Exhibit 10.39
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of the
23rd day of June, 1999 by and between XXXXXXXXXX.XXX, INC. ("Company") and
Xxxxxxx X. XxXxxxx, Xx. ("XxXxxxx").
WHEREAS, the Company has entered into an agreement to purchase the stock
of Display Arts Inc., a Tennessee corporation ("Display Arts");
WHEREAS, XxXxxxx is a shareholder and employee of Display Arts;
WHEREAS, the Company desires to employ XxXxxxx following the closing of
such stock purchase as the " " of the Company; and
WHEREAS, XxXxxxx has agreed to provide such services in accordance with
the terms and conditions of this Agreement.
NOW THEREFORE, in consideration of the mutual promises herein made and of
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
1. Employment. Company shall employ XxXxxxx as the Gen. Mgr. of the
Company's operating subsidiary, Display Arts during the term of this Agreement
and XxXxxxx hereby accepts such employment. XxXxxxx shall be responsible for all
of the day-to-day operational aspects of Display Arts; shall supervise all other
officers and employees of Display Arts; and shall have such other duties
regarding Display Arts and the Company as shall be determined from time to time
by the Chief Executive Officer or the Board of Directors of the Company
("Board"). XxXxxxx agrees to devote his full business time to providing services
to the Company as herein provided and shall perform his duties faithfully and
diligently.
2. Term of Employment. The term of employment of XxXxxxx shall be for a
term of two (2) years from the "Effective Date" of this Agreement (as
hereinafter defined) ("Initial Term") and shall automatically extend for
additional terms of one (1) year ("Renewal Term") unless this Agreement is
terminated as of the last day of the Initial Term or as of the last day of any
Renewal Term, upon not less than ninety (90) days prior written notice by either
party to the other, subject to earlier termination as provided in paragraphs 4,
5, and 6 hereof. The Effective Date of this Agreement and the Initial Term shall
commence upon the closing of the purchase by the Company of the stock of Display
Arts. If for any reason such closing does not occur, this Agreement shall be
null and void in all respects.
3. Compensation.
(a) Base Salary. Commencing on the Effective Date XxXxxxx shall be
paid an initial base salary at the annual rate of $45,000 ("Initial Base
Salary"), payable in equal installments semi-monthly.
(b) Cash Bonus. In addition to the Initial Base Salary, XxXxxxx
shall be paid a cash bonus quarterly during the term of this Agreement equal to
1.5% of the amount of any increase in the gross revenue generated by Display
Arts on a quarterly
basis as compared with the same quarterly period for the previous year. Each
quarter shall coincide with all calendar quarters, with the bonus to be
calculated and paid no later than 30 days after the end of each quarter wherein
a bonus was earned. Upon request, the Company shall permit XxXxxxx access to its
books, records and financial statements for the purpose of confirming the
Company's calculation of XxXxxxx'x bonus for any such quarter.
(c) Vacation. XxXxxxx shall be entitled to paid vacation and paid
Federal and state holidays in accordance with the vacation policy of the Company
then in effect, but no less than three (3) weeks of vacation each year.
(e) Other Benefits. XxXxxxx shall be entitled to participate in all
benefit programs made generally available to other management employees of the
Company, on the same terms and conditions as they are offered to others,
including but not limited to medical, dental, and term life insurance benefits.
XxXxxxx shall also be provided, at the Company's expense, with a vehicle
equipped with a cellular telephone for business use, including all
transportation and insurance costs associated therewith.
(f) Severance Payment. In the event of the termination of XxXxxxx'x
employment hereunder prior to the end of the Initial Term, or any Renewal Term,
by the Company without cause including any deemed termination by the Company as
set forth in paragraph 4(b) hereof, the Company shall pay XxXxxxx liquidated
damages equal to the Initial Base Salary (less withholding and payroll taxes)
XxXxxxx would otherwise be entitled to receive for the unexpired term of this
Agreement, or for a period of one year, whichever is the lesser amount, which
sum is payable at the time that XxXxxxx'x periodic salary payments would be
made, but reduced from the date of termination by the amounts of other income
received by XxXxxxx from any other employment for that time period. In the event
of XxXxxxx'x death or disability during the term hereof, the Company shall pay
to XxXxxxx, or the personal representative of XxXxxxx'x estate in the event of
his death, an amount equal to the Initial Base Salary (less withholding and
payroll taxes) XxXxxxx would otherwise be entitled to receive for the unexpired
term of this Agreement, or for a period of one year, whichever is the lesser
amount, which sum is payable in lump sum within 30 days following such death or
disability. Severance Payments under this Section (f) in the event of XxXxxxx'x
termination of employment, death or disability shall additionally include
payment of XxXxxxx'x bonus described under Subsection (b) hereof. Severance
Payments provided for under this Section (f) shall be in full settlement of any
and all claims that XxXxxxx or XxXxxxx'x estate may have against the Company.
(g) Stock Option Grants/Employee Stock Ownership Plan. XxXxxxx shall
be entitled to participate and receive stock option grants from the Company's
Employee Stock Option Plan ("ESOP") during his employment with the Company, at
the discretion of the Board of Directors or committee of the Board responsible
to administer the ESOP, in amounts which are proportional to and at the same
time as option grants are made to other members of the Company's management and
according to terms and conditions which are comparable to such ESOP option
grants received by other members of the Company's management.
4. Termination of Employment.
(a) Termination For Cause. The Company may terminate the employment
of XxXxxxx at any time for cause (as hereinafter defined) upon written notice.
The term "for cause" shall mean:
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(i) the continued failure by XxXxxxx to substantially perform
his primary duties as Gen. Mgr. of Display Arts in a reasonably professional
manner other than due to temporary or total disability or death, after a written
demand for such substantial performance is delivered to XxXxxxx by the Board of
Directors of the Company;
(ii) the unauthorized dissemination of significant trade
secrets or other proprietary property of the Company;
(iii) the commission of a felony or commission of a crime
involving dishonesty or moral turpitude;
(iv) the commission of any act or acts of dishonesty which
acts are intended to result or do result directly or indirectly in gain or
personal enrichment of XxXxxxx or a related person or affiliated company or when
such acts are intended to cause harm or damages to the Company;
(v) the illegal use of controlled substances;
(vi) the continued use of alcohol so as to have an adverse
effect on the performance of his duties;
(vii) the misappropriation or embezzlement of Company assets;
(viii) the knowingly furnishing of material false reports or
information to the directors or officers of the Company; or
(ix) the making of serious disparaging remarks regarding the
Company publicly or to suppliers and/or customers or potential customers of the
Company.
(b) Default. Either party may terminate this Agreement upon the
breach of any material provision of this Agreement by the other party upon
thirty (30) days prior written notice; provided, however, that such termination
notice shall not be effective if the defaulting party corrects such default
prior to the date of termination. Termination by XxXxxxx of his employment
hereunder by reason of the default of the Company shall be deemed for all
purposes of this Agreement a termination by the Company without cause.
5. Disability. The Company may terminate the employment of XxXxxxx under
this Agreement by written notice upon the total and permanent disability of
XxXxxxx. Total and permanent disability shall mean the inability of XxXxxxx to
substantially perform the essential functions of his position, with or without
reasonable accommodations, due to sickness or other physical or mental
disability, for ninety (90) days in any one hundred twenty (120) day period or a
period of time which exceeds the time for medical leave provided by law,
whichever period is longer. The Company shall give XxXxxxx written notice of any
termination hereunder.
6. Death. The employment of XxXxxxx under this Agreement automatically
terminates upon the death of XxXxxxx.
7. Expense Reimbursement. XxXxxxx shall be reimbursed, upon a proper
accounting, for all expenses reasonably incurred in connection with his
employment hereunder, including all reasonable travel and entertainment expenses
pursuant to Company policy.
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8. Confidential Information. During the Initial Term or any Renewal Term
of this Agreement, other than in the performance of his duties hereunder XxXxxxx
shall not use or disclose to others, without the prior written consent of the
Company, any customer lists, trade secrets, secret know-how, or other
confidential information relative to the business of the Company obtained by
XxXxxxx in the course of rendering services pursuant to this Agreement. The
obligation of XxXxxxx with respect to any item of such information shall
terminate if that item of information becomes disclosed in published literature
or otherwise becomes publicly available, provided that such public disclosure
did not result, directly or indirectly, from any act or omission of XxXxxxx.
Upon leaving the employ of the Company for any reason, XxXxxxx shall continue to
be bound by this Paragraph 8 for a period of two (2) years, and shall not take
with him any customer lists, confidential data, or other documents and
instruments which are the property of the Company. All such data, documents and
instruments and all copies thereof shall be surrendered by XxXxxxx to the
Company on or prior to the termination of his employment.
9. Notices. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been given when delivered by hand or upon delivery to the address set forth
below. If delivered by any other means, addressed to the party, and delivered to
the address set forth below or to such other address as such party gives written
notice in substitution therefor:
(i) if to Company:
Xxxxxxxxxx.xxx, Inc.
000 Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx, Xx., Chairman and
Chief Executive Officer
(ii) if to XxXxxxx:
Xxxxxxx X. XxXxxxx, Xx.
000 Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxx 00000
With Copy to:
D. Xxxxxxxxx Xxxxxxx, Esq.
000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
10. Limitations.
(a) Non-Compete. XxXxxxx agrees that during the term of his
employment with the Company hereunder and for a period of two (2) years
thereafter he shall refrain, directly and indirectly, jointly and severally,
from managing, operating, financing, participating in the ownership, management
or operation of or be employed by, consult with, advise or be otherwise engaged
in any manner with any business which is competitive to those provided by
Display Arts and/or the Company in any of the locations where Display Arts
provides its services and products, which locations are defined to include all
areas within a radius of 75 miles from any existing facility utilized in Display
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Arts' business as of the date that XxXxxxx leaves the Company's employment.
Ownership of less than 5% of companies whose securities are publicly traded and
which compete with the Company's business is not prohibited by this Agreement.
(b) Non-solicitation of Customers. XxXxxxx agrees, that during the
term of his employment with the Company hereunder and for a period of two (2)
years thereafter he shall not, on his own behalf, or on behalf of another,
directly or indirectly, solicit, contact, call upon, communicate with or attempt
to communicate with any customer or prospective customer of Display Arts or the
Company with a view to the providing of services or products which are
competitive with those that are marketed or provided by Display Arts or the
Company as of the date that XxXxxxx leaves the Company's employment, provided
that these restrictions shall apply only to customers or prospects of the
Company which have been customers or prospects with whom XxXxxxx has had
contacts on behalf of the Company.
(c) Non-solicitation of Employees. XxXxxxx agrees that during the
term of his employment hereunder and for a period of two (2) years thereafter,
XxXxxxx will not directly or indirectly solicit or in any other manner encourage
employee of Display Arts or the Company to leave its employ for an engagement in
any capacity with any other company or entity.
(d) Limitations. Notwithstanding the foregoing, the covenants of
XxXxxxx pursuant to this Paragraph 10 shall terminate upon the termination of
XxXxxxx'x employment by the Company without cause or by XxXxxxx by reason of the
Company's breach of its obligations hereunder.
11. Dispute Resolution. Any dispute regarding the interpretation, breach,
damages or otherwise, related to the interpretation or construction of this
Agreement shall be resolved by binding arbitration before one or more
arbitrators appointed by the American Arbitration Association ("AAA") in the
city of Nashville, Tennessee, pursuant to the AAA's Commercial Arbitration
Rules. Either party may institute the action by notice to the AAA and to the
other party. Prior to the filing of complaint with the AAA, the parties shall
meet and attempt to resolve the dispute. The cost of such arbitration shall be
borne equally by the parties except that each party shall be responsible for its
own respective advisors' fees including its attorney and accountant fees. Any
decision or award by said arbitrator(s) shall be binding on the parties.
Notwithstanding the foregoing, any party hereto may apply to any court for a
temporary or permanent injunction or restraining order to specifically enforce
any provision hereof
12. Binding Effect. This Agreement shall inure to the benefit of and be
binding upon XxXxxxx and his estate and personal representatives and upon the
Company and its successors and assigns. This Agreement may not be assigned,
pledged or otherwise hypothecated by XxXxxxx.
13. Successors and Assigns. The Company shall cause any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the assets or outstanding securities of the Company, by
written agreement in form and substance reasonably satisfactory to council to
XxXxxxx to perform the obligations of the Company pursuant to this Agreement in
the same manner and to the same extent that the Company would be required to
perform if no such succession had taken place. In the event the Company has a
parent, the parent shall guarantee the obligations of the Company hereunder.
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14. Severability. In the event of the invalidity, in whole or in part, of
any term or provision of this Agreement, the parties agree that such invalidity
shall not affect the validity of any other term or provision of this Agreement
and that such provision shall be subject to partial enforcement to the extent
permitted under applicable law.
15. Entire Agreement. This Agreement constitutes the entire understandings
of the parties with respect to the employment of XxXxxxx by the Company and
supercedes all prior agreements arid understandings, oral or written.
16. Amendments. This Agreement may not be amended or modified except in a
writing signed by both parties.
17. Waiver. The failure by a party to insist upon strict performance of
any provision hereof shall not constitute a waiver of such provision. All
waivers must be in writing to be enforceable hereunder.
18. Governing Law. This Agreement shall be made and in all respects shall
be interpreted, construed and governed by and in accordance with the laws of the
State of Tennessee, without giving effect to the rules governing conflicts of
law.
19. Recovery of Cost and Expenses. If either party to this Agreement
breaches any of its obligations hereunder, such party shall pay the costs and
expenses, including reasonable attorneys' fees, that the other party incurs in
enforcing the provisions of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
XXXXXXXXXX.XXX, INC.
By: /s/ Xxxxx Xxxxxxx, Xx.
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Xxxxx Xxxxxxx, Xx., Chairman and
Chief Executive Officer
Xxxxxxx X. XxXxxxx, Xx.
/s/ Xxxxxxx X. XxXxxxx, Xx.
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