EMPLOYMENT AGREEMENT
THIS AGREEMENT, entered into the 23rd day of November, 1999, by and between
Xxxxxxx International, Inc a Delaware corporation (the "Company"), and XXXXXX
X. XXXXX ("Marks") (DOB 9.20.1941) to be effective on the Effective Date (as
defined below):
WITNESSETH:
WHEREAS, the Company desires to receive the benefit of Marks's knowledge,
experience, management ability, reputation and contacts in the hospitality
industry; and
WHEREAS, Marks is willing to remain in the employ of the Company on the terms
hereinafter provided;
NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained, the parties do hereby agree as follows:
1. Employment. The Company hereby agrees to employ Marks and Marks hereby
accepts employment and agrees to perform the services specified herein upon
the terms and conditions hereinafter set forth, and as set forth in the
employee handbook.
2. Term. Subject to the provisions of termination hereinafter set forth, the
term of this Agreement shall be effective as of November 23, 1999 (The
"Effective Date") and ending on November 23, 2002. (The "Initial Term")
3. Automatic Annual Renewal. This Agreement will be automatically renewed
annually up to age 62; commencing with a date one year after the date of this
Agreement, for successive three year terms, (the "Renewal Terms") unless
terminated by either party upon written notice submitted to the other, at
least 30 days prior to the end of the first year of the Initial Term or, at
least 30 days prior to the end of any subsequent year, or unless terminated
pursuant to Section 14 hereunder. Further renewals of the three year term
beyond age 62 will be at the Board of Director's discretion. The Renewal Terms
shall be on the same terms and conditions as the Initial Term under this
Agreement except the compensation terms which shall be governed by paragraph
6(i) below. The last day of the Initial Term or any Renewal Term in which
Termination Notice is received shall be referred to as the Termination Date.
In the event that notice is given by the Company of its intention not to renew
this Agreement, the Company can at it's option elect either to pay Marks the
remaining two years of the current term of this Agreement, in a lump sum, or
require that Marks continue in his capacity with the Company and continue to
pay his salary and other benefits in the usual way, or a combination of the
foregoing, ith the continued employment of Marks for a period of less than two
years and an appropriate lump sum, representing the remaining portion of the
two year period of notice, payable on the Termination Date.
4. Duties. Marks has been elected and is engaged for the term of the
Agreement as the President and Chief Operating Officer of this Company. In
such capacity, Marks will, as reasonably requested by the Board of Directors
of the Company from time to time, carry out the functions of his office and
furnish his best advice, information, judgment and knowledge with respect to
the business of the Company and its subsidiaries, which are engaged in the
hospitality business and related businesses.
5. Extent of Service. Marks agrees to perform to the best of his abilities
such duties as hereinabove described and to devote full time, attention and
energy to the business of the Company and the Company's subsidiaries, which
are engaged in the hospitality business, as is necessary to fulfill such
duties.
6. Compensation. The compensation to be paid by the Company to Marks and
which Marks agrees to accept from the Company shall be as follows:
(i) A Salary at an initial annual rate of One Hundred and Ten Thousand
(110,000)Dollars, subject to an automatic annual 5% increase, and to such
increases as the Board of irectors of the Company may, in its sole discretion,
from time to time determine. Such salary compensation shall be payable on a
current basis in equal installments not less frequently than monthly, subject
to applicable withholding.
(ii) An Automobile Allowance, initially at the rate of $650 per month, subject
to such increases as the Board of Directors of the Company may, in its sole
discretion, from time to time determine,
(iii) Participation in the Corporate Executive Bonus Plan, as implemented on
January 24, 1998, subject to any modifications as the Board of Directors of
the Company may, in its sole discretion, from time to time determine,
(iv) The retirement and other benefits accruing to Marks under the "Retirement
-Only Continuation Fixed and Flexible Premium Life Insurance Agreement",
resolved by the Board of Directors of the Company on January 19, 1998 and
entered into on April 22, 1998, between the Company and Marks,
(v) Participation in the Employee Stock Option plan, when one is implemented,
commensurate with other members of the Board of Directors, key officers and
executives of the Company.
7. Benefits. Marks shall be entitled to participate in such other employee
benefit programs, plans and policies, including but not limited to vacation,
sick, medical, dental, life and long term disability plans, as are maintained
by the Company and as may be established for the executive employees of the
Company from time to time on the same basis as other executive employees are
entitled thereto. It is understood that the establishment, termination or
change in any such xecutive employee benefit programs, plans or policies shall
be at the discretion of the Board of Directors of the Company to exercise in
its sole discretion, from time to time, and any such termination or change in
such program, plan or policy will not affect this Employment Agreement so long
as Marks is treated on the same basis as other executive employees
participating in such program, plan or policy, as the case may be. Upon
termination of employment, without regard to the manner in which the
termination was brought about, Marks's rights in such employee benefit
programs, plans or policies shall be governed solely by the terms of the
program, plan or policy itself and not this Agreement.
8. Working Facilities. During the term of his employment, Marks shall be
furnished with a private office, secretarial services and such other
facilities and services as are commensurate with his position with the Company
and adequate for the performance of his duties under this Employment
Agreement.
9. Expenses. Marks is authorized to incur reasonable expenses for the
discharge of his duties hereunder in the promotion of the business of the
Company, including expenses for entertainment, travel and related items. The
Company shall reimburse Marks for all such expenses upon presentation by Marks
from time to time of itemized accounts of expenditures incurred in accordance
with customary Company policies.
10. Non-Competition. Marks understands that he has been exposed to, and will
further develop and be exposed to, confidential information and trade secrets
of the Company or its customers, including (without limitation), intimate
knowledge of customer requirements, business procedures, price lists,
financial data, records, customer lists and frequency and variety of work
associated with particular customers (hereinafter called "Confidential
Information"). Confidential Information has been and will continue to be
developed for commercial advantage and at the expense of the Company, and
maintenance by the Company of the proprietary nature and confidentiality of
Confidential Information to the fullest extent is important to the Company. As
part of the essence of the consideration hereof, Marks agrees that (i) during
the term of the employment of Marks under this Agreement and for a period of
one year immediately following termination of his employment with the Company
if such termination is by the Company with Cause, or by Marks without Good
Reason, Marks will not, for himself or on behalf of any other person or
persons, firm, partnership, company or corporation, engage in any other
business which is in competition with the Company, either as a principal,
partner, agent, employee, director or officer, within the cities in which the
Company operates hotels unless Marks has received written consent from the
Company, (except that this shall not be construed as preventing Marks from or
requiring him to obtain consent of the Company prior to purchasing less than
five percent (5%) of the outstanding shares of publicly traded stock of any
competitive business or enterprise in the trade area of the Company); (ii)
that during the term of the employment of Marks under this Agreement, and for
a period of one year immediately following termination of his employment by
the Company with Cause, or by Marks without Good Reason, Marks will not, for
himself or on behalf of or in conjunction with any other person or persons,
firm, partnership, company or corporation, call upon any client or clients of
the Company with whom his first contact occurred during his period of
employment or consultation with the Company or its predecessors for the
purposes of soliciting business from and/or diverting or taking away business
of such clients of the Company. In the event this section is determined by a
court of competent jurisdiction to exceed geographical, temporal or scope of
activity limitations permitted by applicable law, this section shall be
reformed by the court to the maximum permitted limitation.
11. Non Disclosure of Information. Marks recognizes and acknowledges that he
will have access to certain Confidential Information of the Company which is a
valuable, special and unique asset of the Company's business. He therefore
covenants and agrees, which covenant and agreement is of the essence of this
Agreement, that during or after the term of his employment, he will not
reveal to anyone not an employee, officer, agent or consultant of the Company
at any time the Confidential Information of the Company, and that upon
termination of his employment, he will return to the Company all records and
documents (and all copies thereof) and all other property belonging to the
Company or relative to its business.
12. Solicitation and Enticement of Employees. Marks agrees that during the
term of his employment by the Company and for a period of one (1) year after
termination of his employment with the Company, he will not solicit or entice
any other employee of the Company to leave the Company to go to work for any
other business or organization which is in direct or indirect competition with
the Company.
13. Successor Companies. Notwithstanding anything in this Agreement to the
contrary, Sections 10, 11 and 12 hereof shall not apply and shall be of no
force and effect in the event Marks is employed by any person who purchases
voting control of the Company purchases substantially all of the assets of the
Company, or is the survivor of any merger or other combination with the
Company.
14. Termination.
(a) Death. In the event Marks dies during the term of this Agreement, the
Company shall pay to his executors, administrators or heirs and amount equal
to the Marks's salary and benefits for the remaining period of any term
hereunder (but in no event shall such sum be less than two (2) years' salary),
in a lump sum, which amount the Company will insure on the life of Marks, as
long as such insurance is available at commercially reasonable terms. If such
insurance is not available, the Company will pay such amounts to his
executors, administrators or heirs in monthly installments. The Company shall
thereafter have no further liability to his executors or administrators or to
any other person claiming under him for compensation in accordance with the
terms hereof, except that arising under the Retirement -Only Continuation
Fixed and Flexible Premium Life Insurance Agreement. Benefits shall be payable
in accordance with their respective terms as provided in Section 6 hereof
b) Disability. In the event Marks should be prevented from performing his
duties hereunder by reason of illness or incapacity for a period of twelve
months during the term hereof, the Company shall have the right to terminate
the employment of Marks under this Agreement. The Company shall continue to
pay to Marks his compensation under Sections 6 and 7 above in relation to such
twelve months of disability prior to termination, and following termination
the Company will pay any amount of compensation remaining under the term of
this Agreement; but in no event shall such sum be less than two (2) year's
salary.
(c ) Termination by Company for Cause. The Company may terminate Marks's
employment under this Agreement for Cause at any time. For purposes of this
Agreement, the Company shall have "Cause" to terminate Marks's employment if
he (i) is convicted of one or more acts constituting a felony; or (ii) is
convicted of fraud or one or more acts constituting serious moral turpitude;
or (iii) misappropriates the Company's assets or engages in gross misconduct
materially injurious to the Company or its affiliates or subsidiaries; or (iv)
willfully refuses or grossly neglects to perform the duties reasonably
assigned to him by the Board of Directors of the Company. Upon any
termination of Marks's employment under this section, the Company shall have
no further obligation under this Agreement to make payments to, or bestow any
benefits upon Marks after the date of the termination, other than compensation
payments or benefits accrued, due and payable to Marks prior to the date of
termination under Sections 6 and 7 above.
(d) Termination by Company Without Cause. In the event of the termination of
Marks's employment under this Agreement by the Company without cause (except
as may be otherwise provided in this Section 14), any remaining amounts of
compensation due to Marks under Sections 6 and 7 for the remaining term of
this Agreement (but in no event less than two year's salary) shall be paid in
full, on the Termination Date, which date shall be no more than 30 (thirty)
days after the Company terminates Marks's employment hereunder.
(e) Termination by Marks With Good Reason. Marks may terminate his employment
for Good Reason. For purpose of this Agreement," "Good Reason" shall mean: (i)
without Marks's consent, the assignment to Marks of substantial duties
inconsistent with Marks's position, duties, responsibilities and status with
the Company, or any removal of Marks from his title's and offices, except in
connection with the termination of Marks's employment for the cause or
disability or as a result of Marks's death; (ii) any material change in this
Agreement without Marks's consent (iii) the Company's requiring Marks to
relocate anywhere other than the Dallas, Texas area except for required travel
on the Company's business travel obligations, or, in the event Marks consents
to such relocation out of the State of Texas the failure by the Company to pay
or reimburse Marks for all reasonable moving expenses incurred by Marks
relating to a change of Marks's principal residence in connection with such
relocation and to indemnify Marks against any loss (defined as the difference
between the actual bona fide sale price of such residence and the fair market
value of such residence as determined by a member of the Society of Real
Estate Appraisers designated by Marks and satisfactory to the Company)
realized in the sale of Marks's principal residence in connection with any
such change of xxxxxxxxx.Xx the event of termination under this Section 14(e),
the Company shall pay to Marks the balance of his compensation under Section 6
and any accrued entitlements under Section 7 for the remaining term of this
Agreement (but in no event less than two year's salary) on the Termination
Date.
(f) Change, of Control. In the event of a Change of Control (as defined
below), Marks shall have the right during the 120-day period after
consummation of the Change of Control to terminate his employment and the
Company shall continue to make semi-monthly payments to him for a period of
three (3) years at the rate per year in effect under Sections 6 and 7 as of
the date of termination. For purposes of this Agreement," Change of Control"
means:
(i) the acquisition by any individual, entity or group (within the meaning of
Section 13(d) (3) or 14(d) (2) or the Securities Exchange Act of 1934, as
amended (the Exchange Act")) (a "Person") (other than Merchant Capital
Holdings ("MCH"), any entity controlled by Xxxxxxxx Xxxx, Xxxxxx Xxxxxxxx or a
Person who is the beneficial owner of 10% or more of the combined voting power
of the outstanding voting securities of Xxxxxxx International as of the date
hereof) of beneficial ownership (within the meaning of Rule I 3d-3 promulgated
under the Exchange Act) of a majority of the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors; provided however that any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company shall not constitute a Change of
Control; or
(ii) approval by the shareholders of the Company of reorganization, merger of
consolidation or sale or other disposition of all or substantially all of the
assets of the Company (a "Business Combination"), in each case, unless,
following such Business Combination, all or substantially all of the
individuals and entities who were the beneficial owners of the outstanding
voting securities of the Company immediately prior to such Business
Combination beneficially own, directly or indirectly, a majority of the
combined voting power of the then outstanding voting securities entitled to
vote generally in the election of directors of the corporation resulting from
such Business Combination (including without limitation a corporation which as
a result of such transaction owns the Company or all or substantially all of
the Company's assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership immediately prior to
such Business Combination. In the event of such termination following a
Change of Control, Marks shall have no right to, and the Company shall have no
obligations to pay, any other or further sums, except for the payment required
pursuant to this Section 14(1), for or in relation to severance or other
compensation relating to termination of his employment
with the Company
15. Specific Performance. The Company and Marks jointly and severally,
acknowledge that it would be impossible to calculate or ascertain accurately
and definitively the damages the Company would sustain from a breach by Marks
of the provisions of Sections 10, 11, and 12 hereof and that no adequate
remedy at law exists. Accordingly, in the event of a threatened breach by
Marks of said provisions, the Company shall be entitled to an injunction
restraining such prohibited activity. Nothing herein, however, shall be
construed as prohibiting the Company for such pursuing breach or threatened
breach, including the recovery of damages from Marks.
16. Stock Options upon purchase of Shares by Merchant CapitalHoldings, Ltd.
The execution of this Agreement is required by Merchant Capital Holdings, Ltd,
("MCH") as part of its closing of the Stock Acquisition and Option Agreement
(the "SAOA") that it is entering into contemporaneously with the Company. As a
material inducement to Marks to agree to the Non Competition provisions in
paragraph 10 herein, and to enter into this Agreement, Marks will be issued
six year options, from the date at which MCH purchases each installment of
shares and receives options to purchase further shares in the Company, for
Marks to purchase shares in the Company equal to 50% of each installment of
options issued to MCH under the SAOA, at prices and under terms equal to the
MCH share options.
17. Option to Rescind this Agreement In the event that MCH do not complete the
purchase of one million shares as detailed in the SAOA by the deadline or any
agreed upon extension thereof, Marks, at his sole election, shall have the
right to rescind this Agreement.
18. Notices. Any notice required or permitted to be given under this Agreement
shall be sufficient if in writing and if sent by certified mail (return
receipt requested) to the addresses as follows:
If to Marks: If to the Company:
0000 Xxxxxx Xxxxx Xxxxx 000 X. Xxxxxxxxx Xx.
Xxxxx Xxxxx 00000 XxXxxxxx, XX 00000
or to such other address as any party may have furnished to the other in
writing in accordance herewith, except that notices of changes of address
shall be effective only upon receipt.
19. Assignment. The rights and obligations of the Company under this Agreement
shall injure to the benefit of and be binding upon its successors and assigns.
The rights and obligations of Marks under this agreement are of personal
nature and shall neither be assigned nor transferred in whole or in part by
Marks.
20. Governing Law. This Agreement shall be subject to and governed by the laws
of the State of Texas.
21. Non-Waiver. No waiver of or failure to assert any claim, right, benefit or
remedy hereunder shall operate as a waiver of any other claim, right, benefit
or remedy of the Company or Marks.
22. Amendment. This Agreement may be modified or amended only by written
instrument executed by the parties hereto.
23. Entire Agreement This Agreement sets forth the entire agreement between
the parties pertaining to the subject matter hereof and hereby supersedes and
cancels any and all previous agreements entered into between the parties
hereto or their parents, affiliates, or predecessors. Marks hereby disclaims
reliance on any promise of the Company or its parent, affiliates, or
predecessors, other than as set forth specifically herein.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date and
year first
above written.
For the Company Xxxxxx X. Xxxxx
______/Signature/________ ______/Signature/________
Xxxxxx Xxxxxxxx, Director
