EXHIBIT 10.9C
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made as of July 12, 1999, by and between
XXXXXX.XXX, INC., a Delaware corporation (the "Company"), and Xxxx W.A. Xxxxxxxx
(the "Executive").
RECITAL
The Company currently employs and desires to continue to employ the
Executive and the Executive is willing to make her services available to the
Company on the terms and conditions set forth below. Certain capitalized terms
used herein are defined in section 5 below.
AGREEMENTS
In consideration of the mutual covenants and agreements set forth in this
Agreement, the parties agree as follows:
1. Employment. The Company will employ the Executive, and the Executive
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hereby accepts employment with the Company, upon the terms and conditions set
forth in this Agreement for the period beginning on the date hereof and ending
on the Termination Date (the "Employment Period"), unless the parties mutually
agree to extend the term of this Agreement.
2. Position and Duties.
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(a) During the Employment Period, the Executive will serve as the Chief
Merchandising and Marketing Officer of the Company and will have the normal
duties, responsibilities and authority of such position, subject to the power of
the Board to expand or limit such duties, responsibilities and authority and to
override actions of the Executive.
(b) During the Employment Period, the Executive will (i) devote her
full business time, effort, skill and attention (except for permitted vacation
periods and reasonable periods of illness or other incapacity) to the business
and affairs of the Company and its Subsidiaries, (ii) perform all functions and
services as Chief Merchandising and Marketing Officer of the Company, including
general management and supervision over the operations of the business and
employees of the Company, (iii) act in accordance with the policies and
directives of the Company as determined from time to time by the Board and
communicated to the Executive in writing, and (iv) report to the Board and the
President.
(c) The principal location in which the Executive's services are to be
performed will be the Austin, Texas area. The Executive will not be required to
change such principal location without her consent.
3. Compensation and Benefits.
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(a) Base Salary. During the Employment Period, the Executive's annual
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base salary will be $130,000 or such higher rate as the Board may designate from
time to time (the "Base Salary"), which will be payable in regular installments
in accordance with the Company's general payroll practices and which will be
subject to customary withholding. Each year the Board will review the
Executive's Base Salary and, in its sole discretion, determine whether any
increases (but not decreases) thereof are appropriate.
(b) Incentive Bonus. During the term of this Agreement, the Executive
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will be eligible to participate in the incentive compensation program in effect
for the Company's three founders substantially as set forth on Exhibit A hereto.
(c) Vacation. The Executive will be entitled to receive four weeks of
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paid vacation annually according to the vacation policy established by the
Company. Such vacation may be taken at such times and in such intervals as are
mutually acceptable to the Executive and the Company.
(d) Reimbursement for Reasonable Business Expenses. The Company will
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pay or reimburse the Executive for all reasonable expenses incurred by her in
the course of performing her duties under this Agreement which are consistent
with the Company's policies in effect from time to time with respect to travel,
entertainment and other business expenses, subject to the Company's reasonable
requirements with respect to reporting and documentation of such expenses.
(e) Other Benefits. In addition to the benefits described above,
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during the Employment Period, the Executive will be entitled to participate in
all of the Company's employee benefit programs for which senior executive
employees of the Company are generally eligible.
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4. Termination.
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(a) Termination of the Employment Period. The Employment Period will
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continue until (i) the third anniversary of the date hereof unless the parties
mutually agree to extend the term of this Agreement, (ii) the Executive's death
or Disability, (iii) the Executive resigns or (iv) the Board of Directors
determines that termination of Executive's employment is in the best interests
of the Company.
(b) Termination due to Death or Disability. If the Employment Period
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is terminated due to the Executive's death or Disability, the Executive (or her
estate) shall be entitled to the salary and other benefits accrued by the
Executive under this Agreement up to and including the Termination Date.
(c) Termination by the Company without Cause or by the Executive for
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Good Reason. If (i) the Employment Period is terminated by the Company for any
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reason other than for Cause, Disability or death, (ii) the Employment Period is
terminated by the Company for what the Company believes is Cause or Disability,
and it is ultimately determined that the Employment Period was terminated
without Cause or Disability or (iii) the Executive resigns for Good Reason, the
Executive will be entitled to receive (A) her Base Salary from the Termination
Date until the date 12 months after the Termination Date, and (B) continuation
of benefits through the end of the period in which the Company is required to
make severance payments pursuant to clause (A) above substantially identical to
those to which the Executive was entitled immediately prior to the termination,
or to those being offered to senior executive officers of the Company, or a
successor corporation, if the Company's benefit programs are changed during such
period, unless the Executive becomes eligible for comparable coverage through
another employer, at which time such benefits shall terminate.
(d) Termination by the Company for Cause or by the Executive Without
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Good Reason. If the Employment Period is terminated by the Company with Cause
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or as a result of the Executive's tion without Good Reason, the Company
will not have any further obligations to the Executive under this Agreement
except: (i) as may be provided in accordance with the terms of retirement and
other benefit plans pursuant to Section 3; and (ii) as to that portion of any
unpaid salary and other benefits accrued by the Executive under this Agreement
up to and including the Termination Date.
(e) Stock Options. If a Change in Control is initiated (whether by
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commencing negotiations, action by the Board of Directors of the Company or
otherwise) at any date which is more than six months after the date of
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this Agreement, each option granted to the Executive to purchase shares of the
Company's capital stock (or any option to purchase shares of the acquiring
company issued in substitution for such option) will become fully vested and
exercisable as of the date such Change in Control is consummated. Each such
option will be exercisable in accordance with the provisions of the option grant
agreement and the plan pursuant to which such option was granted.
5. Definitions.
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(a) "Board" means the Board of Directors of the Company.
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(b) "Cause" means (i) any conviction of the Executive for a felony,
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(ii) any gross willful misconduct of the Executive which has a direct and
material injurious effect on the business or reputation of the Company or any of
its Subsidiaries, (iii) any gross dishonesty of the Executive which is directly
and materially injurious to the business or reputation of the Company or any of
its Subsidiaries or (iv) any other material breach of this Agreement by the
Executive. The Executive shall have the opportunity to cure any such acts or
omissions which are capable of being cured within 15 days of the Executive's
receipt of a resolution adopted by the Board finding that, in the good faith
opinion of the Board, the Executive is guilty of acts or omissions constituting
"Cause," which resolution has been duly adopted by an affirmative vote of a
majority of the Board (excluding the Executive, any member of the Executive's
immediate family and any other individual alleged to have participated in the
acts constituting "Cause"). Any such vote shall be taken at a meeting of the
Board called and held for such purpose, after reasonable written notice is
provided to the Executive setting forth in reasonable detail the facts and
circumstances claimed to provide a basis of termination for Cause and the
Executive is given an opportunity, together with her counsel, to be heard before
the Board.
(c) "Change in Control" means:
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(i) the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of
either (i) the then outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (ii) the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally in
the election of directors (the "Outstanding Company Voting Securities");
provided, however, that the following acquisitions will not
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constitute a Change of Control: (i) any acquisition directly from the Company,
(ii) any acquisition by the Company, or (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company; or
(ii) individuals who, as of the date hereof, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board will be considered
as though such individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of office occurs
as a result of an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board; or
(iii) a reorganization, merger or consolidation (a "Business
Combination"), in each case, unless, following such Business Combination, (A)
all or substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of, respectively, the
then outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as a result of
such transaction owns the Company through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to such
Business Combination of the Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be, (B) no Person (excluding any
employee benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly, 50% or more of, respectively, the then outstanding shares of common
stock of the corporation resulting from such Business Combination or the
combined voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed prior to the
Business Combination and (C) at least a majority of the members of the board of
directors of the corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination; or
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(iv) a complete liquidation or dissolution of the Company or the
sale or other disposition of all or substantially all of the assets of the
Company, other than to a corporation, with respect to which following such sale
or other disposition, (A) more than 50% of, respectively, the then outstanding
shares of common stock of such corporation and the combined voting power of the
then outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding Company Common Stock and
the Outstanding Company Voting Securities immediately prior to such sale or
other disposition in substantially the same proportion as their ownership,
immediately prior to such sale or other disposition, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may be, (B)
less than 50% of the then outstanding shares of common stock of such corporation
and the combined voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by any Person (excluding any
employee benefit plan (or related trust) of the Company or such corporation),
except to the extent that such ownership existed immediately prior to the sale
or disposition, and (C) at least a majority of the members of the board of
directors of such corporation were members of the Incumbent Board at the time of
the execution of the initial agreement, or of the action of the Board, providing
for such sale or other disposition of assets of the Company or were elected,
appointed or nominated by the Board.
(d) "Disability" means a physical or mental sickness or any injury
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which renders the Executive incapable of performing the services required of her
as an employee of the Company and which does or may be expected to continue for
more than six months during any 12-month period. In the event Executive is able
to perform her usual and customary duties on behalf of the Company following a
period of disability, and does so perform such duties or such other duties as
are prescribed by the Board of Directors for a period of three continuous
months, any subsequent period of disability will be regarded as a new period of
disability for purposes of this Agreement. The Company and the Executive will
determine the existence of a Disability and the date upon which it occurred. In
the event of a dispute regarding whether or when a Disability occurred, the
matter will be referred to a medical doctor selected by the Company and the
Executive. In the event of their failure to agree upon such a medical doctor,
the Company and the Executive will each select a medical doctor who together
will select a third medical doctor who will make the determination. Such
determination will be conclusive and binding upon the parties hereto.
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(e) "Good Reason" means (i) any material diminution of the Executive's
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responsibilities or the assignment to the Executive of any duties materially
inconsistent with the Executive's position, excluding for this purpose an
isolated, insubstantial and inadvertent action not taken in bad faith and which
is remedied by the Company promptly after receipt of notice thereof given by the
Executive; (ii) any failure by the Company to comply with any of the provisions
of Section 3 of this Agreement, other than an isolated, insubstantial and
inadvertent failure not occurring in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by the Executive; or
(iii) the relocation of the offices at which the Executive is principally
employed to a location which is more than 50 miles from the offices at which the
Executive is principally employed as of the date hereof; provided, that travel
necessary for the performance of the Executive's duties set forth in Section 2
above will not determine the location where the Executive is "principally
employed." The determination by the Executive of Good Reason will be conclusive
if made in good faith.
(f) "Subsidiary" means any entity of which the Company owns securities
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having a majority of the ordinary voting power electing the board of directors
(or comparable governing body) directly or indirectly through one or more
Subsidiaries.
(g) "Termination Date" means the effective date of the termination of
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the Employment Period pursuant to Section 4(a) of this Agreement.
6. Sale, Consolidation or Merger. In the event of a consolidation or
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merger of the Company with or into another corporation or entity, or the sale of
substantially all of the operating assets of the Company to another corporation,
entity or individual, the successor-in-interest will be deemed to have assumed
all liabilities of the Company under this Agreement.
7. Waiver. The failure of either party to insist, in any one or more
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instances, upon performance of the terms or conditions of this Agreement will
not be construed as a waiver or a relinquishment of any right granted hereunder
or of the future performance of any such term, covenant or condition.
8. Severability. In the event that any provision is held to be invalid or
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unenforceable for any reason whatsoever, it is agreed such invalidity or
unenforceability will not affect any other provision of this Agreement and the
remaining covenants, restrictions and provisions hereof will remain in full
force and effect and any court of competent jurisdiction may so modify the
objectionable provision as to make it valid, reasonable and enforceable.
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9. Amendment. This Agreement may only be amended by an agreement in
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writing signed by both of the parties hereto.
10. Governing Law. This Agreement shall be governed by and construed in
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accordance with the laws of the State of Texas, without giving effect to any
choice of law or conflict of law rules or provisions (whether of the State of
Texas or any other jurisdiction) that would cause the application of the laws of
any jurisdiction other than the State of Texas.
11. Benefit. This Agreement shall be binding upon and inure to the
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benefit of and shall be enforceable by and against the Company, its successors
and assigns, and the Executive, her heirs, beneficiaries and legal
representatives. It is agreed that the rights and obligations of the Executive
may not be delegated or assigned except as specifically set forth in this
Agreement.
12. Notice. Notices and all other communications contemplated by this
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Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or when mailed by U.S. registered or certified mail, return
receipt requested and postage prepaid. Mailed notices to the Executive shall be
addressed to the Executive at the home address which the Executive most recently
communicated to the Company in writing. In the case of the Company, mailed
notices shall be addressed to its corporate headquarters, and all notices shall
be directed to the attention of its Secretary.
13. Whole Agreement. No agreements, representations or understandings
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(whether oral or written and whether express or implied) which are not expressly
set forth in this Agreement have been made or entered into by either party with
respect to the subject matter hereof. This Agreement supersedes any agreement
of the same title and concerning similar subject matter dated prior to the date
of this Agreement, and by execution of this Agreement both parties agree that
any such predecessor agreement shall be deemed null and void. Notwithstanding
the foregoing, the rights and obligations of the Executive and the Company under
the Nondisclosure Agreement, dated as of December 21, 1995, between the Company
and the Executive shall remain in full force and effect in accordance with its
terms.
14. Employment Taxes. All payments made pursuant to this Agreement will
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be subject to withholding of applicable income and employment taxes.
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15. Counterparts. This Agreement may be executed in counterparts, each of
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which shall be deemed an original, but all of which together will constitute one
and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first above written.
XXXXXX.XXX, INC.
BY /s/ Xxxxx X. X'Xxxxx
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Xxxxx X. X'Xxxxx, Chief Operating Officer
/s/ Xxxx W.A. Xxxxxxxx
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Xxxx W.A. Xxxxxxxx
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