EXHIBIT 10.69
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (the "Agreement") by and between
F.Y.I. Incorporated, a Delaware corporation (the "Company"), and Xxxxxxx X.
Xxxxxx ("Employee") is hereby entered into and effective as of January 1, 2000.
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
business of providing document management services.
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 Executive Vice President
and Chief Financial Officer. As such, Employee shall have responsibilities,
duties and authority reasonably accorded to and expected of an Executive Vice
President and Chief Financial Officer and will report directly to the Chief
Executive Officer 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 (i) does not
interfere with Employee's duties and responsibilities hereunder and (ii) does
not violate paragraph 3 hereof. The foregoing limitations shall not be
construed as prohibiting Employee from serving on the boards of directors of
other companies or making personal investments in such form or manner as will
require his services, other than to a minimal extent, in the operation or
affairs of the companies or enterprises in which such investments are made nor
violate the terms of paragraph 3 hereof.
2. COMPENSATION. For all services rendered by Employee, the Company
shall compensate Employee as follows:
(a) BASE SALARY. The base salary payable to Employee shall be
$255,000 per year, payable on a regular basis in accordance with the Company's
standard payroll procedures but not less than bi-monthly. On at least an annual
basis, the Board of Directors of the Company (the "Board") will review
Employee's performance and may make increases to such base salary if, in its
discretion, any such increase is warranted. Such recommended increase would, in
all likelihood, require approval by the Board or a duly constituted committee
thereof.
(b) INCENTIVE BONUS PLAN. For 1999 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 his base salary in accordance with this
Incentive Bonus Plan. For 2000, Employee has already been awarded
Warrant No. 15 as partial payment for any 2000 Bonus opportunity. In addition,
a $15,000 cash bonus will be paid if the Company makes the 2000 EPS earning
target of $1.93. The award of any bonus shall be based on the total performance
of the Company, but shall be related to the earnings per share growth of the
Company and shall be payable in various increments based on the performance of
the Company versus targeted goals. The incremental payments and the Company's
targeted performance shall be determined by the Board or the compensation
committee thereof.
(c) EXECUTIVE PERQUISITES, BENEFITS AND 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 his
dependent family members under health, hospitalization, disability,
dental, life and other employee benefit plans that the Company may have
in effect from time to time, with benefits provided to Employee under
this clause to include coverage for all pre-existing conditions and not
less favorable than the benefits provided to other Company executives.
(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
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Agreement. 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) An automobile allowance in the amount of $500 per month.
(v) 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 will include participation in the
Company's 1995 Long-Term Incentive Compensation Plan.
(vi) The Company shall establish a 401(k) Plan and Non-Qualified
Savings Plan and the Employee may participate in this 401(k) Plan and
Non-Qualified Savings Plan. The terms of such Plan shall be approved by
the Board or by the compensation committee thereof.
(vii) The Company shall pay for Employee's attendance at
continuing education seminars to maintain Certified Public Accounting
certification to the extent that Employees' schedule allows and reimburse
Employee for (a) any registration fee and (b) travel and lodging to the
extent such seminars are not available in Dallas, Texas, and (c) fees for
AICPA and other state and local CPA associations.
(viii) The Company shall cover Employee under its Director and
Officer Insurance Policy at the same level of coverage as other
comparably situated executives and will purchase appropriate riders to
such policy to cover malpractice claims.
(ix) The Company shall provide Employee with such other
compensation as may be determined by the Board or compensation committee.
3. NON-COMPETITION AGREEMENT.
(a) Subject to Section 5(d), Employee will not, during the
period of his employment by or with the Company, and for a period of two (2)
years immediately following the termination of his employment under this
Agreement, for any reason whatsoever, directly or indirectly, for himself or on
behalf of or in conjunction with any other person, persons, company,
partnership, corporation or business of whatever nature:
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(i) engage, as an officer, director, shareholder, owner,
partner, joint venturer, or in a managerial capacity, whether as
an employee, independent contractor, consultant or advisor, or as
a sales representative, in any business selling any products or
services in direct competition with the Company, within 100 miles
of (i) the principal executive offices of the Company or (ii) any
place to which the Company provides products or services or in
which the Company is in the process of initiating business
operations during the term of this covenant (the "Territory");
(ii) call upon any person who is, at that time, within
the Territory, an employee of the Company (including the
subsidiaries thereof) in a managerial capacity for the purpose or
with the intent of enticing such employee away from or out of the
employ of the Company (including the subsidiaries thereof),
provided that Employee shall be permitted to call upon and hire
any member of his immediate family;
(iii) call upon any person or entity which is, at that
time, or which has been, within one (1) year prior to that time, a
customer of the Company (including the subsidiaries thereof)
within the Territory for the purpose of soliciting or selling
products or services in direct competition with the Company within
the Territory;
(iv) call upon any prospective acquisition candidate, on
Employee's own behalf or on behalf of any competitor, which
candidate was either called upon by the Company (including the
subsidiaries thereof) or for which the Company made an acquisition
analysis, for the purpose of acquiring such entity; or
(v) disclose customers, whether in existence or
proposed, of the Company (or the Subsidiaries thereof) to any
person, firm, partnership, corporation or business for any reason
or purpose whatsoever.
Notwithstanding the above, the foregoing covenant shall not be deemed to
prohibit Employee from acquiring as an investment not more than three percent
(3%) of the capital stock of a competing business, whose stock is traded on a
national securities exchange or over-the-counter.
(b) Because of the difficulty of measuring economic losses to the
Company as a result of a breach of the foregoing covenant, and because of the
immediate and irreparable damage that could be caused to the Company for which
it would have no other adequate remedy, Employee agrees that the foregoing
covenant may be enforced by the Company in the event of breach by his by
injunctions and restraining orders.
(c) It is agreed by the parties that the foregoing covenants in this
paragraph 3 impose a reasonable restraint on Employee in light of the activities
and business of the Company (including the Company's subsidiaries) on the date
of the execution of this Agreement and the current plans of the Company
(including the Company's subsidiaries); but it is also the intent of the Company
and
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Employee that such covenants be construed and enforced in accordance with the
changing activities, business and locations of the Company (including the
Company's subsidiaries) throughout the term of this covenant, whether before
or after the date of termination of the employment of Employee, subject to
the following paragraph. For example, if, during the term of this Agreement,
the Company (including the Company's subsidiaries) engages in new and
different activities, enters a new business or established new locations for
its current activities or business in addition to or other than the
activities or business enumerated under the Recitals above or the locations
currently established therefore, then Employee will be precluded from
soliciting the customers or employees of such new activities or business or
from such new location and from directly competing with such new business
within 100 miles of its then-established operating location(s) through the
term of this covenant.
It is further agreed by the parties hereto that, in the event that
Employee shall cease to be employed hereunder, and shall enter into a business
or pursue other activities not in competition with the Company (including the
Company's subsidiaries), or similar activities or business in locations the
operation of which, under such circumstances, does not violate clause (i) of
this paragraph 3, and in any event such new business, activities or location are
not in violation of this paragraph 3 or of Employee's obligations under this
paragraph 3, if any, Employee shall not be chargeable with a violation of this
paragraph 3 if the Company (including the Company's subsidiaries) shall
thereafter enter the same, similar or a competitive (i) business, (ii) course of
activities or (iii) location, as applicable.
(d) The covenants in this paragraph 3 are severable and separate, and
the unenforceability of any specific covenant shall not affect the provisions of
any other covenant. Moreover, in the event any court of competent jurisdiction
shall determine that the scope, time or territorial restrictions set forth are
unreasonable, then it is the intention of the parties that such restrictions be
enforced to the fullest extent which the court deems reasonable, and the
Agreement shall thereby be reformed.
(e) All of the covenants in this paragraph 3 shall be construed as an
agreement independent of any other provision in this Agreement, and the
existence of any claim or cause of action of Employee against the Company,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of such covenants. It is specifically
agreed that the period of two (2) years stated at the beginning of this
paragraph 3, during which the agreements and covenants of Employee made in this
paragraph 3 shall be effective, shall be computed by excluding from such
computation any time during which Employee is in violation of any provision of
this paragraph 3.
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4. PLACE OF PERFORMANCE.
(a) Employee understands that he may be again requested by the Board
to relocate from his present 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 the event that Employee is requested to relocate and
agrees to do so, the Company will pay all relocation costs 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; all closing costs on the sale of Employee's
present residence and on the purchase of a comparable residence in the new
location; and added income taxes that Employee may incur, as a result of any
payment hereunder, to the extent any relocation costs are not deductible for tax
purposes. The general intent of the foregoing is that Employee shall not
personally bear any out-of-pocket cost as a result 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 5(c).
5. TERM; TERMINATION; RIGHTS ON TERMINATION. The term of this
Agreement shall begin on the date hereof and continue for three years (the
"Initial Term"). On the Annual anniversary, the Agreement shall automatically
renew for a two-year period, unless a written notice is given that it will not
be renewed. 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. 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 four (4) consecutive months, then thirty
(30) days after receiving written notice (which notice may occur before
or after the end of such four (4) month period, but which shall not be
effective earlier than the last day of such four (4) month period), the
Company may terminate Employee's employment hereunder provided Employee
is unable to 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
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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 two years.
(c) GOOD CAUSE. The Company may terminate the Agreement ten
(10) days after written notice to Employee for good cause, which shall
be: (1) Employee's material and irreparable breach of this Agreement; (2)
Employee's gross negligence in the performance or intentional
nonperformance (continuing for ten (10) days after receipt of the written
notice) of any of Employee's material duties and responsibilities
hereunder; (3) Employee's dishonesty, fraud or misconduct with respect to
the business or affairs of the Company which materially and adversely
affects the operations or reputation of the Company; (4) Employee's
conviction of a felony crime; or (5) 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 thirty (30) days after written notice is
provided to the Employee. 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 two (2) years ("Severance Pay"). Further, any
termination without cause by the Company shall operate to shorten the
period set forth in paragraph 3(a) and during which the terms of
paragraph 3 apply to one (1) year from the date of termination of
employment.
(e) CHANGE IN CONTROL. Refer to paragraph 12 below.
(f) TERMINATION BY EMPLOYEE FOR GOOD REASON. The Employee may
terminate his employment hereunder for "Good Reason." As used herein,
"Good Reason" shall mean the continuance of any of the following after 10
days' prior written notice by Employee to the Company, specifying the
basis for such Employee's having Good Reason to terminate this Agreement:
(i) the assignment to Employee of any duties materially
and adversely inconsistent with the Employee's position as
specified in paragraph 1 hereof (or such other position to which
he may be promoted), including status, offices, responsibilities
or persons to whom the Employee reports as contemplated under
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paragraph 1 of this Agreement, or any other action by the Company
which results in a material and adverse change in such position,
status, offices, titles or responsibilities;
(ii) Employee's removal from, or failure to be
reappointed or reelected to, Employee's position under this
Agreement, except as contemplated by paragraphs 5(a), (b), (c) and
(e); or
(iii) 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.
In the event of any termination by the Employee for Good Reason, as determined
by a court of competent jurisdiction or pursuant to the provisions of paragraph
16 below, 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, provided, that Employee need not seek any such
determination prior to terminating his employment for Good Reason and receiving
the Severance Pay set forth in the following sentence. In addition, Employee
shall be entitled to receive Severance Pay for two (2) years. Further, none of
the provisions of paragraph 3 shall apply in the event this Agreement is
terminated by Employee for Good Reason.
(g) TERMINATION BY EMPLOYEE WITHOUT CAUSE. If Employee resigns
or otherwise terminates his employment without Good Reason pursuant to
paragraph 5(f), Employee shall give a minimum of thirty (30) days written
notice to the Company and shall receive no severance compensation.
Upon termination of this Agreement for any reason provided in clauses (a)
through (g) above, Employee shall be entitled to receive all compensation earned
and all benefits vested and reimbursements 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 9 herein
and Employee's obligations, if any, under paragraphs 3, 6, 7, 8 and 10 herein
shall survive such termination in accordance with their terms.
6. 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
its representatives, vendors or customers which pertain to the business of the
Company shall be and remain the property of the Company and be subject at all
times to its 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 which is collected by
Employee shall be delivered promptly to the Company without request by it upon
termination of Employee's employment.
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7. 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 which 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.
8. 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 agreements with its 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, except as is disclosed in the ordinary
course of business, unless compelled by court order or upon advice of counsel.
9. 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 or is or was an officer of the Company, 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 to the fullest extent authorized by
Delaware law. 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 cannot be held liable to the Company for errors or omissions made in
good faith where Employee has not exhibited gross, willful and wanton negligence
and misconduct or performed criminal and fraudulent acts which materially damage
the business of the Company.
10. 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
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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.
11. 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 two (2) sentences and the express provisions of paragraph 12
below, 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.
12. CHANGE IN CONTROL.
(a) Unless he elects to terminate this Agreement pursuant to (c)
below, Employee understands and acknowledges that the Company may be merged or
consolidated with or into another entity and that such entity shall
automatically succeed to the rights and obligations of the Company hereunder.
(b) In the event of a pending Change in Control wherein the Employee
has not received written notice at least fifteen (15) business days prior to the
anticipated closing date of the transaction giving rise to the Change in Control
from the successor to all or a substantial portion of the Company's business
and/or assets that such successor is willing as of the closing to assume and
agree to perform the Company's obligations under this Agreement in the same
manner and to the same extent that the Company is hereby required to perform,
such Change in Control shall be deemed to be a termination of this Agreement by
the Company and the amount of the lump-sum severance payment due to Employee
shall be 2 1/2 times Employee's annual salary immediately prior to the Change in
Control and the non-competition provisions of paragraph 3 shall not apply
whatsoever. Payment shall be made either at closing of the transaction if
notice is served at least five (5) days before closing or within ten (10) days
of Employee's written notice.
(c) In any Change in Control situation in which Employee has received
written notice from the successor to the Company that such pending successor is
willing to assume the Company's obligations hereunder or Employee receives
notice after the Change in Control that Employee is being terminated, Employee
may nonetheless, at his sole discretion, elect to terminate this Agreement by
providing written notice to the Company at any time prior to closing of the
transaction and up to two (2) years after the closing of the transaction giving
rise to the Change in Control. In such case, the amount of the lump-sum
severance payment due to Employee shall be 2 1/2 times Employee's annual salary
immediately prior to the Change in Control and the non-competition provisions of
paragraph 3 shall all apply. Payment shall be made either at closing if notice
is served at least five (5) days before closing or within ten (10) days of
written notice by Employee.
(d) For purposes of applying paragraph 5 under the circumstances
described in (b) and (c) above, the effective date of termination will be the
later of the closing date of the transaction giving rise to the Change in
Control or Employee's notice as described above, and all compensation,
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reimbursements and lump-sum payments due Employee must be paid in full by the
Company at such time. Further, Employee will be given sufficient time in order
to comply with then Securities and Exchange Commission's regulations to elect
whether to exercise and sell all or any of his vested options to purchase Common
Stock of the Company, including any options with accelerated vesting under the
provisions of the Company's 1995 Stock Option Plan, as amended or any warrants,
such that he may convert the options or warrants to shares of Common Stock of
the Company at or prior to the closing of the transaction giving rise to the
Change in Control, if he so desires.
(e) A "Change in Control" shall be deemed to have occurred if:
(i) any person, other than the Company or an employee benefit
plan of the Company, acquires directly or indirectly the Beneficial
Ownership (as defined in Section 13(d) of the Securities Exchange Act of
1934, as amended) of any voting security of the Company and immediately
after such acquisition such Person is, directly or indirectly, the
Beneficial Owner of voting securities representing 50% or more of the
total voting power of all of the then-outstanding voting securities of
the Company;
(ii) the individuals (A) who, as of the effective date of the
Company's registration statement with respect to its initial public
offering, constitute the Board of Directors of the Company (the "Original
Directors") or (B) who thereafter are elected to the Board of Directors
of the Company and whose election, or nomination for election, to the
Board of Directors of the Company was approved by a vote of at least
two-thirds (2/3) of the Original Directors then still in office (such
directors becoming "Additional Original Directors" immediately following
their election) or (C) who are elected to the Board of Directors of the
Company and whose election, or nomination for election, to the Board of
Directors of the Company was approved by a vote of at least two-thirds
(2/3) of the Original Directors and Additional Original Directors then
still in office (such directors also becoming "Additional Original
Directors" immediately following their election), cease for any reason to
constitute a majority of the members of the Board of Directors of the
Company;
(iii) the stockholders of the Company shall approve a merger,
consolidation, recapitalization, or reorganization of the Company, a
reverse stock split of outstanding voting securities, or consummation of
any such transaction if stockholder approval is not sought or obtained,
other than any such transaction which would result in at least 75% of the
total voting power represented by the voting securities of the surviving
entity outstanding immediately after such transaction being Beneficially
Owned by at least 75% of the holders of outstanding voting securities of
the Company immediately prior to the transaction, with the voting power
of each such continuing holder relative to other such continuing holders
not substantially altered in the transaction; or
(iv) the stockholders of the Company shall approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or a
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substantial portion of the Company's assets (i.e., 50% or more of the
total assets of the Company).
(f) Employee must be notified in writing by the Company at any time
that the Company or any member of its Board anticipates that a Change in Control
may take place.
(g) If any portion of the severance benefits, Change in Control
benefits or any other payment under this Agreement, or under any other agreement
with, or plan of the Company, including but not limited to stock options,
warrants and other long-term incentives (in the aggregate "Total Payments")
would be subject to the excise tax imposed by Section 4999 of the Code, as
amended (or any similar tax that may hereafter be imposed) or any interest or
penalties with respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then Employee shall be entitled under this paragraph to an
additional amount (the "Gross-Up Payment") such that after payment by Employee
of all of Employee's applicable Federal, state and local taxes, including any
Excise Tax, imposed upon such additional amount, Employee will retain an amount
equal to the Excise Tax imposed on the Total Payments.
For purposes of this paragraph Employee's applicable Federal, state and
local taxes shall be computed at the maximum marginal rates, taking into account
the effect of any loss of personal exemptions resulting from receipt of the
Gross-Up Payment.
All determinations required to be made under this Agreement, including
whether a Gross-Up Payment is required under this paragraph, and the assumptions
to be used in determining the Gross-Up Payment, shall be made by the Company's
current independent accounting firm, or such other firm as the Company may
designate in writing prior to a Change in Control (the "Accounting Firm"), which
shall provide detailed supporting calculations both to the Company and Employee
within twenty business days of the receipt of notice from Employee that there
will likely be a Change in Control, or such earlier time as is requested by the
Company. In the event that the Accounting Firm is serving as accountant or
auditor for the party effecting the Change in Control or is otherwise
unavailable, Employee may appoint another nationally recognized accounting firm
to make the determinations required hereunder (which accounting firm shall then
be referred to as the Accounting Firm hereunder). All fees and expenses of the
Accounting Firm with respect to such determinations described above shall be
borne solely by the Company.
Employee agrees (unless requested otherwise by the Company) to use
reasonable efforts to contest in good faith any subsequent determination by the
Internal Revenue Service that Employee owes an amount of Excise Tax greater than
the amount determined pursuant to this paragraph; PROVIDED, that Employee shall
be entitled to reimbursement by the Company of all fees and expenses reasonably
incurred by Employee in contesting such determination. In the event the
Internal Revenue Service or any court of competent jurisdiction determines that
Employee owes an amount of Excise Tax that is either greater than the amount
previously taken into account and paid under this Agreement, the Company shall
promptly pay to Employee the amount of such shortfall. In the case of any
payment that the Company is required to make to Employee pursuant to the
preceding sentence (a "Later Payment"), the Company shall also pay to Employee
an additional amount such that after payment by Employee of all of Employee's
applicable Federal, state and local taxes,
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including any interest and penalties assessed by any taxing authority, on
such additional amount, Employee will retain an amount equal to the total of
Employee's applicable Federal, state and local taxes, including any interest
and penalties assessed by any taxing authority, arising due to the Later
Payment.
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 written 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 Xxxxxxxxx, General Counsel
with a copy to: Xxxxxxx X. Xxxxxx, Esq.
Xxxxx Liddell & Xxxx LLP
0000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
To Employee: Xxxxxxx X. Xxxxxx
000 Xxxxxxxxxxx Xxxx
Xxxxxxx, XX 00000
Notice shall be deemed given and effective three (3) days after the deposit in
the U.S. 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.
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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 5(b) and 5(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 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 Delaware.
EMPLOYEE:
/s/Xxxxxxx X. Xxxxxx
------------------------------------
F.Y.I. INCORPORATED
/s/Xx X. Xxxxxx, Xx.
------------------------------------
By: Xx X. Xxxxxx, Xx.
Title: President and Chief Executive
Officer
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