EXHIBIT 10.3
EMPLOYMENT AND NONCOMPETITION AGREEMENT
This EMPLOYMENT AND NONCOMPETITION AGREEMENT (this "Agreement") is
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entered into as of November ___, 1996, by and between HOLD BILLING SERVICES,
LTD., a Texas limited partnership ("Employer"), and XXXXXX X. BOX ("Employee").
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RECITALS
A. Employer desires to employ Employee as provided herein, and Employee
desires to accept such employment; and
B. Employee will, as an employee of Employer, have access to
confidential information with respect to Employer and its affiliates;
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. DEFINITIONS. Capitalized terms used and not otherwise defined herein
shall have the same meanings as set forth in that certain Partnership Interest
Option Agreement, dated as of May 3, 1996, among Xxxxx Communications, Inc., a
Delaware corporation, Xxxxx Acquisition Sub, Inc., a Delaware corporation, Xxxxx
X. Xxxxxxx, Xx., and Employee, as amended.
2. EMPLOYMENT. Employer, at the Closing, will, without further action
on the part of Employee or Employer, employ Employee, and Employee hereby
accepts employment with Employer upon the terms and conditions hereinafter set
forth.
3. DUTIES. Subject to the power of the general partner of Employer (the
"General Partner") to elect and remove officers, Employee will serve Employer as
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Vice President - Sales (or in such other office as Employer or the General
Partner may determine) and will perform, faithfully and diligently, the services
and functions relating to such office or otherwise reasonably incident to such
office as may be designated from time to time by the General Partner or the
President of the Employer, including without limitation, responsibility for the
growth, operations and performance of the business of Employer and the execution
of the strategic business plan developed with the President of ACI. Employee
will devote his full time, attention, skills, benefits and best efforts to the
performance of his duties hereunder and to the promotion of the business and
interests of Employer and its affiliates and will not, without the prior written
consent of the General Partner or the President of the Employer, become engaged
in any other activity requiring significant time or personal services by
Employee that will conflict with the proper performance of any such duties under
this Agreement. Employer acknowledges Employee may continue to occasionally act
as a telecommunication consultant provided such actions shall not interfere with
or impair Employee's ability to perform Employee's duties and responsibilities
required by Employer and such actions shall be performed on Employee's personal
time.
4. TERM. Unless sooner terminated pursuant to the provisions hereof,
the term of this Agreement (together with any renewals pursuant to this Section,
the "Term") shall be for a term commencing on the date of this Agreement and
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terminating December 31, 2000; provided that this Agreement will be
automatically renewed for additional terms of one year unless either party
notifies the other prior to December 1 of a given year that they do not wish to
renew this Agreement.
5. COMPENSATION. As compensation for services of Employee rendered
under this Agreement, Employee will be entitled to receive the following:
5.1 Salary. During the Term, Employee will be paid an annual
salary of $100,000, payable monthly (the "Salary"). At any time and
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from time to time the Salary may be increased if so determined by the
General Partner or its Compensation Committee after a review of
Employee's performance of his duties hereunder.
5.2 Incentive Compensation. Employer currently has an employee
profit sharing plan, pursuant to which Employer contributes 5% of
Employer's pre-tax profit (exclusive of (i) any management fees and
overhead allocations payable to ACI or its Subsidiaries and (ii)
goodwill and acquisition expenses) into the plan and is paid to
Employer's employees. During the Term of the Agreement, Employer shall
continue such plan or a similar plan with the same basic economic
benefits to such employees. Employee currently participates in such
plan and shall continue to participate in such Plan during the Term of
this Agreement, consistent with past practices.
In addition to the foregoing, Employer has deposited 666,664
shares of ACI Common Stock into escrow. Employee shall be entitled to
receive 83,333 shares of the ACI Common Stock from escrow on April 30,
1998, 1999, 2000, and 2001 if the "PRE-TAX EARNINGS" (as defined below)
of Employer equal or exceed the amounts set forth below for the years
ending December 31 set forth below:
1997 $1,000,000
1998 $1,500,000
1999 $2,100,000
2000 $3,000,000
As used in this paragraph, the term "PRE-TAX EARNINGS" shall be deemed
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to mean the result obtained by subtracting (A) the lesser of (1) the
sum of clause (B)(2), plus clause (B)(3), or (2) $250,000, from (B) the
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sum of (1) the Partnership's audited pre-tax earnings (as determined by
ACI's auditors for inclusion in the audited consolidated financial
statements of ACI, whose determination shall be final and binding on
the parties in all respects) for any applicable year, plus (2) any
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amortization of goodwill included in such earnings, plus (3) any
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allocation of ACI's corporate overhead or similar corporate charges of
ACI included in such earnings. There shall be no carryovers between or
among years or prorations for any year. In the event Employer shall
cease to be a direct or indirect subsidiary of ACI, whether through the
disposition of ACI's ownership of Employer, the sale of all or
substantially all the assets of Employer as a going concern, spinoff,
or otherwise, Employee shall, on the day preceding the effective date
of any such transaction, immediately become fully vested in any and all
shares of ACI Common Stock still held in escrow at such time for
release based upon the audited pre-tax earnings for years not then
completed, and all such fully vested shares of ACI Common Stock shall
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be released from escrow to Employee on or before the consummation of
any such transaction. All shares of ACI Common Stock not released to
Employee pursuant to the terms hereof shall be immediately released
from escrow to ACI on each April 30 set forth above for cancellation.
5.3 Bonus. In addition to the Salary, Employee will be
entitled to receive such bonuses as may be determined by the General
Partner or its Compensation Committee.
5.4 Benefits. During the Term, Employee will be entitled to
receive such group benefits as Employer may provide to its other
employees at comparable salaries and responsibilities to those of
Employee, including, without limitation, providing healthcare benefits
for Employee's dependents consistent with past practices.
5.5 Expenses. Employer will reimburse Employee for all
reasonable and necessary out-of-pocket travel and other expenses
incurred by Employee in rendering services required under this
Agreement, on a monthly basis upon submission of a detailed monthly
statement and reasonable documentation.
6. CONFIDENTIALITY; NON-COMPETITION.
6.1 Acknowledgment of Proprietary Interest. Subject to the
terms and conditions hereof, Employer will permit Employee to have
access to the Confidential Information (as hereinafter defined).
Employee recognizes the proprietary interest of Employer and its
affiliates in any Confidential Information of Employer and its
affiliates. Employee acknowledges and agrees that during the course of
Employee's engagement by Employer Employee will learn Confidential
Information of Employer and its affiliates and any and all Confidential
Information learned by Employee during the course of Employee's
engagement by Employer or otherwise, whether developed by Employee
alone or in conjunction with others or otherwise, will be and is the
property of Employer and its affiliates. Employee further acknowledges
and understands that Employee's disclosure of any Confidential
Information and/or proprietary information will result in irreparable
injury and damage to Employer and its affiliates. As used herein,
"Confidential Information" means all confidential and proprietary
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information of Employer and its affiliates, including without
limitation information derived from reports, investigations,
experiments, research, drawing, designs, plans, proposals, codes,
marketing and sales programs, client lists, client mailing lists,
financial projections, cost summaries, pricing formula, and all other
concepts, ideas, materials, or information prepared or performed for or
by Employer or its affiliates. "Confidential Information" also includes
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information related to the business, products or sales of Employer or
its affiliates, or any of their respective customers, other than
information that is otherwise publicly available.
6.2 Covenant Not-to-Divulge Confidential Information. Employee
acknowledges and agrees that Employer and its affiliates are entitled
to prevent the disclosure of Confidential Information. As a portion of
the consideration for the employment of Employee and for the
compensation being paid to Employee by Employer, Employee agrees at all
times during the Term and thereafter to hold in strict confidence
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and not to disclose or allow to be disclosed to any person, firm or
corporation, other than to persons engaged by Employer and its
affiliates to further the business of Employer and its affiliates, and
not to use except in the pursuit of the business of Employer and its
affiliates, the Confidential Information, without the prior written
consent of Employer, including Confidential Information developed by
Employee.
6.3 Return of Materials at Termination. In the event of any
termination or cessation of his employment with Employer for any reason
whatsoever, Employee will promptly deliver to Employer all documents,
data and other information pertaining to Confidential Information.
Employee will not take any documents or other information, or any
reproduction or excerpt thereof, containing or pertaining to any
Confidential Information.
6.4 Noncompetition. In consideration of employment or
continued employment with Employer and the Confidential Information
learned and to be learned by Employee (the "Noncompetition
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Consideration"), and of the other promises and covenants of Employer
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contained herein, Employee hereby agrees that Employee will not,
directly or indirectly (including without limitation as an owner,
partner, shareholder, investor, lender, consultant or advisor; other
than as a 5% or less shareholder in a corporation registered pursuant
to Section 12(g) of the Securities and Exchange Act of 1934 or a 1% or
less shareholder in any other company), alone or with others, engage in
any business or lines of business that Employer is currently engaged or
in which it engages during the term of this Agreement within the state
of Texas for a period of two years following the termination of
Employee's employment with Employer or any of its affiliates (the
"Noncompetition Period"). Employer acknowledges that Employee's actions
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under Section 3 shall not violate this Section 6.4; provided, however,
that Employer may limit Employee's ability to act as a consultant for
any person that Employee deems a competitor, and, provided further,
that Employee fully honors Employee's obligations under this Section 6.
6.5 Agreement Concerning Employees. In further consideration
of the Noncompetition Consideration and of the other promises and
covenants of Employer contained herein, Employee hereby agrees that
during the Noncompetition Period, he will not, directly or indirectly
(including without limitation as an owner, partner, shareholder,
investor, lender, consultant or advisor), alone or with others, solicit
for employment, hire, retain, employ or otherwise provide compensation
for or to any employee of Employer or any of its affiliates, or any
person who is or was an employee of Employer or any of its affiliates
during the thirty (30) days immediately prior to the date hereof,
without the prior written consent of ACI.
6.6 Reasonableness of Restrictions. Employee acknowledges that
Employer has carefully read and considered the provisions of this
Agreement and, having done so, agrees that the restrictions are
reasonable and necessary restrictions for purposes of protecting the
value received by ACI, which includes the expectation of Employer and
its affiliates of expanding their business throughout the State of
Texas, without competition from Employee during the Noncompetition
Period. Employee further agrees
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that the State of Texas is a reasonable geographic description of the
market in which Employer and its affiliates currently compete. The
parties specifically agree that Employer and its affiliates shall not
be limited to the value allocated to the foregoing agreements for tax
purposes as damages in any legal action by Employer or its affiliates
against Employee for breach of such covenants.
6.7 Remedies for Breach by Employee. Employee expressly
acknowledges and agrees that Employer and its affiliates would be
irreparably damaged by reason of any violation of the provisions of
this Agreement and that any remedy at law for a breach of the
provisions of this Agreement would be inadequate. Therefore, Employee
or its affiliates shall be entitled to seek injunctive or other
equitable relief in a court of competent jurisdiction against Employee,
and his agents, employees, affiliates, partners or other associates,
for any breach or threatened breach of this Agreement without the
necessity of proving actual monetary loss. It is expressly understood
that the remedy described in this Section 6.7 shall not be the
exclusive remedy of Employer or its affiliates for any breach of this
Agreement, and Employer and its affiliates shall be entitled to seek
such other relief or remedy, at law or in equity, to which it may be
entitled as a consequence of any breach of this Agreement. In the event
Employer or its affiliates seek to specifically enforce performance of
this Agreement, Employee hereby irrevocably waives any bonds and any
surety or security relating thereto that may be required by applicable
law as an incident to such action.
7. TERMINATION. This Agreement and the employment relationship created
hereby will terminate upon the occurrence of any of the following events:
(a) The expiration of the Term as set forth in Section 4
above;
(b) The death of Employee;
(c) The "disability" (as hereinafter defined) of Employee; or
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(d) Written notice to Employee from Employer of termination
for "just cause" (as hereinafter defined).
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For purposes of Section 7(c), the "disability" of Employee will mean
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his inability, because of mental or physical illness or incapacity, to perform
his duties under this Agreement for a continuous period of 180 days or for 180
days out of a 210-day period. For purposes of Section 7(d), "just cause" shall
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mean Employee shall commit any act in bad faith and to the detriment of Employer
or shall omit to take any action in bad faith and to the detriment of Employer.
Notwithstanding anything to the contrary in this Agreement, the
provisions of Section 6 will survive any termination, for whatever reason, of
Employee's employment under this Agreement. In the event of the termination of
Employee's employment prior to the completion of the Term, Employee or his
estate, as the case may be, will be entitled only to the Salary payable pursuant
to Section 5 hereof through the end of the calendar month in which termination
occurs.
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8. REMEDIES. Employee recognizes and acknowledges that in the event of
any default in, or breach of any of, the terms, conditions or provisions of this
Agreement by Employee, Employer's and its affiliates remedies at law will be
inadequate. Accordingly, Employee agrees that in such event, Employer and its
affiliates will have the right of specific performance and/or injunctive relief
in addition to any and all other remedies and rights at law or in equity, and
such rights and remedies will be cumulative.
9. ACKNOWLEDGMENTS. Employee acknowledges and recognizes that the
enforcement of any of the provisions set forth in Section 6 by Employer and its
affiliates will not interfere with Employee's ability to pursue a proper
livelihood. Employee recognizes and agrees that the enforcement of this
Agreement is necessary to ensure the preservation and continuity of the business
and good will of Employer and its affiliates.
10. SEVERABILITY. In the event that, notwithstanding the foregoing, any
part of any covenant set forth in this Agreement shall be held to be invalid or
unenforceable, the remaining parts thereof shall nevertheless continue to be
valid and enforceable as though the invalid or unenforceable parts had not been
included therein. In the event that any provision of this Agreement relating to
time periods and/or areas of restriction shall be declared by a court of
competent jurisdiction to exceed the maximum time period or areas such court
deems reasonable and enforceable, said time period and/or areas of restriction
shall be deemed modified so as to become and thereafter be the maximum time
period and/or areas which such court deems reasonable and enforceable. Any
provision of this Agreement otherwise prohibited by or unenforceable under any
applicable law or public policy in any jurisdiction which cannot be reformed in
accordance with the provisions hereof shall, as to such jurisdiction, be
ineffective without affecting any other provision of this Agreement or shall be
deemed to be severed or otherwise modified to conform with such law or public
policy, and the remaining provisions of this Agreement shall remain in force,
provided that the purpose of this Agreement can be effected. To the full extent,
however, that the provisions of such applicable law or public policy may be
waived, this Agreement shall be deemed to be a waiver thereof. The parties
understand and agree that all of the covenants set forth herein are and shall be
separately enforceable, and the parties shall promptly attempt in good faith to
negotiate a substitute for any invalid provision in order to preserve, to the
extent legally possible, the original intent of the parties with respect to this
Agreement.
11. NOTICES. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if (a) delivered
personally, (b) mailed by first-class, registered or certified mail, return
receipt requested, postage prepaid, or (c) sent by next-day or overnight mail or
delivery or (d) sent by telecopy or telegram,
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if to Employer, to
HOLD Billing Services, Ltd.
c/x Xxxxx Communications, Inc.
000 Xxxxx XxXxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, III; and,
if to Employee, to
Xxxxxx X. Xxx
00000 XX 00 Xxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000,
or, in each case, at such other address as may be specified in writing to the
other parties hereto.
All such notices, requests, demands, waivers and other communications
shall be deemed to have been received (w) if by personal delivery on the day
after such delivery, (x) if by certified or registered mail, on the seventh
business day after the mailing thereof, (y) if by next-day or overnight mail or
delivery, on the day delivered, (z) if by telecopy or telegram, on the next day
following the day on which such telecopy or telegram was sent, provided that a
copy is also sent by certified or registered mail.
12. OTHER OBLIGATIONS. Employee represents and warrants that he has not
as of the execution of this Agreement assumed any obligations inconsistent with
those contained herein.
13. MISCELLANEOUS.
13.1 Headings. The headings contained in this Agreement are
for purposes of convenience only and shall not affect the meaning or
interpretation of this Agreement.
13.2 Entire Agreement. This Agreement (including the Schedules
hereto) and the Collateral Agreements (when executed and delivered)
constitute the entire agreement and supersede all prior agreements and
understandings, both written and oral, between the parties with respect
to the subject matter hereof.
13.3 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original and all of
which shall together constitute one and the same instrument.
13.4 Governing Law, Etc. THIS AGREEMENT SHALL BE GOVERNED IN
ALL RESPECTS, INCLUDING AS TO VALIDITY, INTERPRETATION AND EFFECT, BY
THE INTERNAL LAWS OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAWS RULES THEREOF. EMPLOYER AND EMPLOYEE HEREBY
IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF
TEXAS AND THE FEDERAL COURTS OF THE
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UNITED STATES OF AMERICA LOCATED IN THE STATE OF TEXAS, CITY AND COUNTY
OF BEXAR SOLELY IN RESPECT OF THE INTERPRETATION AND ENFORCEMENT OF THE
PROVISIONS OF THIS AGREEMENT AND OF THE DOCUMENTS REFERRED TO IN THIS
AGREEMENT, AND HEREBY WAIVE, AND AGREE NOT TO ASSERT, AS A DEFENSE IN
ANY ACTION, SUIT OR PROCEEDING FOR THE INTERPRETATION OR ENFORCEMENT
HEREOF OR OF ANY SUCH DOCUMENT, THAT IT IS NOT SUBJECT THERETO OR THAT
SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS NOT
MAINTAINABLE IN SAID COURTS OR THAT THE VENUE THEREOF MAY NOT BE
APPROPRIATE OR THAT THIS AGREEMENT OR ANY OF SUCH DOCUMENT MAY NOT BE
ENFORCED IN OR BY SAID COURTS, AND THE PARTIES HERETO IRREVOCABLY AGREE
THAT ALL CLAIMS WITH RESPECT TO SUCH ACTION OR PROCEEDING SHALL BE
HEARD AND DETERMINED IN SUCH A TEXAS STATE OR FEDERAL COURT. EMPLOYER
AND EMPLOYEE HEREBY CONSENT TO AND GRANT ANY SUCH COURT JURISDICTION
OVER THE PERSON OF SUCH PARTIES AND OVER THE SUBJECT MATTER OF ANY SUCH
DISPUTE AND AGREE THAT MAILING OF PROCESS OR OTHER PAPERS IN CONNECTION
WITH ANY SUCH ACTION OR PROCEEDING IN THE MANNER PROVIDED IN SECTION
11, OR IN SUCH OTHER MANNER AS MAY BE PERMITTED BY LAW, SHALL BE VALID
AND SUFFICIENT SERVICE THEREOF.
13.5 Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
successors and permitted assigns.
13.6 Assignment. This Agreement shall not be assignable or
otherwise transferable by any party hereto without the prior written
consent of the other party hereto.
13.7 No Third Party Beneficiaries. Nothing in this Agreement
shall confer any rights upon any person or entity other than the
parties hereto and their respective heirs, successors and permitted
assigns, and any and all current or future affiliates of Employer,
including, without limitation, ACI and its affiliates, which are
intended third-party beneficiaries of this Agreement.
13.8 Amendment; Waivers, Etc. No amendment, modification or
discharge of this Agreement, and no waiver hereunder, shall be valid or
binding unless set forth in writing and duly executed by the party
against whom enforcement of the amendment, modification, discharge or
waiver is sought. Any such waiver shall constitute a waiver only with
respect to the specific matter described in such writing and shall in
no way impair the rights of the party granting such waiver in any other
respect or at any other time. Neither the waiver by any of the parties
hereto of a breach of or a default under any of the provisions of this
Agreement, nor the failure by any of the parties, on one or more
occasions, to enforce any of the provisions of this Agreement or to
exercise any right or privilege hereunder, shall be construed as a
waiver of any other breach or default of a similar nature, or as a
waiver of any of such provisions, rights or privileges
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hereunder. The rights and remedies herein provided are cumulative and
are not exclusive of any rights or remedies that any party may
otherwise have at law or in equity.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK.
SIGNATURES OF THE PARIES ARE ON THE FOLLOWING PAGE.]
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
HOLD BILLING SERVICES, LTD.
By: Xxxxx Acquisition Sub, Inc.
Its General Partner
By:________________________
Xxxxxxx X. Xxxxxx, III
Chairman
___________________________________
Xxxxxx X. Box
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