Xxxxx X. Xxxxxx, Xx.
Employment Agreement
This Employment Agreement, dated as of the ___ day of June, 1998,
by and between Xxxxxx Xxxxxxx International Inc., a Delaware
corporation ("the Company"), and Xxxxx X. Xxxxxx, Xx. ("Xxxxxx").
WITNESSETH:
WHEREAS, Company has determined that it is in its best interest
that Company retain the services of Xxxxxx as its Chief Financial
Officer ("CFO") or in such other position will duties and
responsibilities customarily associated with those of a CFO of a
publicly traded corporation; and
WHEREAS, Xxxxxx has agreed that on July 1, 1998, (the "Effective
Date") he shall assume the responsibilities of the CFO of the Company,
subject to the terms and conditions contained herein.
NOW, THEREFORE, for good and valuable consideration, the receipt
and legal sufficiency of which are hereby expressly acknowledged, the
parties agree as follows:
1. Employment Period.
Company hereby agrees to employ Xxxxxx, and Xxxxxx hereby agrees
to become employed by Company commencing on July 1, 1998, and
terminating as provided for herein (the "Employment Period"). Upon
mutual agreement of Xxxxxx and the Company, this Agreement may be
extended for such time as Xxxxxx and the Company agree.
2. Terms of Employment.
a. Position and Duties.
(i) During the Employment Period, Xxxxxx shall be employed
as an executive officer of the Company with the authority, duties and
responsibilities assigned to Xxxxxx by X. X. Xxxxxxxx, the Chairman
and Chief Executive Officer of Company, which duties shall be
reasonably comparable to, but need not be the same as, those held,
exercised or assigned to the CFO at the date of this Employment
Agreement. During the Employment Period, Xxxxxx'x place of employment
shall remain in the Jackson, Mississippi metropolitan area.
(ii) During the Employment Period (excluding any periods of
vacation and sick leave to which Xxxxxx is entitled), Xxxxxx agrees to
devote reasonable attention, and time during normal business hours to
the business and affairs of Company and to use his best efforts to
perform faithfully and efficiently such responsibilities. It shall not
be a violation of this Agreement for Xxxxxx to: (a) serve on
corporate, civic or charitable boards or committees; (b) deliver
lectures, fulfill speaking engagements or teach at educational
institutions; or (c) manage personal investments, so long as such
activities do not interfere with the performance of Xxxxxx'x
responsibilities as CFO in accordance with this Agreement.
b. Compensation and Benefits.
(i) Base Salary. During the Employment Period, Xxxxxx shall
be paid an annual base salary of $250,000.00 ("Annual Base Salary")
which shall be paid at least as often as monthly until such time as
Annual Base Salary may be increased in accordance with the wishes of
the Board of Directors of the Company. Any increase in Annual Base
Salary shall not limit or reduce any other obligation to Xxxxxx under
this Agreement. The Annual Base Salary shall not be reduced after any
such increase. During the Employment Period, Annual Base Salary shall
be reviewed at least annually.
(ii) Annual Bonus. Xxxxxx shall be entitled to an annual
cash bonus, at the discretion of the Board of Directors, which is to
be based upon Xxxxxx'x general performance and the financial and
operational performance of the Company.
(iii) Signing Bonus. On the Effective Date, Xxxxxx shall at
his sole election be entitled to a signing bonus of either (1)
$150,000 cash or (2) a combination of shares of common stock of the
Company, the number and fair market value thereof to be determined in
accordance with the following sentence, and cash having an combined
value of $150,000. If Xxxxxx elects to receive Company stock as a
portion of his signing bonus pursuant to (2) above, he shall receive
(i) the number of shares determined by dividing $90,000 by the closing
market price of the Company's common stock on June 30, 1998, and (ii)
cash of $60,000.
(iv) Incentive. Welfare and Retirement Plans. In addition to
Annual Base Salary, Annual Bonus and Signing Bonus which may be earned
during the Employment Period as hereinabove provided, Xxxxxx shall be
entitled to participate in any of the following plans or programs
which may be in effect at any time during the Employment Period with
respect to other senior, corporate executive officers of Company: (a)
all incentive, bonus, stock option, savings and retirement plans and
programs; (b) all benefits under welfare benefit plans and programs
provided by the Company (including, without limitation, medical,
prescription, dental, salary
continuance, employee life, group life, accidental death and travel
accident insurance plans and programs); and (c) all other fringe
benefits.
(v) Stock Options. Concurrently with the execution of this
Employment Agreement, the Company shall execute and deliver to Xxxxxx
an Employee Stock Option Contract which grants to Xxxxxx the option to
purchase 150,000 shares of the common stock of the Company, subject to
the provisions of the next sentence, at a price equal to the closing
price of the Company's common stock on June 30, 1998. Options to
purchase Thirty Thousand (30,000) shares of the common stock of the
Company may be exercised at any time commencing with the Effective
Date and an additional Thirty Thousand (30,000) shares become
exercisable in each of the four (4) succeeding years beginning on the
annual anniversary date of the Effective Xxxx, except as provided in
4d(i)D. Subject to the following sentence, once options to purchase
shares become exercisable, the right to exercise an option cannot be
forfeited. The right to exercise an option expires at the earlier of 5
years from the date the option became exercisable or 90 days
subsequent to termination of this Agreement. In addition to the
foregoing Employee Stock Option Contract, Xxxxxx shall be eligible to
receive the grant of additional Stock Options on an annual basis
during the Employment period.
(vi) Automobile. The Company shall at its expense provide
Xxxxxx with an automobile and pay all expenses related thereto,
including without limitation, fuel, insurance, maintenance and
parking, subject to existing Company policy.
(vii) Expenses. During the Employment Period, Xxxxxx shall
be entitled to receive prompt reimbursement for all reasonable
expenses incurred by Xxxxxx in the performance of his duties as CFO,
such reimbursement to be made against the submission by Xxxxxx of
signed, itemized expense reports in accordance with the travel and
business expense reimbursement policies as in effect at any time
applicable to executives of the Company.
(viii) Office and Support Staff. During the Employment
Period, Xxxxxx shall be entitled to an executive office with
furnishings and other appointments commensurate with his position, and
to personal secretarial and other staff assistance.
(ix) Vacation. During the Employment Period, Xxxxxx shall be
entitled to three weeks of paid vacation, plus traditional holidays,
in accordance with the practices of the Company.
(x) Additional Fringe Benefits. The Company shall pay the
costs of a cellular phone, including the monthly fee, and all costs
associated with the business usage of such phone.
(xi) Professional Dues. The Company shall pay for Xxxxxx'x
costs in connection with the maintenance of his professional
designation, certification and membership in any professional
societies, including his registration as a certified public accountant
in
Mississippi, Louisiana, Arkansas, including membership in AICPA, MSCPA
and SLCPA. The Company shall also pay for any continuing education
required to continue his certification as a Certified Public
Accountant in any state in which he is licensed, as well as pay for
all costs associated with Xxxxxx'x attendance at the annual MSCPA
convention.
3. Termination of Employment.
a. Death or Disability.
Xxxxxx'x employment shall terminate automatically upon Xxxxxx'x
death during the Employment Period. If during the Employment Period
Xxxxxx should suffer from Disability (pursuant to the definition of
"Disability" set forth below), Company may give Xxxxxx written notice
in accordance with Section 7b of this Agreement of an intention to
terminate Xxxxxx'x employment. In such event, Xxxxxx'x employment with
the Company shall terminate effective on the 30th day after receipt of
such notice by Xxxxxx (the "Disability Effective Date). 'Disability'
for purposes of this agreement means Xxxxxx'x inability or a
substantial impairment of his ability to perform the material duties
of his employment under this Agreement with the Company as a result of
physical disease, injury, accident, sickness or mental disorder which
is determined to be total and permanent, by a physician selected by
Xxxxxx and the Company.
b. Cause.
The Company may terminate Xxxxxx'x employment during the
Employment Period for "Cause." For purposes of this Agreement, "Cause"
means (i) an act or acts of personal dishonesty taken by Xxxxxx and
intended to result in substantial personal enrichment of Xxxxxx at the
expense of the Company, (ii) repeated violations by Xxxxxx of Xxxxxx'x
obligations under section 2a(i) hereof which are demonstrably willful
and deliberate on Xxxxxx'x part and which are not remedied in a
reasonable period of time after receipt of written notice from the
Company, or (iii) the conviction of Xxxxxx of a felony.
c. Good Reason.
Xxxxxx'x employment may be terminated during the Employment Period by
Xxxxxx, at his election, for Good Reason. For purposes of this
Agreement, "Good Reason" means:
(i) any material failure by the Company to comply with any
of the provisions of this Agreement, unless consented to in writing by
Xxxxxx;
(ii) the departure of X. X. Xxxxxxxx as Chairman of thc
Company, or i 1; as a result of any merger, acquisition or other
transaction the Company is not, in substance, the surviving entity;
(iii) any purported termination by the Company of Xxxxxx'x
employment prior to the expiration of the Employment Period otherwise
than as expressly permitted by this Agreement.
d. Notice of Termination.
Any termination by the Company for Cause or by Xxxxxx for Good
Reason shall be communicated by Notice of Termination to the other
party hereto given in accordance with Section 10b For purposes of this
Agreement, a "Notice of Termination" means a written notice which (i)
indicates the specific termination provision in this Agreement relied
upon, (ii) sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of Xxxxxx'x employment
under the provision so indicated, and (iii) if the Date of Termination
(as defined below) is other than the date of receipt of such notice,
specifies the termination date (which date shall be not more than
fifteen days after the giving of such notice). The failure by Xxxxxx
or by the Company, as the case may be, to set forth in the Notice of
Termination any fact or circumstance which contributes to a showing of
Cause or Good Reason, as the case may be, shall not waive any right of
the Company or Xxxxxx hereunder or preclude the Company or Xxxxxx from
asserting such fact or circumstance in any subsequent action to
enforce their respective rights hereunder.
e. Date of Termination. "Date of Termination" means the date of
receipt of the Notice of Termination or any later date specified
therein, as the case may be; provided, however, (i) if Xxxxxx'x
employment is terminated by Company for Cause, the Date of Termination
shall be earlier of the date on which Company gives Xxxxxx actual
notice of such termination or the date of receipt of the Notice of
Termination, and (ii) if Xxxxxx'x employment is terminated by reason
of death or Disability, the Date of Termination shall be the date of
death of Xxxxxx or the Disability Effective Date, as the case may be.
4. Obligation of the Company upon Termination.
a. Death.
If Xxxxxx'x employment is terminated by reason of Xxxxxx'x death
during the Employment Period, this Agreement shall terminate, other
than the payment of following obligations of Company, without further
obligations of Xxxxxx'x legal representatives under this Agreement:
(i) the portion of Annual Base Salary accrued through the
Date of Termination to the extent not theretofore paid,
(ii) an amount equal to the product of any annual bonus paid
or payable (and
annualized for any fiscal year in which Xxxxxx has been employed for
less than twelve full months) with respect to the fiscal year
immediately preceding the Date of Termination, if any, multiplied by a
fraction, the numerator of which is the number of days in the current
fiscal year through the Date of Termination, and the denominator of
which is 365, and
(iii) any compensation previously deferred by Xxxxxx
(together with any accrued interest thereon) and not yet paid by
Company and any accrued vacation pay not yet paid by Company (the
amounts described in paragraphs (i), (ii) and (iii) are hereafter
referred to as "Accrued Obligations").
Any stock options granted pursuant to this Agreement or any
other stock option plan or agreement which are exercisable by Xxxxxx
at the time of death shall remain exercisable by the executor or
administrator of Xxxxxx'x estate for a period of one year.
All Accrued Obligations shall be paid to Xxxxxx'x estate or
beneficiary, as applicable, in a lump sum in cash within 30 days of
the Date of Termination. Anything in this Agreement to the contrary
notwithstanding, Xxxxxx'x family shall be entitled to receive thc
benefits provided by Company to surviving families of executive
officers of Company.
b. Disability.
If Xxxxxx'x employment is terminated by reason of Xxxxxx'x
Disability, this Agreement shall terminate and the Company shall pay
to Xxxxxx the Accrued Obligations and the Company shall continue to
pay Xxxxxx the monthly Base Salary for a period of. six ( ) months
following termination.. All Accrued Obligations shall be paid to
Xxxxxx in a lump sum in cash within 30 days of the Date of
Termination. Any stock options granted pursuant to this Agreement or
any other stock option plan or agreement which are exercisable by
Xxxxxx at thc Disability Effective Date shall remain exercisable by
Xxxxxx for a period of one year. Anything in this Agreement to the
contrary notwithstanding, Xxxxxx shall be entitled after the
Disability Effective Date to receive disability and other benefits as
in effect with respect to executive officers of Company and their
families.
c. Cause Other Than for Good Reason.
If Xxxxxx'x employment shall be terminated for Cause during the
Employment Period, this Agreement shall terminate without further
obligations to Xxxxxx other than the obligation to pay to Xxxxxx his
Annual Base Salary accrued through the Date of Termination plus the
amount of any compensation previously deferred by Xxxxxx, in each case
to the extent theretofore unpaid, and any stock options held by Xxxxxx
that are exercisable at the Xxxx of Termination shall remain
exercisable for a period of 90 days subsequent to the Date of
Termination. If Xxxxxx terminates employment during the Employment
Period other than for Good Reason, this Agreement shall terminate
without further obligations to Xxxxxx, except that the Company pay
Xxxxxx the Accrued Obligations in lump sum in cash within 30 days of
the Date of Termination
and Xxxxxx'x rights under any stock options that are exercisable shall
be retained as set forth in this agreement or other applicable stock
option plan or agreement.
d. Termination for Good Reason or Other Than for Cause or
Disability.
If, during the first five (5) years of the Employment Period,
Company should terminate Xxxxxx'x employment other than for Cause or
Disability, or if Xxxxxx should terminate employment under this
Agreement for Good Reason:
(i) Company shall pay to Xxxxxx in a lump sum in cash
within 30 days after the Date of Termination the aggregate of the
following amounts:
A. all Accrued Obligations; and
B. a lump sum payment equal to the Annual Base Salary
in effect on the Date of Termination.
C. for a period of one year, or such longer period as
any plan, program, practice or policy may provide, Company, as the
case may be, shall continue benefits to Xxxxxx and/or Xxxxxx'x family
at least equal to those which would have been provided to them in
accordance with the plans and programs described in Section
2(b)(iv)(b) hereof if Xxxxxx'x employment had not been terminated.
D. if Xxxxxx should terminate this Agreement pursuant
to paragraph 3(c)(ii) above, the stock options granted to Xxxxxx
pursuant to this Agreement which have not become exercisable in
accordance with the terms and conditions of the applicable stock
option plans and the stock option agreements shall become exercisable
in accordance with the following schedule:
Date of termination Options which become
Exercisable
Prior to December 31, 1998 30,000
Subsequent to December 31,1998,
but prior to December 31, 1999 60,000
Subsequent to December31, 1999,
but prior to December 31, 2000 90,000
Subsequent to December31,2000 120,000
Subject to the following sentence, once options to purchase shares
become exercisable, the right to exercise an option cannot be
forfeited. The terms of paragraph 2b(v) above notwithstanding, options
that become exercisable pursuant to the schedule above as a result of
termination of this
Agreement for Good Reason and any other stock options held by Xxxxxx
that are exercisable at the time of termination of this Agreement for
Good Reason shall remain exercisable for a period of 1 year subsequent
to termination.
If Xxxxxx should terminate this Agreement for Good Reason other than
pursuant to paragraph 3(c)(ii), any stock options granted pursuant to
this Agreement that are exercisable at the date of termination shall
remain exercisable for 90 days subsequent to termination.
E. In addition, any stock options granted to Xxxxxx
subsequent to the date of this agreement shall become exercisable in
accordance with the terms and conditions of the applicable stock
option plans and the stock option agreements.
If, after the first five (5) years of the Employment Period,
Company should terminate Xxxxxx'x employment other than for Cause or
Disability, or if Xxxxxx should terminate employment under this
Agreement for Good Reason, the Company's only obligation to Xxxxxx
shall be the Accrued Obligations which shall be paid to Xxxxxx in a
lump sum in cash within 30 days after the Date of Termination
5. Non-exclusivity of Rights.
Nothing in this Agreement shall prevent or limit Xxxxxx'x
continuing or future participation in any benefit, bonus, incentive or
other plans, programs, policies or practice, provided by Company for
which Xxxxxx may qualify during the Employment Period, nor shall
anything herein limit or otherwise affect such rights as Xxxxxx may
have under any other agreements with Company. Amounts which are
vested benefits or which Xxxxxx is otherwise entitled to receive under
any plan, policy, practice or program of Company at subsequent to the
Date of termination shall be payable in accordance with such plan,
policy, practice or program except as explicitly modified by this
Agreement.
6. Successors.
a. This Agreement is personal to Xxxxxx and without the prior
written consent of the Company shall not be assignable by Xxxxxx
otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by Xxxxxx'x
legal representatives.
b. Subject to the limitations of Section 3c, this Agreement
shall inure to the benefit of and be binding upon the Company and its
successors and assigns.
c. Subject to the limitations of Section 3c, the Company will
use its best efforts to require any successor (whether direct or
indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets
of the Company to assume expressly and agree to perform this Agreement
in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. As used
in this Agreement, "Company" shall mean Xxxxxx Xxxxxxx International
Inc. and any successor to its business and/or assets as aforesaid
which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
7. Miscellaneous.
a. This Agreement shall be governed by and construed in
accordance with the laws of the State of Mississippi, without
reference to principles of conflict of laws. The captions of this
Agreement are not part of the provisions hereof and shall have no
force or effect. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto
or their respective successors and legal representatives.
b. All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or be
registered or certified nail, return receipt requested, postage
prepaid, addressed as follows:
If to Xxxxxx:
Xxxxx X. Xxxxxx, Xx.
0000 Xxxxxxx Xx.
Xxxxxxx, XX 00000
If to the Company:
Xxxxxx Xxxxxxx International Inc.
000 Xxxx Xxxxxxx Xx.
Xxxxx 000
Xxxxxxx, XX 00000
or to such other address as either party shall have furnished to the
other in writing in accordance herewith. Notice and communications
shall be effective when actually received by the addressee.
c. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
x. Xxxxxx'x or the Company's failure to insist upon strict
compliance with any provision hereof shall not be deemed to be a
waiver of such provision or any other provision thereof.
e. This Agreement contains the entire understanding of Company
and Xxxxxx with respect to the subject matter hereof. From and after
the Effective Date, this Agreement shall supersede all prior
agreements in all respects.
IN WITNESS WHEREOF, Xxxxxx has hereunto set his hand and the
Company has caused these presents to be executed in their names on
their behalf, all as of the day and year first above written.
/s/ XXXXX X. XXXXXX, XX.
Xxxxx X. Xxxxxx, Xx.
XXXXXX XXXXXXX INTERNATIONAL, INC.
By: /s/
Its: President
Attest:/s/
