EXHIBIT 10.12
EMPLOYMENT AGREEMENT
DATED AS OF MAY 1, 2003
BETWEEN
TRANS GLOBAL SERVICES, INC.
AND
XXXXXX XXXXX XXXXXX, III
Xxxxxx Xxxxx Xxxxxx, III ("Executive") and Trans Global Services, a Delaware
Corporation, and its subsidiaries (collectively, "Company") hereby agree as
follows:
1. TERM
The term of this Agreement shall commence as of May 1, 2003 and shall terminate
on May 1, 2005 with annual options thereafter.
2. DUTIES
Executive shall be employed by the Company as its Chief Executive Officer
("CEO") and President. Executive shall report directly and solely to the Board
of Directors ("Board"). Executive shall devote full time and best efforts to the
Company and to fulfillment of the responsibilities called for by his position,
which shall include such duties as may from time to time be assigned by the
Company. The Executive shall promptly disclose any enterprise in which he has a
managerial role, majority ownership, controlling relationship or other financial
interests. In the event Company does business with enterprise in which
Executive has any interests, Executive shall recuse himself from participating
in those business relationship.
3. SALARY
Executive shall receive an annual base salary of $200,000 for the Period of
Employment. For any period thereafter during which this Agreement remains in
effect, the Executive's Base Salary may be increased consistent with
recommendations from the Compensation Committee of the Board, but the Company
shall have no obligation hereunder to effect such increases. Annually, the
Compensation Committee will review the Executive's Base salary for
competitiveness and appropriateness in the industry. In no event, however, will
the Executive's Base Salary on or after May 1, 2003 be less than an annual rate
of $200,000. Base Salary, will be payable according to the customary payroll
practices of the Company and will be subject to all required withholding for
taxes.
4. BONUS
In lieu of participation in any other Company-sponsored annual bonus program,
Executive shall be eligible for a target annual bonus of 100% of the Base Salary
earned during the fiscal year, with the actual amount of the bonus determined by
the Compensation Committee based on an assessment of Company financial
performance and Executive's strategic accomplishments during the fiscal year. In
no way should the target bonus amount be construed as limiting the actual bonus
amount that may be paid to the Executive in any fiscal year. A bonus shall be
payable in cash or a combination of cash, Restricted Stock or Stock Options, as
mutually agreed by and between the Executive and the Compensation Committee.
Final approval of the Executive bonus will be by vote of the majority of the
Board.
5. HEALTH AND WELFARE BENEFITS
During the Period of Employment, the Executive shall be entitled to participate,
under the terms and conditions thereof, in any group life medical, dental or
other health and welfare program generally
1
available to management personnel of the Company which may be in effect from
time to time during the Period of Employment. In addition, Executive shall be
provided with supplemental benefits at no cost to the Executive which result in
the following levels of coverage, inclusive of any coverage provided by basic
Company-sponsored benefits:
(a) Pre-Retirement Life Insurance equal to three (3) times Executive's
annual Base Salary.
(b) Post-Retirement life insurance equal to one and one-half (1.5) times
Executive's annual base salary as of the date of Executive's
retirement.
(c) Disability coverage from all Company-sponsored and government sources
combined to equal to 60% of Base Salary plus pro-rata target bonus,
less any required offsets.
6. LIFE STYLE PERQUISITES
The Executive shall receive the following perquisites:
(a) The Executive will be provided with an automobile. This perquisite may
take the form of reimbursements of monthly payments on an Executive
owned vehicle(taxable), payment of monthly lease (non-taxable) or an
agreed to monthly cash automobile allowance (non taxable).
(b) The Company will reimburse the Executive for his initial membership
fee, monthly dues and other associated costs for a Health/Executive
Club Membership, subject to approval of the Board of Directors.
(c) During each year of the term of this Agreement, Executive may take
vacations at the standard number of days set by Company policy, or
such other period as the Board may authorize, during which time
Executive's compensation shall be paid in full and he shall continue
to participate in all other rights and benefits.
(d) The Company will reimburse the Executive for all reasonable and
necessary expenses incurred by him for or on behalf of the benefit of
the Company.
7. TERMINATION BY THE COMPANY
The Company shall have the right to terminate this Agreement under the following
circumstances:
(i) Upon death of the Executive
(ii) Upon notice to the Executive in the event of an illness or other
disability which has incapacitated him from performing his duties for
six consecutive months as determined in good faith by the Board.
(iii) For good cause upon notice from the Company. Termination by the
Company of the Executive's employment for "good cause" as used in this
Agreement shall be limited to gross negligence or malfeasance by
Executive in performance of his duties under the Agreement or the
voluntary resignation by the Executive as an employee of the Company
without the prior written consent of the Company.
If this Agreement is terminated pursuant to Section 7 (i) above, Executive's
rights and Company's obligations hereunder shall terminate except as expressly
provided in this Agreement.
Notice of termination pursuant to 7(ii)-(iii) must be given to the Executive
within 5 calendar days of the Board's action. Notice shall be by registered or
certified mail or by courier delivery to the Executive at both the Houston,
Texas offices of the Company as well as to Executive's last known home address.
8. TERMINATION BY EXECUTIVE
Executive shall have the right to terminate his employment under this Agreement
upon 30 calendar days written notice to the Company given within 60 calendar
days following the occurrence of any of the following events:
2
(a) Executive is not elected or retained Chief Executive Officer (CEO)
(b) Company acts to change the geographic location of the performance of
Executive's duties from the Houston, Texas Metropolitan area.
9. CONSEQUENCES OF BREACH BY THE COMPANY
If this Agreement is terminated pursuant to Section 8 hereof, or if the Company
shall terminate the Executive's employment under this Agreement in any other
manner that is considered a breach of this Agreement by the Company, the
following shall apply:
(a) Executive shall receive payment, in cash or Restricted stock as
mutually agreed by the Executive and the Board, equal to the present
value of the Executive's base salary hereunder for the remainder of
the term, payable within 30 calendar days of the date of such
termination.
(b) All stock options and Restricted Stock granted by the Company to the
Executive under the Plan or granted by the Company prior to the date
of termination shall become immediately exercisable. The Company shall
pay for and cause the registration of any Restricted Stock.
10. BINDING AGREEMENT
This Agreement shall be binding upon and inure to the benefit of the Executive,
his heirs, distributes and assigns and company, its successor assigns. Executive
may not, without the express written permission of the Company, assign or pledge
any rights or obligations hereunder to any person, firm or corporation.
11. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the laws of
the state of Texas. Company and Executive agree that Xxxxxx County, Texas will
be the venue for any disputes arising from this Agreement.
IN WITNESS THEREOF, the parties have executed this Agreement this 6th day of
May, 2003, effective as of May 1, 2003.
Executive: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Xxxxxx X. Xxxxxx
Compensation Committee Chairperson: /s/ Xxxx X. XxXxxxx
------------------------------------
Xxxx X. XxXxxxx
3
