1
EXHIBIT 10.13
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), made this 3rd day of
April, 1995, is entered into by XXXXX INTERNATIONAL, INC., a Delaware
corporation with its principal place of business at Houston, Texas (the
"Company"), and XXXXX X. XXXXX residing at Houston, Texas (the "Executive").
The Company desires to employ the Executive, and the Executive desires
to be employed by the Company. In consideration of the mutual covenants and
promises contained herein, and the good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged by the parties hereto, the
parties hereto agree as follows:
1. TERM OF EMPLOYMENT.
1.1 The Company hereby agrees to employ the Executive
because of the extraordinary and unique services the Executive can render to
the Company, and the Executive accepts employment with the Company, upon the
terms set forth in this Agreement, for the period commencing on the date hereof
(the "Commencement Date") and ending on April 2, 1998, unless sooner terminated
in accordance with the provisions of Section 4 (the "Employment Period").
1.2 Upon expiration of the term of this Agreement, if the
parties hereto mutually agree, the Employment Period may be extended
indefinitely, and the Executive shall continue thereafter as an "at will"
employee. Regardless of whether employment is continued, this Agreement shall
terminate and be of no further force and effect on April 2, 1998, except as
otherwise specifically provided herein.
2. TITLE; CAPACITY; DUTIES. The Executive shall serve as
President, Xxxxx Diamond Products division or in such other position as the
Company's Board of Directors (the "Board") may determine from time to time.
The foregoing description of Executive position shall not limit the Company
from assigning to Executive other duties and functions in addition to or in
substitution for those described above. The Executive shall be subject to the
supervision of, and shall have such authority as is delegated to him by the
Board, the Company's Chief Executive Office or such other senior executive(s)
as the Board or the Chief Executive Officer shall determine.
3. COMPENSATION AND BENEFITS.
3.1 Salary. The Company shall pay the Executive, in
regular periodic installments, consistent with the Company's general pay
practices, an annual base salary of $180,000.00 for each one year period,
commencing on the Commencement Date, during the Employment Period. Such salary
shall be subject to adjustment as determined by the Board in its annual review
of Executive's performance hereunder. Executive specifically acknowledges that
Company has no obligation to increase said salary as a result of such review.
1
2
3.2 Fringe Benefits and Bonus. The Executive shall
be entitled to participate in all bonus, stock purchase, warrant, stock option
and any other form of benefit programs that the Company establishes and makes
available to its executive employees, if any, to the extent that Executive's
position, tenure, salary, age, health and other qualifications make him
eligible to participate.
3.3 Reimbursement of Expenses. The Company shall
reimburse the Executive for all reasonable travel, entertainment and other
expenses incurred or paid by the Executive in connection with, or related to,
the performance of his duties, responsibilities or services under this
Agreement, upon presentation by the Executive of documentation, expense
statements, vouchers and/or such other supporting information as the Board of
Directors may request.
4. Employment Termination. The employment of the Executive by
the Company pursuant to the Agreement shall terminate upon the occurrence of
any of the following:
4.1 At the election of the Company for cause, immediately
upon written notice by the Company to the Executive. For the purposes of this
Section 4.1, cause for termination shall be deemed to exist upon (a) the
conviction of the Executive of, or the entry of a pleading of guilty or nolo
contendere by the Executive to, any crime involving moral turpitude or any
felony; or (b) any theft, embezzlement, fraud or other act of dishonesty
whether or not involving the Company, which, in the good faith finding of the
Board, will have a material adverse effect on the Company if Executive's
employment by the Company were to continue.
4.2 Upon the Executive's death or in accordance with the
Company's policies applicable to Executive in the event of the inability of the
Executive to provide services due to illness, disability, or physical or
emotional incapacity.
4.3 If for any reason the Executive's position is
eliminated or otherwise becomes redundant, or his responsibilities are
substantially decreased, whether because of merger, acquisition, sale of
business or assets, dissolution, tender offer, or any other reason.
4.4 The expiration of the Employment Period unless
extended in accordance with Section 1.2.
5. EFFECT OF TERMINATION
5.1 Termination Pursuant to Section 4.1 or 4.4.
During the term of this Agreement, in the event the Executive's employment is
terminated pursuant to Section 4.1 or pursuant to Section 4.4 unless extended
in accordance with Section 1.2, the Company shall pay to the Executive the
compensation and benefits otherwise payable to him under Section 3 through the
last day of his actual employment by the Company. Any compensation previously
earned by Executive hereunder but not yet paid to him shall be accelerated and
shall become payable in a lump sum upon termination of employment.
2
3
5.2 Termination Pursuant to Section 4.2 or 4.3.
During the term of this Agreement, if the Executive's employment is terminated
pursuant to Section 4.2 or 4.3, the Company shall pay to the Executive or his
personal representative, as the case may be, the compensation which would
otherwise be payable to the Executive under Section 3 in a lump sum, equal to
the amounts in effect under Section 3 through the end of the Employment Period.
Any compensation previously earned by Executive hereunder but not yet paid to
him shall be accelerated and shall become payable in a lump sum upon
termination of employment.
5.3 No Duty to Mitigate. If the Executive's
employment is terminated pursuant to Section 4.3 or under circumstances
constituting a breach of this Agreement by the Company, the payments and
benefits provided in Section 5.2 shall be payable without regard to Executive's
other income or his ability to obtain other employment, and Executive shall be
under no duty to mitigate the amount payable hereunder.
5.4 Survival. The provisions of Sections 6, 7 and
8 shall survive the termination of this Agreement.
6. Breach of Contract by Executive. Executive recognizes that
the Company is entering into this Agreement in order to obtain the exclusive
use of his personal services during the term hereof, that Executive's services
are of a special, unique, unusual, extraordinary, creative and intellectual
character, and that the commercial success of the enterprise for which
Executive has been hired depends primarily upon the unique character of his
services. Executive therefore agrees that the substantial portion of the
Executive's services to unrelated endeavors during the Employment Period, in
violation of this Agreement and without consent of the Company, shall be a
material breach of this Agreement. The Executive understands that such loss or
diversion of his services could neither be cured by the hiring of other
executives nor could damages be reasonably or adequately calculated and
recovered in an action at law, and therefore Executive further agrees that, to
the extent permitted by law, any material breach of this Agreement may, without
limiting any other remedies, be prevented or cured by an action for specific
performance or injunctive relief, without the need of the Company to post bond
or other security.
7. NON-COMPETITION.
(a) During the Employment Period, the Executive will not
directly or indirectly:
(i) As an individual proprietor, partner,
stockholder, officer, executive, director, joint venture, investor, lender, or
in any other capacity whatsoever (other than as a holder of not more than one
percent (1%) of the total outstanding stock of a publicly held company, engage
in the business of developing, producing, marketing or selling, whether at
wholesale or at retail, or of performing, providing, or offering, products
and/or services of the kind or type developed or being developed, produced,
marketed, sold, offered, provided or performed by the Company while the
Executive was employed by the Company; or
3
4
(ii) recruit, solicit or induce, or attempt to
induce, any executive or executives of the Company or any other person or
entity having any continuing or periodic relationship with the Company to
terminate their employment with, to otherwise cease their relationship with,
the Company, or
(iii) solicit, divert or take away, or attempt to
divert or to take away, the business or patronage of any of the customers or
accounts, or prospective customers or account, of the Company which were
contracted, solicited or serviced by the Executive while employed by the
Company.
(b) If any restriction set forth in this Section 7 is
found by a court of competent jurisdiction to be unenforceable because it
extends for too long period of time or over too great a range of activities or
in too broad a geographic area, it shall be interpreted to extend only over the
maximum period of time, range of activities or geographic areas as to which it
may be enforceable.
(c) The restrictions contained in this Section 7 are
necessary for the protection of the business and goodwill of the Company and
are considered by the Executive to be reasonable for such purpose. The
Executive agrees that any breach of this Section 7 will cause the Company
substantial and irrevocable damage and therefore, the Company shall have the
right, in addition to any other remedies it may have, to seek specific
performance and injunctive relief, without the need to post a bond or other
security.
8. PROPRIETARY INFORMATION AND DEVELOPMENTS.
8.1 Proprietary Information.
(a) Executive agrees that all information and know-how,
whether or not in writing, of a private, secret or confidential nature
concerning the Company's business or financial affairs, business methods,
suppliers or customers (collectively, "Proprietary Information") is and shall
be the exclusive property of the Company. Executive will not disclose any
Proprietary Information to others outside the Company or use the same for any
unauthorized purposes without written approval by the Board, either during or
after his employment, unless and until such Proprietary Information has become
public knowledge without fault of the Executive.
(b) Executive agrees that all files, letters, memoranda,
reports, records, data, sketches, drawings, flow charts, business methods,
promotional materials, video or sound recordings, program listings, or other
written, photographic, or other tangible material containing Proprietary
Information, whether created by the Executive or others, which shall come into
his custody or possession, shall be and are the exclusive property of the
Company to be used by the Executive only in the performance of his duties for
the Company.
(c) Executive agrees that his obligation not to disclose
or use information, know-how and records of the types set forth in paragraphs
(a) and (b) above, also extends to such types of information, know-how, records
and intangible property of customers of the Company or suppliers to the Company
or other third parties who may have disclosed or
4
5
entrusted the same to the Company or to the Executive in the course of the
Company's business.
8.2 Developments.
(a) Executive will make full and prompt disclosure to the
Company of all inventions, improvements, discoveries, methods, developments,
software and works of authorship, whether or not patentable or copyrightable,
which are created, made, conceived or reduced to practice by the Executive or
under his direction jointly with others during his employment by the Company,
whether or not during normal working hours or on the premises of the Company
(all of which are collectively referred to in this Agreement as
"Developments").
(b) Executive agrees to assign and does hereby assign to
the Company (or any person or entity designated by the Company) all his right,
title and interest in and to all Developments and all related patents, patent
applications, copyrights and copyright applications. However, this Section
8.2(b) shall not apply to Developments which do not relate to the present or
planned business or research and development of the Company and which are made
and conceived by the Executive not during normal working hours, not on the
Company's premises and not using the Company's tools, devices, equipment or
Proprietary Information.
(c) Executive agrees to cooperate fully with the Company,
both during and after his employment with the Company, with respect to the
procurement, maintenance and enforcement of copyrights, patents and other
intellectual and intangible property rights (both in the United States and in
foreign countries) relating to Proprietary Information and Developments.
Executive shall sign all papers, including, without limitation, copyright
applications and/or assignments, patent applications and/or assignments,
declarations, oaths, formal assignments, assignments of proprietary rights, and
powers of attorney, which the Company may deem necessary or desirable in order
to protect its rights and interests in any Proprietary Information or
Development.
8.3 Other Agreements. Executive further represents
that his performance of all the terms of this Agreement and as an Executive of
the Company does not and will not breach any agreement to keep in confidence
proprietary information, knowledge or data acquired by him in confidence or in
trust prior to his employment with the Company.
9. Notices. All notices required or permitted under this
Agreement shall be in writing and shall be deemed effective upon personal
delivery or upon deposit in the United States Post Office, by registered or
certified mail, postage prepaid, addressed to the other party at the address
shown above, or at such other address or addresses as either party shall
designate to the other in accordance with this Section 9. A copy of all
notices given by Executive to the Company shall be sent to each member of the
Board.
10. Pronouns. Whenever the context may require, any
pronouns used in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular forms of nouns and pronouns shall
include the plural, and vice versa.
5
6
11. Entire Agreement. This Agreement constitutes the
entire agreement between the parties and supersedes all prior agreements and
understandings, whether written or oral, relating to the subject matter of this
Agreement.
12. Amendment. This Agreement may be amended or modified
only by a written instrument executed by both the Company and Executive.
13. GOVERNING LAW. THE AGREEMENT SHALL BE CONSTRUED, INTERPRETED
AND ENFORCED IN ACCORDANCE WITH THE LAW OF THE STATE OF TEXAS.
14. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of both parties and their respective successors and
assigns, including any corporation with which or into which the Company may be
merged or which may succeed to its assess or business, provided, however, that
the obligations of Executive are personal and shall not be assigned by him.
15. Miscellaneous.
15.1 No delay or omission by the Company in exercising any
right under this Agreement shall operate as a waiver of that or any other
right. A waiver of consent given by the Company on any one occasion shall be
effective only in that instance and shall not be construed as a bar or waiver
of any right on any other occasion.
15.2 The captions of the sections of this Agreement are
for convenience of reference only and in no way define, limit or affect the
scope or substance of any section of this Agreement.
15.3 In case any provision of this Agreement shall be
invalid, illegal or otherwise unenforceable, the validity, legality and
enforceability of the remaining provisions shall in no way be affected or
impaired thereby.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year set forth above.
XXXXX INTERNATIONAL, INC. EXECUTIVE:
/s/ XXXXXXX X. ROCK /s/ XXXXX X. XXXXX
----------------------------- -------------------------------
Xxxxxxx X. Rock Xxxxx X. Xxxxx
President
6
