employee shall disclose promptly to the Company
any and all significant conceptions and ideas for inventions, improvements and
valuable discoveries, whether patentable or not, which are conceived or made by
Employee, solely or jointly with another, during the period of employment or
within one (1) year thereafter, and which are directly related to the business
or activities of the Company and that Employee conceives as a result of his
employment by the Company. Employee hereby assigns and agrees to assign all
his interests therein to the Company or its nominee. Whenever requested to do
so by the Company, Employee shall execute any and all applications, assignments
or other instruments that the Company shall deem necessary to apply for and
obtain letters patent of the United States or any foreign country or to
otherwise protect the Company's interest therein.
7. Trade Secrets. Employee agrees that he will not, during or
after the term of this Agreement with the Company, disclose the specific terms
of the Company's relationships or
6
agreements with their respective significant vendors or customers or any other
significant and material trade secret of the Company, whether in existence or
proposed, to any person, firm, partnership, corporation or business for any
reason or purpose whatsoever.
8. Disclosure of Information. Employee agrees that for a period
of three (3) years after the date hereof or during the term of this Agreement
and for a period of three (3) years thereafter, whichever is longer, without
the prior written consent of the Company, Employee shall not, directly or
indirectly, through any form of ownership, in any individual or representative
or affiliated capacity whatsoever, except as may be required by law, reveal,
divulge, disclose or communicate to any person, firm, association, corporation
or other entity in any manner whatsoever information of any kind, nature or
description concerning: (i) the names of any prior or present suppliers or
customers with respect to the Business, (ii) the prices for products or
services with respect to the Business, (iii) the names of personnel with
respect to the Business, (iv) the manner of operation with respect to the
Business, (v) the plans, trade secrets, or other data of any kind, nature or
description, whether tangible or intangible, with respect to the Business, or
(vi) any other financial, statistical or other information regarding the
business acquired by the Company that the Company designates or treats as
confidential or proprietary. The agreements set forth herein shall not apply
to any information that at the time of disclosure or thereafter is generally
available to and known by the public (other than as a result of a disclosure
directly or indirectly by Employee in violation of this Agreement). Without
regard to whether any or all of the foregoing matters would be deemed
confidential, material or important, the parties hereto stipulate that as
between them, the same are important, material and confidential and gravely
affect the effective and successful conduct of the Business and its goodwill.
9. Noncompetition. (a) Employee agrees that during the term of
this Agreement and, upon termination of Employee's employment by the Company
for a period of three (3) years thereafter, he shall not:
(i) Call upon, solicit, divert, take away or attempt to
call upon, solicit, divert or take away any existing customers, suppliers,
businesses, or accounts of the Business in connection with any business
substantially similar to the Business in the territory defined as 100 miles in
and around the Company's and its affiliates operations (the "Territory");
(ii) Hire, attempt to hire, contact or solicit with
respect to hiring for himself or on behalf of any other person any present
employee of the Company in the Business;
(iii) Lend credit, money or reputation for the purpose of
establishing or operating a business substantially similar to the Business in
the Territory;
(iv) Do any act that Employee knew or reasonably should
have known might directly injure the Company in any material respect or that
might divert customers, suppliers or employees from the Business; and
(v) Without limiting the generality of the foregoing
provisions, conduct a business substantially similar to the Business under the
name "F.Y.I. Incorporated" or any other trade names, trademarks or service
marks heretofore used by the Company or its affiliates.
7
The covenants in subsections (i) through (v) are intended to restrict
Employee from competing in any manner with the Company or the Business in the
activities that have heretofore been carried on by the Company or its
affiliates. The obligations set forth in subsections (i) through (v) above
shall apply to actions by Employee, through any form of ownership, and whether
as principal, officer, director, agent, employee, employer, consultant,
stockholder or holder of any equity security (beneficially or as trustee of any
trust), lender, partner, joint venturer or in any other individual or
representative or affiliated capacity whatsoever. However, none of the
foregoing shall prevent Employee from being the holder of up to 5.0% in the
aggregate of any class of securities of any corporation engaged in the
activities described in subsection (i) through (v) above, provided that such
securities are listed on a national securities exchange or reported on the
Nasdaq National Market.
10. Indemnification. In the event Employee is made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by the Company
against Employee), by reason of the fact that he is or was performing services
under this Agreement, then the Company shall indemnify Employee against all
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement, as actually and reasonably incurred by Employee in connection
therewith. In the event that both Employee and the Company are made a party to
the same third-party action, complaint, suit or proceeding, the Company agrees
to engage competent legal representation, and Employee agrees to use the same
representation, provided that if counsel selected by the Company shall have a
conflict of interest that prevents such counsel from representing Employee,
Employee may engage separate counsel and the Company shall pay all attorneys'
fees of such separate counsel. Further, while Employee is expected at all
times to use his best efforts to faithfully discharge his duties under this
Agreement, Employee shall not be held liable to the Company for errors or
omissions made in good faith where Employee has not exhibited negligence or
performed criminal and fraudulent acts which damage the business of the
Company.
11. No Prior Agreements. Employee hereby represents and warrants
to the Company that the execution of this Agreement by Employee and his
employment by the Company and the performance of his duties hereunder will not
violate or be a breach of any agreement with a former employer, client or any
other person or entity. Further, Employee agrees to indemnify the Company for
any claim, including, but not limited to, attorneys' fees and expenses of
investigation, by any such third party that such third party may now have or
may hereafter come to have against the Company based upon or arising out of any
non-competition agreement, invention or secrecy agreement between Employee and
such third party which was in existence as of the date of this Agreement.
12. Assignment; Binding Effect. Employee understands that he has
been selected for employment by the Company on the basis of his personal
qualifications, experience and skills. Employee agrees, therefore, he cannot
assign all or any portion of his performance under this Agreement. Subject to
the preceding, this Agreement shall be binding upon, inure to the benefit of
and be enforceable by the parties hereto and their respective heirs, legal
representatives, successors and assigns.
8
13. Complete Agreement. This Agreement is not a promise of future
employment. Employee has no oral representations, understandings or agreements
with the Company or any of its officers, directors or representatives covering
the same subject matter as this Agreement. This written Agreement is the
final, complete and exclusive statement and expression of the agreement between
the Company and Employee and of all the terms of this Agreement, and it cannot
be varied, contradicted or supplemented by evidence of any prior or
contemporaneous oral or written agreements. This Agreement may not be later
modified except by a further writing signed by a duly authorized officer of the
Company and Employee, and no term of this Agreement may be waived except by
writing signed by the party waiving the benefit of such term.
14. Notice. Whenever any notice is required hereunder, it shall
be given in writing addressed as follows:
To the Company: F.Y.I. Incorporated
0000 XxXxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxxxxxxx, Esq.
To Employee: Xxx X. Xxxx
0000 Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Notice shall be deemed given and effective three (3) days after the deposit in
the United States mail of a writing addressed as above and sent first class
mail, certified, return receipt requested, or when actually received. Either
party may change the address for notice by notifying the other party of such
change in accordance with this paragraph 14.
15. Severability; Headings. If any portion of this Agreement is
held invalid or inoperative, the other portions of this Agreement shall be
deemed valid and operative and, so far as is reasonable and possible, effect
shall be given to the intent manifested by the portion held invalid or
inoperative. The paragraph headings herein are for reference purposes only and
are not intended in any way to describe, interpret, define or limit the extent
or intent of the Agreement or of any part hereof.
16. Arbitration. Any unresolved dispute or controversy arising
under or in connection with this Agreement shall be settled exclusively by
arbitration, conducted before a panel of three (3) arbitrators in Dallas,
Texas, in accordance with the rules of the American Arbitration Association
then in effect. The arbitrators shall not have the authority to add to,
detract from, or modify any provision hereof nor to award punitive damages to
any injured party. The arbitrators shall have the authority to order back-pay,
severance compensation, vesting of options (or cash compensation in lieu of
vesting of options), reimbursement of costs, including those incurred to
enforce this Agreement, and interest thereon in the event the arbitrators
determine that Employee was terminated without disability or good cause, as
defined in paragraphs 4(b) and 4(c), respectively, or that the Company has
otherwise materially breached this Agreement. A decision by a majority of the
arbitration panel shall be final and binding. Judgment may be entered on the
9
arbitrators' award in any court having jurisdiction. The direct expense of any
arbitration proceeding shall be borne by the Company.
17. Governing Law. This Agreement shall in all respects be
construed according to the laws of the State of Texas.
18. Counterparts. This Agreement may be executed simultaneously
in two (2) or more counterparts, each of which shall be deemed an original and
all of which together shall constitute but one and the same instrument.
19. Attorneys' Fees. In the event of any litigation or
arbitration arising under or in connection with this Agreement, the prevailing
party shall be entitled to reasonable attorneys' fees as determined by the
court or arbitration panel, as the case may be. Each party to this Agreement
represents and warrants that it has been represented by counsel in the
negotiation and execution of this Agreement, including without limitation the
provisions set forth in this paragraph 19.
10
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
F.Y.I. INCORPORATED
By: /s/ Xx X. Xxxxxx, Xx.
-------------------------------
Name: Xx X. Xxxxxx, Xx.
Title: President and Chief Executive Officer
EMPLOYEE:
/s/ Xxx X. Xxxx
-------------------------------
Xxx X. Xxxx
