Exhibit 10.28
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated June 10, 1998 between XXXXXX XXXXXX, INC., a
Delaware corporation ("Company"), and XXXXX-XXXXXX XXXXXX ("Executive").
WHEREAS, Executive is currently the Chairman of the Board, President and
Chief Executive Officer of the Company;
WHEREAS, Executive is currently a party to an Amended and Restated
Employment Agreement dated July 3, 1997 ("Amended and Restated Agreement") with
the Company;
WHEREAS, pursuant to that certain Agreement and Plan of Merger (the "Merger
Agreement") dated as of the date hereof among PUTNAM, HAYES & XXXXXXXX, INC., a
Massachusetts corporation ("PHB"), the Company and PHB MERGER CORP., a
Massachusetts corporation and wholly-owned subsidiary of the Company ("Merger
Sub"), Merger Sub will merge with and into PHB (the "Merger"), PHB will be
renamed PHB Xxxxxx Bailly, Inc. ("PHB Xxxxxx Xxxxxx") and the common stock of
PHB, including the common stock of PHB owned by the Executive, will be converted
into shares of common stock of the Company ("Common Stock");
WHEREAS, as a result of the Merger, the Company anticipates changes in
the management of the Company which are inconsistent with certain terms in the
Amended and Restated Agreement;
WHEREAS, in consideration of the compensation and benefits to be afforded
to Executive pursuant to this Agreement, Executive has agreed to execute and
deliver this Agreement and to terminate, effective as of the effective time of
the Merger, any prior employment agreements or arrangements with the Company;
WHEREAS, the Company desires to employ Executive, and Executive desires to
be employed by the Company, from the day after the effective time of the Merger,
on the terms and conditions set forth herein.
Whereas, Executive agrees to be bound by the confidentiality, non-compete
and non-solicitation provisions herein;
WHEREAS, the Board of Directors of the Company has approved the terms of
this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, the Company and Executive, intending to be legally bound, agree as
follows:
1. Employment, Term, Duties and Responsibilities.
a. During the Term (as hereinafter defined) of this Agreement, the Company
agrees to employ Executive and Executive agrees to serve as President and Chief
Executive Officer of the Company through December 31, 1999. As of January 1,
2000, Executive shall become Chairman of the Board of the Company and will
perform such other duties assigned to him by the Chief Executive Officer and the
Board of Directors of the Company (the "Company Board") and agreed to by
Executive. In the event that Executive shall elect to resign from the Company
Board, Executive shall continue as a full-time executive officer of the Company
performing such duties as the Chief Executive Officer, the Company Board and
Executive shall mutually agree. As of January 1, 2000, in his capacity as an
executive officer of the Company, Executive will report directly to the Chief
Executive Officer of the Company.
During the Term, Executive agrees to serve Company faithfully and to the
best of his ability; to devote his entire time, energy and skill during regular
business hours (except for illness or incapacity and except for vacation time as
provided herein) to such employment; to use his best efforts, skills and ability
to promote its interests; if elected, to serve as a director of Company and its
subsidiaries or affiliated corporations or entities; and to perform such duties
as from time to time may be assigned to him, subject to the preceding paragraph
hereof.
Notwithstanding the foregoing, Executive may engage in charitable, academic
and public and industry service activities so long as such activities do not
materially interfere with the performance of his duties and responsibilities
under this Agreement.
b. Subject to the provisions of this Agreement to the contrary, the Term
shall commence on the closing date of the Merger (the "Effective Time"), and end
on July 3, 2000.
2. Compensation.
The Company agrees to pay Executive as compensation for all duties
performed by him in any capacity during the period of his employment under this
Agreement:
a. An annual base salary ("Base Salary") payable in equal bi-monthly
installments at an initial annual rate of $393,750 commencing at the Effective
Time. On January 1 of each year during the Term commencing January 1, 1999, the
annual rate of Base Salary shall be increased by no less than the greater of (i)
five percent (5%) over the annual rate of Base Salary in effect for the
preceding year, and (ii) the increase in the CPI National Index for the year. b.
An annual bonus payment ("Bonus"), in an amount, if any, determined by the
Compensation Committee of the Company Board.
c. From time to time, Executive shall also be eligible to receive options
to purchase Common Stock of the Company pursuant to the terms of the Xxxxxx
Bailly Employee Incentive and Non-Qualified Stock Option and Restricted Stock
Plan or any successor Plan, and in the amounts determined by, and subject to the
terms and conditions of, the Stock Option Committee of the Company Board. d.
During the Term, for so long as Executive is a member of the Company Board or
the board of directors of any of the Company's subsidiaries or affiliated
companies, Executive shall receive such compensation and other benefits
(including insurance coverage and indemnification) as other similarly situated
members of such board of directors receive for their service in such capacity.
3. Benefits; Reimbursement of Expenses; Annual Physical.
Executive shall also be entitled to:
a. participate in all of the benefit programs which are provided by
the Company;
b. reimbursement by the Company of all expenses reasonably incurred by
him in connection with the performance of his duties, including,
without limitation, travel and entertainment expenses reasonably
related to the business or interests of the Company, upon submission
by him of written documentation of such expenses; and
c. a fully-paid annual physical examination.
4. Disability or Death.
a. If, during the Term of this Agreement, Executive becomes disabled or
incapacitated for a period of twelve (12) consecutive months to such an extent
that he is unable to perform his duties hereunder ("Permanently Disabled"), the
Company shall have the right at any time thereafter, so long as Executive is
then still Permanently Disabled, to terminate this Agreement. If the Company
elects to terminate this Agreement by reason of Executive becoming Permanently
Disabled, the Company, for the unexpired Term of this Agreement, shall continue
to pay:
(1) to Executive, sixty percent (60%) of his Base Salary (whether through
insurance or otherwise) at the rate in effect on the date of such termination,
such payments to be made as set forth in Section 2 plus, within thirty (30) days
of such termination, a lump sum payment in the amount of the Executive's Base
Salary at the date of such termination; or
(2) in the event of Executive's death after such termination for Permanent
Disability, then to the persons and in the manner set forth in subparagraph (c)
of this Section 4, an amount per annum equal to sixty percent (60%) of
Executive's Base Salary (whether through insurance or otherwise) at the rate in
effect on the date this Agreement is terminated by the Company, such payments to
be made as set forth in Section 2.
If, and so long as, the Company does not elect to terminate this Agreement
as a result of Executive's Permanent Disability, this Agreement shall continue
in full force and effect and Executive shall be entitled to all benefits
provided under this Agreement including, without limitation, compensation as set
forth in Section 2.
b. If the Executive dies during the Term, this Agreement shall
automatically terminate, except that (i) for the unexpired portion of the Term,
the Company shall continue to pay to the persons and in the manner set forth in
subparagraph (c) of this Section 4, an amount per annum equal to sixty percent
(60%) of Executive's Base Salary in effect on the date of Executive's death,
such payments to be made as set forth in Section 2, and (ii) within thirty (30)
days of such termination, the Company shall pay such persons a lump sum payment
Section 4a(2)) in the amount of the Executive's Base Salary at the date of
termination.
c. Any payments to be made pursuant to subparagraph (a) or (b) of this
Section 4 to persons other than Executive in the event of the death of Executive
shall be made to Executive's designated beneficiaries or, if no such designation
has been made and Executive's spouse survives Executive, then the payments shall
be made to Executive's spouse, and if such spouse subsequently dies before all
such payments are made, the remaining payments shall be made to the estate of
Executive's spouse. If Executive is not survived by a spouse, then the payments
shall be made among Executive's issue who survive Executive, per stirpes, and if
any individual who is issue of Executive and who as of the date of death of
Executive is entitled to receive payments dies after Executive's death, the
payments which such issue would have been entitled to receive shall be made to
his or her estate. If at the date of Executive's death Executive is not survived
by any spouse, or any issue, then the payments shall be made to Executive's
estate.
5. Termination.
This Agreement shall terminate prior to the expiration of its Term as
follows:
a. Automatically upon Executive's death, in which event the provisions
of Section 4 shall continue to be applicable;
b. By the Company, upon notice from the Company, in the event Company
elects to terminate Executive's employment due to Executive's
Permanent Disability pursuant to the provisions of Section 4;
c. By the Company, for "cause," which for purposes of this Agreement
shall mean:
(i) failure to comply with material rules, standards or
procedures reasonably promulgated by the Company in accordance
with ordinary and usual business standards, or dereliction of
assigned responsibilities consistent with Section 1 above, such
failure or dereliction remaining uncured by Executive for thirty
(30) days after receiving written notice from the Company of such
failure or dereliction that specifically describes the nature of
such alleged failures;
(ii) substandard performance of assigned responsibilities
measured in accordance with performance standards agreed upon
from time to time by Executive and the Company;
(iii) material violation by Executive, or any other person acting
upon his specific directions, of a federal, state or local
statute, rule or regulation applicable to the Company, to its
management, or to the operation of the Company's business;
(iv) material breach of the terms of this Agreement;
(v) knowing falsification of the Company's records or documents;
(vi) gross negligence;
(vii) conviction by Executive, or any other person acting upon
Executive's specific directions, of any misdemeanor that involves
fraud or a material loss to the Company or of a felony; or
(viii) any act of dishonesty or moral turpitude.
The refusal to permanently relocate from Executive's current place of work
will not constitute a "cause" for termination of employment by the Company.
d. By Executive, upon the Company's failure to perform or observe any of
the material terms or provisions of this Agreement, and the continued failure of
the Company to cure such default within thirty (30) days after written demand
for performance has been given to the Company by Executive, which demand shall
describe specifically the nature of such alleged failure to perform or observe
such material terms or provisions. Without limiting the foregoing, it is
acknowledged and agreed that Sections 1, 2, 3, and 4 of this Agreement are
material provisions of this Agreement.
e. By Executive, upon notice from Executive after Company's failure to pay
Executive amounts under Sections 2 and 3 when due and the continued failure of
the Company to make such payment within ten (10) days after written demand for
such payment is made by Executive.
f. By Executive, upon notice from Executive following a "change in control"
(as defined in Section 17).
6. Effect of Termination.
a. In the event of the termination of this Agreement by Company pursuant to
paragraph (c) of Section 5, the Company shall be under no obligation to
Executive, except to pay his accrued and unpaid Base Salary, Bonus, and paid
leave entitlements to the date of termination, and to permit exercise pursuant
to the Plan of any vested but unexercised options Executive shall not be
entitled to receive any Base Salary or Bonus after the date of termination, or
to exercise any unvested options under the Plan.
b. In the event of the termination of this Agreement by Executive pursuant
to paragraphs (d), (e) or (f) of Section 5, or in the event of the termination
of this Agreement by the Company other than pursuant to a notice of termination
under paragraph (b) or (c) of Section 5, Executive shall receive from Company
(i) payments at an annual rate equal to his Base Salary in effect on the date of
such termination in equal bimonthly installments until thirty-six (36) months
from the effective date of such termination; and (ii) a lump-sum payment in
amount equal to four (4) times his Base Salary on the date of termination
payable within thirty (30) days thereof.
If the Company and Executive shall become involved in a dispute relating to
any alleged breach of this Agreement by the Company or Executive, and if
Executive prevails (by judgment, settlement or otherwise) in such dispute, the
Company shall reimburse Executive for all reasonable costs (including reasonable
fees and disbursements of counsel) incurred by him in connection with such
dispute upon presentation to the Company of evidence of such costs.
7. Termination of Prior Agreements.
This Agreement expressly supersedes all agreements and understandings
between the parties regarding the subject matter hereof and any such agreement
is terminated as of the closing date of the Merger.
8. Binding Effect.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto, their respective legal representatives and to any successor of
the Company, which successor shall be deemed substituted for the Company under
the terms of this Agreement. As used in this Agreement, the term "successor"
shall include any person, firm, corporation or other business entity which at
any time, whether by merger, purchase or otherwise, acquires all or
substantially all of the assets or business of the Company.
9. Waiver of Breach.
The waiver by the Company of a breach of any provision of this Agreement by
Executive shall not operate or be construed as a waiver of any subsequent
breach.
10. Notices.
Any notice required or permitted to be given hereunder shall be sufficient,
upon acknowledgement of receipt, if in writing and if sent by facsimile message
or by recognized courier to Executive at each of his residences or to the
Company at its principal place of business.
11. Entire Agreement.
This document contains the entire agreement of the parties and may not be
changed except in a writing signed by both parties.
12. Governing Law.
This Agreement shall be governed by and construed in accordance with the
laws of the Commonwealth of Virginia as applied to contracts executed and
performed wholly within the Commonwealth of Virginia.
13. Confidentiality.
a. From and after the Effective Time, Executive shall not, without the
prior written consent of the Company Board, for any reason, either directly or
indirectly, divulge to any third-party or use for his or her own benefit, or for
any purpose other than the exclusive benefit of the Company, any confidential,
proprietary, business and technical information or trade secrets (the
"Proprietary Information") of the Company or any of its subsidiaries whether
learned prior to or after the date hereof.
Proprietary Information shall include, but shall not be limited to, any
information relating to computer codes or instructions (including source and
object code listings, logic algorithms, subroutines, modules or other subparts
of computer programs and related documentation, including program notation);
computer processing systems and techniques; concepts; layouts; flowcharts;
specifications; know-how; any associated programmer, user or other manuals or
other like textual materials; all computer inputs and outputs (regardless of the
media on which it is stored or located); hardware and software configurations;
designs; interfaces; research; processes; inventions; products; methods;
marketing, sales and distribution data, plans and efforts; relationships with
actual and prospective customers and suppliers; and any other materials prepared
by Executive in the course of Executive's employment with the Company or
prepared by any other employee or contractor of the Company or any of its
subsidiaries for their customers, and any other materials that have not been
made available to the general public.
Furthermore, nothing contained herein shall restrict Executive from
divulging or using for his own benefit or for any other purpose any Proprietary
Information that is readily available to the general public so long as such
information did not become available to the general public as a direct or
indirect result of Executive's breach of this Agreement.
b. All right, title and interest in and to Proprietary Information shall be
and remain the sole and exclusive property of the Company. Executive will not
remove from the Company's offices or premises any documents, records, notebooks,
files, correspondence, reports, memoranda or similar materials of or containing
Proprietary Information, or other materials or property of any kind belonging to
the Company unless necessary or appropriate in connection with the ongoing
business of the Company or its subsidiaries and, in the event that such
materials or property are removed, all of the foregoing shall be returned to
their proper files or places of safekeeping as promptly as possible after the
removal shall serve its specific purpose.
Executive shall not make, retain, remove and/or distribute any copies of
any of the Proprietary Information for any reason whatsoever except as may be
necessary in the performance of Executive's obligations as an officer or
employee of the Company or any of its subsidiaries. Executive shall not divulge
to any third person the nature of and/or contents of any of the Proprietary
Information to which Executive may have access or with which for any reason
Executive became familiar in the course of Executive's employment hereunder,
except as disclosure shall be necessary for the purposes of conducting the
ongoing business of the Company. Upon Executive's termination as an employee,
officer or director of the Company or any of its subsidiaries, Executive shall
return to the Company all originals and copies of the Proprietary Information
then in Executive's possession.
c. Nothing contained herein shall restrict Executive's ability to make any
disclosures as may be required by law; provided, however, that Executive shall
(i) deliver to the Company reasonably prompt prior written notice of the nature
and justification for such disclosures; and (ii) cooperate reasonably with the
Company prior to any such disclosure in any actions which the Company shall take
in order to obtain a protective order or similar relief with respect to the
Proprietary Information sought to be disclosed.
14. Non-Compete and Non-Solicitation Covenants.
a. Except (i) in furtherance of the Company's business or otherwise on
behalf of the Company, (ii) after the Company's termination of this Agreement
without Cause (as defined in Section 5 (c)), (iii) after Executive's termination
of this Agreement pursuant to paragraphs (d), (e) or (f) of Section 5 or (iv)
upon the occurrence of a Material Adverse Event (as defined below), Executive
will not do any of the following, directly or indirectly, during the period
beginning with the Effective Time and ending on the third anniversary thereof
("Covenant Period") without the prior written consent of the Company Board
(which consent shall not be unreasonably withheld):
(1) engage or participate, directly or indirectly, in any
business activity competitive with the business conducted by the
Company or any of its subsidiaries as of the Effective Time or
thereafter (collectively, the "Business");
(2) become interested (as owner, stockholder, lender, partner,
co-venturer, director, officer, employee, agent, consultant or
otherwise) in any person, firm, corporation, association or other
entity engaged in any business that is competitive with the
Business, or become interested in (as owner, stockholder, lender,
partner, co-venturer, director, officer, employee, agent,
consultant or otherwise) any portion of the business of any
person, firm, corporation, association or other entity if such
portion of such business is competitive with the Business.
Notwithstanding the foregoing, Executive may hold not more than
one percent (1%) of the outstanding securities of any class of
any publicly-traded securities of a company that is engaged in
activities competitive with the Business.
b. Except in furtherance of the Company's Business or otherwise on behalf
of the Company, Executive will not do any of the following, directly or
indirectly, during the Covenant Period without the prior written consent of the
Company Board (which consent shall not be unreasonably withheld):
(1) solicit or call on, either directly or indirectly, any
customer or supplier with whom the Company or any of its
subsidiaries shall have dealt with (x) in the two year period
preceding the Effective Time or (y) any time after the Effective
Time;
(2) influence or attempt to influence any supplier, customer or
potential customer of the Company to terminate or modify any
written or oral agreement or course of dealing with the Company
or any of its subsidiaries; or
(3) influence or attempt to influence any person either (i) to
terminate or modify his or her employment, consulting, agency,
distributorship or other arrangement with the Company or any of
its subsidiaries, or (ii) to employ or retain, or arrange to have
any other person or entity employ or retain, any person who has
been employed or retained by the Company or any of its
subsidiaries as an employee, consultant, agent or distributor of
the Company or any of its subsidiaries at any time during (x) the
one (1) year period immediately preceding the Effective Time or
(y) any time after the Effective Time.
c. Definition
The term "Material Adverse Event" shall mean
(i) a bankruptcy petition filed against the Company under
and pursuant to Chapter 7 of the United States Bankruptcy
Code;
(ii) the dissolution of the Company;
(iii) the assignment of Executive without his consent, to
responsibilities or duties of a materially lesser status or
degree of responsibility than Executive's responsibilities
or duties as of the Effective Time; or
(iv) the requirement by the Company that the Executive,
without his consent, be based anywhere other than the place
where Executive is based as of the Effective Time.
d. Executive acknowledges that (i) he has carefully read and considered the
provisions of this Section 14, and (ii) has obtained legal counsel in
determining whether to enter into this Agreement. Executive acknowledges that
the foregoing restrictions may limit his ability to earn a livelihood in a
business similar to the Business, but Executive nevertheless believes that he
has received and will receive sufficient consideration and other benefits in
connection with the Agreement to justify such restrictions, which restrictions
Executive does not believe would prevent him or her from earning a living in
businesses that are not competitive with the Business and without otherwise
violating the restrictions set forth herein.
e. The terms of the covenants contained in this Section 14 shall be
construed as separable and shall be independent and shall be interpreted and
applied consistently with the requirements of reasonableness and equity. Except
as otherwise provided in Section 14 a, these covenants shall survive the
termination of this Agreement during the Covenant Period but not thereafter.
15. Specific Enforcement; Extension of Covenant Period.
a. Executive acknowledges that the restrictions contained in Section 14
hereof are reasonable and necessary to protect the legitimate interest of the
Company. Executive also acknowledges that any breach by him or her of such
sections will cause continuing and irreparable injury to the Company for which
monetary damages would not be an adequate remedy. Executive agrees that he shall
not, in any action or proceeding to enforce Section 14 of this Agreement, assert
the claim or defense that an adequate remedy at law exists. In the event of such
breach by Executive, the Company shall have the right to enforce the provisions
of Section 14 of this Agreement by seeking injunctive or other relief in any
court and this Agreement shall not in any way limit remedies of law or in equity
otherwise available to the Company with respect to such section.
b. The Covenant Period set forth in Section 14 hereof shall not include,
and shall be deemed extended by, any time required for litigation to enforce the
relevant covenants; provided, that the Company is successful on the merits in
any such litigation. The "time required for litigation" is herein defined to
mean the period of time from service of process upon Executive through the
expiration of all appeals related to such litigation.
16. Registration Expenses of Executive.
The Company agrees to pay reasonable attorney's fees of Executive in
connection with Executive's participation in a Demand Registration, Piggyback
Registration or Tag-Along transaction on the same basis and in the same amount
made available to other selling stockholders in such registrations and
transactions.
17. Change of Control
For purposes hereof, the term "change in control" shall mean any of
the following events:
a. if any "Person" (as the term person is used for purposes of Sections
13(d) or 14(d) of the Securities Exchange Act of 1934 ("1934 Act") shall have
"Beneficial Ownership" (as the term beneficial ownership is used for purposes of
Rule 13d-3 promulgated under the 0000 Xxx) of thirty three percent (33%) or more
of the combined voting power of Company's then outstanding voting securities
("Voting Securities"), at any time that the Beneficial Ownership of Voting
Securities of the Company by such Person exceeds Executive's Beneficial
Ownership of Voting Securities of the Company;
b. the approval by stockholders of the Company of (i) a merger,
reorganization or consolidation involving the Company if the stockholders of
Company immediately before such merger, reorganization or consolidation, do not
or will not own directly or indirectly immediately following such merger,
reorganization or consolidation more than fifty percent (50%) of the combined
voting power of the outstanding voting securities of the corporation resulting
from or surviving such merger, reorganization or consolidation in substantially
the same proportion as their ownership of the Voting Securities of the Company
immediately before such merger, reorganization or consolidation, (ii) a complete
liquidation or dissolution of the Company or (iii) an agreement for the sale or
other disposition of all or substantially all of the assets of the Company; or
c. the acceptance by stockholders of Company of shares in a share exchange
if the stockholders of Company immediately before such share exchange, do not or
will not own directly or indirectly immediately following such share exchange
more than fifty percent (50%) of the combined voting power of the outstanding
voting securities of the corporation resulting from or surviving such share
exchange in substantially the same proportion as the ownership of the Voting
Securities of the Company outstanding immediately before such share exchange.
d. if Xxxxxxx X. Xxxxxxxxx shall cease to serve as Chief Executive Officer
of PHB Xxxxxx Bailly or as Executive Vice President and Chief Operating Officer
of the Company before January 1, 2000, or after January 1, 2000, as Chief
Executive Officer of the Company or as a Director of the Company other than as a
result of death or disability or termination for cause pursuant to Section 5(c);
e. if Xxxxxx X. Xxxxx III shall cease to serve as Chairman of the Company Board
before January 1, 2000, or as a member of the Company Board other than as a
result of death or disability or termination for cause pursuant to Section 5(c);
f. if Executive shall cease to serve as Chief Executive Officer of the
Company before January 1, 2000, or after January 1, 2000, as Chairman of the
Company Board, other than as a result of death, disability, electing to resign
or termination for cause pursuant to Section 5(c).
18. Arbitration
Except as otherwise provided in Section 15, in the event of any dispute
between the parties under or relating to this Agreement or otherwise relating to
Executive's employment by the Company, such dispute shall be submitted to and
settled by arbitration in Arlington, Virginia, in accordance with the rules and
regulations of the American Arbitration Association then in effect. The
arbitrators shall have the right and authority to determine how their award or
decision as to each issue and matter in dispute may be implemented or enforced.
Any decision or award shall be final and conclusive on the parties; judgment
upon any award or decision may be entered in any court or competent jurisdiction
in the Commonwealth of Virginia or elsewhere; and the parties hereto consent to
the application by any party in interest to any court of competent jurisdiction
for confirmation or enforcement of such award.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.
XXXXXX XXXXXX, INC.
By:/s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx Title:
Vice President and Chief Financial Officer
XXXXX-XXXXXX XXXXXX
/s/ Xxxxx-Xxxxxx Xxxxxx
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