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EXHIBIT 10.2
XXXXX COMPANIES, INC.
EMPLOYMENT AND NON-COMPETE AGREEMENT
This Agreement is entered into this 9th day of November, 2000 by and
between XXXXX COMPANIES, INC., a Delaware Corporation ("Xxxxx") and XXXXXX X.X.
XXXXXX ("XXXXXX").
Whereas XXXXXX has certain knowledge and skills in the management of
operational functions and wishes to be employed by Xxxxx; and
Whereas Xxxxx desires to employ XXXXXX in its business;
Wherefore, Xxxxx and XXXXXX in consideration of the covenants contained
herein agree as follows:
1. Xxxxx shall employ XXXXXX as of November 10, 2000 in the position of
President and Chief Operating Officer (with job functions and
responsibilities as specified in Exhibit A hereto) in the San Francisco
Bay Area reporting to the Chairman of the Board of Xxxxx Companies, Inc.
2. Xxxxx shall compensate XXXXXX for such employment as follows:
a. Twenty-Nine Thousand One Hundred Sixty-Six Dollars and
Sixty-Seven Cents ($29,166.67) gross salary per month;
b. Effective November 10, 2000, a grant of two hundred seventy-five
thousand (275,000) non-qualified stock options in lieu of annual
100% cash bonus target under the Senior Management Bonus Plan
for FY2001-FY2003, such options to vest one-thirty-sixth (1/36)
per month until fully vested after three years. The exercise
price of these options will be based on the closing price of the
Company's common stock on the NASDAQ National Market on the
effective date of such grant;
c. Annual grants effective each June 1, commencing June 1, 2001 of
non-qualified stock options, based on XXXXXX'x performance
against specific objectives and in the sole discretion of the
Compensation Committee of the Board of Directors, in a quantity
up to a target of seven times then base salary divided by the
closing price of the Company's common stock on the NASDAQ
National Market on the effective date of each such grant.
Fifty-five thousand (55,000) of previously awarded options shall
be deemed attributable to fy01 and beyond and shall reduce any
stock option grants that would otherwise be made to XXXXXX
during fy01 and beyond until the fifty-five thousand (55,000)
stock options have been exhausted;
d. Financial Planning and Tax Preparation services provided by a
provider selected by Xxxxx or, at XXXXXX'x election,
reimbursement of such services by a provider selected by XXXXXX
in an amount not to exceed Seven Thousand Five Hundred Dollars
($7,500.00) per calendar year.
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XXXXX COMPANIES, INC. FORM 10-Q
e. Monthly membership dues in either the Olympic Club, San
Francisco or the Metropolitan Club, San Francisco whichever
XXXXXX is initiated into first.
f. Other Fringe Benefits as provided to all Xxxxx executives on the
Operating Committee;
g. Four weeks paid vacation per year;
h. Reimbursement of reasonable business related expenses in
accordance with the Xxxxx travel and entertainment policy.
Travel will be First Class or Business Class if available.
i. The Company will reimburse XXXXXX for any legal fees to review
this employment agreement. The amount not to exceed Three
Thousand Dollars ($3,000.00).
3. This Agreement shall have a term expiring on November 10, 2003. All
terms herein shall remain unchanged for the duration of the term of this
Agreement unless changed or modified by a written document signed by
XXXXXX and the Chairman of the Board of Directors of Xxxxx. At or prior
to the expiration date of this Agreement, XXXXXX and the Company shall
enter into negotiations as to any renewal of this Agreement.
4. Xxxxx may terminate this agreement with no further liability or
obligation hereunder for "cause". For purposes hereof, "cause" shall
mean misconduct including, but not limited to:
i. Conviction of any felony or any crime involving moral turpitude
or dishonesty;
ii. Participation in a fraud or act of dishonesty against the
company;
iii. Willful breach of the company's policies;
iv. Intentional damage to the company's property;
v. Material breach of this agreement;
vi. Material failure to meet the mutually agreed upon performance
objectives set at the commencement of each fiscal year through
the normal management by objectives process as established by
the company; or
vii. Conduct that in the good faith and reasonable judgement of the
Board of Directors of Xxxxx demonstrates gross unfitness to
perform your job functions.
5. If, as a result of a change of control, XXXXXX'x employment hereunder is
terminated other than for cause, or in the event that XXXXXX elects to
resign his employment therefor the Change in Control Agreement
previously entered into shall prevail.
6. XXXXXX shall not engage in any activity whatsoever which conflicts with
the interests of Xxxxx or with XXXXXX'x duties as an employee of Xxxxx.
XXXXXX understands that XXXXXX'x employment is on a full-time basis, and
XXXXXX agrees not to engage in any other employment or business-related
activity, other than serving as a member of the Board of Directors of no
more than two corporations and none of which are competitors or vendors
of Xxxxx, without the prior written consent of the Chairman of the Board
of Xxxxx. XXXXXX hereby represents that XXXXXX has no agreements
with, or obligations
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XXXXX COMPANIES, INC. FORM 10-Q
to, any person or entity which conflicts, or may conflict, with the
interests of Xxxxx or with XXXXXX'x duties as an employee of Xxxxx.
7. XXXXXX understands and acknowledges that during XXXXXX'x employment with
Xxxxx, XXXXXX has been and shall be exposed to Confidential Information
(defined below), all of which is proprietary and which rightfully
belongs to Xxxxx. XXXXXX shall hold in a fiduciary capacity for the
benefit of Xxxxx all such Confidential Information obtained by XXXXXX
during XXXXXX'x employment with Xxxxx and shall not, directly or
indirectly, at any time, either during or after XXXXXX'x employment with
Xxxxx, without Xxxxx' prior written consent, use any of such
Confidential Information or disclose any of such Confidential
Information to any individual or entity other than authorized employees
of Xxxxx except as required in the performance of XXXXXX'x duties for
Xxxxx. XXXXXX shall take all reasonable steps to safeguard such
Confidential Information and to protect such Confidential Information
against disclosure, misuse, loss or theft. The term "Confidential
Information" shall mean any information not generally known in the
relevant trade or industry, which was obtained from Xxxxx or which was
learned, discovered, developed, conceived, originated or prepared during
or as result of the performance of any services by XXXXXX as an employee
of Xxxxx or on behalf of Xxxxx, including, without limitation,
information concerning the provision of freight forwarding services such
as the cost of such services, price lists, marketing programs or plans,
lists of customers, potential customers, dealers and contacts and other
compilations of confidential information.
8. Subject to the non-competition and non-solicitation covenants below,
upon termination of XXXXXX'x employment other than for expiration of
this contract, disability, cause or a change in control, Xxxxx shall pay
XXXXXX, as XXXXXX'x sole remedy for such termination:
a. Salary continuation for a period of eighteen months in an amount
equal to XXXXXX'x monthly base salary in effect prior to the
salary continuation period and paid on the Company's normal pay
days; and
b. Restricted stock and stock options previously granted but not
yet vested shall continue to vest during the salary continuation
period. All restricted stock and stock options previously
granted but not yet vested as of the completion of the salary
continuation period shall vest at the completion of the salary
continuation period. XXXXXX shall have ninety (90) days after
the completion of the salary continuation period to exercise
stock options. Any stock options not exercised within ninety
(90) days after the completion of the salary continuation period
shall lapse; and
c. Continuation of group health and financial planning benefits
during the salary continuation period.
d. There shall be no vacation or personal day accrual during the
salary continuation period. In consideration of such payment,
for the salary continuation period of eighteen months
("Non-Competition Period") the following shall apply:
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(1) during the term hereof and for the Non-Competition period
after XXXXXX ceases to be employed by Xxxxx, XXXXXX shall
not, directly or indirectly, either for himself or any
other person, own, manage, control, participate in, invest
in, permit his name to be used by, act as consultant or
advisor to, render services for (whether alone or in
association with any individual, entity, or other business
organization), or otherwise assist in any manner any
individual or entity that engages in or owns, invests in,
manages or controls any venture for enterprise engaged in
the provision of services that are similar to, or in
competition with, or may materially detract from, any
services provided by Xxxxx or as to which Xxxxx had firm
plans as of the date XXXXXX ceased to be employed by
Xxxxx. Nothing herein shall prohibit XXXXXX from being a
passive owner of not more than two percent (2%) of the
outstanding stock of any class of securities of a
corporation engaged in such business which is publicly
traded, so long as he has no active participation in the
business of such corporation.
(2) during the Non-Competition Period, XXXXXX shall not,
directly or indirectly, (i) induce or attempt to induce or
aid another in inducing any employee of Xxxxx to leave the
employ of Xxxxx, or in any way interfere with the
relationship between Xxxxx and any employee of Xxxxx, or
(ii) induce or attempt to induce any customer of Xxxxx to
cease doing business with Xxxxx, or in any way interfere
with the relationship between Xxxxx and any customer or
other business relation of Xxxxx.
(3) during the Non-Competition Period, XXXXXX shall not,
directly or indirectly employ any employee of Xxxxx who
voluntarily terminates such employment until three months
have passed following termination of such employment.
(4) in the event a court shall refuse to enforce the
agreements contained herein, either because of the scope
of the geographical area specified in this Agreement or
the duration of the restrictions, the parties hereto
expressly confirm their intention that the geographical
areas covered hereby and the time period of the
restrictions be deemed automatically reduced to the
minimum extent necessary to permit enforcement.
9. Each of the parties hereto acknowledges and agrees that the extent of
damages to Xxxxx in the event of a breach by XXXXXX of this Agreement
would be impossible to ascertain and there is and will be available to
Xxxxx no adequate remedy at law to compensate it in the event of such a
breach. Consequently, XXXXXX, agrees that, in the event that he breaches
any of such covenants, Xxxxx shall be entitled, in addition to any other
relief to which it may be entitled including without limitation money
damages, to enforce any or all of such covenants by injunctive or other
equitable relief ordered by any court of competent jurisdiction.
10. No agreements, representations or understandings (whether oral or
written and whether express or implied) which are not expressly set
forth in this Agreement have been made
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or entered into by either party with respect to the subject matter
hereof except for the Change of Control Agreement previously entered
into. This Agreement shall supercede any prior employment agreements
between XXXXXX and Xxxxx other than the Change of Control Agreement
previously entered into.
11. This Agreement shall be governed by and construed in accordance with the
laws of the State of California.
12. To ensure rapid and economical resolution of any disputes which may
arise under this agreement, XXXXXX and Xxxxx agree that any and all
disputes or controversies of any nature whatsoever, regarding the
interpretation, performance, enforcement or breach of this agreement
shall be resolved by confidential, final and binding arbitration (rather
than trial by jury or court or resolution in any other forum) under the
then existing rules of Judicial Arbitration and Mediation Services
("JAMS") in San Francisco, California. In the event that JAMS ceases to
exist as an arbitration service, any such matter shall be resolved by
confidential, final and binding arbitration under the then existing
rules of the American Arbitration Association in San Francisco,
California. The prevailing party in the arbitration shall be entitled to
recover his or its attorneys' fees and costs.
XXXXX COMPANIES, INC. /s/ XXXXXX X. X. XXXXXX
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By: /s/ Xxxx X. Xxxxx
Title: Chairman of the Board of Directors
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