EXHIBIT 10.26
EMPLOYMENT AGREEMENT
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THIS AGREEMENT is made and entered into as of this 27th day of
September, 1999, by and between The Maxim Group, Inc., a Delaware corporation
(the "Company"), and Xxxxxxx X. Xxxxx (hereinafter "Executive");
WHEREAS, the Company, recognizing the experience and knowledge of
Executive in financial accounting matters, desires to retain the valuable
services of Executive, it being in the best interests of the Company to
arrange a term of employment for Executive; and
WHEREAS, Executive desires to devote full time service to the
business of the Company, in accordance with the terms and conditions
hereinafter set forth.
NOW, THEREFORE, for and in consideration of the mutual premises and
covenants herein contained, the parties hereto agree as follows:
1. EMPLOYMENT. For the Term of Employment, as hereinafter defined,
the Company agrees to employ Executive and Executive agrees to accept such
employment and to perform such duties and functions as the Board of Directors
of the Company may assign to Executive from time to time, but only
administrative and managerial functions commensurate with Executive's past
experience and performance level. Unless otherwise agreed to by Executive, he
shall perform such duties primarily from the Company's offices in Kennesaw,
Georgia. Executive agrees to devote his full time and energy to the business
of the Company, and shall perform his duties in a trustworthy and
businesslike manner, all for the purpose of advancing the interests of the
Company.
It is hereby expressly agreed among the parties hereto that primary
responsibility for the supervision of Executive shall rest with the Board of
Directors of the Company and Chief Executive Officer, which shall review
Executive's performance annually, make adjustments to Executive's
compensation and award such other bonuses and employee benefits as they shall
deem appropriate.
2. TITLE. Executive shall serve as Chief Financial Officer of the
Company, as well as such other positions, and with such titles, as the Board
of Directors and Executive may mutually agree upon during the Term of
Employment (as defined below).
3. TERM OF EMPLOYMENT. The "Term of Employment" referred to in
Section 1 hereof and hereinafter shall be three years, commencing on the date
of this Agreement. This Agreement shall automatically renew on the third
anniversary of the date of this Agreement unless earlier terminated in
accordance with Section 6 of the Agreement, or unless either party
gives the other written notice at least thirty (30) days prior to such
anniversary date that he or it does not desire to renew the Agreement.
4. COMPENSATION.
4.1 BASE SALARY. During the Term of Employment, Executive shall be
paid an annual base salary (hereinafter "Base Salary"), which shall be paid
in equal installments in accordance with the Company's normal pay practices,
but not less frequently than monthly. Executive's initial annual Base Salary
shall be $225,000. The Board of Directors of the Company shall review
Executive's Base Salary annually and may increase such Base Salary for the
subsequent one-year period.
4.2 INCENTIVE BONUS PLAN. During the Term of Employment and in
addition to Executive's Base Salary, Executive shall be entitled to receive
such additional bonus payments determined as follows:
(a) A bonus equal in amount up to 50% of Executive's Base
Salary for each fiscal year of the Company in which the Company meets or
exceeds certain financial and operating goals as set by the executive
management team of the Company and the Compensation Committee of the Board of
Directors.
(b) Executive shall also be entitled to participate, in the
discretion of the Board of Directors, in such other executive incentive bonus
plans for any fiscal year or portion thereof as may from time to time be
designated by the Board of Directors for executive officers generally.
4.3 STOCK OPTIONS. The Company has granted to Executive stock
options to purchase one hundred thousand (100,000) shares of Company common
stock, all issued under the Company's stock option plan. The options will
vest in equal annual increments over a five-year period ending on the fifth
anniversary of the date of this Agreement. All vested options will expire on
September 21, 2009. Fifty thousand (50,000) stock options will have an
exercise price of $6.13 per share. The remaining fifty thousand (50,000)
stock options will have an exercise price of $6.67 per share.
4.4 ADDITIONAL BENEFITS. During the Term of Employment, Executive
shall have the right to participate in any and all employee benefit programs
established and maintained by the Company from time to time including,
without limitation, such medical or dental plans as may be established from
time to time by the Company. Executive shall be entitled to participate in
any qualified or unqualified stock option, pension, profit sharing or other
employee benefit plan adopted by the Company hereinafter and covering
executive officers generally.
Throughout the Term of Employment, Executive shall also be entitled
to reimbursement for reasonable business expenses incurred by him in the
performance of his duties hereunder,
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including certain entertainment expenses, as approved from time to time by
the Board of Directors of the Company.
4.5 VACATION. Executive shall be entitled to annual vacation leave
in accordance with the Company's vacation policy as set forth in the current
Employee Handbook of the Company. Vacation shall be scheduled at reasonable
times not in conflict with Executive's duties hereunder.
5. ILLNESS, INCAPACITY OR DEATH DURING EMPLOYMENT.
(a) If by reason of illness or incapacity, Executive is unable
to perform his services or discharge his duties hereunder for sixty (60) or
more consecutive days or ninety (90) days in the aggregate during any twelve
(12) month period, then upon ten (10) days' prior notice, the Company may, in
its sole discretion, either suspend Executive without pay of any kind, salary
or bonus, until Executive is able to perform his services and discharge his
duties hereunder or terminate the employment of Executive, and thereupon,
Executive shall be paid his Base Salary from the date of termination through
the 10-day notice period.
(b) In the event of Executive's death, all obligations of the
Company under this Agreement shall terminate other than the payment of that
portion of the Base Salary and bonus, if any, earned by Executive to the date
of death.
6. TERMINATION.
6.1 FOR CAUSE. This Agreement may be terminated by the Company at
any time during the Term of Employment for cause (as hereinafter defined)
immediately and without further obligation other than for monies already paid
to the Employee. For purposes of this Agreement, "for cause" shall mean the
occurrence of any of the following:
(a) Employee's inattention to or substandard performance of the
services required of Employee hereunder;
(b) failure of Employee to follow reasonable written
instructions or policies of the Company;
(c) Employee willfully engaging in conduct which is
demonstrably and materially injurious to the Company or its
subsidiaries, monetarily or otherwise;
(d) conviction of Employee during the Term of Employment of a
crime involving breach of trust or moral turpitude; or
(e) Employee's commission of any act or activity prohibited
under the terms of this Agreement.
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For purposes of Clause (c) of this definition, no act, or failure to
act, on the Executive's part shall be deemed "willful" unless done, or
omitted to be done, by the Executive not in good faith and without reasonable
belief that the Executive's act, or failure to act, was in the best interest
of the Company. In the event that the Company discharges Employee for cause
under this Section 6.1, and it is subsequently determined judicially that the
termination was without cause (as hereinafter defined), then such discharge
shall be deemed a discharge without cause subject to the provisions of
Section 6.2 of this Agreement. In the event that the Company discharges
Employee for cause under this Section 6.1, such notice of discharge shall be
accompanied by a written and specific description of the reason(s) for such
discharge.
6.2 WITHOUT CAUSE. The Company may, upon thirty (30) days' written
notice to Executive, terminate this Agreement without cause at any time
during the Term of Employment. In such event and notwithstanding any
provision to the contrary contained in any stock option agreement of
Executive, any stock options which have been granted to Executive but which
are not yet exercisable as of the date of notice of termination shall be
deemed to be presently exercisable as of the date of notice of termination.
The Company shall pay to Executive, as liquidated damages in lieu of all
other claims, twelve (12) months' Base Salary then in effect at the time of
Executive's termination. Payment of such monies shall be made in equal
monthly installments. The Company may, in its sole discretion, at any time
during the period that payments under this Section 6.2 would otherwise be
due, discharge its obligations pursuant to this Section 6.2 by paying to
Executive the present value of its obligations hereunder as determined by an
enrolled actuary.
6.3 EXECUTIVE'S OBLIGATIONS UPON TERMINATION. Upon the termination
of his employment hereunder for whatever reason, Executive shall:
(a) Forthwith tender his resignation from any directorship or
office he may hold in the Company; and
(b) Not at any time represent himself still to be connected or
to have any connection with the Company.
6.4 EFFECT OF TERMINATION. The provisions of this Agreement shall
survive the termination of this Agreement and the termination of Executive's
employment with the Company to the extent required to give full effect to the
covenants and agreements contained herein.
7. CONFIDENTIALITY.
7.1 CONFIDENTIAL INFORMATION. Subject to Section 7(b) below,
Executive agrees that, both during the term of this Agreement and after the
termination of this Agreement, Executive will hold in a fiduciary capacity
for the benefit of the Company, and shall not directly or indirectly use or
disclose, except as authorized by the Company in connection with the
performance of Executive's duties, any Confidential Information, as defined
hereinafter, that
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Executive may have or acquire (whether or not developed or compiled by
Executive and whether or not Executive has been authorized to have access to
such Confidential Information) during the term of this Agreement. The term
"Confidential Information" as used in this Agreement shall mean and include
any information, data and know-how relating to the business of the Company
that is disclosed to Executive by the Company or known by him as a result of
his relationship with the Company and not generally within the public domain
(whether constituting a trade secret or not), including without limitation,
the following information:
(i) financial information, such as the Company's earnings,
assets, debts, prices, fee structure, volumes of purchases
or sales or other financial data, whether relating to the
Company generally, or to particular products, services,
geographic areas or time periods;
(ii) supply and service information, such as information
concerning the goods and services utilized or purchased by
the Company, the names or addresses of suppliers, terms of
supply or service contracts, or of particular
transactions, or related information about potential
suppliers, to the extent that such information is not
generally known to the public, and to the extent that the
combination of suppliers or use of a particular supplier,
though generally known or available, yields advantages to
the Company the details of which are not generally known;
(iii) marketing information, such as details about ongoing or
proposed marketing programs or agreements by or on behalf
of the Company, marketing forecasts or results of
marketing efforts or information about impending
transactions;
(iv) personnel information, such as employees' personal or
medical histories, compensation or other terms of
employment, actual or proposed promotions, hiring,
resignations, disciplinary actions, terminations or
reasons therefor, training methods, performance or other
employee information;
(v) customer information, such as any compilation of past,
existing or prospective customers, customer proposals or
agreements between customers and the Company, status of
customer accounts or credit, or related information about
actual or prospective customers; and
(vi) information with respect to any corporate affairs that the
Company agreed to treat as confidential.
The term "Confidential Information" does not include information that has
become generally available to the public by the act of one who has the right
to disclose such information without violating any right of the Company or
the client to which such information pertains.
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7.2 COVENANT OF CONFIDENTIALITY. The covenant contained in this
Section 7 shall survive the termination of Executive's employment with the
Company for any reason for a period of five (5) years; provided, however,
that with respect to those items of Confidential Information which constitute
trade secrets under applicable law, Executive's obligations of
confidentiality and non-disclosure as set forth in this Section 7 shall
continue to survive after said five (5) year period to the greatest extent
permitted by applicable law. These rights of the Company are in addition to
those rights the Company has under the common law or applicable statutes for
the protection of trade secrets.
8. NON-COMPETITION.
8.1 TERRITORY. Executive acknowledges that he will perform services
hereunder which directly affect the Company's business presently conducted
within the territory comprised of the 48 contiguous states of the United
States (the "Territory"). Accordingly, the parties hereto deem it necessary
to enter into the protective agreement set forth below, the terms and
conditions of which have been negotiated by and between the parties hereto.
8.2 NON-SOLICITATION. Executive agrees (a) that he will not take any
customer or franchise lists of the Company after leaving his employ and (b)
that he will, for so long as he is employed hereunder and for a period of two
(2) years following termination of his employment for any reason, refrain
from soliciting or attempting to solicit directly or indirectly or by
assisting others, any business from any of the Company's customers or
franchisees, including actively sought prospective customers or franchisees,
with whom Executive had material contact during his employment for purposes
of providing products or services that are similar to or competitive with
those provided by the Company, namely floor covering products and support
services of the type offered or provided by the Company.
8.3 NON-SOLICITATION OF EMPLOYEES. Executive agrees that he will,
for so long as he is employed hereunder and for a period of three (3) years
after termination of his employment, refrain from recruiting or hiring, or
attempting to recruit or hire, directly or by assisting others, any employee
of the Company who is employed by the Company or any successor or affiliate
of the Company if the Company or its successor or affiliate is then engaged
in the business of the sale of franchises to retail floor covering dealers,
and the sale and distribution of floor covering products and support services
of the type offered or provided by the Company.
8.4 ACKNOWLEDGEMENTS. The covenants of Executive set forth in this
Section 8 are separate and independent covenants for which valuable
consideration has been paid, the receipt, adequacy and sufficiency of which
are acknowledged by Executive, and have also been made by Executive to induce
the Company to enter into this Agreement. The aforesaid covenants may be
availed of or relied upon by the Company in any court of competent
jurisdiction, and shall form the basis of injunctive relief and damages (but
not including expenses of litigation) suffered by the Company arising out of
any breach of the aforesaid covenants by Executive. The covenants of
Executive set forth in this Section 8 are cumulative to all other covenants
of Executive in
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favor of the Company contained in this Agreement and shall survive the
termination of this Agreement for the purposes intended. Should any covenant,
term or condition contained in this Section 8 become or be declared invalid
or unenforceable by a court of competent jurisdiction, then the parties
request that such court judicially modify such unenforceable provision
consistent with the intent of Section 8 so that it shall be enforceable as
modified, and in any event the invalidity of any provision of Section 8 shall
not affect the validity of any other provision in Section 8 or elsewhere in
this Agreement.
9. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties hereto regarding employment of Executive, and
supersedes and replaces any prior agreements relating thereto.
10. ASSIGNMENT. All of the terms and provisions of this Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
respective heirs, executors, administrators, legal representatives,
successors and assigns of the parties hereto, except that the duties and
responsibilities of Executive hereunder are of a personal nature and shall
not be assignable or delegable in whole or in part by Executive. No
assignment by the Company of its rights hereunder shall relieve the Company
of any liability to Executive hereunder.
11. SEVERABILITY. Each section and subsection of this Agreement
constitutes a separate and distinct understanding, covenant and provision
hereof. In the event that any provision of this Agreement shall finally be
determined to be unlawful, such provision shall be deemed to be severed from
this Agreement, but every other provision of this Agreement shall remain in
full force and effect.
12. GOVERNING LAW. This Agreement shall in all respects be
interpreted, construed and governed by and in accordance with the laws of the
State of Georgia.
13. RIGHTS OF THIRD PARTIES. Nothing herein, expressed or implied,
is intended to or shall be construed to confer upon or give to any person,
firm or other entity, other than the parties hereto and their permitted
assigns, any rights or remedies under or by reason of this Agreement.
14. AMENDMENT. This Agreement may not be amended orally but only by
an instrument in writing duly executed by the parties hereto.
15. NOTICES. Any notice or other document or communication permitted
or required to be given to Executive pursuant to the terms hereof shall be
deemed given if personally delivered to Executive or sent to him, postage
prepaid, by registered or certified mail, at 0000 Xxxxxxxxx Xxxxx, Xxxxxxx,
Xxxxxxx 00000, or any such other address as Executive shall have notified the
Company in writing. Any notice or other document or other communication
permitted or required to be given to the Company pursuant to the terms hereof
shall be deemed given if personally delivered or sent to the Company, postage
prepaid, by registered or certified
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mail, at 000 XxxxXxxx Xxxxx, Xxxxxxxx, Xxxxxxx 00000, or at such other
address as the Company shall have notified Executive in writing.
16. WAIVER. The waiver by either party hereto of a breach of any
provision of this Agreement by the other shall not operate or be construed as
a waiver of any subsequent breach of the same or any other provision of this
Agreement by the breaching party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the day and year first above written.
THE MAXIM GROUP, INC.
Attest: /s/ XXXXXX X. XXXXXX By: /s/ X. X. XXXXXX
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Executive Vice President - Title: PRESIDENT AND CHIEF EXECUTIVE
Finance OFFICER
"EXECUTIVE"
/s/ XXXXXXX X. XXXXX
------------------------------(L.S.)
Xxxxxxx X. Xxxxx
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