Exhibit 10.6
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), is made this 17th November 1995, by
and between Volume Services, Inc. a Delaware corporation ("Employer" or
"Company"), together with its successors and assigns, and Xxxxxxx X. Xxxxx,
("Executive") together with his heirs and assigns.
WHEREAS, the Company desires to employ the Executive and the Executive desires
to be employed to provide his services to the Company, all on the terms and
subject to the conditions as hereinafter set forth;
WHEREAS, Employer and Executive wish to provide for Executive's continued
employment if the Company is sold;
NOW, THEREFORE, in consideration of the mutual promises contained herein and
other good anti valuable consideration, the parties hereto agree as follows:
1. Stock Sale. This Agreement is contingent upon the sale of the outstanding
stock of the Company to VSI Acquisition Corporation ("the Stock Sale"). If the
Stock Sale does not occur, this Agreement shall be unenforceable by either
party. If the Stock sale does occur, this Agreement shall be binding upon the
Executive and the Company, and neither party may cancel or terminate this
Agreement prior to the Stock Sale without the express written consent of the
other party, it being expressly understood that the Company and the purchaser of
the stock of the Company are relying upon this Agreement to complete the Stock
Sale.
2. Employment Term. The Executive shall be employed for a period beginning on
the date of the Stock Sale and continuing for a term which does not end until
this Agreement is terminated pursuant to Xxxxxxx 0, Xxxxxxxxxxx. This shall be
referred to as "the Employment Term" or "the Term of Employment."
3. Employment, Position and Duties. Employer hereby employs and engages the
services of Executive during the Term of Employment as an executive of Employer
in the position of Chief Financial Officer of Volume Services, Inc. Executive's
employment with Employer under this Agreement shall be in a capacity
commensurate with the status, authority, duties and responsibilities of a chief
Financial officer for a similarly-sized company. The scope of Executive's
responsibilities as Chief Financial officer will include, but not be limited to,
overall responsibility for insuring that proper accounting and financial
practices and standards are maintained at both the corporate level and in the
operations. In addition, Executive's responsibilities will include financial and
accounting support for new sales and marketing efforts and the development of
management employees in accordance with the succession plans of volume services.
Executive agrees to serve Employer in such position and capacity for the Term of
Employment, to devote the reasonable and necessary attention and time to the
business affairs of Employer, and to expend his reasonable efforts to discharge
the responsibilities he is assigned.
4. Terms and Conditions of Employment
4.1 Base Salary. During the Term of Employment, Executive shall be
entitled to be paid a Base Annual Salary. Executive shall continue to receive
the Base Annual Salary he is receiving on the day of the Stock Sale. The base
annual salary shall be reviewed at least annually, and may be increased in the
Company's discretion.
4.2 Bonus. The Board of Directors of the Company shall, from time to
time, develop a management incentive compensation plan that will provide for the
possibility of cash bonuses for the Executive and other executives of the
Company, provided certain performance targets are met. The Executive shall be
entitled to participate in the management incentive compensation plan and,
assuming the prescribed performance targets are achieved, to receive a cash
bonus payable at the end of the second month following the end of the fiscal
year in an amount calculated in accordance with the terms of the plan. The
amount of any accrued but unpaid bonus at the time of termination of the
Employment Term shall be calculated in accordance with the terms of the plan.
Notwithstanding the foregoing, Executive shall not be entitled to a bonus if
there is a Termination for Just Cause as defined below.
4.3 Vacation. During each calendar year of the Employment Term, the
Executive shall be entitled to four (4) weeks of paid vacation.
4.4 Other Benefits. During the Employment Term, the Executive shall be
entitled to participate in all retirement and/or savings plans, mall incentive
compensation plans, and all group health, hospitalization and disability
insurance plan, and other employee welfare benefit plans in which other key
executives of the company participate.
4.5 Relocation. Should the Company request that Executive relocate
during the Employment Term, then the Company shall reimburse the Executive for
necessary and reasonable moving expenses in accordance with the then relocation
policy applicable to key executives.
4.6 Reimbursement of Expenses Incurred in Performance of Employment. In
addition to the compensation provided for under Section 2 hereof, upon
submission of proper vouchers, the Company shall pay or reimburse the Executive
f or all normal and reasonable expenses, including travel expenses (which
includes reimbursement for business use on a per-mile basis of Executive's
personal automobile)f incurred by the Executive during the Employment Term in
connection with the Executive's responsibilities to the Company.
-2-
5. Termination.
5. (a) The Employment Term shall terminate immediately upon the
occurrence of any of the following events:
(1) immediately upon the death of the Executive;
(2) Upon the one hundred eightieth (180th) day
following the Permanent Disability of the
Executive (as defined below);
(3) upon the effective date of Resignation by
the Executive (as defined below);
(4) upon the sixtieth (60th) day following
notice given by the Company of Termination
Without Cause (as defined below); or,
(5) upon the close of business on the date the
Company gives the Executive notice of
Termination for Just Cause (as defined
below).
5. (b) For purposes of this Agreement:
(1) "Permanent Disability" shall mean the Executive is unable
to perform the essential functions of his job with or without
reasonable accommodation by reason of a physical or mental
disability or infirmity which has continued for more than one
hundred eighty (180) consecutive days. The Executive agrees to
submit such medical evidence regarding such disability or
infirmity as is reasonably requested by the Company.
(2) "Resignation by the Executive" shall mean any voluntary
termination or resignation by the Executive. Executive is
required to give at least thirty (30) days written notice of
Resignation and the Company is entitled, upon receiving such
notice, to accept such Resignation any time prior to the
Resignation date proposed by the Executive. The effective date
of the Resignation shall be the day the resignation is
accepted by the Company. However, Executive shall be paid
through the notice period so long as the Executive has given
thirty (30) calendar days notice of Resignation.
(3) "Termination Without Cause" shall mean any termination by
the Company for any reason other than termination due to
"Permanent Disability" or "Termination for Just Cause."
(4) "Termination for Just Cause" shall mean termination of the
employment of the Executive for "just cause" pursuant to
applicable law. In addition, the termination of the
Executive's employment shall be deemed to have been for just
cause if termination of his employment shall have been the
result of:
-3-
(i) an act or acts by him, or any omission by
him, constituting a felony, and the
Executive has entered a guilty plea or
confession to or has been convicted of such
felony;
(ii) act of fraud or dishonesty by the Executive
which results or is intended to result in
harm to the Company;
(iii) gross negligence by the Executive in the
performance of his duties;
(iv) gross insubordination by the Executive;
(v) the breach of any material provision of this
Agreement by the Executive.
Further, it is expressly agreed that Executive's refusal to relocate
outside the United States or to Alaska or Hawaii, and if that refusal
by the Executive results in the Executive's termination, then said
termination shall be a "Termination Without Cause.".
5. (c) Except for the payment of any earned but unpaid salary due at
the time of termination of the Employment Term and except for any payments which
may be due as set forth below, Executive shall not be entitled to receive any
additional compensation of any kind from the Company upon the termination of the
Employment Term:
(1) If termination of the Employment Term is due to the death of
the Executive, Executive's surviving spouse, or if none, the
Executive's estate or legal representative, shall be paid the
Base Annual Salary in monthly installments for a period of two
(2) years commencing immediately upon the death of Executive;
plus any accrued, but unpaid bonus, at the time of death,
payable at the end of the second month following the end of
the fiscal year in accordance with the terms of the bonus
plan.
(2) If termination of the Employment Term is due to the Permanent
Disability of the Executive, the Executive shall be paid
one-half of the Base Annual Salary in monthly installments for
a period of two (2) years after the termination of the
Executive's employment; plus any accrued, but unpaid bonus, at
the time of Permanent Disability, payable at the end of the
second month following the end of the fiscal year in
accordance with the terms of the bonus plan.
(3) If termination of the Employment Term is due to the
Resignation of the Executive, the Executive shall be paid
through the thirtieth (30th) calendar day following receipt by
the Company of Executive's written resignation; plus any
accrued but unpaid bonus at the time of Resignation, payable
at the end of the
-4-
second month following the end of the fiscal year in
accordance with the terms of the bonus plan.
(4) If termination of the Employment Term is due to Termination
without Cause by the Company, the Executive shall be paid
severance equal to two times (2x) the amount of the
Executive's Base Annual Salary in effect at the time of
termination, payable in a lump sum at the time of termination,
less applicable withholdings required by law; plus any
accrued, but unpaid bonus at the time of termination payable
at the end of the second month following the end of the fiscal
year in accordance with the terms of the bonus plan. In
addition, Executive shall be paid the Company subsidy for
eighteen (18) months of COBRA coverage payable in a lump sum
at termination less applicable withholdings required by law.
In addition to severance pay provided herein, the Company, at
its expense, will provide the Executive with outplacement
counseling and the support services of an executive
outplacement firm for a period until re-employment, but no
longer than eighteen (18) months after termination.
5. (d) Release Contingency; No Duplication of Severance Pay. Payment of
benefits under Section 5 of this Agreement shall be conditioned upon Executive's
execution of a full release of all claims against Employer (other than claims
with respect to vested retirement benefits, vested stock options and other
vested accrued benefits, and other than with respect to workers compensation
claims) which is in a form acceptable to Employer; and also shall be in lieu of
any other severance payments under any other severance plan or program of
Employer.
6. Protected Information; Prohibited Solicitation.
6. (a) The Executive hereby recognizes and acknowledges that during the
course of his employment by the Company, the Company has disclosed and will
furnish, disclose, or make available to the Executive confidential and
proprietary information related to the Company's business including, without
limitation, customer lists, financial information, ideas, processes, inventions,
and devices (the "Confidential Information"), that such Confidential Information
has been developed and will be developed through the expenditure by the Company
of substantial time and money and that all such Confidential Information except
to the extent it is in the public domain shall constitute trade secrets
protected under applicable law. The Executive further agrees to use such
Confidential Information only for the purpose of carrying out his duties with
the Company and agrees that he will not, for a period of two (2) years after his
last day of employment with the Company, misappropriate for himself or others or
disclose to any third party, either directly or indirectly, any Confidential
Information. It is expressly understood that Executive shall not be in breach of
this Section 6(a) for any disclosure he is required to make by virtue of a final
unappealable order of a court of competent jurisdiction. It is further expressly
agreed that Executive shall return to the Company at the time of termination and
not retain any
-5-
property belonging to the Company, including, without limitation any and all
originals and copies of documents referencing or containing any Confidential
Information.
6. (b) The Executive hereby agrees that for a period of two (2) years
following his last day of employment by the Company, Executive shall not,
without the written consent of the Company, knowingly solicit, entice, or
persuade any other employees of the Company to leave the services of the Company
for any reason.
6. (c) The Executive further agrees that he will not, for a period of
two (2) years following his last day of employment by the Company, enter into
any relationship whatsoever, either directly or indirectly alone or in a
partnership, or as an officer, director, employee or stockholder (beneficially
owning the stock or options to acquire stock totaling more than five percent of
the outstanding shares) of any corporation (other than the Company), or
otherwise acquire or agree to acquire a significant percent or future equity or
other proprietorship interest, whether as a stockholder, partner, proprietor, or
otherwise, with any enterprise, business, or division thereof (other than the
Company), which is engaged in the contract concessions and entertainment
business similar to that engaged in by the Company in those states within the
United States in which the Company is, at the time of such termination of
employment, conducting its business and over which the Executive has had direct
or indirect supervisory responsibility while in the employment of the Company.
6. (d) Information Regarding This Agreement. Executive shall not,
without the prior written consent of Employer, either before, during or after
the Employment Term, communicate or divulge any information regarding the
circumstances or amounts payable under this Agreement; provided, that nothing in
this paragraph shall prevent Executive from sharing with his spouse and
confidential legal and financial advisors general information regarding the
amount of his compensation as may be necessary to make basic financial
decisions, or disclosing general information about Executive's work experience
(not including any confidential, proprietary or other information concerning the
Company or its operations) to prospective employers if necessary to enable
Executive to obtain placement at a salary and other benefits commensurate with
Executive's past compensation.
6. (e) The Executive acknowledges that the restrictions placed upon him
by this Section 6 are reasonable, given the nature of his position, and that
there is sufficient consideration promised him pursuant to this Agreement to
support these restrictions.
6. (f) The restrictions of this Section 6 shall survive Executive's
last day of employment by the Company and shall be in addition to any
restrictions imposed upon the Executive by statute or at common law.
7. Injunctive Relief. The Executive hereby expressly acknowledges that
any breach or threatened breach by the Executive of any of the terms set forth
in Section 6 of this Agreement may result in significant and continuing injury
to the Company, the monetary value of which may
-6-
be impossible to establish. Therefore, the Executive agrees that the Company
shall be entitled to apply for injunctive relief in South Carolina or any other
court of appropriate jurisdiction. The provisions of this Section 7 shall
survive the Employment Term.
8. Parties Benefitted; Assignments. This Agreement shall be binding
upon the Executives, the heirs and personal representative or representatives of
the Executive and upon the Company and its successors and assigns. Neither this
Agreement nor any rights or obligations hereunder may be assigned by the
Executive.
9. Notices. Any notice required or permitted by this Agreement shall be
in writing sent by personal delivery, or by registered or certified mail, return
receipt requested, addressed to Executive's immediate supervisor and the Company
at its then principal office, or the Executive at his then current address, as
the case may be or to such other address or addresses as any party hereto may
from time to time specify in writing for the purpose of a notice given to the
other parties in compliance with this Section 9. Notices shall be deemed given
when received.
10. Governing Law and Venue. This Agreement shall be governed by,
construed and enforced in accordance with the laws of the State of South
Carolina without regard to conflict of law principles and the parties agree to
submit themselves to the jurisdiction of the federal or state courts of the
State of South Carolina for any claim arising under this Agreement which is
brought by the other party in South Carolina.
11. Arbitration of Disputes. Except for claims barred by the applicable
statute of limitations and except for claims for injunctive relief which the
Company may elect to pursue in state or federal court, the Executive and the
Company agree that any and all disputes between them, and any claim by either
party that cannot be amicably settled shall be determined solely and exclusively
by arbitration in accordance with the Employment Dispute Resolution Rules then
pertaining of the American Arbitration Associations or any successor thereof at
its office nearest Employer's principal place of business unless the parties
otherwise agree in writing. The arbitration shall be conducted by three
arbitrators. Judgment upon an award by the majority of the arbitrators shall be
binding, and shall be entered in a court of competent jurisdiction.
12. Indemnification and Insurance; Legal Expenses. The Company will
indemnify and hold harmless the Executive to the fullest extent permitted by the
laws of the State of South Carolina for the indemnification of officers or
directors, against all costs, charges and expenses whatsoever incurred or
sustained by the Executive in connection with any action suit, or proceedings to
which the Executive may be made a party by reason of being or having been an
officer or employee of the Company, or having served any other enterprises at
the request of the Company. In addition, the Company will maintain officer and
director liability insurance and the Executive shall be entitled to the
protection offered in any insurance policies the Company may elect to maintain
generally for the benefit of its directors and officers insuring against such
losses. It is expressly understood that there is no obligation by the Company to
indemnify the
-7-
Executive for any dispute, claim, or controversy arising under this Agreement,
or for which indemnification is inappropriate under applicable law.
13. Miscellaneous. This Agreement contains the entire agreement of the
parties relating to the subject matter hereof. This Agreement supersedes any
prior written or oral agreements or understandings between the parties relating
to the employment of Executive, the compensation or benefits promised to
Executive or any other agreement or understanding relating in any way to the
subject matter in this Agreement. No modification or amendment of this Agreement
shall be valid unless in writing and signed by or on behalf of the parties
hereto. A waiver of the breach of any term or condition of this Agreement shall
not be deemed to constitute a waiver of any subsequent breach of the same or any
other term or condition. This Agreement is intended to be performed in
accordance with, and only to the extent permitted by all applicable laws,
ordinances, rules and regulations. If any provision of this Agreement, or the
application thereof to any person or circumstance shall, for any reason and to
any extent, be held invalid or unenforceable, such invalidity and
unenforceability shall not affect the remaining provisions hereof and the
application of such provisions to other persons or circumstances, all of which
shall be enforced to the greatest extent permitted by law. The compensation
provided to the Executive pursuant to this Agreement shall be subject to any
withholdings and deductions required by any applicable tax laws. Any amounts
payable to the Executive hereunder after the death of the Executive shall be
paid to the Executive's estate or legal representative. The headings in this
Agreement are inserted for convenience of reference only and shall not be part
of or control or affect the meaning of any provision hereof.
IN WITNESS WHEREOF the parties have duly executed and delivered this
Agreement as of the day and year first above written.
VOLUME SERVICES, INC. EXECUTIVE
By: /s/ Xxxxxxxx X. Xxxxx /s/ Xxxxxxx X. Xxxxx
----------------------- --------------------------
Xxxxxxxx X. Xxxxx Xxxxxxx X. Xxxxx
-8-
