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EXHIBIT 10.8
EMPLOYMENT AGREEMENT
BETWEEN
XXXXXXXX AND XXXXXXXX, INC.
AND
XXXXXX X. XXXXXXXX, XX.
Effective: December 1, 1996
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EMPLOYMENT AGREEMENT
TABLE OF CONTENTS
1. Employment . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Duties and Functions as Employee . . . . . . . . . . . . . . . 1
A. Positions . . . . . . . . . . . . . . . . . . . . . . . 1
B. General Duties and Functions as Employee . . . . . . . 1
3. Extent of Employee Services . . . . . . . . . . . . . . . . . . 1
4. Satisfaction of Employer . . . . . . . . . . . . . . . . . . . 2
5. Employee's Compensation and Benefits . . . . . . . . . . . . . 2
A. Base Salary . . . . . . . . . . . . . . . . . . . . . . 2
B. Annual Performance Bonus . . . . . . . . . . . . . . . 2
C. Stock Options . . . . . . . . . . . . . . . . . . . . . 4
D. Home Office . . . . . . . . . . . . . . . . . . . . . . 4
E. Other Benefits . . . . . . . . . . . . . . . . . . . . 4
6. Employee Covenants . . . . . . . . . . . . . . . . . . . . . . 4
A. Employee Representations . . . . . . . . . . . . . . . 5
B. Non-Competition . . . . . . . . . . . . . . . . . . . . 7
C. Non-Interference . . . . . . . . . . . . . . . . . . . 7
D. Disclosure of Information . . . . . . . . . . . . . . . 7
E. Return of Records . . . . . . . . . . . . . . . . . . . 8
F. Remedies . . . . . . . . . . . . . . . . . . . . . . . 8
7. Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
8. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . 9
A. Death . . . . . . . . . . . . . . . . . . . . . . . . . 9
B. Disability . . . . . . . . . . . . . . . . . . . . . . 9
C. Mutual Consent . . . . . . . . . . . . . . . . . . . . 10
D. By Employee . . . . . . . . . . . . . . . . . . . . . . 10
E. For "Good Cause" . . . . . . . . . . . . . . . . . . . 10
F. December 31, 2006 . . . . . . . . . . . . . . . . . . . 10
9. Payments upon Termination; Severance . . . . . . . . . . . . . 11
A. Death . . . . . . . . . . . . . . . . . . . . . . . . . 11
B. Disability . . . . . . . . . . . . . . . . . . . . . . 11
C. Mutual Consent . . . . . . . . . . . . . . . . . . . . 11
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D. By Employee . . . . . . . . . . . . . . . . . . . . . . 11
E. For Good Cause . . . . . . . . . . . . . . . . . . . . 11
F. Expiration of Agreement . . . . . . . . . . . . . . . . 11
G. Additional Benefits . . . . . . . . . . . . . . . . . . 12
H. Change in Control . . . . . . . . . . . . . . . . . . . 12
10. References and Gender . . . . . . . . . . . . . . . . . . . . . 13
11. Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
12. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
13. Insurance; Medical Exam . . . . . . . . . . . . . . . . . . . . 14
14. Invalid Provisions . . . . . . . . . . . . . . . . . . . . . . 14
15. Nonassignability . . . . . . . . . . . . . . . . . . . . . . . 14
16. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . 14
17. Laws Governing . . . . . . . . . . . . . . . . . . . . . . . . 14
18. Succession . . . . . . . . . . . . . . . . . . . . . . . . . . 15
19. Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . 15
20. Waivers and Consents . . . . . . . . . . . . . . . . . . . . . 15
21. Multiple Counterparts . . . . . . . . . . . . . . . . . . . . . 15
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EMPLOYMENT AGREEMENT
This Agreement made this 30th day of December, 1996, effective as of
December 1, 1996, by and between Xxxxxxxx and Xxxxxxxx, Inc., a Pennsylvania
corporation (the "Employer") and Xxxxxx X. Xxxxxxxx, Xx. ("Employee").
R E C I T A L S:
A. Employee desires employment as an Employee of the Employer.
B. The Employer desires to employ Employee under the terms and conditions
hereof.
C. In consideration of the mutual covenants herein contained, the parties
agree as follows:
AGREEMENT
1. EMPLOYMENT. The Employer hereby employs Employee and Employee
hereby accepts such employment upon the terms and conditions of this Agreement.
2. DUTIES AND FUNCTIONS AS EMPLOYEE. Employee is engaged by the
Employer to perform the following duties and functions:
A. POSITIONS. Employee will serve as Vice Chairman of
the Board of Directors and Senior Vice President.
B. GENERAL DUTIES AND FUNCTIONS AS EMPLOYEE. Employee
agrees to render to Employer his services as Vice Chairman of the Board of
Directors and Senior Vice President and his duties will be those customarily
performed by persons acting in such capacity of a company of a size and nature
comparable to Employer and those designated by the Chief Executive Officer or
the Board of Directors of the Employer (the "Board") consistent with the
position of Vice Chairman. Employee shall also serve, upon request and without
additional compensation, as an officer or director, or both, of any subsidiary,
division or affiliate of the Employer or any other entity in which the Employer
holds an equity interest.
3. EXTENT OF EMPLOYEE SERVICES. Employee shall devote his full
working time, attention, efforts, and energies to the business and affairs of
the Employer and its affiliated companies. Employee during the term of this
Agreement shall not engage in any other business activity similar to the
Employer's business without the Employer's consent, whether or not that
business activity is pursued for gain, profit, or other pecuniary advantages,
nor shall Employee be interested, directly or indirectly, in any form, fashion,
or manner, as partner, officer, director, stockholder, advisor, employee,
investor, or in any other form or capacity in such other business; provided,
however, that nothing herein contained shall be deemed to prevent or limit the
right of Employee to invest any of his personal funds in securities of any
corporation whose securities are regularly traded on any public exchange or
regulated market of which Employee, after any
EMPLOYMENT AGREEMENT -1-
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such investment, owns less than one percent (1%) of any class of such
corporation's outstanding securities. Notwithstanding the foregoing, Employee
may, with the permission of the Board, sit on the boards of corporations
(public and private) and devote time and attention to nonprofit organizations
and academic institutions, provided such activities shall be consistent with
Employee's commitments to the Employer and not affect Employee's performance of
Employee's obligations under this Agreement. During the term of Employee's
employment, Employee's principal residence shall be in Dallas County, Texas, or
a county contiguous thereto.
4. SATISFACTION OF EMPLOYER. Employee agrees that he will
faithfully, promptly, and to the best of his ability, experience, and talent,
perform all of the duties that may be required of and from him pursuant to the
express and implicit terms hereof. Such duties shall be rendered at Dallas,
Texas or a county contiguous thereto (the "Dallas Area"). Employee shall not
be required to travel outside of the Dallas Area with respect to the
performance of his services under this Agreement in excess of 10% of his time
incurred in performing such services.
5. EMPLOYEE'S COMPENSATION AND BENEFITS. For all services
rendered by Employee during his employment hereunder, the Employer shall
compensate Employee as follows:
A. BASE SALARY. During the term of Employee's
employment with Employer pursuant to this Agreement, the Employer shall pay
Employee for his services a minimum annual base salary of $175,000, payable in
accordance with the Employer's payroll practices as in effect from time to
time, and subject to such withholding as is required by law. Employee's base
salary will be reviewed annually and subject to increase at the discretion of
the Board. Employee's annual base salary in effect from time to time,
exclusive of any other compensation hereunder, is hereinafter called "Base
Salary".
B. ANNUAL PERFORMANCE BONUS. In addition to Base
Salary, Employee shall receive an "Annual Performance Bonus" (herein so
called), which shall be the greater of (1) an amount determined by the Board of
Directors of Employer at the end of a fiscal year, or (2) the amount determined
in accordance with the following formulation:
(1) FORMULATION. The Annual Performance Bonus
will be determined from Employer's earnings
before state and federal taxes ("Before Tax
Earnings"). The Board shall each year during
the term of this Agreement establish a
Performance Bonus Criteria (herein so called)
which shall be Employer's budgeted Before Tax
Earnings for that year and which shall not be
less than the Performance Bonus Criteria for
the immediately preceding year.
(a) If Before Tax Earnings are less than
80% of Performance Bonus Criteria,
Employee shall earn no Annual
Performance Bonus. If Before Tax
Earnings are equal to at least 80%
of the Performance Bonus Criteria,
Employee shall earn an
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Annual Performance Bonus as
determined under Paragraphs
5(B)(1)(b), (c) and (d) below, as
applicable.
(b) If Before Tax Earnings are 80%-99%
of the Performance Criteria,
Employee shall earn an Annual
Performance Bonus in an amount
ranging between 25% and 48.75 % of
Employee's Base Salary, determined
on a prorated basis. For example,
if Before Tax Earnings are 92% of
the Performance Bonus Criteria,
Employee shall earn an Annual
Performance Bonus equal to 40% of
Employee's Base Salary.
(c) If Before Tax Earnings are 100%-119%
of the Performance Criteria,
Employee shall earn an Annual
Performance Bonus in an amount
ranging between 50% and 97.5% of
Employee's Base Salary, determined
on a prorated basis. For example,
if Before Tax Earnings are 110% of
the Performance Criteria, Employee
shall earn an Annual Performance
Bonus equal to 75% of Employee's
Base Salary.
(d) If Before Tax Earnings are 120% or
greater of the Performance Bonus
Criteria, Employee shall earn an
Annual Performance Bonus equal to
100% of Employee's Base Salary, plus
an additional 2% of Employee's Base
Salary for each 1% above 120% of the
Performance Bonus Criteria.
(2) SOURCE OF FINANCIAL INFORMATION AND
CALCULATION. Before Tax Earnings shall be
determined on an accrual basis based on the
Employer's audited annual financial
statements for its fiscal tax year. The
determination of Employer's Before Tax
earnings by the Employer's independent
auditors will be final and binding on all
parties.
(3) MID-YEAR CALCULATION. If employment is
started or terminated during a fiscal year of
the Employer and Employee is entitled to the
Annual Performance Bonus hereunder, the
Annual Performance Bonus determination will
be made at the end of such fiscal year and
prorated based on the number of days Employee
was employed during that year; provided, in
the case of Employee's termination of
employment, Employee in his sole discretion
may elect to determine the Annual Performance
Bonus based on Before Tax
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Earnings annualized through the last day of
the month preceding the date of Employee's
termination of employment.
(4) PAYMENT. Except as otherwise provided for
herein, the Annual Performance Bonus will be
paid no later than 30 days following the
independent auditor's completion of the
Employer's audited annual financial
statements.
C. STOCK OPTIONS. During Employee's employment under
this Agreement, Employee will be eligible to participate in the Xxxxxxxx and
Xxxxxxxx, Inc. 1996 Stock Option Plan or such other stock option plans as may
be adopted by the Employer during the term of this Agreement (the "Stock Option
Plan") at a level specified by the Board, or by a committee designated by the
Board, when the Board (or committee) grants options to employees of the
Employer. The terms of each option granted to Employee will be governed by the
Stock Option Plan and the written option agreement entered into between the
Employer and Employee in accordance with the Stock Option Plan.
D. HOME OFFICE. Upon the request of Employee at any
time during the term of this Agreement, the Employer at its expense will equip
a home office for Employee's use and fulfillment of his duties and functions
hereunder. Such home office will be equipped as determined to be appropriate
by the Employer, and shall include on-line electronic access to the files,
records, internal and external communications and other information appropriate
to assist Employee with the fulfillment of his duties hereunder. Employee
agrees that as soon as practicable following termination of this Agreement, he
shall return any and all equipment requested to be returned by the Employer and
that his on-line access to the Employer's information shall cease.
E. OTHER BENEFITS. The Employer shall, at its expense,
furnish Employee with such other benefits as are from time to time provided by
the Employer for the benefit of its executives generally during the term of
this Agreement, including, without limitation, vacation pay, an automobile
allowance and fees for serving on the Board of Directors in amounts not less
than the previous year. In addition, Employer shall at its expense provide the
Employer with long-term disability insurance and umbrella liability insurance
in amounts as determined by the Board and life insurance of two times
Employee's compensation or such other amount as available to the Employer's
employees under its group term life insurance program. All benefits provided
to Employee shall be subject to the provisions of applicable law. During the
term of this Agreement, the benefits provided to Employee for a particular
year, or the economic equivalent thereof, shall not be less than the benefits
provided to Employee for the immediately preceding year.
6. EMPLOYEE COVENANTS. The parties recognize that the services
to be rendered as an employee under this Agreement by Employee are special,
unique, and of an extraordinary character and, therefore, Employee in
consideration for the employment hereunder makes the following representations
and covenants (the "Covenants") for the benefit of Employer.
EMPLOYMENT AGREEMENT -4-
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A. EMPLOYEE REPRESENTATIONS.
(1) PROPRIETARY INFORMATION. Employee is aware
and acknowledges that Employer has developed
a special competence in its Business
(hereinafter defined) and has accumulated
Confidential Information (hereinafter
defined) not generally known to others in the
field which is of unique value in the conduct
and growth of Employer's Business and which
Employer treats as proprietary.
(2) ACCESS TO CONFIDENTIAL INFORMATION. In the
course of Employee's employment, Employee
will be employed in a position or positions
with Employer in which Employee may receive
or contribute to the Confidential Information
of Employer. Employee recognizes the optimum
progress of Employer's Business cannot take
place unless Confidential Information is
entrusted to Employee.
(3) PROTECTION OF GOODWILL. Employee
acknowledges that in the course of carrying
out, performing, and fulfilling his
responsibilities to Employer, Employee has
and will have access to and be entrusted with
Confidential Information relating to
Employer's Business and Clients (hereinafter
defined). Employee recognizes that (i) the
goodwill of Employer depends upon, among
other things, its keeping the Confidential
Information confidential and that
unauthorized disclosure of the Confidential
Information would irreparably damage
Employer, and (ii) disclosure of any
Confidential Information to competitors of
Employer or to the general public would be
highly detrimental to Employer. Employee
further acknowledges that in the course of
performing his obligations to Employer, he
will be a representative of Employer to many
of Employer's Clients and in some instances
Employer's primary contact with the Client,
and as such will be responsible for
maintaining or enhancing the business and
goodwill of Employer with those Clients.
(4) MEANINGS OF TERMS. Employee acknowledges
that the following terms shall have the
following meanings:
a. BUSINESS shall mean Employer's
present business of providing
personnel services, including but
not limited to, temporary help
services, employee placement,
employee search, employee leasing,
and as such business may be expanded
and diversified in the future
through acquisitions by Employer or
future development or
diversification, including any
business which Employer has targeted
or
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discussed to be targeted by officers
or board members for acquisition or
entry during the Restricted Period
(as defined below).
b. EMPLOYER shall refer to Xxxxxxxx and
Xxxxxxxx, Inc. and its subsidiaries
and any other business or entity in
which Employer has or acquires an
equity interest.
c. CLIENTS means any individual,
principal, proprietorship,
partnership, corporation,
association, or other entity that
has been served by Employer as a
customer or franchise during the
term of Employee's employment,
including those who were (or became)
Client(s) of Employer at the time of
(or at any time during) Employee's
employment.
d. COMPETING BUSINESS means any
business, firm, undertaking,
company, or organization, other than
Employer, which competes in any
state in the United States in which
the Employer's business is located
(the "Restricted Area") with
Employer's Business.
e. CONFIDENTIAL INFORMATION means
information disclosed to or known to
Employee as a direct or indirect
consequence of, or through his
employment with Employer, about
Employer's business methods,
operations, and services, including,
but not limited to, all information,
written or oral, including without
limitation, manuals, videos, audios,
and internal publications not
generally known, or proprietary to
Employer, about Employer's
manufacturing, marketing, pricing,
accounting, merchandising, and
information gathering techniques and
methods, and all accumulated data,
listings, or similar recorded matter
used or useful in Employer's
Business, including but not limited
to, Employer's Client lists,
Employer's franchisees' Client
lists, reports, business forms,
advertisements, and marketing
reports and presentation materials.
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 of the Employer, and
its goodwill.
EMPLOYMENT AGREEMENT -6-
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B. NON-COMPETITION. Employee agrees that during his
employment with Employer, Employee shall not within the Restricted Area, either
through any kind of ownership (other than ownership of securities any
corporation whose securities are regularly traded on any public exchange or
regulated market of which Employee owns less than one percent (1 %) of any
class of such corporation's outstanding securities), or as a director, officer,
principal, agent, employee, employer, advisor, consultant, co-partner, or in
any individual or representative capacity whatsoever, either for Employee's own
benefit or for the benefit of any other person or firm, partnership,
association, corporation, or other entity, without the prior written consent of
Employer, participate, directly or indirectly, in a Competing Business
involving any Client.
C. NON-INTERFERENCE. During his employment with the
Employer and for a period of thirty-six (36) months after the termination of
his employment, irrespective of the time, manner, or cause of his termination,
Employee shall not:
(1) SOLICITATION. Directly or indirectly, either
as principal, agent, employee, employer,
stockholder, co-partner, or in any other
individual or representative capacity
whatsoever induce, solicit, or attempt to
induce or solicit any existing Client or
induce, solicit or attempt to induce or
solicit any existing Client to terminate its
relationship with Employer, either for
Employee's own benefit or for the benefit of
any other person, firm, or corporation
competitive with that of the Employer.
(2) SOURCES. Directly or indirectly, request or
advise any present or future merchandise
resource, supply resource, financial
resource, or service resource of the Employer
or any existing Client to withdraw, curtail,
or cancel the furnishing or sales of
merchandise, supplies, or services to the
Employer or any existing Client.
(3) EMPLOYEES. Directly or indirectly, induce or
attempt to influence any employee of the
Employer or employee of any existing Client
to terminate employment with the Employer or
the existing Client, as the case may be, or
hire any former employee of the Employer who
has resigned.
D. DISCLOSURE OF INFORMATION. Unless compelled to
disclose information in a legal proceeding, Employee expressly covenants and
agrees that he will not, during or after the termination of his employment with
the Employer, irrespective of the time, manner or cause of the termination,
directly or indirectly use, disclose, copy, or assist any other person or firm
in the use, disclosure, or copying of, any Confidential Information, except
with the written consent of or at the written request of Employer.
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E. RETURN OF RECORDS. Upon termination of his
employment, Employee will surrender to the Employer all lists, books, and
records of or in connection with the Employer's Clients, customers, suppliers,
prospective customers, or businesses and all copies thereof and all other
property belonging to the Employer, whatsoever, including, without limitation,
all Confidential Information. Employee shall have no right to copy or
otherwise reproduce lists, books or accounts, records or other property of the
Employer.
F. REMEDIES.
(1) ENFORCEMENT OF COVENANTS. Employee agrees
that a violation on his part of any Covenant
in this Paragraph 6 will cause such damage to
the Employer as will be irreparable and for
that reason, Employee further agrees that the
Employer shall be entitled, as a matter of
right, to an injunction out of any court of
competent jurisdiction, restraining any
further violation of the Covenants by
Employee, his employer, employees, partners,
or agents. In addition to the foregoing
remedy, in the event of a violation by
Employee of any Covenant in this Paragraph 6,
Employee shall be liable to the Employer for
actual damages. Such right to injunction and
actual damages shall be cumulative and in
addition to whatever other remedies the
Employer may have.
(2) INDEPENDENT COVENANTS. Each of the Covenants
contained in this Paragraph 6 shall be
construed as covenants or agreements
independent of any other provision of this
Paragraph 6 of this Agreement and the
allegation or existence of any claim or cause
of action of Employee against the Employer,
whether predicated on this Agreement or
otherwise, shall not constitute a defense to
the enforcement by the Employer of the
Covenants contained herein.
(3) INTERPRETATION. It is the intent of the
parties that the provisions contained in
Paragraph 6 shall, to the fullest extent
permissible under law and public policy, be
enforced by the courts of each state and
jurisdiction in which enforcement is sought
and that the unenforceability (or the
modification necessary to conform with such
law and public policy) of any part of
Paragraph 6 shall not be deemed to render
unenforceable any other part of Paragraph 6.
Accordingly, if any part of Paragraph 6 shall
be adjudicated to be invalid or unenforceable
in any action or proceeding in which
Employee, his heirs, executors,
administrators and the Employer, its
successors, or assigns, are parties, whether
in its entirety or except as modified as to
duration, territory, accounts, employees, or
otherwise, then that part shall be deemed
deleted or amended, as the case may be, from
the Agreement in order to render the
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remainder of Paragraph 6 both valid and
enforceable. Any such deletion or amendment
shall apply only where the court rendering
the same has jurisdiction.
(4) SURVIVAL. Notwithstanding any provision in
this Agreement to the contrary, the
representations of Employee contained in
Paragraph 6A and the rights of the Employer
hereunder relating to such representations
shall not terminate upon the termination of
this Agreement but shall continue to remain
in full force and effect for a period of
thirty-six (36) months after the termination
of Employee's employment with the Employer,
irrespective of the time, manner or cause of
his termination.
(5) NOTICE REQUIRED. Employee expressly agrees
to notify any prospective employer or
affiliate in a Competing Business of the
Covenants, and authorizes Employer to make
contact with, and discuss the nature and
obligations of these Covenants with, any
person or affiliate reasonably believed by
Employer to be engaged or about to be engaged
in an act that would constitute a violation
of the Covenants. Employee hereby waives and
releases Employer from, any claims whatsoever
arising in connection with Employer's contact
or discussions with such person or affiliate.
7. TERM. Subject to the provisions for termination as provided
elsewhere herein the term of Employee's employment under this Agreement shall
commence on December 1, 1996, and terminate on December 31, 2006.
8. TERMINATION. Notwithstanding anything herein contained to the
contrary (including Paragraph 7 hereof), this Agreement shall terminate upon
the first to occur of any of the following events:
A. DEATH. Upon the death of Employee.
B. DISABILITY. Upon the final and binding determination
of disability of Employee, whether by mutual agreement or in accordance with
the procedures set forth in this Subparagraph 8B. For purposes of this
Agreement, Employee shall be subject to a "disability" when he is unable to
continue substantially all of his normal duties of employment by reason of a
physical or mental impairment. In determining whether Employee is subject to a
disability, Employer's determination shall be based upon the opinion of any
licensed physician of the appropriate recognized field of medicine or
psychiatric practice who has examined Employee and who agrees and opines that
the Employee is disabled; provided, however, if Employee disagrees with such
determination, then Employee and Employer shall agree upon an independent
qualified physician to review the case and make a final determination of
disability. If the parties cannot agree upon an independent physician to make
such determination, then each party shall appoint
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a physician and those two physicians shall select a third physician who shall
then make a final and binding determination with respect to Employee's
disability.
C. MUTUAL CONSENT. By mutual written consent of the
parties.
D. BY EMPLOYEE. By Employee by giving 30 days' written
notice of termination to Employer.
E. FOR "GOOD CAUSE". By Employer upon written notice
for "good cause," which shall mean for purposes of this Agreement, Employee's
(i) conviction of a felony or any other criminal act which the Board considers
materially damaging to the reputation of the Employer, (ii) conviction of
fraud, (iii) conviction of dishonesty, self- dealing, or embezzlement, (iv)
willful and intentional violation of Employer's published policies, (v) gross
or intentional neglect of duty, or (vi) failure or unwillingness to perform
substantially and faithfully Employee's duties hereunder (other than a failure
due to Employee's disability); provided, however, in the event "good cause"
relates to items (iv) through (vi) above, then Employer shall notify Employee
of such cause, and, if such violation can be cured, Employee shall have 30 days
from receipt of notice to cure such violation.
F. DECEMBER 31, 2006.
The effective date of termination under the foregoing provisions shall be as
follows:
(1) PARAGRAPH 8A, the date of death.
(2) PARAGRAPH 8B, the date of written notice from
the Employer to Employee of his "disability"
termination.
(3) XXXXXXXXX 0X, the date determined under the
written mutual consent of the parties.
(4) PARAGRAPH 8D, the termination date as
provided in Employee's written notice;
provided that the Employer may accelerate the
termination so that it occurs at any time
during the 30-day notice period, while
continuing Employee's Base Salary for the
remainder of the 30-day notice period.
(5) PARAGRAPH 8E, the termination shall be
immediate upon the delivery by Employer of
written notice or the end of the cure period
if cure is possible but is not effected.
(6) PARAGRAPH 8F, December 31, 2006.
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Notwithstanding the foregoing, Employer may terminate Employee's use of
Employer's offices, equipment and supplies at any time after notice of
termination of employment is given by Employer or Employee.
9. PAYMENTS UPON TERMINATION; SEVERANCE.
A. DEATH. In the event termination of employment is the
result of death under Paragraph 8A above, Employee shall be paid his Base
Salary through the end of the month in which death occurred; Employee's Annual
Performance Bonus will be determined through the last day of the month
preceding the month in which death occurs in accordance with the provisions of
Paragraph 5B(3); and the right of Employee's representative to exercise stock
options, if any, will be determined in accordance with the terms of the Stock
Option Plan.
B. DISABILITY. In the event of termination of
employment for disability under Paragraph 8B above, Employee shall be paid his
Base Salary through the date of termination of employment; Employee's Annual
Performance Bonus will be determined through the last day of the month
preceding the month in which the termination of employment occurs in accordance
with the provisions of Paragraph 5B(3); and the right of Employee or Employee's
representative to exercise stock options, if any, will be determined in
accordance with the terms of the Stock Option Plan.
C. MUTUAL CONSENT. If termination of employment is by
mutual consent under Xxxxxxxxx 0X above, the parties shall agree to the
payments to be made, if any, to Employee upon such termination.
D. BY EMPLOYEE. In the event of termination of
employment by Employee under Xxxxxxxxx 0X, Xxxxxxxx shall be paid his Base
Salary through the date of termination of employment. Employee's Annual
Performance Bonus will be determined through the last day of the month
preceding the date of termination of his employment in accordance with the
provisions of Paragraph 5B(3). Employee's right to exercise stock options, if
any, will be determined in accordance with the terms of the Stock Option Plan.
E. FOR GOOD CAUSE. In the event of a termination of
employment for good cause under Paragraph 8E, Employee will be entitled to
receive his Base Salary through the date of termination of employment.
Employee will not be entitled to receive any Annual Performance Bonus or to
exercise any unexercised stock options under the Stock Option Plan.
F. EXPIRATION OF AGREEMENT. In the event of termination
of employment in connection with the termination of the Agreement under
Paragraph 8F, Employee shall be paid his Base Salary and Annual Performance
Bonus through December 31, 2006, and will be entitled to exercise stock
options, if any, under the terms of the Stock Option Plan.
EMPLOYMENT AGREEMENT -11-
15
G. ADDITIONAL BENEFITS. In the event Employer
terminates Employee's employment prior to the date set forth in Paragraph 8F,
other than for good cause under Paragraph 8E, Employee will be entitled to
receive, in addition to other amounts, if any, payable to Employee under this
Agreement, a severance benefit in an amount equal to three times his Base
Salary and Annual Performance Bonus paid by Employer during the twelve month
period immediately preceding his termination of employment, reduced by the Base
Salary and Annual Performance Bonus payments, if any, payable to Employee under
other provisions of this Agreement or a result of Employee's termination of
employment.
H. CHANGE IN CONTROL.
(1) Notwithstanding anything else stated in this
Paragraph 9, if (A) a Change in Control, as
defined in subparagraph H(2), occurs during
the term of this Agreement, and (B) if on or
at any time during the two-year period
immediately following a Change in Control,
the Employee's employment with the Employer
is terminated, either:
(i) by the Company for any reason other
than the occurrence of one of the
events set forth in Subparagraphs
8A, 8B, 8C, 8E or 8F; or
(ii) by the Employee as the result of and
on or before the expiration of 60
days following: (a) a significant
reduction by the Employer of
Employee's job responsibilities with
the Employer, or (b) a reduction by
the Employer of Employee's Base
Salary as in effect immediately
prior to the Change in Control, or
(c) because of a move of Employee's
job location by more than 25 miles;
then the Employer shall pay to the Employee, within 30 days after the effective
date of Employee's termination of employment, an amount equal to three times
Employee's Base Salary and three times a pro rata portion of Employee's Annual
Performance Bonus determined through the date of termination of employment, and
the Employer shall take such actions as are lawfully permitted to have all
options to purchase shares under the Stock Option Plan that are not then
exercisable, become immediately exercisable. The Employer may withhold from
such payment any federal, state, city, county or other taxes. If amounts paid
pursuant to this paragraph 9H become subject to the excise tax (the "Excise
Tax") imposed under Section 4999 of the Internal Revenue Code of 1986, as
amended, the Employer shall pay to Employee an additional amount such that the
net amount retained by Employee, after deduction of any Excise Tax on the
amounts payable under this Paragraph 9H, shall be equal to the full amount
payable under this Paragraph 9H with regard to the Excise Tax.
(2) "Change in Control" for purposes of this
Paragraph means the first to occur of any of
the following events:
EMPLOYMENT AGREEMENT -12-
16
(A) the effective date of any
transaction or series of
transactions (other than a
transaction to which only the
Employer and one or more of its
subsidiaries are parties) pursuant
to which (i) the Employer becomes a
subsidiary of another corporation,
or (ii) Employer is merged or
consolidated with, or assets or more
than 51% of the outstanding voting
securities of the Employer are sold
to or acquired by, another person,
another corporation or another group
of associated persons acting in
concert; provided, however, that for
purposes of this subparagraph
H(2)(A), in the case of a "series of
transactions" as described herein,
the effective date of the final
transaction shall be deemed to be
the date of the final transaction
upon which one of the results set
forth above occurs; or
(B) the date upon which any person,
corporation or group of associated
persons acting in concert, excluding
any persons or groups who have then
been directors, officers or holders
of greater than five percent of the
outstanding voting securities of the
Employer for a continuous period of
at least five years, become a direct
or indirect beneficial owner of
voting securities of the Employer
representing an aggregate of more
than 20% of the votes then entitled
to be cast at an election of the
Employer's Board of Directors; or
(C) the date upon which the persons who
were members of the Employer's Board
of Directors, as of the effective
date of this Agreement (the
"Original Directors"), cease to
constitute a majority of the Board
of Directors; provided, however,
that any new director whose
nomination or selection has been
approved by the affirmative vote of
at least a majority of the Original
Directors then in office shall also
be deemed an Original Director.
Except for the foregoing payments, Employee shall not be entitled to receive
any other benefits except as may be required by law.
10. REFERENCES AND GENDER. All references to "paragraphs" or
"subparagraphs" contained herein are, unless specifically indicated otherwise,
references to paragraphs or subparagraphs of this Agreement. Whenever herein
the singular number is used, the same shall include the plural where
appropriate, and words of any gender shall include each other gender where
appropriate. The terms "herein" and "hereof" as used in this Agreement are
references to this Agreement, unless the context indicates otherwise.
EMPLOYMENT AGREEMENT -13-
17
11. CAPTIONS. The captions, headings, and arrangements used in
this Agreement are for convenience only and do not in any way affect, limit,
amplify, or modify the terms and provisions hereof.
12. NOTICES. Whenever this Agreement requires or permits any
consent, approval, notice, request, or demand from one party to another, the
consent, approval, notice, request, or demand must be in writing to be
effective, including, without limitation, telex, or telegraphic communications,
and shall be deemed to have been given on the earlier of receipt or the third
day after it is enclosed in an envelope, addressed to the Employee at the
address set forth for the Employee on the payroll records of the Employer and
to the Employer at the address stated below or at such other address as the
Employer may designate for all purposes as its corporate headquarters, properly
stamped, sealed, and deposited in the United States mail. The address of
Employer as of the effective date of this Agreement is as set forth on the
signature page hereof.
13. INSURANCE; MEDICAL EXAM. Employee agrees to take a physical
examination to be performed by a medical doctor selected by the Employer. The
cost of such exam will be borne by the Employer. During the term of this
Agreement, Employee shall be required as a condition of employment to take an
annual physical exam at the expense of the Employer. In addition, Employee
agrees to take such physical examinations as may be required by the Employer in
order for the Employer to purchase insurance on Employee's life in such amount
or amounts as the Employer deems appropriate.
14. INVALID PROVISIONS. If any provision of this Agreement is
held to be illegal, invalid, or unenforceable under present or future laws
effective during the term, including renewals, of this Agreement, such
provision shall be fully severable; this Agreement shall be construed and
enforced as if such illegal, invalid, or unenforceable provision had never
comprised a part of this Agreement; and the remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected by
the illegal, invalid, or unenforceable provision or by its severance from this
Agreement. Furthermore, in lieu of each such illegal, invalid, or
unenforceable provision there shall be added automatically as part of this
Agreement a provision as similar in terms to such illegal, invalid, or
unenforceable provision as may be possible and be legal, valid, and
enforceable.
15. NONASSIGNABILITY. Neither this Agreement, nor any rights or
obligations of either party hereunder may be transferred or assigned except
that the Employer may assign this entire Agreement to any successor to all or
substantially all of the Employer's business and assets.
16. ENTIRE AGREEMENT. This Agreement contains the entire
agreement of the parties hereto. No modification or amendment of any of the
terms, conditions, or provisions herein may be made otherwise than by written
agreement signed by the parties hereto, or in any event by the parties sought
to be bound hereby.
17. LAWS GOVERNING. THIS AGREEMENT SHALL BE CONSTRUED AND
INTERPRETED ACCORDING TO THE LAWS OF THE STATE OF TEXAS.
EMPLOYMENT AGREEMENT -14-
18
18. SUCCESSION. This Agreement shall inure to the benefit of and
be binding upon the parties hereto, and upon their successors in interest of
any kind whatsoever.
19. ARBITRATION. Any controversy or claim arising out of or
relating to this Agreement, including but not limited to claims based on or
arising from an alleged tort, shall at the request of any party be determined
by arbitration, under the auspices and rules of the American Arbitration
Association, in accordance with the Texas General Arbitration Act if
applicable, otherwise in accordance with the United States Arbitration Act.
Judgment upon the award rendered by the arbitrator shall be entered in any
court having jurisdiction. The institution and maintenance of an action for
judicial relief or pursuit of a provisional or ancillary remedy shall not
constitute a waiver of the right of any party to submit the controversy or
claim to arbitration. Nothing contained in this paragraph is intended to
prevent a party from bringing an action in State or Federal court in Dallas
County, Texas, or such other county and state in which Employer then has its
principal place of business, to (i) enforce that party's right to arbitrate
under this Agreement or (ii) to obtain relief by way of Specific Performance to
enforce the Covenants contained in Paragraph 6 hereof. The arbitration shall
be commenced by filing a demand for arbitration upon the other party or parties
and the American Arbitration Association. The arbitrator shall be a person who
is qualified to make decisions in legal matters. The arbitration proceeding
shall be held in Dallas County, Texas. The arbitrator shall maintain the
privacy of the hearings, and shall have the power to exclude witnesses, other
than a party, during the testimony of any other witness. The prevailing party
in the arbitration proceeding shall be entitled to reasonable attorney's fees,
costs, and necessary expenses incurred in connection with such proceeding, as
determined by the arbitrator.
20. WAIVERS AND CONSENTS. One or more waivers of any covenant,
term, or provision of this Agreement by any party shall not be construed as a
waiver of a subsequent breach of the same covenant, term, or provision, nor
shall it be considered a waiver of any other then existing or subsequent breach
of a different covenant, term, or provision. The consent or approval by either
party to or of any act by the other party requiring such consent or approval
shall not be deemed to waive or render unnecessary consent to or approval of
any subsequent similar act. No custom or practice of either party shall
constitute a waiver of either party's rights to insist upon strict compliance
with the terms hereof.
21. MULTIPLE COUNTERPARTS. This Agreement has been executed in a
number of identical counterparts, each of which, for all purposes, is to be
deemed an original, and all of which constitute, collectively, an agreement;
but in making proof of this Agreement, it shall not be necessary to produce or
account for more than one such counterpart.
(The signature page is the next following page)
EMPLOYMENT AGREEMENT -15-
19
IN WITNESS WHEREOF, this Agreement is executed as of the date first
written above.
EMPLOYEE: EMPLOYER:
XXXXXXXX AND XXXXXXXX, INC.
/s/ XXXXXX X. XXXXXXXX, XX. By: /s/ XXXXXX X. XXXXXXXX, XX.
----------------------------- ---------------------------------
Xxxxxx X. Xxxxxxxx, Xx. Xxxxxx X. Xxxxxxxx, Xx.
Chairman of the Board
ADDRESS: ADDRESS:
0000 Xxxxxxxx Xxxxx 00000 X. Xxxxxxx Xxxxxxxxxx
Xxxxx, XX 00000 Xxxxx 000
Xxxxxx, Xxxxx 00000
EMPLOYMENT AGREEMENT -16-
