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EXHIBIT 10.25
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") by and between F.Y.I. Incorporated,
a Delaware corporation (the "Company"), and Xx X. Xxxxxx, Xx. ("Employee") is
hereby entered into and effective as of November 15, 1995. This Agreement
hereby supersedes any other employment agreements or understandings; written or
oral, between the Company and Employee.
R E C I T A L S
The following statements are true and correct:
As of the date of this Agreement, the Company is engaged primarily in the
business of providing document management services.
Employee is employed hereunder by the Company in a confidential relationship
wherein Employee, in the course of his employment with the Company, has and
will continue to become familiar with and aware of information as to the
Company's customers, specific manner of doing business, including the
processes, techniques and trade secrets utilized by the Company, and future
plans with respect thereto, all of which has been and will be established and
maintained at great expense to the Company; this information is a trade secret
and constitutes the valuable goodwill of the Company.
Therefore, in consideration of the mutual promises, terms, covenants and
conditions set forth herein and the performance of each, it is hereby agreed as
follows:
A G R E E M E N T S
1. Employment and Duties.
(a) The Company hereby employs Employee as President and Chief
Executive Officer. As such, Employee shall have responsibilities, duties and
authority reasonably accorded to and expected of a President and Chief
Executive Officer and will report directly to the Board of Directors of the
Company (the "Board"). Employee hereby accepts this employment upon the terms
and conditions herein contained and, subject to paragraph 1(b), agrees to
devote his working time, attention and efforts to promote and further the
business of the Company.
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(b) Employee shall not, during the term of his employment
hereunder, be engaged in any other business activity pursued for gain, profit
or other pecuniary advantage except to the extent that such activity (i) does
not interfere with Employee's duties and responsibilities hereunder and (ii)
does not violate paragraph 3 hereof. The foregoing limitations shall not be
construed as prohibiting Employee from serving on the boards of directors of
other companies or making personal investments in such form or manner as will
require his services, other than to a minimal extent, in the operation or
affairs of the companies or enterprises in which such investments are made nor
violate the terms of paragraph 3 hereof.
2. Compensation. For all services rendered by Employee, the
Company shall compensate Employee as follows:
(a) Base Salary. The base salary payable to Employee shall be
$200,000 per year, payable on a regular basis in accordance with the Company's
standard payroll procedures but not less than bi-monthly. On at least an
annual basis, the Board will review Employee's performance and may make
increases to such base salary if, in its discretion, any such increase is
warranted. Such recommended increase would, in all likelihood, require
approval by the Board or a duly constituted committee thereof.
(b) Incentive Bonus Plan. For 1996 and subsequent years, it is
the Company's intent to develop a written Incentive Bonus Plan setting forth
the criteria under which Employee and other officers and key employees will be
eligible to receive year-end bonus awards. Employee shall be eligible for a
bonus opportunity of up to 100% of his base salary in accordance with this
Incentive Bonus Plan. The award of any bonus shall be based on the total
performance of the Company, but shall be related to the earnings per share
growth of the Company and shall be payable in various increments based on the
performance of the Company versus targeted goals. The incremental payments and
the Company's targeted performance shall be determined by the Board or the
compensation committee thereof.
(c) Executive Perquisites, Benefits and Other Compensation.
Employee shall be entitled to receive additional benefits and compensation from
the Company in such form and to such extent as specified below:
(i) Payment of all premiums for coverage for Employee and
his dependent family members under health, hospitalization,
disability, dental, life and other insurance plans that the Company
may have in effect from time to time, with benefits provided to
Employee under this clause (1) to be at least comparable to the
benefits afforded to Employee in his current position (and to include
coverage for all pre-existing conditions) and not less favorable than
the benefits provided to other Company executives.
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(ii) Reimbursement for all business travel and other out-
of-pocket expenses reasonably incurred by Employee in the performance
of his services pursuant to this Agreement. All reimbursable expenses
shall be appropriately documented in reasonable detail by Employee
upon submission of any request for reimbursement, and in a format and
manner consistent with the Company's expense reporting policy.
(iii) Four (4) weeks paid vacation for each year during the
period of employment or such greater amount as may be afforded
officers and key employees generally under the Company's policies in
effect from time to time (pro rated for any year in which Employee is
employed for less than the full year).
(iv) Beginning upon the completion of the Company's
initial public offering (the "IPO"), an automobile allowance in the
amount of $500 per month.
(v) The Company shall reimburse Employee up to $300 per
month for club dues actually incurred by Employee, provided that such
club is used at least 50 percent of the time for business purposes.
(vi) The Company shall provide Employee with other
executive perquisites as may be available to or deemed appropriate for
Employee by the Board and participation in all other Company-wide
employee benefits as available from time to time, which will include
participation in the Company's 1995 Long-Term Incentive Compensation
Plan.
(vii) The Company shall provide Employee with reasonable
assistance in personal tax planning from Xxxxxx Xxxxxxxx.
(viii) The Company shall, under Employee's direction,
establish a 401(k) Plan following consummation of the IPO of the
common stock (the "Common Stock") of the Company. The terms of such
Plan shall be approved by the Board or by the compensation committee
thereof.
(ix) The Company shall provide Employee with warrants (the
"Warrants") to acquire 100,000 shares of Common Stock of the Company
at an exercise price equal to $10.00 per share. The Warrants shall
become exercisable as to 50% of the underlying shares of Common Stock
on March 31, 1997 and as to the remaining 50% of the shares on January
26, 1998. The Warrants shall expire on the fifth anniversary of the
initial exercise date. In addition, Employee shall be granted options
(the "Options") to acquire 80,000 shares of Common Stock at the price
to the public of the Common Stock in the IPO. The Options shall
become exercisable as to 20% of the underlying shares of Common Stock
on the 180th day following the date of the final prospectus and as to
the remainder, 20% of the underlying shares of Common Stock on each of
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the first four anniversaries of the date of grant. The Options shall
expire on the tenth anniversary of the consummation of the date of
grant.
(x) The Company shall provide Employee with additional
warrants (the "Additional Warrants") to acquire (i) 50,000 shares of
Common Stock of the Company at an exercise price equal to $20.00 per
share at such time as the Common Stock has closed at or above $20.00
per share for five consecutive days. The Company shall provide
Employee with additional options (the "Additional Options") to acquire
(i) 50,000 shares of Common Stock of the Company at an exercise price
equal to $25.00 per share at such time as the Common Stock has closed
at or above $25.00 per share for five consecutive days; and (ii)
50,000 shares of Common Stock of the Company at an exercise price
equal to $35.00 per share at such time as the Common Stock has closed
at or above $35.00 per share for five consecutive days. The
Additional Warrants and the Additional Options shall become
exercisable as to 50% of the underlying shares of Common Stock on the
first anniversary of their issuance and as to the remaining 50% of the
shares on the second anniversary of their issuance. The Additional
Warrants expire on the fifth anniversary of the initial exercise date.
The Additional Options shall expire on the tenth anniversary of the
date of grant. Upon the grant of the Additional Warrants and the
Additional Options, Employee may exercise the Additional Options until
they expire.
3. Non-Competition Agreement.
(a) Subject to Section 3(a), Employee will not, during the period
of his employment by or with the Company, and for a period of two (2) years
immediately following the termination of his employment under this Agreement,
for any reason whatsoever, directly or indirectly, for himself or on behalf of
or in conjunction with any other person, persons, company, partnership,
corporation or business of whatever nature:
(i) engage, as an officer, director, shareholder, owner,
partner, joint venturer, or in a managerial capacity, whether as an
employee, independent contractor, consultant or advisor, or as a sales
representative, in any business selling any products or services in
direct competition with the Company, within 100 miles of (i) the
principal executive offices of the Company or (ii) any place to which
the Company provides products or services or in which the Company is
in the process of initiating business operations during the term of
this covenant (the "Territory");
(ii) call upon any person who is, at that time, within the
Territory, an employee of the Company (including the subsidiaries
thereof) in a managerial capacity for the purpose or with the intent
of enticing such employee away from or out of the employ of the
Company (including the subsidiaries thereof), provided that Employee
shall be permitted to call upon and hire any member of his or her
immediate family;
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(iii) call upon any person or entity which is, at that time,
or which has been, within one (1) year prior to that time, a customer
of the Company (including the subsidiaries thereof) within the
Territory for the purpose of soliciting or selling products or
services in direct competition with the Company within the Territory;
(iv) call upon any prospective acquisition candidate, on
Employee's own behalf or on behalf of any competitor, which candidate
was either called upon by the Company (including the subsidiaries
thereof) or for which the Company made an acquisition analysis, for
the purpose of acquiring such entity; or
(v) disclose customers, whether in existence or proposed,
of the Company (or the Subsidiaries thereof) to any person, firm,
partnership, corporation or business for any reason or purpose
whatsoever.
Notwithstanding the above, the foregoing covenant shall not be deemed
to prohibit Employee from acquiring as an investment not more than three
percent (3%) of the capital stock of a competing business, whose stock is
traded on a national securities exchange or over-the-counter.
(b) Because of the difficulty of measuring economic losses to the
Company as a result of a breach of the foregoing covenant, and because of the
immediate and irreparable damage that could be caused to the Company for which
it would have no other adequate remedy, Employee agrees that the foregoing
covenant may be enforced by the Company in the event of breach by him by
injunctions and restraining orders.
(c) It is agreed by the parties that the foregoing covenants in
this paragraph 3 impose a reasonable restraint on Employee in light of the
activities and business of the Company (including the Company's subsidiaries)
on the date of the execution of this Agreement and the current plans of the
Company (including the Company's subsidiaries); but it is also the intent of
the Company and Employee that such covenants be construed and enforced in
accordance with the changing activities, business and locations of the Company
(including the Company's subsidiaries) throughout the term of this covenant,
whether before or after the date of termination of the employment of Employee,
subject to the following paragraph. For example, if, during the term of this
Agreement, the Company (including the Company's subsidiaries) engages in new
and different activities, enters a new business or established new locations
for its current activities or business in addition to or other than the
activities or business enumerated under the Recitals above or the locations
currently established therefore, then Employee will be precluded from
soliciting the customers or employees of such new activities or business or
from such new location and from directly competing with such new business
within 100 miles of its then-established operating location(s) through the term
of this covenant.
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It is further agreed by the parties hereto that, in the event that
Employee shall cease to be employed hereunder, and shall enter into a business
or pursue other activities not in competition with the Company (including the
Company's subsidiaries), or similar activities or business in locations the
operation of which, under such circumstances, does not violate clause (i) of
this paragraph 3, and in any event such new business, activities or location
are not in violation of this paragraph 3 or of Employee's obligations under
this paragraph 3, if any, Employee shall not be chargeable with a violation of
this paragraph 3 if the Company (including the Company's subsidiaries) shall
thereafter enter the same, similar or a competitive (i) business, (ii) course
of activities or (iii) location, as applicable.
(d) The covenants in this paragraph 3 are severable and separate,
and the unenforceability of any specific covenant shall not affect the
provisions of any other covenant. Moreover, in the event any court of
competent jurisdiction shall determine that the scope, time or territorial
restrictions set forth are unreasonable, then it is the intention of the
parties that such restrictions be enforced to the fullest extent which the
court deems reasonable, and the Agreement shall thereby be reformed.
(e) All of the covenants in this paragraph 3 shall be construed as
an agreement independent of any other provision in this Agreement, and the
existence of any claim or cause of action of Employee against the Company,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of such covenants. It is
specifically agreed that the period of two (2) years stated at the beginning of
this paragraph 3, during which the agreements and covenants of Employee made in
this paragraph 3 shall be effective, shall be computed by excluding from such
computation any time during which Employee is in violation of any provision of
this paragraph 3.
4. Place of Performance.
(a) Employee has agreed to relocate to Dallas, Texas and
understands that he may be again requested by the Board to relocate from his
present residence to another geographic location in order to more efficiently
carry out his duties and responsibilities under this Agreement or as part of a
promotion or other increase in duties and responsibilities. In connection with
Employee's relocation to Dallas, and in the event that Employee is again
requested to relocate and agrees to do so, the Company will pay all relocation
costs to move Employee, his immediate family and their personal property and
effects. Such costs may include, by way of example, but are not limited to,
pre-move visits to search for a new residence, investigate schools or for other
purposes; temporary lodging and living costs prior to moving into a new
permanent residence; duplicate home carrying costs; all closing costs on the
sale of Employee's present residence and on the purchase of a comparable
residence in the new location; and added income taxes that Employee may incur,
as a result of any payment hereunder, to the extent any relocation costs are
not deductible for tax purposes. The general intent of the foregoing is that
Employee shall not personally bear any out-of-pocket cost as a result of the
relocation, with an understanding that Employee will use his best efforts to
incur
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only those costs which are reasonable and necessary to effect a smooth,
efficient and orderly relocation with minimal disruption to the business
affairs of the Company and the personal life of Employee and his family.
(b) Notwithstanding the above, if Employee is requested by the
Board to relocate and Employee refuses, such refusal shall not constitute "good
cause" for termination of this Agreement under the terms of paragraph 5(c).
5. Term; Termination; Rights on Termination. The term of this
Agreement shall begin on the date hereof and continue for three (3) years (the
"Initial Term"), and, unless terminated sooner as herein provided, shall
continue thereafter on a year-to-year basis on the same terms and conditions
contained herein. This Agreement and Employee's employment may be terminated
in any one of the followings ways:
(a) Death. The death of Employee shall immediately
terminate the Agreement with no severance compensation due to
Employee's estate.
(b) Disability. If, as a result of incapacity due to
physical or mental illness or injury, Employee shall have been absent
from his full-time duties hereunder for four (4) consecutive months,
then thirty (30) days after receiving written notice (which notice may
occur before or after the end of such four (4) month period, but which
shall not be effective earlier than the last day of such four (4)
month period), the Company may terminate Employee's employment
hereunder provided Employee is unable to resume his full-time duties
at the conclusion of such notice period. Also, Employee may terminate
his employment hereunder if his health should become impaired to an
extent that makes the continued performance of his duties hereunder
hazardous to his physical or mental health or his life, provided that
Employee shall have furnished the Company with a written statement
from a qualified doctor to such effect and provided, further, that, at
the Company's request made within thirty (30) days of the date of such
written statement, Employee shall submit to an examination by a doctor
selected by the Company who is reasonably acceptable to Employee or
Employee's doctor and such doctor shall have concurred in the
conclusion of Employee's doctor. In the event this Agreement is
terminated as a result of Employee's disability, Employee shall
receive from the Company, in a lump-sum payment due within ten (10)
days of the effective date of termination, the base salary at the rate
then in effect for whatever time period is remaining under the Initial
Term of this Agreement or for one (1) year, whichever amount is
greater.
(c) Good Cause. The Company may terminate the Agreement
ten (10) days after written notice to Employee for good cause, which
shall be: (1) Employee's material and irreparable breach of this
Agreement; (2) Employee's gross negligence in the performance or
intentional nonperformance (continuing for ten (10) days after receipt
of the written notice) of any of Employee's material duties and
responsibilities
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hereunder; (3) Employee's dishonesty, fraud or misconduct with respect
to the business or affairs of the Company which materially and
adversely affects the operations or reputation of the Company; (4)
Employee's conviction of a felony crime; or (5) chronic alcohol abuse
or illegal drug abuse by Employee. In the event of a termination for
good cause, as enumerated above, Employee shall have no right to any
severance compensation.
(d) Without Cause. At any time after the commencement of
employment, the Company may, without cause, terminate this Agreement
and Employee's employment, effective thirty (30) days after written
notice is provided to the Company. Should Employee be terminated by
the Company without cause, Employee shall receive from the Company, in
a lump-sum payment due on the effective date of termination, the base
salary at the rate then in effect for whatever time period is
remaining under the Initial Term of this Agreement or for two (2)
years, whichever amount is greater ("Severance Pay"). Further, any
termination without cause by the Company shall operate to shorten the
period set forth in paragraph 3(a) and during which the terms of
paragraph 3 apply to one (1) year from the date of termination of
employment.
(e) Change in Control. Refer to paragraph 12 below.
(f) Termination by Employee for Good Reason. The
Employee may terminate his employment hereunder for "Good Reason." As
used herein, "Good Reason" shall mean the continuance of any of the
following after 10 days' prior written notice by Employee to the
Company, specifying the basis for such Employee's having Good Reason
to terminate this Agreement:
(i) the assignment to Employee of any duties
materially and adversely inconsistent with the Employee's
position as specified in paragraph 1 hereof (or such other
position to which he may be promoted), including status,
offices, responsibilities or persons to whom the Employee
reports as contemplated under paragraph 1 of this Agreement,
or any other action by the Company which results in a material
and adverse change in such position, status, offices, titles
or responsibilities;
(ii) Employee's removal from, or failure to be
reappointed or reelected to, Employee's position under this
Agreement, except as contemplated by paragraphs 5(a), (b), (c)
and (e); or
(iii) any other material breach of this Agreement by the
Company, including the failure to pay Employee on a timely basis the
amounts to which he is entitled under this Agreement.
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In the event of any termination by the Employee for Good Reason, as determined
by a court of competent jurisdiction or pursuant to the provisions of paragraph
16 below, the Company shall pay all amounts and damages to which Employee may
be entitled as a result of such breach, including interest thereon and all
reasonable legal fees and expenses and other costs incurred by Employee to
enforce his rights hereunder. In addition, Employee shall be entitled to
receive Severance Pay for two (2) years. Further, none of the provisions of
paragraph 3 shall apply in the event this Agreement is terminated by Employee
for Good Reason.
(g) Termination by Employee Without Cause. If Employee
resigns or otherwise terminates his employment without Good Reason
pursuant to paragraph 5(f), Employee shall receive no severance
compensation.
Upon termination of this Agreement for any reason provided in clauses (a)
through (g) above, Employee shall be entitled to receive all compensation
earned and all benefits vested and reimbursements due through the effective
date of termination. Additional compensation subsequent to termination, if
any, will be due and payable to Employee only to the extent and in the manner
expressly provided above or in paragraph 16. All other rights and obligations
of the Company and Employee under this Agreement shall cease as of the
effective date of termination, except that the Company's obligations under
paragraph 9 herein and Employee's obligations under paragraphs 3, 6, 7, 8 and
10 herein shall survive such termination in accordance with their terms.
6. Return of Company Property. All records, designs, patents,
business plans, financial statements, manuals, memoranda, lists and other
property delivered to or compiled by Employee by or on behalf of the Company or
its representatives, vendors or customers which pertain to the business of the
Company shall be and remain the property of the Company and be subject at all
times to its discretion and control. Likewise, all correspondence, reports,
records, charts, advertising materials and other similar data pertaining to the
business, activities or future plans of the Company which is collected by
Employee shall be delivered promptly to the Company without request by it upon
termination of Employee's employment.
7. Inventions. Employee shall disclose promptly to the Company
any and all significant conceptions and ideas for inventions, improvements and
valuable discoveries, whether patentable or not, which are conceived or made by
Employee, solely or jointly with another, during the period of employment or
within one (1) year thereafter, and which are directly related to the business
or activities of the Company and which Employee conceives as a result of his
employment by the Company. Employee hereby assigns and agrees to assign all
his interests therein to the Company or its nominee. Whenever requested to do
so by the Company, Employee shall execute any and all applications, assignments
or other instruments that the Company shall deem necessary to apply for and
obtain Letters Patent of the United States or any foreign country or to
otherwise protect the Company's interest therein.
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8. Trade Secrets. Employee agrees that he will not, during or
after the term of this Agreement with the Company, disclose the specific terms
of the Company's relationships or agreements with its significant vendors or
customers or any other significant and material trade secret of the Company,
whether in existence or proposed, to any person, firm, partnership, corporation
or business for any reason or purpose whatsoever, except as is disclosed in the
ordinary course of business.
9. Indemnification. In the event Employee is made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by the Company
against Employee), by reason of the fact that he is or was performing services
under this Agreement, then the Company shall indemnify Employee against all
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement, as actually and reasonably incurred by Employee in connection
therewith. In the event that both Employee and the Company are made a party to
the same third-party action, complaint, suit or proceeding, the Company agrees
to engage competent legal representation, and Employee agrees to use the same
representation, provided that if counsel selected by the Company shall have a
conflict of interest that prevents such counsel from representing Employee,
Employee may engage separate counsel and the Company shall pay all attorneys'
fees of such separate counsel. Further, while Employee is expected at all
times to use his best efforts to faithfully discharge his duties under this
Agreement, Employee cannot be held liable to the Company for errors or
omissions made in good faith where Employee has not exhibited gross, willful
and wanton negligence and misconduct or performed criminal and fraudulent acts
which materially damage the business of the Company.
10. No Prior Agreements. Employee hereby represents and warrants
to the Company that the execution of this Agreement by Employee and his
employment by the Company and the performance of his duties hereunder will not
violate or be a breach of any agreement with a former employer, client or any
other person or entity. Further, Employee agrees to indemnify the Company for
any claim, including, but not limited to, attorneys' fees and expenses of
investigation, by any such third party that such third party may now have or
may hereafter come to have against the Company based upon or arising out of any
non-competition agreement, invention or secrecy agreement between Employee and
such third party which was in existence as of the date of this Agreement.
11. Assignment; Binding Effect. Employee understands that he has
been selected for employment by the Company on the basis of his personal
qualifications, experience and skills. Employee agrees, therefore, he cannot
assign all or any portion of his performance under this Agreement. Subject to
the preceding two (2) sentences and the express provisions of paragraph 12
below, this Agreement shall be binding upon, inure to the benefit of and be
enforceable by the parties hereto and their respective heirs, legal
representatives, successors and assigns.
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12. Change in Control.
(a) Unless he elects to terminate this Agreement pursuant to (c)
below, Employee understands and acknowledges that the Company may be merged or
consolidated with or into another entity and that such entity shall
automatically succeed to the rights and obligations of the Company hereunder.
(b) In the event of a pending Change in Control wherein the
Company and Employee have not received written notice at least fifteen (15)
business days prior to the anticipated closing date of the transaction giving
rise to the Change in Control from the successor to all or a substantial
portion of the Company's business and/or assets that such successor is willing
as of the closing to assume and agree to perform the Company's obligations
under this Agreement in the same manner and to the same extent that the Company
is hereby required to perform, then such Change in Control shall be deemed to
be a termination of this Agreement by the Company without cause and the
applicable portions of paragraph 5(d) will apply; however, under such
circumstances, the amount of the lump-sum severance payment due to Employee
shall be triple the amount calculated under the terms of paragraph 5(d) and the
non-competition provisions of paragraph 3 shall not apply whatsoever.
(c) In any Change in Control situation in which Employee has
received written notice from the successor to the Company that such successor
is willing to assume the Company's obligations hereunder, Employee may
nonetheless, at his sole discretion, elect to terminate this Agreement by
providing written notice to the Company at least five (5) business days prior
to the anticipated closing of the transaction giving rise to the Change in
Control. In such case, the applicable provisions of paragraph 5(d) will apply
as though the Company had terminated the Agreement without cause; however,
under such circumstances, the amount of the lump-sum severance payment due to
Employee shall be 150% the amount calculated under the terms of paragraph 5(d)
and the non-competition provisions of paragraph 3 shall all apply for a period
of one (1) year from the effective date of termination.
(d) For purposes of applying paragraph 5 under the circumstances
described in (b) and (c) above, the effective date of termination will be the
closing date of the transaction giving rise to the Change in Control and all
compensation, reimbursements and lump-sum payments due Employee must be paid in
full by the Company at or prior to such closing. Further, Employee will be
given sufficient time and opportunity to elect whether to exercise all or any
of his vested options to purchase Common Stock of the Company, including any
options with accelerated vesting under the provisions of the Company's 1995
Long-Term Incentive Compensation Plan, such that he may convert the options to
shares of Common Stock of the Company at or prior to the closing of the
transaction giving rise to the Change in Control, if he so desires.
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(e) A "Change in Control" shall be deemed to have occurred if:
(i) any person, other than the Company or an employee benefit
plan of the Company, acquires directly or indirectly the Beneficial
Ownership (as defined in Section 13(d) of the Securities Exchange Act
of 1934, as amended) of any voting security of the Company and
immediately after such acquisition such Person is, directly or
indirectly, the Beneficial Owner of voting securities representing 50%
or more of the total voting power of all of the then-outstanding
voting securities of the Company;
(ii) the individuals (A) who, as of the effective date of the
Company's registration statement with respect to its initial public
offering, constitute the Board of Directors of the Company (the
"Original Directors") or (B) who thereafter are elected to the Board
of Directors of the Company and whose election, or nomination for
election, to the Board of Directors of the Company was approved by a
vote of at least two-thirds (2/3) of the Original Directors then still
in office (such directors becoming "Additional Original Directors"
immediately following their election) or (C) who are elected to the
Board of Directors of the Company and whose election, or nomination
for election, to the Board of Directors of the Company was approved by
a vote of at least two-thirds (2/3) of the Original Directors and
Additional Original Directors then still in office (such directors
also becoming "Additional Original Directors" immediately following
their election), cease for any reason to constitute a majority of the
members of the Board of Directors of the Company;
(iii) the stockholders of the Company shall approve a merger,
consolidation, recapitalization, or reorganization of the Company, a
reverse stock split of outstanding voting securities, or consummation
of any such transaction if stockholder approval is not sought or
obtained, other than any such transaction which would result in at
least 75% of the total voting power represented by the voting
securities of the surviving entity outstanding immediately after such
transaction being Beneficially Owned by at least 75% of the holders of
outstanding voting securities of the Company immediately prior to the
transaction, with the voting power of each such continuing holder
relative to other such continuing holders not substantially altered in
the transaction; or
(iv) the stockholders of the Company shall approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or a substantial portion of the
Company's assets (i.e., 50% or more of the total assets of the
Company).
(f) Employee must be notified in writing by FYI at any time that FYI
or any member of its Board anticipates that a Change in Control may take place.
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(g) Employee shall be reimbursed by the Company or its successor
for any excise taxes that Employee incurs under Section 4999 of the Internal
Revenue Code of 1986, as a result of any Change in Control. Such amount will
be due and payable by the Company or its successor within ten (10) days after
Employee delivers a written request for reimbursement accompanied by a copy of
his tax return(s) showing the excise tax actually incurred by Employee.
13. Complete Agreement. This Agreement is not a promise of future
employment. Employee has no oral representations, understandings or agreements
with the Company or any of its officers, directors or representatives covering
the same subject matter as this Agreement. This written Agreement is the
final, complete and exclusive statement and expression of the agreement between
the Company and Employee and of all the terms of this Agreement, and it cannot
be varied, contradicted or supplemented by evidence of any prior or
contemporaneous oral or written agreements. This written Agreement may not be
later modified except by a further writing signed by a duly authorized officer
of the Company and Employee, and no term of this Agreement may be waived except
by writing signed by the party waiving the benefit of such term.
14. Notice. Whenever any notice is required hereunder, it shall
be given in writing addressed as follows:
To the Company: F.Y.I. Incorporated
0000 XxXxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
with a copy to: Xxxxxxx X. Xxxxxx, Esq.
Xxxxx Xxxxxxx Rain Xxxxxxx
0000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
To Employee: Xx X. Xxxxxx, Xx.
c/o F.Y.I. Incorporated
0000 XxXxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000x)
Notice shall be deemed given and effective three (3) days after the deposit in
the U.S. mail of a writing addressed as above and sent first class mail,
certified, return receipt requested, or when actually received. Either party
may change the address for notice by notifying the other party of such change
in accordance with this paragraph 14.
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14
15. Severability; Headings. If any portion of this Agreement is
held invalid or inoperative, the other portions of this Agreement shall be
deemed valid and operative and, so far as is reasonable and possible, effect
shall be given to the intent manifested by the portion held invalid or
inoperative. The paragraph headings herein are for reference purposes only and
are not intended in any way to describe, interpret, define or limit the extent
or intent of the Agreement or of any part hereof.
16. Arbitration. Any unresolved dispute or controversy arising
under or in connection with this Agreement shall be settled exclusively by
arbitration, conducted before a panel of three (3) arbitrators in Dallas,
Texas, in accordance with the rules of the American Arbitration Association
then in effect. The arbitrators shall not have the authority to add to,
detract from, or modify any provision hereof nor to award punitive damages to
any injured party. The arbitrators shall have the authority to order back-pay,
severance compensation, vesting of options (or cash compensation in lieu of
vesting of options), reimbursement of costs, including those incurred to
enforce this Agreement, and interest thereon in the event the arbitrators
determine that Employee was terminated without disability or good cause, as
defined in paragraphs 5(b) and 5(c), respectively, or that the Company has
otherwise materially breached this Agreement. A decision by a majority of the
arbitration panel shall be final and binding. Judgment may be entered on the
arbitrators' award in any court having jurisdiction. The direct expense of any
arbitration proceeding shall be borne by the Company.
[BALANCE OF SHEET INTENTIONALLY LEFT BLANK]
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17. Governing Law. This Agreement shall in all respects be
construed according to the laws of the State of Delaware.
Dated: November 16, 1995,
as amended and restated
as of March 31, 1997
EMPLOYEE:
/s/ Xx X. Xxxxxx, Xx.
---------------------
Xx X. Xxxxxx, Xx.
F.Y.I. INCORPORATED
By: /s/ Xxxxx Xxxxxxxxxx
---------------------
Xxxxx Xxxxxxxxxx
Executive Vice President
Chief Financial Officer
