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EMPLOYMENT AGREEMENT
This Agreement is effective as of November 1, 1994, by and between The
Xxxxxx Group, Inc., a Delaware corporation ("Xxxxxx") and Xxx Xxxxxxxxxx
("Employee").
Xxxxxx wishes to transfer Employee from Dallas, Texas to San Francisco,
California and Employee is willing to accept such transfer on a full-
time basis upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the promises and mutual covenants
hereinafter set forth and the consideration described in this Agreement,
Xxxxxx and Employee hereby agree as follows:
1. Nature of Agreement:
1.1. Employment. Xxxxxx agrees to transfer Employee, and
Employee agrees to accept such transfer by Xxxxxx upon the terms and
conditions herein provided.
1.2. Cancellation of Prior Offers. Any and all prior
contracts of employment or offers or representations with respect
thereto are hereby canceled and void in all their terms and conditions.
This provision shall not pertain to any stock option or non-solicitation
agreements previously entered into with Employee.
2. Terms and Duties:
2.1. Term of Employment. The employment of Employee under
this Agreement shall be for three (3) years and is terminable as more
particularly set forth in Article 6 ("Termination").
2.2. Location. Employee's location of employment shall be
in San Francisco. Employee's location of employment may be changed only
upon the mutual consent of Employee and Xxxxxx.
2.3. Position and Primary Responsibility. Employee shall
serve as Senior Vice President, Global Logistics Management, Circle
international, Inc. In such capacity, he shall be responsible for all
areas reasonably requested by the Chief Executive Officer of Xxxxxx and
he shall report to the Chief Executive Officer.
2.4. Exclusivity. During the employment term, Employee
shall devote his full time, attention, energies, and best efforts
exclusively to the performance of his duties for and on behalf of
Xxxxxx.
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3. Compensation:
3.1. Base Salary. Employee shall receive a base salary of
$14,000 per month, which shall be subject to an annual performance
review.
3.2. Bonus. For 1995 and thereafter, Employee shall
receive an annual bonus in an amount equal to 1/4 of 1% of Xxxxxx'x
income from operations ("operating income"), on the condition that the
operating income is at least 110% of the previous year's. In any event,
Xxxxxxxxxx shall be entitled to an annual minimum guaranteed bonus of
$45,000 per year. Attached as Exhibit A is the Company's Income
Statement in which operating income as defined herein is reported. In
the event of an acquisition or merger increasing Xxxxxx'x operating
income above that recorded for 1994, any bonus based on this additional
income shall be subject to the reasonable discretion of the Chief
Executive Officer. Subject to the provisions of Section 6.3b below,
each bonus payment hereunder is due on the condition that Xxxxxxxxxx is
employed with the Company when the company-wide annual bonuses are paid.
3.3. Payment. All compensation to Employee hereunder
shall be paid in accordance with all relevant Xxxxxx directives, rules,
and regulations and cost accounting policies in effect from time to time
and shall be subject to all applicable employment and withholding taxes.
4. Other Employment Benefits:
4.1. Xxxxxx'x insurance and benefit plans will be available to
Employee and his dependents on the same basis as it is currently
provided.
4.2. Employee will receive each year a three-week paid
vacation.
4.3. Employee also will be entitled to participate in the
Xxxxxx 401-K plan, profit sharing plan, and stock option plans.
Effective November 1, 1994 Xxxxxxxxxx has been granted options to
purchase 15,000 shares of Xxxxxx Group common stock pursuant to the
Company's Omnibus Equity Incentive Plan. For each year in which this
Employment Agreement is effective pursuant to Section 2.1. above,
Xxxxxxxxxx shall be entitled to a grant of options to purchase 15,000
shares of common stock under the Company's then existing stock option
plan.
4.4. The Company will pay all of Xxxxxxxxxx'x reasonable moving
expenses for him and his immediate family to move from Dallas, Texas to
the San Francisco Bay Area in an amount not to exceed $20,000 upon
presentation of reasonable invoices for moving expenses.
4.5. The Company will loan Xxxxxxxxxx the amount of $100,000 to
assist with housing costs, which shall include real estate brokerage
costs, points and a down payment for the purchase of a home in the San
Francisco Bay Area. This amount
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will be due to Xxxxxxxxxx when he provides to Xxxxxx a fully executed
real estate purchase and sale contract, regardless of whether this
agreement has expired without renewal at the time Xxxxxxxxxx requests
said funds. The unpaid principal of the loan will bear interest at six
percent (6%) per annum and shall be evidenced by a promissory note. The
principal and accrued interest of the loan will be forgiven in equal
annual installments, over five years, with the date of advancement of
the $100,000 as the anniversary date, as long as Xxxxxxxxxx remains an
employee of the Company. The entire unpaid balance shall be forgiven if
Xxxxxxxxxx'x employment is terminated without cause or in the event of
Xxxxxxxxxx'x death or permanent disability. The entire unpaid balance
shall be accelerated and immediately due and owing upon either
Xxxxxxxxxx'x voluntary resignation as an employee or termination of
employment with cause. The balance outstanding will not be accelerated
in the event this Agreement expires without renewal as long as
Xxxxxxxxxx remains an employee of the Company. To the extent the
forgiveness of the above loan is a taxable event, Xxxxxx will take the
required action to pay 50% of all of the projected additional tax
imposed on Xxxxxxxxxx based on the appropriate and applicable federal
and state tax rates for Xxxxxxxxxx.
5. Additional Obligations of Employees During and After Employment:
5.1. Non-Competition. So long as Employee is employed by
Xxxxxx, Employee will engage in no other business activities directly or
indirectly which are or may be competitive or which might place him in a
competing position to that of Xxxxxx or any parent, affiliated, or
subsidiary company of Xxxxxx without the written consent of the Chief
Executive Officer. Employee shall make written disclosure to the Chief
Executive Officer of Xxxxxx of any activity in which he is engaging or
plans to engage which directly or indirectly might be competitive or
which might place him in a competing position to that of Xxxxxx or any
of its affiliated or subsidiary companies. The obligation to make such
written disclosure extends to all activity by which Employee is making
preparations to compete with Xxxxxx.
5.2. Records. All records, files, documents, and the like,
or abstracts, summaries, or copies thereof, relating to the business of
Xxxxxx or the business of any of Xxxxxx'x parent, subsidiary, or
affiliated companies, which Xxxxxx or Employee shall prepare or use or
come into contact with, shall remain the sole property of Xxxxxx or the
affiliated or subsidiary company, as the case may be, and shall not be
removed from the premises without the written consent of Xxxxxx, and
shall be promptly returned to Xxxxxx upon termination of employment.
5.3. Customers of Xxxxxx. If Employee personally or through
any employees or departments under Employee's direction has been
responsible for and/or participated in any contracts, assignments, or
follow-ons to such contracts or assignments for customers of Xxxxxx in
the normal course of Xxxxxx'x business, and/or if proposals to engage in
such contracts and /or assignments have been submitted or actively
solicited by Xxxxxx within two years prior to the date of termination,
Employee shall not solicit,
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provide services or information to, work for, provide consulting
services to, or in any way be engaged by any such customer for a period
of one year after termination of employment hereunder. Employee
understands, acknowledges, and agrees that such customers are developed
and maintained by Xxxxxx through the use of confidential, proprietary,
and/or trade secret information to which Employee may have access during
his employment term. Additionally, Employee shall remain bound by the
terms of the Non-Solicitation Agreement dated August 19, 1992 attached
hereto as Exhibit B. Any compensation due under that Agreement shall be
paid when due, in addition to any other compensation provided for in
this Agreement.
5.4. Enforcement. In addition to the remedies provided in
Article 9 ("Arbitration"), Xxxxxx shall be entitled to equitable relief,
including provisional and final injunctive relief, to enforce the terms
of this Article 5 ("Additional Obligations of Employee During and After
Employment").
6. Termination:
6.1. Immediate Termination of Employment by Xxxxxx. Xxxxxx may
immediately terminate this Employment Agreement at any time under the
following conditions:
a. Upon the Employee's death or incapacity. In such case,
Employee's compensation shall be calculated through the last day of the
month in which said death or incapacity occurred, and paid to Employee,
his heirs or estate;
b. The conviction of any felony or of a misdemeanor involving
fraud or dishonesty, and/or the commission or omission of acts deemed to
be fraudulent or materially dishonest. In such case, compensation shall
be calculated through the last day actually worked by Employee.
6.2. Termination of Employment for Cause. Xxxxxx may terminate
Employee's employment for cause, which shall include, without
limitation, a breach of any of the material terms of this Agreement, a
material and repeated failure to follow either general corporate
policies or the reasonable instructions of the Chief Executive Officer
of Xxxxxx, or any of the conditions set out above in Paragraph 6.1.
Employee shall be given reasonable notice of any of the grounds for
termination of employment for cause, and shall be given the opportunity
to discuss and address such notice with the Chief Executive Officer.
6.3. Termination of Employment Without Cause.
a. In the event of termination without cause, or constructive
termination by a material change in the responsibilities of Employee, or
by a change in the location of Employee's employment, Employee's sole
remedy shall be an entitlement to receive his base monthly compensation
in each of the twelve (12) months from the date of
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termination. During which time Employee shall accept no other employment
without the consent of Xxxxxx, which consent shall not be unreasonably
withheld. Any amounts received during such twelve (12) month period
from a subsequent employer shall be in mitigation of Xxxxxx'x
responsibilities to make payment hereunder, and shall be offset against
amounts due by Xxxxxx.
b. In the event of either termination without cause or a
failure to renew this Agreement as provided for below, Employee shall be
entitled to receive a pro-rata share of the incentive payment, if any,
earned by him that fiscal year, based on the number of days worked prior
to termination as the numerator and 365 days as the denominator.
Employee shall not be entitled to an incentive payment if his employment
has been voluntarily terminated by him or terminated by Xxxxxx with
cause.
c. In the event that Xxxxxx fails to renew this Agreement on
substantially similar terms for reasons without cause, Employee shall be
entitled to receive his base monthly compensation in each of the twelve
(12) months from the date of expiration of this Agreement, subject to
Xxxxxx'x right to offset in Paragraph 6.3.a above, and the pro-rata
share of the incentive payment, if any, earned as provided for above.
6.4. Termination of Employment by Employee. Employee may
terminate his employment at Xxxxxx at any time with or without cause
during the term of this Agreement. However, any such termination must be
made upon the giving of sixty (60) days written notice to Xxxxxx'x Chief
Executive Officer. Employee shall be entitled to convert company
insurance plans in accordance with applicable federal and state laws
upon such termination.
6.5. Effect of Termination. Except as otherwise provided
herein, termination of employment shall terminate all obligations of
Xxxxxx pursuant to this Agreement. Termination of employment shall
result in immediate termination of Employee's employment term.
7. Entire Agreement:
7.1. This Agreement is to be considered in conjunction with
the Non-Solicitation Agreement attached hereto as Exhibit B and the
Incentive Stock Option dated November 1, 1994. These Agreements
constitute the entire understanding of the parties hereto and supersedes
any and all prior agreements and understandings, whether oral or
written, between the parties. This Agreement may be modified only by
agreement in writing executed by Employee and the Chief Executive
Officer of Xxxxxx. This Agreement may not be modified by any implied
understanding or agreement, notwithstanding any statements or conduct of
the parties occurring subsequent to the formation of this Agreement.
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8. Miscellaneous:
8.1. Interpretation of this Agreement. This Agreement shall be
interpreted in accordance with the plain meaning of its terms and not
strictly for or against either party hereto.
8.2. Variation. Any variation in salary or conditions which
may occur after the effective date of this Agreement shall not
constitute a new agreement, but the terms and conditions of this
Agreement, except as to such variation, shall continue in force.
8.3. Unenforceability. The unenforceability or invalidity of
any paragraph or subparagraph, or portion thereof, of this Agreement
shall not affect the enforceability and validity of the balance of this
Agreement.
8.4. Collateral Documents. Each party hereto shall make,
execute, and deliver such other instruments or documents as may be
reasonably required in order to effectuate the purposes of this
Agreement.
8.5. Written Policies and Procedures. The written policies and
procedures of Xxxxxx or its parent company, The Xxxxxx Group, Inc.,
where not in contradiction to or superseded by this Agreement, as from
time to time amended shall be binding upon and adhered to by Employee.
Copies of said policies and procedures are available to Employee in the
offices of The Xxxxxx Group, Inc. Nothing in said written policies and
procedures of The Xxxxxx Group, Inc. shall in any way be construed to
alter, amend, or modify the termination provisions set forth in Article
6 herein above.
8.6. Notice to Prospective Employers. Employee agrees that
he shall provide prospective employers of Employee a copy of this
Employment Agreement prior to accepting any offers of employment made by
said prospective employers during the period one year following the date
that Employee's employment hereunder terminates. If Employee does not
upon demand of Xxxxxx provide adequate proof that he has complied with
this obligation, Employee agrees that Xxxxxx may in its sole discretion
and without recourse by Employee provide any employer to whom Employee
was obliged to provide this Agreement with a copy hereof.
8.7. Notices. Any notices to be given hereunder to any party
must be in writing and must be effected by personal delivery or by
registered or certified mail, postage pre-paid with return receipt
requested. Mailed notices shall be directed to the parties at the
addresses appearing below. Each party may change his address by giving
written notice in accordance with this section. Notices delivered
personally shall be deemed communicated as of actual receipt; mailed
notices shall be deemed communicated as of three (3) business days after
deposit with the United States Postal Service.
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EMPLOYER: EMPLOYEE:
The Xxxxxx Group, Inc. Xxx Xxxxxxxxxx
000 Xxxxxxxx Xxxxxx 000 Xxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000 Xxx Xxxxxxxxx, XX 00000
8.8. Assignment. None of the obligations or duties or rights
or benefits arising under this Agreement may be assigned or delegated by
Employee, in whole or in part, without the prior written consent of the
Chief Executive Officer of Xxxxxx.
8.9. Gender and Number. Whenever the context of this Agreement
permits, the masculine, feminine, and neuter shall each include the
other, and the singular shall include the plural.
9. Arbitration:
9. 1. In the event there is any dispute arising out of
Employee's employment with Xxxxxx, the termination of that employment,
or this Employment Agreement, whether such dispute gives rise or may
give rise to a cause of action in contract or tort or based on any other
theory or statute, including without limitation for breach of the
covenant of good faith and fair dealing or employment discrimination,
Employee and Xxxxxx agree to submit exclusively such dispute to final
and binding arbitration pursuant to the provisions of Title 9 of Part
III of the California Code of Civil Procedure, commencing at Section
1280, et seq., or any successor or replacement statutes, upon a request
submitted in writing to the party to this employment agreement within
six (6) months of the date of the dispute arose or the termination of
Employee's employment, whichever occurs first. The failure to timely
request arbitration hereunder shall constitute a complete waiver of all
rights to raise any claims in any forum arising out of any dispute
described herein. The limitations period set forth herein shall not be
subject to tolling, equitable or otherwise. The parties agree that such
arbitration shall be the exclusive remedy for any dispute described
herein. The parties further agree that, except as specifically provided
otherwise herein, in arbitration the exclusive remedy for alleged
violation of the terms, conditions, or covenants of employment,
including this employment agreement, and for any harm alleged in
connection with any dispute subject to arbitration hereunder shall be a
money award not to exceed the amount of actual contract damages less any
proper offset for mitigation of such damages, and the parties shall not
be entitled to any other remedy at law or in equity including but not
limited to other money damages, punitive damages, specific performance,
and/or injunctive relief. Prior to submitting any dispute to
arbitration hereunder, the parties shall attempt to settle such dispute
themselves. The arbitrator shall not have the power to alter, amend, or
modify any of the provisions of this employment agreement. Nothing
herein shall be construed to abridge any of Employee's rights to seek
workers' compensation benefits.
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IN WITNESS WHEREOF, the parties hereto have executed this agreement on
the day and year above written.
THE XXXXXX GROUP, INC.
By:
/S/ XXX XXXXXXXXXX
