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EXHIBIT 10.4
TXEN, INC.
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EMPLOYMENT AGREEMENT
with
XXXXXX X. XXXXXXXXX
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Dated: December 16, 1994
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EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into on the 16 day of December, 1994, by and
among Xxxxxx X. Xxxxxxxxx, residing at 0000 Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxx
(herein called the "Employee"), TXEN, INC. (herein called "TXEN") with a
principal place of business at 00 Xxxxxxxxx Xxxxxx Xxxxxxx, Xxxxx 000,
Xxxxxxxxxx, Xxxxxxx 00000, and XXXXXXX RESEARCH CORPORATION, with a principal
place of business located at 0000 Xxxxxxxx Xxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxx
00000 (herein called "NRC").
W I T N E S S E T H:
WHEREAS, TXEN Company is engaged in the business of managed care
administration and providing information systems and services to managed care
administrators;
WHEREAS, NRC, as purchaser, and TXEN, as seller, entered into and
consummated a Convertible Preferred Stock Purchase Agreement dated as of the
date hereof (the "Purchase Agreement") whereby NRC acquired one share of
Preferred Stock of TXEN, and the Employee's continued employment with TXEN was a
material inducement to NRC to enter into the Purchase Agreement;
WHEREAS, NRC has also entered into a Stock Purchase Option Agreement of
even date herewith giving NRC the option to purchase all of the capital stock of
TXEN owned by the Employee together with the capital stock owned by the other
shareholders of TXEN provided NRC converts the Preferred Stock into Class B
Common Stock; and
WHEREAS, TXEN and NRC desire to obtain the services of the Employee as
President of TXEN and the Employee is willing to render such services to TXEN
upon the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the mutual promises set forth
herein and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree as follows:
1. Duties and Salary.
(a) TXEN agrees to employ the Employee and the Employee agrees to
accept employment by TXEN on a full-time basis as
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President of TXEN at a base salary of $8,000 per month payable during the Term
of Employment, as hereinafter defined. Such salary shall be subject to increases
from time to time as authorized by the Board of Directors of TXEN (the "Board"),
provided any increase in compensation paid to the Employee shall require the
affirmative vote of the director or directors elected to the Board by NRC so
long as NRC owns any capital stock of TXEN.
(b) The Employee hereby agrees to undertake such travel as may be
required in the performance of his duties. The reasonable travel expenses of the
Employee shall be reimbursed in accordance with TXEN's reimbursement policy, in
effect from time to time.
(c) The Employee shall carry out his duties under the general
supervision of the Board or its designee.
(d) The Employee's duties shall include the duties and
responsibilities identified on Schedule I attached hereto. The Employee shall
perform such other tasks and duties as may be assigned by TXEN, from time to
time and TXEN reserves the right to change the office and/or position of the
Employee within TXEN, so long as such change is mutually acceptable. The
Employee shall devote his full time, attention, skill and efforts to the tasks
and duties assigned by TXEN. The Employee shall not provide services, for
compensation, to any other person or business entity while employed by TXEN
without approval of the Board and NRC.
(e) The Employee shall not be required to relocate beyond the
Birmingham, Alabama, metropolitan area without his consent.
2. Term of Employment. This Agreement shall commence as of the date hereof
and shall end four years from the date hereof (the "Term of Employment"), unless
terminated earlier or extended as provided herein. Upon expiration of the
initial Term of Employment unless earlier terminated as provided herein, the
Term of Employment shall continue automatically month-to-month until terminated
by either party with at least thirty (30) days' prior written notice with or
without cause. Notwithstanding the foregoing, if NRC purchases all of the
capital stock of TXEN pursuant to the Stock Purchase Option Agreement, NRC may
elect to (1) immediately terminate the Employee's employment or (2) extend the
Employee's employment for one year after the purchase of all of the capital
stock of TXEN by NRC in which event the Term of Employment shall be extended by
such additional period, unless terminated earlier as provided herein.
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3. Termination Before Expiration of Term of Employment. The termination of
the employment of the Employee during the Term of Employment may occur in one of
the following ways:
(a) By TXEN, for Cause. Termination by TXEN shall be deemed to be
for cause only upon:
(i) Employee's conviction of or pleading guilty to a
felony;
(ii) A good faith determination by the Board that the
Employee has breached either this Agreement, the
Purchase Agreement or the Stock Purchase Option
Agreement;
(iii) Refusal or failure by the Employee, without
reasonable excuse or proper authorization, to carry
out any reasonable instructions of the Board
consistent with Employee's rights or duties as set
forth in this Agreement;
(iv) Material breach of this Agreement or any material
breach of any agreement with NRC;
(v) The Employee's demonstration of negligence or willful
misconduct in the execution of his duties, including
without limitation breach of fiduciary duty or the
duty of loyalty owed TXEN.
If TXEN intends to terminate for cause, TXEN shall provide notice to
Employee of intent to terminate this Agreement, stating the termination
provision in this Agreement relied upon and setting forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination under the
provisions so indicated, and shall provide Employee with an opportunity to cure
the alleged default or breach within thirty (30) days of receipt of the notice,
provided that if the matter is not curable within such thirty (30) day period,
the Employee shall not be deemed in default if the Employee commences
immediately to cure the matter and proceeds diligently thereafter to complete
the cure, further provided that the alleged breach or default must be cured
within ninety (90) days of receipt of the notice. TXEN shall not be required to
give more than one notice with respect to the same matter. Notwithstanding the
foregoing, no notice and no cure right shall be required with
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respect to termination for cause under 3(a)(i) or an act involving theft of
information or property of TXEN.
(b) By TXEN, Without Cause. Any termination of Employee by TXEN
for reasons other than as set forth in subsections 3(a)(i) through 3(a)(v)
above shall be a termination without cause. TXEN may terminate the employment of
Employee without cause by thirty (30) days' prior written notice at any time. If
NRC purchases all of the capital stock of TXEN pursuant to the Stock Purchase
Option Agreement, NRC may cause TXEN to terminate the employment of Employee
without cause immediately after the closing of such purchase and without giving
30 days, prior notice.
(c) By the Employee. The Employee may by written notice terminate
his employment at any time during the Term of Employment:
(i) For any reason other than for Good Reason (as
defined below) upon thirty (30) days' prior written
notice at any time.
(ii) For "Good Reason," defined as termination because of
a material breach by TXEN of this Agreement
including, without limitation, making a material
change in the Employee's duties, responsibilities or
authority as set forth in this Agreement, without his
express written consent. In all cases in which
Employee intends to terminate for Good Reason, the
Employee shall provide TXEN with notice of intent to
terminate this Agreement, stating the facts and
circumstances giving rise to a breach of this
Agreement claimed to provide a basis for termination
under the provisions so indicated, and shall provide
TXEN with an opportunity to cure the alleged default
or breach within thirty (30) days of receipt of the
notice, provided that if the matter is not curable
within such thirty (30) day period, TXEN shall not be
deemed in default if it commences immediately to cure
the matter and proceeds diligently thereafter to
complete the cure, further provided that the alleged
breach or default must be cured within ninety (90)
days of receipt of the notice. Employee shall not be
required to give more than one such notice with
respect to the same matter.
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(d) Death of the Employee.
(e) Disability of Employee. If, during the Term of Employment, a
physician selected by TXEN determines that the Employee has
become physically or mentally disabled so as to be unable to
carry out the normal and usual duties of his employment for
three (3) continuous months, and reasonable accommodation
cannot be made to allow the Employee to continue to perform
his duties full-time, his employment hereunder may be
terminated at the election of TXEN or the Employee.
4. Consequences of Termination. The termination of the employment of
Employee will cause the following results:
(a) If the termination is by TXEN for cause, or is by the Employee
for any reason other than for Good Reason, TXEN will pay the Employee within
five (5) days after the date of termination any unpaid salary, the amount of any
accrued annual vacation pay to which he may be entitled under TXEN's vacation
plan, and benefits. All such compensation and benefits (if any) shall be paid
only through the date termination occurs.
(b) If the termination is by TXEN without cause or because of
death or disability, TXEN shall pay to the Employee, in addition to the amounts
set forth in 4(a) above, an amount equal to fifty percent (50%) of the
Employee's monthly base salary then in effect in monthly installments over a
three-month period immediately following the termination.
(c) If the termination is by the Employee for Good Reason, TXEN
shall pay to the Employee, in addition to the amounts set forth in 4(a) above,
an amount equal to fifty percent (50%) of the Employee's monthly base salary
then in effect in monthly installments over a three-month period immediately
following the termination.
(d) In the event of the Employee's death or disability, the
following provisions will apply:
(i) Upon his death, the Employee's estate will be
entitled to receive the amount set forth in Section
4(b) and the benefits set forth in any plans of
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TXEN then in effect and applicable under the
circumstances. The Employee or his estate shall be
entitled to no other compensation or benefits the
event of death.
(ii) Upon termination on account of disability, Employee
will be entitled to receive the amount set forth in
Section 4(b) and the benefits set forth in any plans
of TXEN then in effect and applicable under the
circumstances. The Employee or his personal
representative shall be entitled to no other
compensation or benefits in the event of disability.
(e) The Employee shall not be required to mitigate the amount of
payment provided for in this Section 4 by seeking employment.
(f) The amounts set forth above in this Section 4 shall be paid
and received in complete discharge of any other obligation of TXEN (or NRC) to
Employee resulting from termination of his employment.
5. Fringe Benefits.
The Employee shall participate in any group health insurance, vacation
and sick leave plans, and other benefit plans available to all employees of TXEN
in accordance with their terms and conditions which may be amended or terminated
by TXEN at any time.
6. Non-Disclosure Covenants and Proprietary Matters.
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(a) Unless authorized or instructed in writing by TXEN and NRC,
the Employee shall not, except as required in the conduct of TXEN's business,
during or at any time after the Term of Employment, disclose to others, or use,
any of NRC's or TXEN's inventions or discoveries or their respective secret or
confidential information or data (oral, written, or in machine readable form)
which the Employee may obtain during the course of or in connection with the
Employee's employment, including such inventions, discoveries, information,
know-how or data relating to machines, equipment, products, systems, software,
contracts, contract performance, research and/or development, designs,
compositions, formulae, processes, manufacturing procedures or business methods,
whether or not developed by the Employee, by others in NRC or TXEN or obtained
by NRC or TXEN from third parties, and irrespective of whether or not such
inventions, discoveries, information, knowledge or data have been identified by
NRC or TXEN as secret or confidential, unless and until, and then to the extent
and only to the extent that, such inventions, discoveries, information,
knowledge or data become available to the public otherwise than by the
Employee's act or omission.
(b) The Employee shall not, except as required in the conduct of
TXEN's business, disclose to others, or use, any of the information (which, if
disclosed or used, could be harmful to NRC or TXEN) relating to present and
prospective customers of NRC or TXEN, business dealings with such customers,
prospective sales and advertising programs and agreements with representatives
or prospective representatives of NRC or TXEN, present or prospective sources of
supply or any other business arrangements o NRC or TXEN, including but not
limited to customers, customer lists, costs, prices and earnings, whether or not
such information is developed by the Employee, by others in NRC or TXEN or
obtained by NRC OR TXEN from third parties, and irrespective of whether or not
such information has been identified by NRC or TXEN as secret or confidential,
unless and until, and then to the extent and only to the extent that, such
information becomes available to the public otherwise than by the Employee's act
or omission.
(c) The Employee agrees to disclose immediately to TXEN or any
persons designated by it and to assign to TXEN or its successors or assigns, all
inventions made, discovered, or first reduced to practice by the Employee,
solely or jointly with others, during the Term of Employment or within a period
of six months from the date of termination of such employment (either during or
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outside of the Employee's working hours and either on or off TXEN's premises),
which inventions are made, discovered or conceived either in the course of such
employment, or with the use of TXEN's time, material, facilities or funds, or
which are directly related to any investigations or obligations undertaken by
TXEN; and the Employee hereby grants and agrees to grant the right to TXEN and
its nominees to obtain, for its own benefit and in its own name (entirely at its
expense) patents and patent applications including original, continuation,
reissue, utility and design patents, and applications, patents of addition,
confirmation patents, registration patents, xxxxx patents, utility models, and
all other types of patents and the like, and all renewals and extensions of any
of them for those inventions in any and all countries; and the Employee shall
assist TXEN, at TXEN's expense, without further charge during the term of the
Employee's employment, and after termination of the Employee's employment at the
same base salary rate (excluding any bonuses, incentive or deferred compensation
or other benefits and based upon a forty hour work week) as during the last year
of the Employee's employment (determined on an hourly basis for this purpose),
through counsel designated by TXEN, to execute, acknowledge, and deliver all
such further papers, including assignments, applications for Letters Patent (of
the United States or of any foreign country), oaths, disclaimers or other
instruments and to perform such further acts, including giving testimony or
furnishing evidence in the prosecution or defense of appeals, interferences,
suits and controversies relating to any aforesaid inventions as may reasonably
be deemed necessary by TXEN or its nominees to effectuate the vesting or
perfecting in TXEN or its nominees of all right, title and interest in and to
said inventions, applications and patents. Notwithstanding the foregoing, the
Employee need not take any action called for under this Section 6(c) which will
cause undue personal hardship to the Employee.
(d) The Employee agrees to disclose immediately to TXEN or any
persons designated by it and to assign to TXEN, at its option, or its successors
or assigns, all works of authorship, including all writings, computer programs,
software, and firmware, written or created by the Employee solely or jointly
with others, during the course of his employment by TXEN (either during or
outside of the Employee's working hours and either on or off TXEN's premises),
which works are made or conceived either in the course of such employment, or
with the use of TXEN's time, material, facilities or funds, or which are
directly related to any investigations or
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obligations undertaken by TXEN; and the Employee hereby agrees that all such
works are works made for hire, of which TXEN is the author and the beneficiary
of all rights and protections afforded by the law of copyright in any and all
countries; and the Employee will assist TXEN at TXEN's expense without further
charges during the term of his employment, and after termination of his
employment at the same base salary rate (excluding any bonuses, incentive or
deferred compensation or other benefits) as during the last year of his
employment (determined on an hourly basis for this purpose assuming a forty hour
work week), through counsel designated by TXEN, to execute, acknowledge, and
deliver all such further papers, including assignments, applications for
copyright registration (in the United States or in any foreign country), oaths,
disclaimers or other instruments, and to perform such further acts, including
giving testimony or furnishing evidence in the prosecution or defense of
appeals, interferences, suits and controversies relating to any aforesaid works,
as may be deemed necessary by TXEN or by its nominees to effectuate the vesting
or perfecting in TXEN or its nominees of all rights and interest in and to said
works and copies thereof, including the exclusive rights of copying and
distribution.
(e) The Employee shall keep complete, accurate and authentic
accounts, notes, data and records of all inventions made, discovered or
developed and all works of authorship written or created by the Employee as
aforesaid in the manner and form requested by TXEN.
(f) All computer or other hardware, computer software, computer
programs, source codes, object codes, magnetic tapes, printouts, samples, notes,
records, reports, documents, customer lists, photographs, catalogues and other
writings, whether copyrightable or not, relating to or dealing with TXEN's or
NRC's business and plans, and those of others entrusted to TXEN or NRC, which
are prepared or created by the Employee or which may come into his possession
during or as a result of his employment, are the property of TXEN or NRC, as
applicable, and upon termination of his employment, the Employee agrees to
return all such computer software, computer programs, source codes, object
codes, magnetic tapes, printouts, samples, notes, records, reports, documents,
customer lists, photographs, catalogues and writings and all copies thereof to
TXEN or NRC.
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7. Non-Solicitation and Non-Competition. During the Restriction Period (as
hereinafter defined) within the United States of America, the Employee shall not
directly or indirectly:
(a) Solicit the business of TXEN from any customer of TXEN or any
entity controlled by TXEN or solicit any employees of TXEN to leave the employ
of TXEN.
(b) Directly or indirectly, hire any employees or former employees
of TXEN or any entity controlled by TXEN within one year of the date of
termination of his employment with TXEN or cause any entity with which the
Employee is affiliated to hire any such employees or former employees of TXEN.
(c) Engage in, represent in any way or be connected with, as
consultant, officer, director, partner, employee, sales representative,
proprietor, stockholder or otherwise (except for the ownership of a less than 1%
stock interest in a publicly-traded corporation where Employee is not in a
management or control position), any business competing with the business of
TXEN as conducted by TXEN on the date hereof or during the period of Employee's
employment by TXEN.
(d) As used herein, the Restriction Period shall mean the period
while the Employee is employed by TXEN and the following periods:
(i) 36 months after the date the Employee ceases to be
employed by TXEN and/or
(ii) 60 months after NRC purchases all of the capital
stock of TXEN pursuant to the Stock Purchase Option Agreement.
The above periods in sections 7(d)(i) and 7(d)(ii) shall not be
mutually exclusive. For example, if NRC purchases the capital stock of TXEN more
than 36 months after the Employee ceases to be employed by TXEN, the Restriction
Period of 7(d)(ii) shall apply even though the Restriction Period of 7(d)(i)
also applied. Similarly, if the Employee ceases to be employed by TXEN more than
60 months after NRC purchases the capital stock of TXEN, the Restriction Period
of section 7(d)(i) shall apply even though the Restriction Period of 7(d)(ii)
also applied.
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8. No Conflict. Employee represents and warrants that he is not a party to
or otherwise subject to or bound by the terms of any contract, agreement or
understanding which in any manner would limit or otherwise affect his ability to
perform his obligations hereunder, including without limitation any contract,
agreement or understanding containing terms and provisions similar in any manner
to those contained in Sections 6 and 7 hereof. Employee covenants to indemnify
and hold NRC, TXEN and any of their affiliates harmless from any cost or damages
(including attorneys' fees and expenses) resulting from any breach of the
provisions of this Agreement.
9. Survival of Covenants, Effect.
(a) The covenants on the part of the Employee contained or
referred to in Sections 6 and 7 above shall survive termination of this
Agreement, and the existence of any claim or cause of action of the Employee
against TXEN or NRC, whether predicated on this Agreement or otherwise. The
Employee agrees that a remedy at law for any breach of the foregoing covenants
contained or referred to in Sections 6 and 7 would be inadequate, that TXEN and
NRC would suffer irreparable harm as a result and that NRC and/or TXEN shall be
entitled to a temporary and permanent injunction or an order for specific
performance of such covenants without the necessity of proving actual damage to
NRC or TXEN and without the posting of any bond or other security. Any breach of
this Agreement by TXEN or NRC shall not release the Employee from his
obligations under Sections 6 and 7 hereof.
(b) The Employee hereby represents and acknowledges that NRC and
TXEN are relying on the covenants in Sections 6 and 7 in entering into this
Agreement and the Purchase Agreement and other agreements related thereto and
that the restrictions in Sections 6 and 7 are fair and reasonable. The Employee
acknowledges that TXEN does business throughout the United States and that the
geographic scope of the covenants in Section 7 is therefore reasonable and
necessary to protect the interests of TXEN.
(c) It is the intent of the parties that the provisions of
Sections 6 and 7 shall be enforced to the fullest extent permissible under the
laws and public policies of each jurisdiction in which enforcement is sought. If
any particular provision of Sections 6 and 7 shall be adjudicated to be invalid
or unenforceable, such provision(s) of Sections 6 and 7 shall be
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deemed amended to provide restrictions to the fullest extent permissible and
consistent with applicable law and policies, and such amendment shall apply only
with respect to the particular jurisdiction in which such adjudication is made.
If such deemed amendment is not allowed by the adjudicating body, the offending
provision, only, shall be deleted and the remainder of Sections 6 and 7 shall
not be effected.
10. Assignment.
The rights and obligations of TXEN under this Agreement may be assigned
by TXEN to NRC or to any other successors in interest of TXEN and/or NRC of that
part of the business of TXEN or NRC to which this Agreement applies or to their
respective affiliates. This Agreement may not be assigned and any duties of the
Employee may not be delegated by the Employee, but any amounts owing to the
Employee upon his death shall inure to the benefit of his estate.
11. Notices.
All notices or other communications which may be or are required to be
given, served or sent by either party to the other party pursuant to this
Agreement shall be in writing, addressed to its/his residence or place of
business as set forth above, and shall be mailed by first-class certified mail,
return receipt requested, postage prepaid, next-day air delivery, or transmitted
by facsimiles or hand delivery. Such notice or other communication shall be
deemed sufficiently given, served, sent or received for all purposes at such
time as it is delivered to the addressee or at such time as delivery is refused
by the addressee upon presentation. Each party may designate by notice in
writing an address to which any notice or communication may thereafter be so
given, served or sent. Any notice or other communication sent by Employee to
TXEN shall also be sent, at the same time, to NRC. Notices hand delivered to
TXEN or NRC must be delivered to an officer of TXEN and NRC and all other
notices shall be sent to the attention of the Board, in the case of TXEN, or to
the President, in the case of NRC.
12. Applicable Law Jurisdiction.
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This Agreement has been negotiated and executed in the State of
Alabama, and it shall be governed by, construed and enforced in accordance with
the internal substantive laws and not the choice of law rules of the State of
Alabama.
13. Effectiveness/Interpretation.
The parties acknowledge and agree that this Agreement has been
negotiated at arm's length between parties equally sophisticated and
knowledgeable in the matters dealt with herein. Each party has been represented
by counsel of its or his own choosing. Accordingly, any rule of law or legal
decision that would require interpretation of any ambiguities in the Agreement
against the party that drafted it is not applicable and is waived.
14. Third Party Beneficiary.
NRC is a third party beneficiary to this entire Agreement but shall
have no liability to pay the compensation due Employee and to perform the other
obligations of TXEN hereunder. NRC is not a guarantor of any of the TXEN
obligations hereunder.
15. Severability.
If any of the articles, sections, paragraphs, clauses or provisions of
this Agreement shall be held by a court of last resort to be invalid, the
remainder of this Agreement shall not be affected thereby.
16. Entire Agreement.
The foregoing contains the entire agreement between the parties
relating to the subject matter of this Agreement, and may not be altered or
amended except by an instrument in writing approved by TXEN and NRC and signed
by the parties hereto, and this Agreement supersedes all prior understandings
and agreements relating to employment of the Employee by TXEN. The parties
acknowledge that any prior oral or written agreements between NRC and the
Employee, if any, are hereby terminated. The parties acknowledge that the
Employee and NRC have also entered into the Purchase Agreement and Stock
Purchase Option Agreement which shall be in addition to and not in lieu of the
provisions of this Agreement.
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IN WITNESS WHEREOF, TXEN and NRC have caused this Agreement to be
executed by their duly authorized officers and the Employee has hereunto set his
hand as of the date first above written.
TXEN, INC.
By: Xxxxxx X. Xxxxxxxxx
-----------------------------------
Xxxxxx X. Xxxxxxxxx, President
XXXXXXX RESEARCH CORPORATION
By:
-----------------------------------
Its:
-------------------------------
Xxxxxx X. Xxxxxxxxx
--------------------------------------
Xxxxxx X. Xxxxxxxxx, Employee
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SCHEDULE I
Duties of Employees
XXXXXX X. XXXXXXXXX, PRESIDENT
(i) to promote the growth of and manage the business and day to day
operations of TXEN;
(ii) to perform the duties normally associated with the Office of President
or such other office to which Employee may be nominated and appointed
by the Board, subject to control and direction of the Board;
(iii) to train and supervise TXEN's employees and to perform or cause to be
performed quality control for projects and contracts performed by TXEN;
(iv) to manage and/or actually assist in the bidding and performance of
major or material projects and contracts undertaken by TXEN;
(v) to direct and supervise the sale and marketing of TXEN's contracts,
services and products and, if requested, the contracts, services and
products of NRC;
(vi) to perform such other and/or different duties as may be determined or
delegated by the Board, consistent with the duties of the President.
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AMENDMENT TO EMPLOYMENT AGREEMENT
---------------------------------------
XXXXXXX SELECT CORPORATION
AND
XXXXXX X. XXXXXXXXX
---------------------------------------
Dated: August 29, 1997
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AMENDMENT TO EMPLOYMENT AGREEMENT
THIS AMENDMENT TO CERTAIN EMPLOYMENT AGREEMENT, dated 16th of December,
1994, is entered into on this the 29th day of August, 1997, by XXXXXXX SELECT
CORPORATION, a Delaware corporation and the wholly owned subsidiary of NRC and
Xxxxxx X. Xxxxxxxxx ("Employee"). Unless otherwise defined, capitalized terms
used herein shall have the meaning ascribed to such terms in the Employment
Agreement or Merger Agreement (hereinafter defined).
W I T N E S S E T H:
WHEREAS, Xxxxxxx Research Corporation ("NRC"), SELECT, a wholly owned
subsidiary of NRC, TXEN, Inc. ("TXEN"), and the holders of all of the $0.002 par
value Class A Common Stock of TXEN (the "Shareholders") have entered into and
consummated an Agreement of Merger dated as of August 27, 1997 (the "Merger
Agreement") whereby TXEN merged with and into SELECT;
WHEREAS, the Employee's continued employment with SELECT was a material
inducement to SELECT and NRC to enter into the Merger Agreement;
WHEREAS, the Employee owned Class A Common Stock of TXEN and received a
portion of the Merger Consideration;
WHEREAS, NRC, pursuant to Section 2 of Employment Agreement has elected
to extend Employee's Term of Employment after the Effective Date of the merger
of TXEN into SELECT; and
WHEREAS, NRC, SELECT, and Employee mutually desire that Employee
continue to be employed by SELECT;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the undersigned parties do hereby amend the Employment Agreement as
follows:
1. SELECT agrees to the continued employment of the
Employee, and the Employee agrees to accept continued employment by SELECT on a
full-time basis as President of SELECT with the same Duties and Salary as set
forth in the Employment Agreement, except that Employee shall report to the
Chief Executive Officer of SELECT.
2. Section 2 of said Employment Agreement is amended to
read as follows:
2. Term of Employment. This Agreement shall
commence as of the Effective Date of the Merger
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Agreement and shall end two (2) years from
the date hereof (the "Term of Employment"), unless
terminated earlier or extended as provided herein.
3. Unless the context requires otherwise, all references
to TXEN, Inc., in the Employment Agreement shall mean SELECT.
Except as amended. above, the Employment Agreement shall remain in full
force and effect according to its terms and conditions.
IN WITNESS WHEREOF, the parties have hereunto executed this Amendment
to Employment Agreement on the date and year first above written.
XXXXXXX SELECT CORPORATION
By: /s/ Xxxxxxx J, Xxxx
-----------------------------------
Xxxxxxx X. Xxxx,
Its: Chief Executive Officer
/s/ Xxxxxx X. Xxxxxxxxx
--------------------------------------
Xxxxxx X. Xxxxxxxxx, Employee
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AMENDMENT NUMBER TWO TO EMPLOYMENT AGREEMENT
=================================================
XXXXXXX TXEN CORPORATION
AND
XXXXXX X. XXXXXXXXX
=================================================
Dated: June 1, 1998
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AMENDMENT NUMBER TWO TO EMPLOYMENT AGREEMENT
THIS AMENDMENT NUMBER TWO TO EMPLOYMENT AGREEMENT, dated December 16,
1994, as amended August 29, 1997 (the "Employment Agreement"), is entered into
on this the 1st day of June, 1998, by XXXXXXX TXEN CORPORATION, formerly known
as XXXXXXX SELECT CORPORATION, a Delaware corporation and the wholly owned
subsidiary of NRC ("Xxxxxxx TXEN"), and Xxxxxx X. Xxxxxxxxx, ("Employee").
Unless otherwise defined, capitalized terms used herein shall have the meaning
ascribed to such terms in the Employment Agreement or Merger Agreement
(hereinafter defined).
W I T N E S S E T H:
WHEREAS, Xxxxxxx Research Corporation ("NRC"), XXXXXXX SELECT
CORPORATION ("Xxxxxxx Select"), a Wholly owned subsidiary of NRC, TXEN, Inc.
("TXEN'), and the holders of all of the $0.002 par value Class A Common Stock of
TXEN (the "Shareholders") entered into and consummated an Agreement of Merger
dated as of August 27, 1997 (the "Merger Agreement") whereby TXEN merged with
and into Xxxxxxx Select with Xxxxxxx Select as the surviving corporation;
WHEREAS, Xxxxxxx Select changed its name to Xxxxxxx TXEN after the
merger;
WHEREAS, Employee entered into the Employment Agreement with TXEN which
has been assumed by Xxxxxxx TXEN; and
WHEREAS, Xxxxxxx TXEN, and Employee mutually desire to amend the
Employment Agreement;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the undersigned parties do hereby amend the Employment Agreement as
follows:
1. Section 1(a) is hereby deleted in its entirety and a
new Section 1(a) is hereby substituted as follows:
Xxxxxxx TXEN agrees to employ the Employee, and the
Employee agrees to accept employment by Xxxxxxx TXEN
on a part-time basis averaging approximately 20 hours
per week beginning June 1, 1998, and ending January
31, 1999, at the hourly rate of Seventy-Five and
60/100 Dollars ($75.60), which shall be the
Employee's base salary. Effective February 1, 1999,
the Employee shall work on a part-time basis
averaging approximately ten (10) hours per week at an
hourly rate of Seventy-Nine and 08/100 Dollars
22
($79.08), which shall be the Employee's base salary.
2. Section 1(d) is hereby deleted in its entirety and a new
Section l(d) is hereby substituted as follows:
Employee shall be employed in the position of Chairman of the
Board of Directors of Xxxxxxx TXEN until such time as he is
removed from that position by death, resignation, or action of
the Xxxxxxx TXEN Board of Directors. Employee's duties shall
include the duties and responsibilities identified on Schedule
I-A attached hereto. The Employee shall perform such other
tasks and duties as may be reasonably assigned by Xxxxxxx
TXEN, from time to time.
3. Section 5 entitled Fringe Benefits is hereby deleted in its
entirety and a new Section 5 is hereby substituted as follows:
Employee shall participate in any group health insurance,
vacation, and sick leave plans, and other benefits available
to part-time employees of Xxxxxxx TXEN in accordance with
their terms and conditions which may be amended or terminated
by Xxxxxxx TXEN at any time. In addition, the Employee shall
be allowed to purchase the prevailing Blue Cross/Blue Shield
group coverage offered to full-time employees by directly
reimbursing the Company on a monthly basis for the cost of the
premiums therefor. Employee may continue this purchase of
health care coverage at the applicable monthly insured rate
until the plan terminates or until the Employee attains age
65, whichever occurs first. If the Employee's spouse is
younger than the Employee, then his spouse may continue to
purchase such insurance by paying to Xxxxxxx TXEN the premium
cost for individual coverage until age 65 or until the plan
terminates, whichever occurs first. If group health insurance
coverage with Blue Cross/Blue Shield is terminated and group
health insurance coverage is placed with another insurer,
health maintenance organization (HMO), or other provider of
such coverage, the Employee and his
23
spouse shall be entitled to obtain health insurance coverage
by paying the premium cost therefor in the same manner as
permitted with respect to the Blue Cross/Blue Shield plan,
provided such insurer, HMO, or other provider approves such
participation by Employee and/or his spouse.
Except as amended above, the Employment Agreement shall remain in full
force and effect according to its terms and conditions.
IN WITNESS WHEREOF, the parties have hereunto executed this Amendment
Number Two to Employment Agreement on the date and year first above written.
XXXXXXX TXEN CORPORATION
By: /s/ XXXX X. XXXXXX
-----------------------------------
XXXX X. XXXXXX
Its: Chief Executive Officer
/S/ XXXXXX X. XXXXXXXXX
--------------------------------------
Xxxxxx X. Xxxxxxxxx, Employee
- 3 -
24
AMENDMENT NUMBER THREE TO EMPLOYMENT AGREEMENT
==========================================================
XXXXXXX TXEN CORPORATION
AND
XXXXXX X. XXXXXXXXX
==========================================================
DATED: NOVEMBER 6, 1998
25
AMENDMENT NUMBER THREE
TO
EMPLOYMENT AGREEMENT
THIS AMENDMENT NUMBER THREE TO EMPLOYMENT AGREEMENT, dated December 16,
1994, as amended August 29, 1997, and June 1, 1998 (the "Employment Agreement"),
is entered into on this the 6th day of November, 1998, by XXXXXXX TXEN
CORPORATION, formerly known as XXXXXXX SELECT CORPORATION, a Delaware
corporation ("Xxxxxxx TXEN"), and XXXXXX X. XXXXXXXXX, ("Employee"). Unless
otherwise defined, capitalized terms used herein shall have the meaning ascribed
to such terms in the Employment Agreement or Merger Agreement (hereinafter
defined).
W I T N E S S E T H:
WHEREAS, Xxxxxxx Research Corporation ("NRC"), XXXXXXX SELECT
CORPORATION ("Xxxxxxx Select"), a wholly owned subsidiary of NRC, TXEN, Inc.
("TXEN"), and the holders of all of the $0.002 par value Class A Common Stock of
TXEN (the "Shareholders") entered into and consummated an Agreement of Merger
dated as of August 27, 1997 (the "Merger Agreement") whereby TXEN merged with
and into Xxxxxxx Select with Xxxxxxx Select as the surviving corporation (the
"Merger");
WHEREAS, Xxxxxxx Select changed its name to Xxxxxxx TXEN after the
Merger;
WHEREAS, Employee entered into the Employment Agreement with TXEN which
has been assumed by Xxxxxxx TXEN; and
WHEREAS, Xxxxxxx TXEN and Employee mutually desire to amend the
Employment Agreement;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the undersigned parties do hereby amend the Employment Agreement as
follows:
1. References in the Employment Agreement to TXEN, Xxxxxxx Select or
Select shall mean Xxxxxxx TXEN wherever the context requires in light of the
Merger and change in name of Xxxxxxx Select to Xxxxxxx TXEN.
2. Section 2 of the Employment Agreement and Section 2 of the August
29, 1997, Amendment to the Employment Agreement are deleted and there is hereby
substituted a new Section 2 of the Employment Agreement, as follows:
"This Employment Agreement shall commence as of the effective date
of the Merger Agreement and shall end on the later of
26
(i) August 28, 1999; or
(ii) Two years after the date a registration
statement initially registering the
Company's common stock under the Securities
Act of 1933 is declared effective by the
Securities and Exchange Commission, provided
such registration statement is declared
effective before August 28, 1999.
The period between the commencement date and the
termination date as set forth above shall be the
`Term of Employment,' unless terminated earlier or
extended as provided herein. Upon expiration of the
initial Term of Employment unless earlier terminated
as provided herein, the Term of Employment shall
continue automatically month-to-month until
terminated by either party with at least thirty (30)
days prior written notice with or without cause."
3. This Amendment is effective on the date hereof.
4. Except as amended above, the Employment Agreement shall remain in
full force and effect according to its terms and conditions.
IN WITNESS WHEREOF, the parties have hereunto executed this Amendment
Number Three to Employment Agreement on the date and year first above written.
XXXXXXX TXEN CORPORATION
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
XXXX X. XXXXXX
Its: Chief Executive Officer
/s/ Xxxxxx X. Xxxxxxxxx
-------------------------------------
Xxxxxx X. Xxxxxxxxx, Employee
