1
EXHIBIT 10.9
EMPLOYMENT AGREEMENT
BETWEEN
▇▇▇▇▇▇▇▇ AND ▇▇▇▇▇▇▇▇, INC.
AND
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Effective: December 1, 1996
2
EMPLOYMENT AGREEMENT
TABLE OF CONTENTS
1. Employment . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Duties and Functions as Employee . . . . . . . . . . . . . . . 1
A. Positions . . . . . . . . . . . . . . . . . . . . . . . 1
B. General Duties and Functions as Employee . . . . . . . 1
3. Extent of Employee Services . . . . . . . . . . . . . . . . . . 1
4. Satisfaction of Employer . . . . . . . . . . . . . . . . . . . 2
5. Employee's Compensation and Benefits . . . . . . . . . . . . . 2
A. Base Salary . . . . . . . . . . . . . . . . . . . . . . 2
B. Annual Performance Bonus . . . . . . . . . . . . . . . 2
C. Stock Options . . . . . . . . . . . . . . . . . . . . . 4
D. Home Office . . . . . . . . . . . . . . . . . . . . . . 4
E. Other Benefits . . . . . . . . . . . . . . . . . . . . 4
6. Employee Covenants . . . . . . . . . . . . . . . . . . . . . . 4
A. Employee Representations . . . . . . . . . . . . . . . 5
B. Non-Competition . . . . . . . . . . . . . . . . . . . . 7
C. Non-Interference . . . . . . . . . . . . . . . . . . . 7
D. Disclosure of Information . . . . . . . . . . . . . . . 7
E. Return of Records . . . . . . . . . . . . . . . . . . . 8
F. Remedies . . . . . . . . . . . . . . . . . . . . . . . 8
7. Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
8. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . 9
A. Death . . . . . . . . . . . . . . . . . . . . . . . . . 9
B. Disability . . . . . . . . . . . . . . . . . . . . . . 9
C. Mutual Consent . . . . . . . . . . . . . . . . . . . . 10
D. By Employee . . . . . . . . . . . . . . . . . . . . . . 10
E. For "Good Cause" . . . . . . . . . . . . . . . . . . . 10
F. December 31, 2006 . . . . . . . . . . . . . . . . . . . 10
EMPLOYMENT AGREEMENT -i-
3
9. Payments upon Termination; Severance . . . . . . . . . . . . . 11
A. Death . . . . . . . . . . . . . . . . . . . . . . . . . 11
B. Disability . . . . . . . . . . . . . . . . . . . . . . 11
C. Mutual Consent . . . . . . . . . . . . . . . . . . . . 11
D. By Employee . . . . . . . . . . . . . . . . . . . . . . 11
E. For Good Cause . . . . . . . . . . . . . . . . . . . . 11
F. Expiration of Agreement . . . . . . . . . . . . . . . . 11
G. Additional Benefits . . . . . . . . . . . . . . . . . . 11
H. Change in Control . . . . . . . . . . . . . . . . . . . 12
10. References and Gender . . . . . . . . . . . . . . . . . . . . . 13
11. Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
12. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
13. Insurance; Medical Exam . . . . . . . . . . . . . . . . . . . . 14
14. Invalid Provisions . . . . . . . . . . . . . . . . . . . . . . 14
15. Nonassignability . . . . . . . . . . . . . . . . . . . . . . . 14
16. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . 14
17. Laws Governing . . . . . . . . . . . . . . . . . . . . . . . . 14
18. Succession . . . . . . . . . . . . . . . . . . . . . . . . . . 15
19. Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . 15
20. Waivers and Consents . . . . . . . . . . . . . . . . . . . . . 15
21. Multiple Counterparts . . . . . . . . . . . . . . . . . . . . . 15
EMPLOYMENT AGREEMENT -ii-
4
EMPLOYMENT AGREEMENT
This Agreement made this 30th day of December 1996, effective as of
December 1, 1996, by and between ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇, Inc., a Pennsylvania
corporation (the "Employer") and J. ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Employee").
R E C I T A L S:
A. Employee desires employment as an Employee of the Employer.
B. The Employer desires to employ Employee under the terms and conditions
hereof.
C. In consideration of the mutual covenants herein contained, the parties
agree as follows:
AGREEMENT
1. EMPLOYMENT. The Employer hereby employs Employee and Employee
hereby accepts such employment upon the terms and conditions of this Agreement.
2. DUTIES AND FUNCTIONS AS EMPLOYEE. Employee is engaged by the
Employer to perform the following duties and functions:
A. POSITIONS. Employee will serve as Senior Vice President
of the Employer.
B. GENERAL DUTIES AND FUNCTIONS AS EMPLOYEE. Employee agrees
to render to Employer his services as Senior Vice President and his duties will
be those customarily performed by persons acting in such capacity of a company
of a size and nature comparable to Employer and those designated by the Chief
Executive Officer or the Board of Directors of the Employer (the "Board")
consistent with the position of Senior Vice President. Employee shall also
serve, upon request and without additional compensation, as an officer or
director, or both, of any subsidiary, division or affiliate of the Employer or
any other entity in which the Employer holds an equity interest.
3. EXTENT OF EMPLOYEE SERVICES. Employee shall devote his full
working time, attention, efforts, and energies to the business and affairs of
the Employer and its affiliated companies. Employee during the term of this
Agreement shall not engage in any other business activity similar to the
Employer's business without the Employer's consent, whether or not that
business activity is pursued for gain, profit, or other pecuniary advantages,
nor shall Employee be interested, directly or indirectly, in any form, fashion,
or manner, as partner, officer, director, stockholder, advisor, employee,
investor, or in any other form or capacity in such other business; provided,
however, that nothing herein contained shall be deemed to prevent or limit the
right of Employee to invest any of his personal funds in securities of any
corporation whose securities
EMPLOYMENT AGREEMENT -1-
5
are regularly traded on any public exchange or regulated market of which
Employee, after any such investment, owns less than one percent (1%) of any
class of such corporation's outstanding securities. Notwithstanding the
foregoing, Employee may, with the permission of the Board, sit on the boards of
corporations (public and private) and devote time and attention to nonprofit
organizations and academic institutions, provided such activities shall be
consistent with Employee's commitments to the Employer and not affect
Employee's performance of Employee's obligations under this Agreement. During
the term of Employee's employment, Employee's principal residence shall be in
Dallas County, Texas, or a county contiguous thereto.
4. SATISFACTION OF EMPLOYER. Employee agrees that he will
faithfully, promptly, and to the best of his ability, experience, and talent,
perform all of the duties that may be required of and from him pursuant to the
express and implicit terms hereof. Such duties shall be rendered at Dallas,
Texas or a county contiguous thereto (the "Dallas Area"). Employee shall not
be required to travel outside of the Dallas Area with respect to the
performance of his services under this Agreement in excess of 10% of his time
incurred in performing such services.
5. EMPLOYEE'S COMPENSATION AND BENEFITS. For all services rendered
by Employee during his employment hereunder, the Employer shall compensate
Employee as follows:
A. BASE SALARY. During the term of Employee's employment with
Employer pursuant to this Agreement, the Employer shall pay Employee for his
services a minimum annual base salary of $175,000, payable in accordance with
the Employer's payroll practices as in effect from time to time, and subject to
such withholding as is required by law. Employee's base salary will be
reviewed annually and subject to increase at the discretion of the Board.
Employee's annual base salary in effect from time to time, exclusive of any
other compensation hereunder, is hereinafter called "Base Salary".
B. ANNUAL PERFORMANCE BONUS. In addition to Base Salary,
Employee shall receive an "Annual Performance Bonus" (herein so called), which
shall be the greater of (1) an amount determined by the Board of Directors of
Employer at the end of a fiscal year, or (2) the amount determined in
accordance with the following formulation:
(1) FORMULATION. The Annual Performance Bonus will be
determined from Employer's earnings before state and
federal taxes ("Before Tax Earnings"). The Board
shall each year during the term of this Agreement
establish a Performance Bonus Criteria (herein so
called) which shall be Employer's budgeted Before
Tax Earnings for that year and which shall not be
less than the Performance Bonus Criteria for the
immediately preceding year.
(a) If Before Tax Earnings are less than 80% of
Performance Bonus Criteria, Employee shall
earn no Annual Performance Bonus. If Before
Tax Earnings are equal to at least 80% of the
Performance Bonus Criteria, Employee shall
earn an
EMPLOYMENT AGREEMENT -2-
6
Annual Performance Bonus as determined under
Paragraphs 5(B)(1)(b), (c) and (d) below, as
applicable.
(b) If Before Tax Earnings are 80%-99% of the
Performance Criteria, Employee shall earn an
Annual Performance Bonus in an amount ranging
between 25% and 48.75 % of Employee's Base
Salary, determined on a prorated basis. For
example, if Before Tax Earnings are 92% of
the Performance Bonus Criteria, Employee
shall earn an Annual Performance Bonus equal
to 40% of Employee's Base Salary.
(c) If Before Tax Earnings are 100%-119% of the
Performance Criteria, Employee shall earn an
Annual Performance Bonus in an amount ranging
between 50% and 97.5% of Employee's Base
Salary, determined on a prorated basis. For
example, if Before Tax Earnings are 110% of
the Performance Criteria, Employee shall earn
an Annual Performance Bonus equal to 75% of
Employee's Base Salary.
(d) If Before Tax Earnings are 120% or greater of
the Performance Bonus Criteria, Employee
shall earn an Annual Performance Bonus equal
to 100% of Employee's Base Salary, plus an
additional 2% of Employee's Base Salary for
each 1% above 120% of the Performance Bonus
Criteria.
(2) SOURCE OF FINANCIAL INFORMATION AND CALCULATION.
Before Tax Earnings shall be determined on an
accrual basis based on the Employer's audited annual
financial statements for its fiscal tax year. The
determination of Employer's Before Tax earnings by
the Employer's independent auditors will be final
and binding on all parties.
(3) MID-YEAR CALCULATION. If employment is started or
terminated during a fiscal year of the Employer and
Employee is entitled to the Annual Performance Bonus
hereunder, the Annual Performance Bonus
determination will be made at the end of such fiscal
year and prorated based on the number of days
Employee was employed during that year; provided, in
the case of Employee's termination of employment,
Employee in his sole discretion may elect to
determine the Annual Performance Bonus based on
Before Tax
EMPLOYMENT AGREEMENT -3-
7
Earnings annualized through the last day of the
month preceding the date of Employee's termination
of employment.
(4) PAYMENT. Except as otherwise provided for herein,
the Annual Performance Bonus will be paid no later
than 30 days following the independent auditor's
completion of the Employer's audited annual
financial statements.
C. STOCK OPTIONS. During Employee's employment under this
Agreement, Employee will be eligible to participate in the ▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇▇, Inc. 1996 Stock Option Plan or such other stock option plans as may
be adopted by the Employer during the term of this Agreement (the "Stock Option
Plan") at a level specified by the Board, or by a committee designated by the
Board, when the Board (or committee) grants options to employees of the
Employer. The terms of each option granted to Employee will be governed by the
Stock Option Plan and the written option agreement entered into between the
Employer and Employee in accordance with the Stock Option Plan.
D. HOME OFFICE. Upon the request of Employee at any time
during the term of this Agreement, the Employer at its expense will equip a
home office for Employee's use and fulfillment of his duties and functions
hereunder. Such home office will be equipped as determined to be appropriate
by the Employer, and shall include on-line electronic access to the files,
records, internal and external communications and other information appropriate
to assist Employee with the fulfillment of his duties hereunder. Employee
agrees that as soon as practicable following termination of this Agreement, he
shall return any and all equipment requested to be returned by the Employer and
that his on-line access to the Employer's information shall cease.
E. OTHER BENEFITS. The Employer shall, at its expense,
furnish Employee with such other benefits as are from time to time provided by
the Employer for the benefit of its executives generally during the term of
this Agreement, including, without limitation, vacation pay, an automobile
allowance and fees for serving on the Board of Directors in amounts not less
than the previous year. In addition, Employer shall at its expense provide the
Employer with long-term disability insurance and umbrella liability insurance
in amounts as determined by the Board and life insurance of two times
Employee's compensation or such other amount as available to the Employer's
employees under its group term life insurance program. All benefits provided
to Employee shall be subject to the provisions of applicable law. During the
term of this Agreement, the benefits provided to Employee for a particular
year, or the economic equivalent thereof, shall not be less than the benefits
provided to Employee for the immediately preceding year.
6. EMPLOYEE COVENANTS. The parties recognize that the services to be
rendered as an employee under this Agreement by Employee are special, unique,
and of an extraordinary character and, therefore, Employee in consideration for
the employment hereunder makes the following representations and covenants (the
"Covenants") for the benefit of Employer.
EMPLOYMENT AGREEMENT -4-
8
A. EMPLOYEE REPRESENTATIONS.
(1) PROPRIETARY INFORMATION. Employee is aware and
acknowledges that Employer has developed a special
competence in its Business (hereinafter defined) and
has accumulated Confidential Information
(hereinafter defined) not generally known to others
in the field which is of unique value in the conduct
and growth of Employer's Business and which Employer
treats as proprietary.
(2) ACCESS TO CONFIDENTIAL INFORMATION. In the course
of Employee's employment, Employee will be employed
in a position or positions with Employer in which
Employee may receive or contribute to the
Confidential Information of Employer. Employee
recognizes the optimum progress of Employer's
Business cannot take place unless Confidential
Information is entrusted to Employee.
(3) PROTECTION OF GOODWILL. Employee acknowledges that
in the course of carrying out, performing, and
fulfilling his responsibilities to Employer,
Employee has and will have access to and be
entrusted with Confidential Information relating to
Employer's Business and Clients (hereinafter
defined). Employee recognizes that (i) the goodwill
of Employer depends upon, among other things, its
keeping the Confidential Information confidential
and that unauthorized disclosure of the Confidential
Information would irreparably damage Employer, and
(ii) disclosure of any Confidential Information to
competitors of Employer or to the general public
would be highly detrimental to Employer. Employee
further acknowledges that in the course of
performing his obligations to Employer, he will be a
representative of Employer to many of Employer's
Clients and in some instances Employer's primary
contact with the Client, and as such will be
responsible for maintaining or enhancing the
business and goodwill of Employer with those
Clients.
(4) MEANINGS OF TERMS. Employee acknowledges that the
following terms shall have the following meanings:
a. BUSINESS shall mean Employer's present
business of providing personnel services,
including but not limited to, temporary help
services, employee placement, employee
search, employee leasing, and as such
business may be expanded and diversified in
the future through acquisitions by Employer
or future development or diversification,
including any business which Employer has
targeted or
EMPLOYMENT AGREEMENT -5-
9
discussed to be targeted by officers or board
members for acquisition or entry during the
Restricted Period (as defined below).
b. EMPLOYER shall refer to ▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇▇, Inc. and its subsidiaries, and any
other business or entity in which Employer
has or acquires an equity interest.
c. CLIENTS means any individual, principal,
proprietorship, partnership, corporation,
association, or other entity that has been
served by Employer as a customer or franchise
during the term of Employee's employment,
including those who were (or became)
Client(s) of Employer at the time of (or at
any time during) Employee's employment.
d. COMPETING BUSINESS means any business, firm,
undertaking, company, or organization, other
than Employer, which competes in any state in
the United States in which the Employer's
business is located (the "Restricted Area")
with Employer's Business.
e. CONFIDENTIAL INFORMATION means information
disclosed to or known to Employee as a direct
or indirect consequence of, or through his
employment with Employer, about Employer's
business methods, operations, and services,
including, but not limited to, all
information, written or oral, including
without limitation, manuals, videos, audios,
and internal publications not generally
known, or proprietary to Employer, about
Employer's manufacturing, marketing, pricing,
accounting, merchandising, and information
gathering techniques and methods, and all
accumulated data, listings, or similar
recorded matter used or useful in Employer's
Business, including but not limited to,
Employer's Client lists, Employer's
franchisees' Client lists, reports, business
forms, advertisements, and marketing reports
and presentation materials. Without regard
to whether any or all of the foregoing
matters would be deemed confidential,
material, or important, the parties hereto
stipulate that as between them, the same are
important, material, and confidential and
gravely affect the effective and successful
conduct of the business of the Employer, and
its goodwill.
EMPLOYMENT AGREEMENT -6-
10
B. NON-COMPETITION. Employee agrees that during his
employment with Employer, Employee shall not within the Restricted Area, either
through any kind of ownership (other than ownership of securities of any
corporation whose securities are regularly traded on any public exchange or
regulated market of which Employee owns less than one percent (1 %) of any
class of such corporation's outstanding securities), or as a director, officer,
principal, agent, employee, employer, advisor, consultant, co-partner, or in
any individual or representative capacity whatsoever, either for Employee's own
benefit or for the benefit of any other person or firm, partnership,
association, corporation, or other entity, without the prior written consent of
Employer, participate, directly or indirectly, in a Competing Business
involving any Client.
C. NON-INTERFERENCE. During his employment with the Employer
and for a period of thirty-six (36) months after the termination of his
employment, irrespective of the time, manner, or cause of his termination,
Employee shall not:
(1) SOLICITATION. Directly or indirectly, either as
principal, agent, employee, employer, stockholder,
co-partner, or in any other individual or
representative capacity whatsoever induce, solicit,
or attempt to induce or solicit any existing Client
or induce, solicit or attempt to induce or solicit
any existing Client to terminate its relationship
with Employer, either for Employee's own benefit or
for the benefit of any other person, firm, or
corporation competitive with that of the Employer.
(2) SOURCES. Directly or indirectly, request or advise
any present or future merchandise resource, supply
resource, financial resource, or service resource of
the Employer or any existing Client to withdraw,
curtail, or cancel the furnishing or sales of
merchandise, supplies, or services to the Employer
or any existing Client.
(3) EMPLOYEES. Directly or indirectly, induce or
attempt to influence any employee of the Employer
or employee of any existing Client to terminate
employment with the Employer or the existing Client,
as the case may be, or hire any former employee of
the Employer who has resigned.
D. DISCLOSURE OF INFORMATION. Unless compelled to disclose
information in a legal proceeding, Employee expressly covenants and agrees that
he will not, during or after the termination of his employment with the
Employer, irrespective of the time, manner or cause of the termination,
directly or indirectly use, disclose, copy, or assist any other person or firm
in the use, disclosure, or copying of, any Confidential Information, except
with the written consent of or at the written request of Employer.
EMPLOYMENT AGREEMENT -7-
11
E. RETURN OF RECORDS. Upon termination of his employment,
Employee will surrender to the Employer all lists, books, and records of or in
connection with the Employer's Clients, customers, suppliers, prospective
customers, or businesses and all copies thereof and all other property
belonging to the Employer, whatsoever, including, without limitation, all
Confidential Information. Employee shall have no right to copy or otherwise
reproduce lists, books or accounts, records or other property of the Employer.
F. REMEDIES.
(1) ENFORCEMENT OF COVENANTS. Employee agrees that a
violation on his part of any Covenant in this
Paragraph 6 will cause such damage to the Employer
as will be irreparable and for that reason, Employee
further agrees that the Employer shall be entitled,
as a matter of right, to an injunction out of any
court of competent jurisdiction, restraining any
further violation of the Covenants by Employee, his
employer, employees, partners, or agents. In
addition to the foregoing remedy, in the event of a
violation by Employee of any Covenant in this
Paragraph 6, Employee shall be liable to the
Employer for actual damages. Such right to
injunction and actual damages shall be cumulative
and in addition to whatever other remedies the
Employer may have.
(2) INDEPENDENT COVENANTS. Each of the Covenants
contained in this Paragraph 6 shall be construed as
covenants or agreements independent of any other
provision of this Paragraph 6 of this Agreement and
the allegation or existence of any claim or cause of
action of Employee against the Employer, whether
predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by the
Employer of the Covenants contained herein.
(3) INTERPRETATION. It is the intent of the parties
that the provisions contained in Paragraph 6 shall,
to the fullest extent permissible under law and
public policy, be enforced by the courts of each
state and jurisdiction in which enforcement is
sought and that the unenforceability (or the
modification necessary to conform with such law and
public policy) of any part of Paragraph 6 shall not
be deemed to render unenforceable any other part of
Paragraph 6. Accordingly, if any part of Paragraph
6 shall be adjudicated to be invalid or
unenforceable in any action or proceeding in which
Employee, his heirs, executors, administrators and
the Employer, its successors, or assigns, are
parties, whether in its entirety or except as
modified as to duration, territory, accounts,
employees, or otherwise, then that part shall be
deemed deleted or amended, as the case may be, from
the Agreement in order to render the
EMPLOYMENT AGREEMENT -8-
12
remainder of Paragraph 6 both valid and enforceable.
Any such deletion or amendment shall apply only
where the court rendering the same has jurisdiction.
(4) SURVIVAL. Notwithstanding any provision in this
Agreement to the contrary, the representations of
Employee contained in Paragraph 6A and the rights of
the Employer hereunder relating to such
representations shall not terminate upon the
termination of this Agreement but shall continue to
remain in full force and effect for a period of
thirty-six (36) months after the termination of
Employee's employment with the Employer,
irrespective of the time, manner or cause of his
termination.
(5) NOTICE REQUIRED. Employee expressly agrees to
notify any prospective employer or affiliate in a
Competing Business of the Covenants, and authorizes
Employer to make contact with, and discuss the
nature and obligations of these Covenants with, any
person or affiliate reasonably believed by Employer
to be engaged or about to be engaged in an act that
would constitute a violation of the Covenants.
Employee hereby waives and releases Employer from,
any claims whatsoever arising in connection with
Employer's contact or discussions with such person
or affiliate.
7. TERM. Subject to the provisions for termination as provided
elsewhere herein the term of Employee's employment under this Agreement shall
commence on December 1, 1996, and terminate on December 31, 2006.
8. TERMINATION. Notwithstanding anything herein contained to the
contrary (including Paragraph 7 hereof), this Agreement shall terminate upon
the first to occur of any of the following events:
A. DEATH. Upon the death of Employee.
B. DISABILITY. Upon the final and binding determination of
disability of Employee, whether by mutual agreement or in accordance with the
procedures set forth in this Subparagraph 8B. For purposes of this Agreement,
Employee shall be subject to a "disability" when he is unable to continue
substantially all of his normal duties of employment by reason of a physical or
mental impairment. In determining whether Employee is subject to a disability,
Employer's determination shall be based upon the opinion of any licensed
physician of the appropriate recognized field of medicine or psychiatric
practice who has examined Employee and who agrees and opines that the Employee
is disabled; provided, however, if Employee disagrees with such determination,
then Employee and Employer shall agree upon an independent qualified physician
to review the case and make a final determination of disability. If the
parties cannot agree upon an independent physician to make such determination,
then each party shall appoint
EMPLOYMENT AGREEMENT -9-
13
a physician and those two physicians shall select a third physician who shall
then make a final and binding determination with respect to Employee's
disability.
C. MUTUAL CONSENT. By mutual written consent of the parties.
D. BY EMPLOYEE. By Employee by giving 30 days' written notice
of termination to Employer.
E. FOR "GOOD CAUSE". By Employer upon written notice for
"good cause," which shall mean for purposes of this Agreement, Employee's (i)
conviction of a felony or any other criminal act which the Board considers
materially damaging to the reputation of the Employer, (ii) conviction of
fraud, (iii) conviction of dishonesty, self-dealing, or embezzlement, (iv)
willful and intentional violation of Employer's published policies, (v) gross
or intentional neglect of duty, or (vi) failure or unwillingness to perform
substantially and faithfully Employee's duties hereunder (other than a failure
due to Employee's disability); provided, however, in the event "good cause"
relates to items (iv) through (vi) above, then Employer shall notify Employee
of such cause, and, if such violation can be cured, Employee shall have 30 days
from receipt of notice to cure such violation.
F. DECEMBER 31, 2006.
The effective date of termination under the foregoing provisions shall be as
follows:
(1) PARAGRAPH 8A, the date of death.
(2) PARAGRAPH 8B, the date of written notice from the
Employer to Employee of his "disability"
termination.
(3) ▇▇▇▇▇▇▇▇▇ ▇▇, the date determined under the written
mutual consent of the parties.
(4) PARAGRAPH 8D, the termination date as provided in
Employee's written notice; provided that the
Employer may accelerate the termination so that it
occurs at any time during the 30-day notice period,
while continuing Employee's Base Salary for the
remainder of the 30-day notice period.
(5) PARAGRAPH 8E, the termination shall be immediate
upon the delivery by Employer of written notice or
the end of the cure period if cure is possible but
is not effected.
(6) PARAGRAPH 8F, December 31, 2006.
EMPLOYMENT AGREEMENT -10-
14
Notwithstanding the foregoing, Employer may terminate Employee's use of
Employer's offices, equipment and supplies at any time after notice of
termination of employment is given by Employer or Employee.
9. PAYMENTS UPON TERMINATION; SEVERANCE.
A. DEATH. In the event termination of employment is the
result of death under Paragraph 8A above, Employee shall be paid his Base
Salary through the end of the month in which death occurred; Employee's Annual
Performance Bonus will be determined through the last day of the month
preceding the month in which death occurs in accordance with the provisions of
Paragraph 5B(3); and the right of Employee's representative to exercise stock
options, if any, will be determined in accordance with the terms of the Stock
Option Plan.
B. DISABILITY. In the event of termination of employment for
disability under Paragraph 8B above, Employee shall be paid his Base Salary
through the date of termination of employment; Employee's Annual Performance
Bonus will be determined through the last day of the month preceding the month
in which the termination of employment occurs in accordance with the provisions
of Paragraph 5B(3); and the right of Employee or Employee's representative to
exercise stock options, if any, will be determined in accordance with the terms
of the Stock Option Plan.
C. MUTUAL CONSENT. If termination of employment is by mutual
consent under ▇▇▇▇▇▇▇▇▇ ▇▇ above, the parties shall agree to the payments to be
made, if any, to Employee upon such termination.
D. BY EMPLOYEE. In the event of termination of employment by
Employee under ▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇ shall be paid his Base Salary through the
date of termination of employment. Employee's Annual Performance Bonus will be
determined through the last day of the month preceding the date of termination
of his employment in accordance with the provisions of Paragraph 5B(3).
Employee's right to exercise stock options, if any, will be determined in
accordance with the terms of the Stock Option Plan.
E. FOR GOOD CAUSE. In the event of a termination of
employment for good cause under Paragraph 8E, Employee will be entitled to
receive his Base Salary through the date of termination of employment.
Employee will not be entitled to receive any Annual Performance Bonus or to
exercise any unexercised stock options under the Stock Option Plan.
F. EXPIRATION OF AGREEMENT. In the event of termination of
employment in connection with the termination of the Agreement under Paragraph
8F, Employee shall be paid his Base Salary and Annual Performance Bonus through
December 31, 2006, and will be entitled to exercise stock options, if any,
under the terms of the Stock Option Plan.
G. ADDITIONAL BENEFITS. In the event Employer terminates
Employee's employment prior to the date set forth in Paragraph 8F, other than
for good cause under
EMPLOYMENT AGREEMENT -11-
15
Paragraph 8E, Employee will be entitled to receive, in addition to other
amounts, if any, payable to Employee under this Agreement, a severance benefit
in an amount equal to three times his Base Salary and Annual Performance Bonus
paid by Employer during the twelve month period immediately preceding his
termination of employment, reduced by the Base Salary and Annual Performance
Bonus payments, if any, payable to Employee under other provisions of this
Agreement as a result of Employee's termination of employment.
H. CHANGE IN CONTROL.
(1) Notwithstanding anything else stated in this
Paragraph 9, if (A) a Change in Control, as defined
in subparagraph H(2), occurs during the term of this
Agreement, and (B) if on or at any time during the
two-year period immediately following a Change in
Control, the Employee's employment with the Employer
is terminated, either:
(i) by the Company for any reason other than the
occurrence of one of the events set forth in
Subparagraphs 8A, 8B, 8C, 8E or 8F; or
(ii) by the Employee as the result of and on or
before the expiration of 60 days following:
(a) a significant reduction by the Employer
of Employee's job responsibilities with the
Employer, or (b) a reduction by the Employer
of Employee's Base Salary as in effect
immediately prior to the Change in Control,
or (c) because of a move of Employee's job
location by more than 25 miles;
then the Employer shall pay to the Employee, within 30 days after the effective
date of Employee's termination of employment, an amount equal to three times
Employee's Base Salary and three times a pro rata portion of Employee's Annual
Performance Bonus determined through the date of termination of employment, and
the Employer shall take such actions as are lawfully permitted to have all
options to purchase shares under the Stock Option Plan that are not then
exercisable, become immediately exercisable. The Employer may withhold from
such payment any federal, state, city, county or other taxes. If amounts paid
pursuant to this paragraph 9H become subject to the excise tax (the "Excise
Tax") imposed under Section 4999 of the Internal Revenue Code of 1986, as
amended, the Employer shall pay to Employee an additional amount such that the
net amount retained by Employee, after deduction of any Excise Tax on the
amounts payable under this Paragraph 9H, shall be equal to the full amount
payable under this Paragraph 9H with regard to the Excise Tax.
(2) "Change in Control" for purposes of this Paragraph
means the first to occur of any of the following
events:
EMPLOYMENT AGREEMENT -12-
16
(A) the effective date of any transaction or
series of transactions (other than a
transaction to which only the Employer and
one or more of its subsidiaries are parties)
pursuant to which (i) the Employer becomes a
subsidiary of another corporation, or (ii)
Employer is merged or consolidated with, or
assets or more than 51% of the outstanding
voting securities of the Employer are sold to
or acquired by, another person, another
corporation or another group of associated
persons acting in concert; provided, however,
that for purposes of this subparagraph
H(2)(A), in the case of a "series of
transactions" as described herein, the
effective date of the final transaction shall
be deemed to be the date of the final
transaction upon which one of the results set
forth above occurs; or
(B) the date upon which any person, corporation
or group of associated persons acting in
concert, excluding any persons or groups who
have then been directors, officers or holders
of greater than five percent of the
outstanding voting securities of the Employer
for a continuous period of at least five
years, become a direct or indirect beneficial
owner of voting securities of the Employer
representing an aggregate of more than 20% of
the votes then entitled to be cast at an
election of the Employer's Board of
Directors; or
(C) the date upon which the persons who were
members of the Board of Directors, as of the
effective date of this Agreement (the
"Original Directors"), cease to constitute a
majority of the Board of Directors; provided,
however, that any new director whose
nomination or selection has been approved by
the affirmative vote of at least a majority
of the Original Directors then in office
shall also be deemed an Original Director.
Except for the foregoing payments, Employee shall not be entitled to receive
any other benefits except as may be required by law.
10. REFERENCES AND GENDER. All references to "paragraphs" or
"subparagraphs" contained herein are, unless specifically indicated otherwise,
references to paragraphs or subparagraphs of this Agreement. Whenever herein
the singular number is used, the same shall include the plural where
appropriate, and words of any gender shall include each other gender where
appropriate. The terms "herein" and "hereof" as used in this Agreement are
references to this Agreement, unless the context indicates otherwise.
EMPLOYMENT AGREEMENT -13-
17
11. CAPTIONS. The captions, headings, and arrangements used in this
Agreement are for convenience only and do not in any way affect, limit,
amplify, or modify the terms and provisions hereof.
12. NOTICES. Whenever this Agreement requires or permits any consent,
approval, notice, request, or demand from one party to another, the consent,
approval, notice, request, or demand must be in writing to be effective,
including, without limitation, telex, or telegraphic communications, and shall
be deemed to have been given on the earlier of receipt or the third day after
it is enclosed in an envelope, addressed to the Employee at the address set
forth for the Employee on the payroll records of the Employer and to the
Employer at the address stated below or at such other address as the Employer
may designate for all purposes as its corporate headquarters, properly stamped,
sealed, and deposited in the United States mail. The address of Employer as of
the effective date of this Agreement is as set forth on the signature page
hereof.
13. INSURANCE; MEDICAL EXAM. Employee agrees to take a physical
examination to be performed by a medical doctor selected by the Employer. The
cost of such exam will be borne by the Employer. During the term of this
Agreement Employee shall be required as a condition of employment to take an
annual physical exam at the expense of the Employer. In addition, Employee
agrees to take such physical examinations as may be required by the Employer in
order for the Employer to purchase insurance on Employee's life in such amount
or amounts as the Employer deems appropriate.
14. INVALID PROVISIONS. If any provision of this Agreement is held to
be illegal, invalid, or unenforceable under present or future laws effective
during the term, including renewals, of this Agreement, such provision shall be
fully severable; this Agreement shall be construed and enforced as if such
illegal, invalid, or unenforceable provision had never comprised a part of this
Agreement; and the remaining provisions of this Agreement shall remain in full
force and effect and shall not be affected by the illegal, invalid, or
unenforceable provision or by its severance from this Agreement. Furthermore,
in lieu of each such illegal, invalid, or unenforceable provision there shall
be added automatically as part of this Agreement a provision as similar in
terms to such illegal, invalid, or unenforceable provision as may be possible
and be legal, valid, and enforceable.
15. NONASSIGNABILITY. Neither this Agreement, nor any rights or
obligations of either party hereunder may be transferred or assigned except
that the Employer may assign this entire Agreement to any successor to all or
substantially all of the Employer's business and assets.
16. ENTIRE AGREEMENT. This Agreement contains the entire agreement of
the parties hereto. No modification or amendment of any of the terms,
conditions, or provisions herein may be made otherwise than by written
agreement signed by the parties hereto, or in any event by the parties sought
to be bound hereby.
17. LAWS GOVERNING. THIS AGREEMENT SHALL BE CONSTRUED AND INTERPRETED
ACCORDING TO THE LAWS OF THE STATE OF TEXAS.
EMPLOYMENT AGREEMENT -14-
18
18. SUCCESSION. This Agreement shall inure to the benefit of and be
binding upon the parties hereto, and upon their successors in interest of any
kind whatsoever.
19. ARBITRATION. Any controversy or claim arising out of or relating
to this Agreement, including but not limited to claims based on or arising from
an alleged tort, shall at the request of any party be determined by
arbitration, under the auspices and rules of the American Arbitration
Association, in accordance with the Texas General Arbitration Act if
applicable, otherwise in accordance with the United States Arbitration Act.
Judgment upon the award rendered by the arbitrator shall be entered in any
court having jurisdiction. The institution and maintenance of an action for
judicial relief or pursuit of a provisional or ancillary remedy shall not
constitute a waiver of the right of any party to submit the controversy or
claim to arbitration. Nothing contained in this paragraph is intended to
prevent a party from bringing an action in State or Federal court in Dallas
County, Texas, or such other county and state in which Employer then has its
principal place of business, to (i) enforce that party's right to arbitrate
under this Agreement or (ii) to obtain relief by way of Specific Performance to
enforce the Covenants contained in Paragraph 6 hereof. The arbitration shall
be commenced by filing a demand for arbitration upon the other party or parties
and the American Arbitration Association. The arbitrator shall be a person who
is qualified to make decisions in legal matters. The arbitration proceeding
shall be held in Dallas County, Texas. The arbitrator shall maintain the
privacy of the hearings, and shall have the power to exclude witnesses, other
than a party, during the testimony of any other witness. The prevailing party
in the arbitration proceeding shall be entitled to reasonable attorney's fees,
costs, and necessary expenses incurred in connection with such proceeding, as
determined by the arbitrator.
20. WAIVERS AND CONSENTS. One or more waivers of any covenant, term,
or provision of this Agreement by any party shall not be construed as a waiver
of a subsequent breach of the same covenant, term, or provision, nor shall it
be considered a waiver of any other then existing or subsequent breach of a
different covenant, term, or provision. The consent or approval by either
party to or of any act by the other party requiring such consent or approval
shall not be deemed to waive or render unnecessary consent to or approval of
any subsequent similar act. No custom or practice of either party shall
constitute a waiver of either party's rights to insist upon strict compliance
with the terms hereof.
21. MULTIPLE COUNTERPARTS. This Agreement has been executed in a
number of identical counterparts, each of which, for all purposes, is to be
deemed an original, and all of which constitute, collectively, an agreement;
but in making proof of this Agreement, it shall not be necessary to produce or
account for more than one such counterpart.
(The signature page is the next following page)
EMPLOYMENT AGREEMENT -15-
19
IN WITNESS WHEREOF, this Agreement is executed as of the date first
written above.
EMPLOYEE: EMPLOYER:
▇▇▇▇▇▇▇▇ AND ▇▇▇▇▇▇▇▇, INC.
/s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
----------------------- --------------------------
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Chairman of the Board
ADDRESS: ADDRESS:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
EMPLOYMENT AGREEMENT -16-