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Exhibit 10.20
EMPLOYMENT AGREEMENT
This Employment Agreement (this "AGREEMENT"), dated and effective as
of the 3rd day of June, 1998, is entered into in Dallas, Texas by and between
HighwayMaster Corporation, a Delaware corporation, with its principal place of
business located at 00000 Xxxxxx Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx, 00000
("EMPLOYER"), and Xxxx X. Xxxxxx, an individual residing in Dallas, Texas
("EMPLOYEE").
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein, Employer and Employee, intending to be legally bound, hereby agree as
follows:
1. Employment Relationship. Employer hereby employs Employee, and
Employee hereby accepts such employment, upon the terms and conditions set
forth in this Agreement. Such employment relationship shall continue for the
stated term of this Agreement, as described in Section 8 hereof, or until the
earlier termination of such relationship and this Agreement pursuant to Section
6 hereof.
2. Position and Responsibilities of Employee. Employee shall be
employed as Senior Vice President, Director of Marketing, with job
responsibilities initially limited to the AutoLink project, to be expanded at
the sole discretion of Employer. Employee shall report to the Director of
AutoLink and shall devote such time and attention to the business of Employer
as shall be required for the efficient management thereof, and shall manage and
supervise such business, and shall devote his full time best efforts to the
faithful performance of his duties on behalf of Employer. Employee shall also
perform such other duties, and may have job responsibilities and titles
modified from time to time as may be requested by the President and Director of
AutoLink or by resolution of the Board of Directors of Employer, provided such
duties and job titles are generally consistent with the level of responsibility
currently held by Employee. Employee shall not engage in additional gainful
employment during the term of this Agreement without advance written consent
from Employer.
3. Compensation. For all services rendered by Employee pursuant to
this Agreement, Employer shall pay to Employee, and Employee shall accept as
full compensation hereunder the following:
(a) Salary. Employee shall receive a salary of $12,500 per month
payable by Employer in bi-monthly amounts in Dallas, Texas. Employee's
salary shall be subject to all appropriate federal and state
withholding taxes and shall be payable in accordance with the normal
payroll procedures of Employer. Employer may be permitted in its sole
discretion, but not required, to increase the amount of compensation
payable to Employee during the term of this Agreement, however, once
increased the compensation may not be decreased.
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(b) Benefits and Perquisites. Employee shall be entitled to
participate in the employee benefit plans provided by Employer for all
employees generally, and for executive employees of Employer. Employer
shall be entitled to change such plans from time to time, and the
parties acknowledge that at the initial date of this Agreement the
fringe benefits provided to Employee include a corporate 401(k) plan
(contributions by Employee only), health and dental insurance for the
Employee, and reimbursement of certain expenses in accordance with the
policies and procedures of the Company.
(c) Discretionary Bonuses. Employer shall establish an incentive
bonus plan for Employee based on various targets and performance
criteria to be established by the President and the Director of
AutoLink in consultation with the Employee. The evaluation of the
performance of the Employee as measured by the applicable targets and
the awarding of applicable bonuses, if any, shall be at the sole
discretion of the Director of AutoLink and the President. The
potential annual bonus which may be awarded to Employee shall be in
the amount of $50,000 at each fiscal year end of Employer during the
term of this Agreement. The first fiscal year bonus shall not be
reduced by proration for the amount of time Employee was employed by
Employer during the first fiscal year of his employment, whereas the
final bonus shall be prorated to reflect the portion of the final
fiscal year which is covered by this Agreement. Each annual
discretionary bonus may be awarded in whole, in part, or withheld in
its entirety based on the level of incentive bonus plan performance
criteria achieved by Employee, in the sole judgement of the President
and the Director of AutoLink. The discretion allowed the President,
the Director of AutoLink, and Senior Management in this paragraph are
expressly made subject to the duty of good faith and fair dealing set
forth below in Paragraph 13.
4. Stock Options. Upon commencement of employment and approval of the
Compensation Subcommittee of the Board of Directors of HighwayMaster
Communications, Inc., Employee shall be issued stock options to purchase 30,000
shares of stock of HighwayMaster Communications, Inc. at a price to be
determined by such Committee which is equal to the trading price of the stock
on a public trading market on the date of issuance. The options will vest over
a four year schedule as set forth in the applicable Employee Stock Option Plan
and the Employee Stock Option Agreement to be signed by the Employee. In the
event of any direct conflict, the terms of the stock options shall be governed
by the terms of this Section 4 of this Agreement and not by the Employee Stock
Option Agreement and the Employee Stock Option Plan, as amended from time to
time in accordance with their terms. Notwithstanding the other terms of this
paragraph, in the event that 50% or more of the outstanding common stock or
assets of the Employer are sold or otherwise transferred for reasons other than
merely administrative reorganization ("Change in Control of the Company"), all
stock options issued concurrently with the execution of this Agreement shall
accelerate and be deemed vested on the day prior to the Change in Control of
the Company.
5. Protective Covenants. Employee recognizes that his employment by
Employer is one of the highest trust and confidence because (i) Employee will
become fully familiar with all aspects of Employer's business during the period
of his employment with Employer, (ii) certain information
EMPLOYMENT AGREEMENT - PAGE 2
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of which Employee will gain knowledge during his employment by Employer is
proprietary and confidential information which is of special and peculiar value
to Employer, and (iii) if any such proprietary and confidential information
were imparted to or became known by any person, including Employee, engaging in
a business in competition with that of Employer, hardship, loss and irreparable
injury and damage could result to Employer, the measurement of which would be
difficult if not impossible to ascertain. Employee acknowledges that any and
all inventions, improvements, discoveries, formulae, processes, products or
designs developed by Employee alone or in conjunction with others in connection
with Employer's business during the term of Employee's employment with Employer
("Proprietary Information") shall be the sole and absolute property of Employer
in perpetuity, that Employee shall promptly disclose such Proprietary
Information to Employer, and Employee shall have no right, title or interest
therein or to receive additional monies therefor, regardless of whether
development occurred during working hours or any other time during the term of
Employee's employment with Employer. Employee shall assist Employer in
obtaining patents on all such Proprietary Information deemed patentable by
Employer and shall execute all documents necessary to obtain such patents and
to vest Employer with full and exclusive title to the patents and to provide
testimony, documents, or otherwise make himself available to protect the
patents against infringement by others. For purposes of this Agreement, an
invention shall be deemed to have been made during the period of Employee's
employment if, during such period, the invention was conceived or first
actually reduced to practice, and Employee agrees that any patent application
filed by Employee within one (1) year after the termination of Employee's
employment with Employer shall be presumed to relate to an invention made
during the term of Employee's employment with Employer unless Employee can
establish the contrary. Employee further acknowledges that Employer has
developed unique skills, concepts, sales presentations, marketing programs,
marketing strategy, business practices, methods of operation, trademarks,
licenses, technical information, Proprietary Information, computer software
programs, tapes and discs concerning its operations systems, customer lists,
customer leads, documents identifying past, present and future customers,
hiring and training methods, investment policies, financial and other
confidential and proprietary information concerning its operations and
expansion plans ("Trade Secrets"). Therefore, Employee agrees that it is
necessary for Employer to protect its business and that of its affiliates from
such damage, and Employee further agrees that the following covenants
constitute a reasonable and appropriate means, consistent with the best
interest of both Employee and Employer, to protect Employer or its affiliates
against damage due to loss or disclosure of Proprietary Information or Trade
Secrets and shall apply to and be binding upon Employee as provided herein:
(a) Trade Secrets. Employee recognizes that his position with
Employer is one of the highest trust and confidence by reason of
Employee's access to and contact with certain Trade Secrets of
Employer. Employee agrees and covenants that, except as may be
required by Employer in connection with this Agreement, or with the
prior written consent of Employer, Employee shall not, either during
the term of this Agreement or thereafter, directly or indirectly, use
for Employee's own benefit or for the benefit of another, or disclose,
disseminate, or distribute to another, except as directed by Employer
or as required for the performance of Employee's duties on behalf of
the Employer, any Trade Secret (whether or not acquired, learned,
obtained, or developed by Employee alone or in
EMPLOYMENT AGREEMENT - PAGE 3
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conjunction with others) of Employer or of others with whom Employer
has a business relationship. All memoranda, notes, records, drawings,
documents, or other writings whatsoever made, compiled, acquired, or
received by Employee during the term of this Agreement, arising out
of, in connection with, or related to any activity or business of
Employer, including, but not limited to, the customers, suppliers, or
others with whom Employer has a business relationship, the
arrangements of Employer with such parties, and the pricing and
expansion policies and strategy of Employer, are, and shall continue
to be, the sole and exclusive property of Employer and shall, together
with all copies thereof and all advertising literature, be returned
and delivered to Employer by Employee immediately, without demand,
upon the termination of this Agreement, or at any time upon Employer's
demand.
Employee represents and warrants that he is not bound by any
agreement with any prior employer or other party that will be breached
by execution and performance of this Agreement, or which would
otherwise prevent him from performing his duties with Employer as set
forth in this Agreement. Employee represents and warrants that he has
not retained any copies of proprietary and confidential information of
any prior employer, and he will not use or rely on any confidential
and proprietary information of any prior employer in carrying out his
duties for Employer.
(b) Covenant Not to Compete. In the event this Agreement is
terminated for any reason, Employee hereby covenants and agrees that
for a period of 24 months after termination of this Agreement for any
reason, he will not directly or indirectly, either as an employee,
employer, consultant, agent, principal, partner, shareholder (other
than through ownership of publicly-traded capital stock of a
corporation which represents less than five percent (5%) of the
outstanding capital stock of such corporation), corporate officer,
director, investor, financier or in any other individual or
representative capacity, engage or participate in the wireless
tracking and communication services business for the long haul
trucking industry in the United States of America, or in wireless
automotive vehicle security and roadside assistance services in the
United States of America.
(c) Survival of Covenants. Each covenant of Employee set forth in
this Section 5 shall survive the termination of this Agreement and
shall be construed as an agreement independent of any other provision
of this Agreement, and the existence of any claim or cause of action
of Employee against Employer whether predicated on this Agreement or
otherwise shall not constitute a defense to the enforcement by
Employer of said covenant.
(d) Remedies. In the event of breach or threatened breach by
Employee of any provision of this Section 5, Employer shall be
entitled to relief by temporary restraining order, temporary
injunction, or permanent injunction or otherwise, in addition to other
legal and equitable relief to which it may be entitled, including any
and all monetary damages which Employer may incur as a result of said
breach, violation or threatened breach or violation. Employer may
pursue any remedy available to it concurrently or consecutively in any
order as to any breach, violation, or threatened breach or violation,
and the pursuit of one of such
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remedies at any time will not be deemed an election of remedies or
waiver of the right to pursue any other of such remedies as to such
breach, violation, or threatened breach or violation, or as to any
other breach, violation, or threatened breach or violation.
Employee hereby acknowledges that Employee's agreement to be bound by
the protective covenants set forth in this Section 5 was a material inducement
for Employer entering into this Agreement and agreeing to pay Employee the
compensation and benefits set forth herein.
6. Termination. The employment relationship between Employee and
Employer created hereunder shall terminate before the expiration of the stated
term of this Agreement upon the occurrence of any one of the following events:
(a) Death or Permanent Disability. The employment relationship
shall be terminated effective on the death of the Employee.
The Employee shall be entitled to leaves of absence from the
Company in accordance with the policy of the Company generally
applicable to executives for illness or other temporary disabilities
for a period or periods not exceeding six months in any calendar year,
and her status as an employee shall continue during such periods.
Provided, that Employee shall apply for Employer's short term
disability insurance payments during such six month period, Employer
shall supplement such short term disability payments during the first
three months of such six month period to equal Employee's total
compensation under this Agreement, and during the last three months of
such six month period Employee shall accept payments under the
Employer's standard short term disability plan (as referenced in
Section 3(b) above) in lieu of salary amounts set forth in Sections
3(a) above. If, as a result of Employee's incapacity due to physical
or mental illness which prevents Employee from satisfactorily
performing duties for the Company on a full time basis and such
incapacity is determined to be total and permanent such that the
Employee will have been unable to perform her duties on a full-time
basis for six months during a single fiscal year, the Employee shall
be deemed to have experienced a permanent disability and the Company
may terminate this Agreement upon thirty days written notice. If
Employer terminates this Agreement pursuant to this sub-section,
Employee shall be entitled to the compensation as specifically
provided in Section 7 below.
(b) Termination for Cause. The following events, which for purposes
of this Agreement shall constitute "cause" for termination:
(1) The willful breach by Employee of any provision of Sections
1, 2 or 5 (including but not limited to a refusal to follow lawful
directives of the Senior Management or Board of Directors of
Employer which are not inconsistent with the provisions of this
Agreement) after notice to Employee of the particular details
thereof and a period of 10 days thereafter within which to cure
such breach and the failure of Employee to cure such breach within
such 10 day period;
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(2) Any act of fraud, misappropriation or embezzlement by
Employee with respect to any aspect of Employer's business;
(3) The illegal use of drugs by Employee during the term of
this Agreement that, in the determination of the Senior Management
of Employer, substantially interferes with Employee's performance
of his duties hereunder;
(4) Substantial failure of performance by Employee, other than
a failure permitted pursuant to Subsection 6(a) above which is
repeated or continued after 30 day written notice to Employee of
such failure, and which is reasonably determined by the Senior
Management of Employer to be materially injurious to the business
or interests of Employer and which failure is not cured by Employee
within such 30 day period; or
(5) conviction of Employee by a court of competent jurisdiction
of a felony or of a crime involving moral turpitude.
Any notice of discharge under Section 6(a) or 6(b) above shall
describe with reasonable specificity the cause or causes for the
termination of Employee's employment, as well as the effective date of
the termination (which effective date may be the date of such notice
under Subsection 6(a) or 6(b) above). If Employer terminates
Employee's employment for any of the reasons set forth above, Employer
shall have no further obligations hereunder from and after the
effective date of termination (other than as set forth below) and
shall have all other rights and remedies available under this or any
other agreement and at law or in equity.
(c) Termination by Employee. Employee may terminate this Agreement
without liability to Employer arising from the resignation of Employee
at any time during the term of this Agreement upon 90 days or more
(the "Notice Period") written notice to Employer. In the event of a
proper notice by Employee, the termination date of Employee's
employment and this Agreement with Employer shall be the date provided
in such notice, and Employee shall be entitled to compensation during
the Notice Period (ending in its entirety upon completion of the
Notice Period), as provided in Section 7 below. Upon proper notice of
Employee's voluntary termination, Employer has the right to require
Employee to cease his employment responsibilities immediately;
however, for purposes of the compensation, stock option vesting, and
all other benefits provided to Employee by or as a result of this
Agreement, Employee shall be considered an employee of Employer for
the entire Notice Period.
(d) Termination by Employer with Notice. Employer may terminate
this Agreement without cause at any time upon 30 days' written notice
to Employee, during which period Employee shall not be required to
perform any services for Employer other than to assist Employer in
training his successor and generally preparing for an orderly
transition;
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PROVIDED, HOWEVER, that Employee shall be entitled to compensation
upon such termination as provided in Section 7 below.
7. Compensation Upon Termination. Upon the termination of Employee's
employment under this Agreement before the expiration of the stated term hereof
for any reason, Employee shall be entitled to (i) the salary earned by him
before the effective date of termination as provided in Section 3(a) hereof
(including salary payable during any applicable notice period), prorated on the
basis of the number of full days of service rendered by Employee during the
salary payment period to the effective date of termination, (ii) any accrued,
but unpaid, vacation or sick leave benefits, (iii) any previously authorized
but unreimbursed business expenses, and (iv)the pro-rata portion of the
Discretionary Bonus set forth in Section 3(c) above which shall be determined
based on the annualization of the Employer's performance criteria in its
then-current fiscal year as established through the termination date of this
Agreement. If Employee's employment hereunder terminates because of the death
or permanent disability of Employee, all amounts that may be due to him under
this Section 7 shall be paid to him or his administrators, personal
representatives, heirs and legatees, as may be appropriate.
If Employee's employment hereunder terminates without cause pursuant
to Section 6(d) above, Employer shall pay to Employee (in addition to the
amounts set forth in Subsections 7(i), 7(ii), 7(iii) and 7(iv) above) salary
payments for the duration of the initial term of this Agreement as set forth in
Section 8 below when and as such salary payments would have come due had the
Employee's employment not been terminated. Any options awarded concurrently
with execution of this Agreement that have not yet vested shall continue to
vest until the end of the initial term of this Agreement set forth in Section 8
below, pursuant to the provisions of Section 4 above. Provided, that in the
event Employee's employment hereunder terminates pursuant to Section 6(d) after
the Employer ceases to conduct business as a going concern as a result of
insolvency or bankruptcy; Employee shall only be entitled to 9 months of
regular salary payments as set forth in Section 3(a) above, accelerated and
payable to Employee immediately upon termination.
The provisions of Sections 5 and 7 hereof shall survive the
termination of the employment relationship hereunder and this Agreement to the
extent necessary or reasonably appropriate to effect the intent of the parties
hereto as expressed in such provisions.
8. Term. This Agreement shall be binding and enforceable against
Employer and Employee immediately upon its execution by both such parties. The
stated term of this Agreement and the employment relationship created hereunder
shall begin on _______, 1998, and shall remain in effect for three years
thereafter, unless sooner terminated in accordance with Section 6 hereof. This
Agreement shall be deemed to be renewed for a month-to-month, at-will basis
after its initial term unless the parties execute an express written renewal
agreement which specifies a different term.
9. Remedies. Each of the parties to this Agreement will be entitled to
enforce its rights under this Agreement specifically, to recover damages by
reason of any breach of any provision of this Agreement and to exercise all
other rights existing in its favor. Notwithstanding Section 10 below, the
parties hereto agree and acknowledge that money damages may not be an adequate
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remedy for any breach of the provisions of this Agreement and that any party
may in its sole discretion apply to any court of law or equity of competent
jurisdiction for specific performance and/or injunctive relief in order to
enforce or prevent any violations of the provisions of this Agreement.
10. Arbitration. Any controversy or claim arising out of or relating
to this Agreement or relating to Employee's rights, compensation and
responsibilities as an employee shall be determined by arbitration in Dallas,
Texas in accordance with the rules of the American Arbitration Association then
in effect. The arbitration shall be submitted to a single arbitrator selected
in accordance with the American Arbitration Association's procedures then in
effect for the selection of commercial arbitrators. This Section 10 shall
survive termination of this Agreement for any reason.
11. Assignment. This Agreement is personal to Employee and may not be
assigned in any way by Employee without the prior written consent of Employer.
This Agreement shall not be assignable or delegable by Employer, other than to
an affiliate of Employer; provided, however, that in the event of the merger or
consolidation of Employer the obligations of Employer hereunder shall be
binding upon the surviving or resulting entity of such merger of consolidation.
The rights and obligations under this Agreement shall inure to the benefit of
and shall be binding upon the heirs, legatees, administrators and personal
representatives of Employee and upon the successors, representatives and
assigns of Employer.
12. Severability and Reformation. The parties hereto intend all
provisions of this Agreement to be enforced to the fullest extent permitted by
law. If, however, any provision of this Agreement is held to be illegal,
invalid, or unenforceable under present or future law, such provision shall be
fully severable, and this Agreement shall be construed and enforced as if such
illegal, invalid, or unenforceable provision were never a part hereof, and the
remaining provisions shall remain in full force and effect and shall not be
affected by the illegal, invalid, or unenforceable provision or by its
severance.
13. Duty of Good Faith and Fair Dealing. Employer and Employee agree
to deal fairly and in good faith with each other and with respect to all
obligations imposed by this Agreement.
14. Notices. All notices and other communications required or
permitted to be given hereunder shall be in writing and shall be deemed to have
been duly given if delivered personally, mailed by certified mail (return
receipt requested) or sent by overnight delivery service, cable, telegram,
facsimile transmission or telex to the parties at the following addresses or at
such other addresses as shall be specified by the parties by like notice:
(a) If to Employer: Xxxxxx X. Xxxxxxxxx
General Counsel
HighwayMaster Corporation
00000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000-0000
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If to Employee: Xxxx X. Xxxxxx
0000 Xxxxxx Xxxx Xx.
Xxxxx, XX 00000
Notice so given shall, in the case of notice so given by mail, be
deemed to be given and received on the fourth calendar day after posting, in
the case of notice so given by overnight delivery service, on the date of
actual delivery and, in the case of notice so given by cable, telegram,
facsimile transmission, telex or personal delivery, on the date of actual
transmission or, as the case may be, personal delivery.
15. Further Actions. Whether or not specifically required under the
terms of this Agreement, each party hereto shall execute and deliver such
documents and take such further actions as shall be necessary in order for such
party to perform all of his or its obligations specified herein or reasonably
implied from the terms hereof.
16. GOVERNING LAW; VENUE. THIS AGREEMENT SHALL BE DEEMED MADE WHEN
ACCEPTED BY HIGHWAYMASTER AT HIGHWAYMASTER'S EXECUTIVE OFFICE IN DALLAS, AND
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF
THE STATE OF SUCH OFFICE AND EMPLOYEE CONSENTS TO EXCLUSIVE JURISDICTION AND
VENUE AT THE SITE OF SUCH OFFICE, AND TO SERVICE OF PROCESS BY CERTIFIED OR
REGISTERED MAIL. EMPLOYEE ACKNOWLEDGES THAT HIS CONTACTS WITH THE STATE OF
TEXAS ARE SUBSTANTIAL AND CONTINUING, INCLUDING VISITS TO DALLAS FOR TRAINING,
VARIOUS ADMINISTRATIVE FUNCTIONS, ETC.
17. Entire Agreement and Amendment. This Agreement contains the entire
understanding and agreement between the parties, and supersedes any other
agreement between Employee and Employer, whether oral or in writing, with
respect to the subject matter hereof. This Agreement may not be altered,
amended, or rescinded, nor may any of its provisions be waived, except by an
instrument in writing signed by both parties hereto or, in the case of an
asserted waiver, by the party against whom the waiver is sought to be enforced.
18. Counterparts. This Agreement may be executed in counterparts, with
the same effect as if both parties had signed the same document. All such
counterparts shall be deemed an original, shall be construed together and shall
constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
EMPLOYER:
HIGHWAYMASTER CORPORATION
By: /s/ XXXXXXX X. XXXXXXXX
--------------------------------------
XXXXXXX X. XXXXXXXX,
President and Chief Executive Officer
EMPLOYEE:
/s/ XXXX X. XXXXXX
-----------------------------------------
Xxxx X. Xxxxxx
EMPLOYMENT AGREEMENT - PAGE 10
