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Exhibit 10.24
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") made and entered into
effective as of the 15th day of April, 1998, by and between Eye Care Centers of
America, Inc., a Texas corporation (the "Company"), or its assigns, and Xxxx
XxXxxxx ("Employee");
W I T N E S S E T H:
WHEREAS, the Company desires to employ executive on the terms and
conditions set forth below; and
WHEREAS, Employee desires to serve in the employment of the Company on
the terms and conditions set forth below;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the parties hereto agree as follows:
1. EMPLOYMENT. The Company hereby employs Employee and Employee
hereby accepts such employment, upon the terms and conditions set forth herein.
2. TERM. The term of this Agreement shall commence on July 8,
1998 (the "Effective Date") and shall expire on December 31, 2000, subject to
earlier termination and extension as hereinafter provided (the "Term").
Thereafter, and subject to Section 8(d), this Agreement shall automatically
renew for successive one-year terms unless either party gives written notice of
its election not to renew at least thirty (30) days prior to the end of the then
current period. In the event of such extension, all of the terms and conditions
of this Agreement shall remain in full force and effect.
3. DUTIES. During the Term, Employee agrees that he will devote
his full business time, attention and energies to the business of the Company
and its subsidiaries and affiliates, if applicable, and to the performance of
his duties hereunder, and shall not engage in any other business, profession, or
occupation for compensation or otherwise.
4. COMPENSATION.
(a) BASE COMPENSATION. During the term of this
Agreement, the Company shall pay to Employee a salary at an
annual rate of not less than $325,000 (the "Base Salary"). The
Base Salary shall be reviewed by the Board from time to time
as the Board deems appropriate. The Base Salary shall be
payable during the Term in substantially equal installments
not less frequently than monthly in accordance with the
Company's standard payroll policy.
(b) BONUS. Employee shall be eligible to earn a
bonus based upon a bonus plan to be determined from time to
time by the Company for each fiscal
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year. Employee is guaranteed a bonus payout at target for
fiscal 1998, i.e., $130,000 (calculated as $325,000 annual
base salary times 40%).
(c) SIGNING BONUS. Employee shall receive a
signing bonus of $500,000 payable the later of his start date
in San Antonio, TX or the closing on the sale of ECCA to
Xxxxxx X. Xxx.
(d) RELOCATION ALLOWANCE. Employee shall receive
a relocation allowance of $50,000 in lieu of any other
relocation assistance provided per Company policy.
(e) REIMBURSEMENT OF EXPENSES; AUTOMOBILE. The
Company shall reimburse Employee, in accordance with Company's
policy in effect from time to time, for all reasonable travel,
entertainment and other business expenses incurred by Employee
in the performance of his duties and responsibilities
hereunder. Employee will receive an automobile allowance of
$600 per month and will be reimbursed for his reasonable
automobile insurance costs.
(f) STOCK OPTION PLAN. Employee shall be
eligible to participate in the Eye Care Centers of America,
Inc.'s Executive Stock Option Plan, and his rights with
respect to options granted to him thereunder shall be governed
solely by the terms of such plan, as it may be in effect from
time to time, and the terms of the Stock Option Agreement
evidencing the grant of such options.
(g) NET PAYMENTS. The amount of any gross
payments provided for in this Agreement shall be paid net of
any applicable withholding required under federal, state or
local law.
5. EQUITY INVESTMENT. You will make a personal investment in the
Company's common stock. This investment amount and timing will be determined by
the Company within the range of $150,000 and $250,000.
6. BENEFITS. Employee shall be entitled to receive the benefits
made available or applicable from time to time to the employees of the Company;
provided, however, that the receipt of such benefits by Employee shall be
subject to the Company's eligibility and enrollment requirements pertaining to
such benefit programs with the exception that Employee shall be entitled to
receive four weeks vacation per full calendar year in lieu of standard company
vacation policy.
7. CONFIDENTIALITY AND COMPETITIVE ACTIVITIES.
(a) CONFIDENTIALITY. Employee acknowledges that
during his employment with the Company, the Company has and
will continue to disclose to
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him the confidential affairs and proprietary information of
the Company and its subsidiaries and affiliates which is
developed by and belongs to the Company and its subsidiaries
and affiliates, including matters of a business nature such as
information about costs, profits, markets, sales, trade
secrets, potential patents and other business ideas, customer
lists, supplier and vendor lists, plans for future
developments and/or acquisitions, and information of any other
kind not known within the optical retail industry generally
(collectively, "Confidential Matters"). Employee further
acknowledges that the Company would not hire Employee or
disclose these Confidential Matters to Employee without the
promises made by Employee in this Section 7. In light of the
foregoing, Employee agrees:
(i) To keep secret all Confidential
Matters of the Company and of any subsidiaries and
affiliates of the Company, and not to disclose them
to anyone outside of the Company or its subsidiaries
or affiliates, or otherwise use them or use them or
use his knowledge of them for his own benefit or for
the benefit of any third party, including, without
limitation, use of the trade secrets, trade names or
trademarks of the Company, either during or after the
Term, except with the Company's prior written
consent; and
(ii) To deliver promptly to the Company
at the termination of the Term, or at any time the
Company may request, all memoranda, notices, records,
reports and other documents (and all copies thereof)
relating to the business of the Company or any of its
subsidiaries or affiliates, including, but not
limited to, Confidential Matters, which he may then
possess or have under his control.
Notwithstanding any of the foregoing, the term "Confidential Matters" does not
include information which (i) is or becomes generally available to the public
other than as a result of any disclosure by Employee or (ii) Employee is
compelled to disclose by judicial or administrative process; provided, that in
the case of any such requirement or purported requirement Employee shall provide
written notice to the Company prior to producing such information, which notice
shall be given at least ten (10) days prior to the producing such information,
if practicable, so that the Company may seek a protective order or other
appropriate remedy.
(b) COMPETITIVE ACTIVITIES. Employee expressly
recognizes and acknowledges that the terms and condition of
this Section 7(b) are reasonable as to time, area and scope of
restricted activity, necessary to protect the legitimate
interests of the Company, and are not unduly burdensome to
Employee. For a period commencing on the Effective Date and
ending twelve (12) months following the effective date of a
termination of Employee's employment (for any reason
whatsoever other than termination by the Company without Cause
or if the Company elects not to renew the Term as provided in
Section 2 hereof),
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Employee shall not, without the written consent of the
Company, directly or indirectly (whether for compensation or
otherwise), alone or as officer, director, stockholder
(excepting not more than 1% stockholdings for investment
purposes in securities of publicly held and traded companies),
partner, associate, employee, agent, principal, trustee,
salesman, consultant, capacity, take any action in or
participate with or become interested in or associated with
the companies commonly referred to as Xxxx/Pearl, Lenscrafter
or Walmart (or any successor thereto). (Such activities are
hereinafter referred to as the "Competitive Activities").
(c) ANTISOLICITATION. Employee agrees that
during the Term of this Agreement, and for a period of two (2)
years thereafter, he will not influence or attempt to
influence customers (including customers with respect to
managed care plans), vendors or suppliers of the Company or
any of its present or future direct or indirect subsidiaries
or affiliates, either directly or indirectly, to divert their
business from the Company or any of its direct or indirect
subsidiaries or affiliates to any individual, partnership,
firm, corporation or other entity then in competition with the
business of the Company or any subsidiary or affiliate of the
Company; provided this prohibition shall not apply to general
advertisements in newspaper or other widely distributed
publications, media, or mail, whether electronic or otherwise.
(d) SOLICITING EMPLOYEES. Employee agrees that
during the Term of this Agreement, and for a period of two (2)
years thereafter, he will not directly or indirectly contact
or solicit to employ, or employ, any of the then current or
past employees of the Company or any subsidiary or affiliate
of the Company unless such person shall have ceased to be
employed by the Company and such cessation of employment shall
have occurred at least twelve (12) months prior thereto;
provided this prohibition shall not apply to general
advertisements in newspaper or other widely distributed
publications, media, or mail, whether electronic or otherwise.
8. REMEDIES FOR BREACH. In addition to the rights and remedies
provided in Section 15, and without waiving the same if Employee breaches, or
threatens to breach, any of the provisions of Section 7, the Company shall have
the following rights and remedies, in addition to any others, each of which
shall be independent of the other and severally enforceable:
(i) The right and remedy to have such provisions
specifically enforced by any court having equity jurisdiction
together with an accounting for any benefit or gain by
Employee in connection with any such breach. Employee
specifically acknowledges and agrees that any breach or
threatened breach of the provisions of Section 7 will cause
irreparable injury to the Company and that money damages
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will not provide an adequate remedy to the Company. Such
injunction shall be available without the posting of any bond
or other security.
(ii) The right and remedy to require Employee to
account for and pay over to the Company all compensation,
profits, monies, accruals, increments or other benefits
(hereinafter collectively the "Benefits") derived or received,
directly or indirectly, by Employee as a result of any
transactions constituting a breach of any of the provisions of
Section 7, Employee hereby agreeing to account for and pay
over the Benefits to the Company.
(iii) The right to terminate Employee's employment
pursuant to Section 9(c).
(iv) Upon discovery by the Company of a breach or
immediate and material threatened breach of Section 7, the
right to immediately suspend payments to Employee under
Section 9, pending a resolution of the dispute.
If any covenant contained in Section 7 or any portion thereof is hereafter
construed to be invalid or unenforceable, the same shall not affect the
remainder of the covenant or covenants contained therein, which shall be given
full effect, without regard to the invalid portions, and any court having
jurisdiction shall reform the covenant to the extent necessary to cause the
limitations contained therein as to time, geographical area and scope of
activity to be restrained to be reasonable and to impose a restraint that is not
greater than necessary to protect the goodwill and other business interest of
the Company and to enforce the covenant as reformed. The parties hereto intend
to and hereby confer jurisdiction to enforce the covenants contained in Section
7 upon the courts of any state or other jurisdiction in which any alleged breach
of any such covenant occurs. If the courts of any of one or more of such states
or other jurisdictions shall hold such covenants not wholly enforceable by
reason of the scope thereof or otherwise, it is the intention of the parties
hereto that such determination not bar or in any way affect the Company's right
to the relief provided above in the courts of any other states or jurisdictions
as to breaches of such covenants in such other respective states or
jurisdictions, and the above covenants as they relate to each state or
jurisdiction being, for this purpose, severable into diverse and independent
covenants.
9. TERMINATION OF AGREEMENT.
(a) DEATH. This Agreement shall automatically
terminate upon the death of Employee. During the Term, if
Employee's employment is terminated due to his death,
Employee's estate shall be entitled to receive the Base Salary
set forth in Section 4 accrued through the date of death;
provided, however, Employee's estate shall not be entitled to
any bonus payments (except as otherwise provided in the
applicable bonus plan) or any other benefits (except as
provided by law).
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(b) DISABILITY. If Employee is unable to perform
his services by reason of mental or physical Disability (as
herein defined), the Company may terminate this Agreement at
any time. Upon termination of Employee's employment due to
Disability, Employee shall be entitled to receive the Base
Salary set forth in Section 4 accrued through the date on
which Employee is first eligible to receive payment of
disability benefits under the employee benefit plans as then
in effect, and if no such plan is in effect, through the month
ending one hundred eighty (180) days after onset of Disability
and Employee shall not be entitled to any bonus payments
(except as otherwise provided in the applicable bonus plan) or
any other benefits (except as provided by law). The term
"Disability" shall mean an infirmity preventing Employee from
performing his duties for a period of more than three (3)
consecutive months where no reasonable accommodation is
available or where a reasonable accommodation would create an
undue burden on the Company. Any question as to the existence
of Disability of Employee as to which Employee and the Company
cannot agree shall be determined in writing by a qualified
independent physician mutually acceptable to Employee and the
Company. If the Employee and the Company cannot agree as to a
qualified independent physician, each shall appoint such a
physician and those two physicians shall select a third who
shall make such determination in writing. The determination of
Disability made in writing to the Company and Employee shall
be final and conclusive for all purposes of the Agreement.
(c) TERMINATION FOR CAUSE. The Company may
terminate this Agreement at any time for "Cause" in accordance
with the procedures provided below. Termination of this
Agreement for "Cause" shall mean termination upon (i) the
breach of any material provision of this Agreement by Employee
which has not been rectified or cured within 30 days after
notice by the Company to the Employee containing in reasonably
specific detail the violation or breach and the necessary
corrective action to rectify or cure such violation or breach,
(ii) commission of an act punishable by imprisonment, (iii)
willful failure to substantially perform his duties hereunder
(other than as a result of total or partial incapacity due to
physical or mental illness) which has not been rectified or
cured within 30 days after notice by the Company to the
Employee containing in reasonably specific detail the acts or
omissions complained of and the necessary corrective action to
rectify or cure the matters set forth in such notice;
provided, however, if the actions or omissions that are the
subject of such notice are substantially similar to acts or
omissions with respect to which the Employee has received
notice hereunder with the prior 12 months and had an
opportunity to cure or rectify, the Employee shall not be
entitled to such notice and opportunity to cure, (iv) the
engaging by Employee in conduct that is materially injurious
to the Company, monetarily or otherwise, including, without
limitation, embezzlement, fraud, theft, dishonesty,
misfeasance, insubordination, malfeasance, and neglect of
duties, (v) violation of the Company's code of conduct or any
material violation
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or repeated violations by Employee of the other policies and
procedures promulgated from time to time by the Company, or
(vi) current alcohol or drug abuse by Employee. In the event
of termination of Employee's employment for Cause, Employee
shall be entitled to receive only the Base Salary set forth in
Section 4 accrued through the date of termination and he shall
not be entitled to any bonus payments or other benefits
(except as provided by law).
(d) OTHER TERMINATION BY THE COMPANY. The
Company may terminate this Agreement at any time without
"Cause" by providing written notice to Employee. If the
Company terminates this Agreement at any time without Cause
(i.e., other than pursuant to Section 9(b) or 9(c) above), the
company shall continue to pay Employee his Base Salary for a
period of twelve months following the date of termination of
employment under this agreement, the timing and manner of such
payments to be in accordance with the salary payment
arrangements in effect at the time of such termination.
Employee shall be required to comply with Section 7. It shall
be a condition precedent of payment to Employee of such
continued payments pursuant to this subsection (d) that the
Employee execute a full and complete release of the Company,
each of its subsidiaries, affiliates and their respective
past, present and future officers, directors, employees,
consultants, attorneys, agents and shareholders, in form and
substance reasonably acceptable to the Company, of any claims
Employee may have against any of them, to the extent such
claims arise from Employee's employment hereunder.
Notwithstanding any provision in this Agreement to the
contrary, the Company's obligations to make payments pursuant
to this Section 9(d) shall immediately terminate in the event
that the Employee engages in any of the Competitive Activities
(even if Section 7(b) is not applicable due to termination of
employment without Cause).
(e) TERMINATION BY EMPLOYEE. Employee may
terminate this Agreement upon thirty (30) days prior written
notice to the Company. Termination shall be effective at the
expiration of the notice period. All obligations of the
Company under this Agreement shall end on the effective date
of termination and the Company shall have no further
obligations under this Agreement, including, but not limited
to payment of salary, bonuses or any similar compensation or
benefits. Notwithstanding the notice provided by Employee, the
Company, in its sole discretion, may choose to accept
Employee's resignation immediately. In that event, the
Company's only obligation to Employee will be to pay the Base
Salary Employee would have received during the notice period.
(f) MITIGATION. Employee shall not be required
to mitigate the amount of any payment or benefit to be
provided pursuant to Section 9(d) ("Severance") by seeking
other employment. However, anything in this Agreement
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notwithstanding, if Employee provides services for other than
de minimus pay to anyone, including the Company, or any of its
subsidiaries or affiliates ("Post Contract Services"), during
a period in which he is receiving such Severance (the
"Severance Period"), the amount of Severance to be paid to
Employee with respect to such Severance Period shall,
beginning on the date such payment for Post Contract Services
is received by employee, be reduced by the lesser of (i) fifty
percent (50%) of such Severance payment, or (ii) fifty percent
(50%) of such payment for Post Contract Services rendered.
10. EFFECT OF TERMINATION. Upon termination of this Agreement, for
any reason other than death, disability, or other termination by the Company
(without Cause) prior to December 31, 2000, the Employee agrees to reimburse the
Company a pro-rata portion of the sign-on bonus calculated as $500,000 times the
number of days from the Termination Date until December 31, 2000 divided by the
number of days from the Effective Date until December 31, 2000.
Additionally, upon the termination of this Agreement, whether by the expiration
of the Term specified in Section 2 or pursuant to Section 9, the rights of
Employee which shall have accrued prior to the date of such termination shall
not be affected in any way. Except as provided in Section 9(d), Employee shall
not have any rights which have not previously accrued upon termination of this
Agreement.
11. COMMUNICATIONS. All notices and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given
when (a) delivered by hand (with written confirmation of receipt), (b) when
received by the addressee, if sent by a nationally recognized overnight delivery
services (receipt requested), in each case to the respective addresses set forth
below, or to such other addresses as either party may have furnished to the
other in writing in accordance herewith, except that notice of a change of
address shall be effective only upon actual receipt; to the Company: the
Company, at c/o Eye Care Centers of America, Inc., 00000 Xxxx Xxxxxx, Xxx
Xxxxxxx, Xxxxx 00000-0000, for the attention of Xxxxxxx Xxxxxxx, President; and
to Employee: Xxxx XxXxxxx, 00000 XxXxx, Xxxxxx Xxxxxx, Xxxxxxxxxx 00000.
12. AMENDMENTS OR ADDITIONS. No amendments or additions to this
Agreement shall be binding unless in writing and signed by all parties hereto.
13. BINDING EFFECT; ASSIGNABILITY. This Agreement shall be binding
upon, and shall inure to the benefit of, Employee; the obligations of Employee
hereunder are personal and this Agreement may not be assigned by Employee. This
Agreement is completely assignable by the Company without notice to or consent
of Employee. This Agreement shall be binding upon, and shall inure to the
benefit of, the Company and shall also bind and inure to the benefit of any
successor of the Company by merger or consolidation or any assignee of all or
substantially all of its properties.
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14. HEADINGS; REFERENCES. The headings used in this Agreement are
included solely for convenience and shall not affect, or be used in connection
with, the interpretation of this Agreement. References to a "Section" when used
without further attribution shall refer to the particular sections of this
Agreement.
15. BINDING ARBITRATION. Subject to the rights of any party to
seek injunctive relief pursuant to Section 8 above and without waiving the same,
the parties agree that all disputes, controversies or claims that may arise
among them (including their agents and employees), arising out of or relating to
this Agreement, or the breach, termination or invalidity thereof, shall be
submitted to, and determined by, binding arbitration. Such arbitration shall be
conducted before a single arbitrator pursuant to the Commercial Arbitration
Rules then in effect of the American Arbitration Association, except to the
extent such rules are inconsistent with this Section 15. The arbitrator shall
apply the laws of the State of Texas (without regard to conflict of law rules)
in determining the substance of the dispute, controversy or claim and shall
decide the same in accordance with applicable usages and terms of trade. The
fees of the arbitration initially shall be paid one-half by the Company and
one-half by Employee; provided, however, that the prevailing party in any such
arbitration shall be entitled to recover its reasonable attorneys' fees, costs
and expenses incurred in connection with the arbitration. Any award pursuant to
such arbitration shall be final and binding upon the parties, and judgment on
the award may be entered in any federal or state court sitting in any court
having jurisdiction. The Employee and such officer as may be specifically
designated by the Board. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not expressly set forth in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Texas without regard to its conflicts of law
principles.
17. SURVIVING PROVISIONS. The obligations of the Company under
Section 9, of Employee under Section 7, and of both the Company and Employee
under Section 15 shall survive the expiration of the Term of this Agreement.
18. ENTIRE AGREEMENT. This Agreement shall constitute the entire
agreement between the parties superseding all prior agreements and all other
negotiations, letter of intent, memoranda of understandings, and representations
(if any) made by and among such parties, and may not be modified or amended, and
no waiver shall be effective, unless by written document signed by both parties
hereto. Notwithstanding its foregoing, the parties agree that the provisions of
Section 7 shall be in addition to, and shall not supersede, similar provisions
contained in the Stock Purchase Agreement. The Company and Employee have each
had an opportunity to consult with counsel of their choice regarding the terms
and conditions of this Agreement, and each understands the consequences of
entering into and complying with the terms and conditions of the Agreement.
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19. PRONOUNS. In this Agreement, the use of any gender shall be
deemed to include all genders, and the use of the singular shall include the
plural, wherever it appears appropriate from the context.
20. ENFORCEMENT COSTS. If any legal action or other proceeding,
including arbitration, is brought for the enforcement of this Agreement, or
because of an alleged dispute, breach, default or misrepresentation in
connection with any provisions of this Agreement, the prevailing party or
parties shall be entitled to recover reasonable attorneys' fees, court costs and
all expenses even if not taxable as court costs, incurred in that action or
proceeding, in addition to any other relief to which such party or parties may
be entitled.
21. SEVERABILITY. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof. Except
that to the extent any court determines that Section 7 is invalid or
unenforceable, in this event the Company shall be relieved of its payment
obligations to Employee under Section 9.
22. INDEMNIFICATION. Employee shall be entitled to
indemnification, in his capacity as an officer of the Company in accordance with
the provisions of the Company's certificate of incorporation, bylaws or actions
of the Board, as the same shall be in effect from time to time, and Employee
shall be entitled to the protection of any insurance policies the Company may
elect to maintain generally for the benefit of its officers or directors.
23. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original and all of which,
taken together, shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the day and year first above written.
Eye Care Centers of America, Inc.
By:
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Xxxxxxx X. Xxxxxxx
President & Chief Executive Officer
EMPLOYEE:
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Xxxx XxXxxxx
Chief Operating Officer
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