EXHIBIT 10.26
EMPLOYMENT AGREEMENT
HLM DESIGN, INC.
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into by
and between HLM DESIGN, INC. (the "Company") and XXXXXX X. XXXXXXX, an
individual residing at 0000 Xxxxxxxx Xxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx, 00000 (the
"Employee").
In consideration of the grant of options for the purchase of 50,000
shares of the Company's capital stock and the acceptance thereof by the Employee
(the "Stock Options"), and in further consideration of the mutual covenants
contained herein and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and the Employee agree as
follows:
1. Employment. The Employee shall perform such duties and
responsibilities and shall serve in such capacities as may be assigned to him
from time to time by the Company's Board of Directors. The Employee agrees to
perform his duties and discharge his responsibilities, as assigned to him from
time to time, faithfully, diligently and in a timely manner.
2. Compensation. All component parts and aspects of the
Employee's compensation, including any salary, bonuses and any other form of
compensation, shall be determined by the Board of Directors from time to time,
and shall be paid to the Employee in accordance with the Company's standard
policies and procedures. The Employee shall be paid an annual base salary in an
amount no less than Two Hundred Fifty Thousand Dollars ($250,000) for each year
that he remains an employee of the Company (the Employee's "Minimum Annual
Salary").
3. Benefits. The Company shall pay the Employee a monthly
automobile allowance of $2,500 per month, from which the Employee shall pay all
expenses of providing his own automobile for business purposes, including but
not limited to, fuel, maintenance, repairs, taxes and insurance. The Company
agrees to reimburse the Employee for other reasonable business expenses which
are incurred by the Employee, in compliance with the Company's policies with
respect to incurring business expenses, in the performance of his duties
hereunder. The Employee shall submit expense reports to the Company as required
by Section 274 of the Internal Revenue Code. In addition, subject to and
contingent upon the Employee meeting and complying with, and continuing to
comply with, all eligibility and participation conditions and requirements, the
Employee shall receive all hospitalization, major medical, and disability
insurance benefits, as well as all other fringe benefits provided
to or made available by the Company for its employees generally, in accordance
with the terms and provisions of such insurance and benefit programs as they may
exist from time to time.
4. Term. The initial term of the Employee's employment shall
be for a period of three (3) years, which term shall commence on the effective
date of this Agreement. Thereafter, the term of the Employee's employment
automatically shall automatically be renewed for successive periods of one (1)
year. Each party reserves the right to terminate the relationship for any reason
upon the giving of written notice to the other party at least six (6) months
prior to the effective date of termination stated in the notice the expiration
of the then applicable term of this Agreement. In the event the Company at any
time elects not to renew this Agreement or terminates this Agreement the
relationship without cause, then the Employee's termination compensation shall
include the payment by the Company to the Employee of an amount equal to three
(3) times the amount of the Employee's Minimum Annual Salary ("Termination
Compensation"), payable to the Employee in the same manner and at the same times
as he would have received payment of his regular annual salary payments.
5. Termination for Cause. The Company may terminate the
Employee's employment hereunder immediately for cause only for the following
causes:
(a) A material breach of this Agreement arising from
the Employee's material failure to substantially perform his employment
duties and responsibilities, which determination of material breach may
be made by the Company only after the Employee has been given specific
written notice of such nonperformance and a ninety (90) day period in
which to cure or correct or commence to cure or correct such
nonperformance; or
(b) Conviction of the Employee, including a plea of
nolo contendere by the Employee, of a crime involving an act of moral
turpitude.
In the event the Company terminates the Employee's employment for
cause, ninety (90) days' advance written notice shall be required to be given to
the Employee and no Termination Compensation shall be due or owing to the
Employee. In such event the Employee shall remain bound by the provisions of
paragraphs 6 through 10 below. In lieu of such advance written notice, the Board
of Directors of the Company may terminate the Agreement immediately; provided,
however, in that event, the Company shall pay to the Employee an amount equal to
three (3) times the amount of the Employee's compensation then in effect as of
the date of his termination. The Employee's employment shall continue until the
effective date of termination set forth in the Company's written
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notice of termination, unless terminated prior thereto by the Company as
provided above.
6. Nonpiracy of Clients and Covenant Not to Compete.
(a) The Employee agrees that, during the term of the
Employee's employment hereunder and for a period of three (3) years
after the date of the termination of his employment hereunder for any
or no reason, the Employee will not, directly or indirectly, as an
individual or as an owner, agent, employee, independent contractor,
consultant, officer, director, stockholder or partner of any
architectural or engineering business or company, or of any
partnership, corporation, association, or any other business
organization or entity engaged in the business of providing
architectural or engineering services:
(i) sell, service, solicit, divert, take
away, or attempt to sell, service, solicit, divert or take
away the business of any person known to the Employee to be a
client of the Company and for whom the Company has provided
architectural or engineering services within three (3) years
prior to the date of the termination of the Employee's
employment; or
(ii) refer or direct to or accept for
himself or for any architectural or engineering company or
business or to or for any partnership, corporation,
association or any other business organization or entity
engaged in the business of providing architectural or
engineering services or to or for any person employed by or in
any way affiliated with any of them, any inquiries or
communications whatsoever about any business or services being
provided by the Company at the date of any such inquiry or
communication or which the Company had provided at any time
during the one (1) year period immediately prior to the date
of the termination of the Employee's employment (including,
but not limited to, any requests for bids or proposals) from
or by (a) any client of the Company during the one (1) year
period immediately prior to the date of the termination of the
Employee's employment or (b) any client which had been a
client of the Company and for which the Company had provided
services at any time during the one (1) year period
immediately prior to the date of the termination of his
employment (even though the Employee may have had a
relationship with such client or may have considered such
client to have been a potential or prospective client prior to
the date of his employment by the Company.
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(b) The Employee acknowledges that the Company's
clients are located throughout the United States and that the Company's
business in this regard is typical of the nature of the architectural
and engineering business in general. The Employee accordingly agrees
that the geographic territory or scope of the nonpiracy provisions and
restrictive covenants contained in paragraphs 6(a)(i) and (ii) above
are reasonable in that they are limited to the specific locations (or
addresses) of each of the Company's clients protected by such nonpiracy
provisions and restrictive covenants. The Employee likewise
acknowledges and agrees that the time period or duration of such
nonpiracy provisions and restrictive covenants are reasonable and that
the three (3) year period following the termination of the Employee's
employment and the three (3) year period in subparagraph 6(a)(i) and
the one (1) year period in subparagraph 6(a)(ii) prior to the date of
the termination of his employment are reasonably necessary for the
Company to protect its continuing business relationship with regard to
each of its clients protected by such nonpiracy provisions and
restrictive covenants. The Employee further acknowledges and agrees
that all of the Company's clients are the sole and exclusive property
of the Company and that such nonpiracy provisions and restrictive
covenants are necessary to protect the Company's property and its
business relationships with its clients. The Employee also acknowledges
that he has sufficient training and skills to obtain similar and
comparable employment to that provided him by the Company with another
business or company and that the enforcement of the nonpiracy
provisions and restrictive covenants contained herein against him by
way of injunctive relief would not prevent him from earning a
satisfactory living.
7. Nonpiracy of Proprietary Information and Trade Secrets. The
Employee acknowledges that, during his employment, he will continue to acquire,
be exposed to, or have access to, material, data and information that constitute
valuable, confidential and proprietary information and trade secrets of the
Company, which may include, without limitation, client lists, prospect lists,
client needs, client contacts, methods of pricing, costs and sales data,
financial statements and data, Company policies and procedures, Company business
plans, processes, market studies, methods of marketing, business opportunities,
customized computer software and other aspects of the Company's business
operations. During and after the termination of his employment with the Company,
the Employee shall not, directly or indirectly, use, misuse, misappropriate,
disclose, divulge or make known to any architectural or engineering business or
to any partnership, corporation, association, or any other business organization
or entity engaged in the business of providing architectural or engineering
services or to any person employed by or in any way
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affiliated with any of them, for any reason or purpose whatsoever, any of the
Company's confidential and proprietary information and trade secrets, except as
may be permitted by the Company in the course of the Employee's employment with
the Company. In consideration of the unique nature of the confidential and
proprietary information and trade secrets, all of the Employee's obligations
pertaining to the confidentiality and non-disclosure thereof shall remain in
effect in perpetuity or until the Company has released any such information into
the public domain, in which case the Employee's obligations hereunder shall
cease with respect only to such information so released. Provided, further, the
Employee's obligations hereunder shall cease with respect to the Company's
information relating to the identity of its clients (and their contacts, needs
and projects) protected by the nonpiracy provisions and restrictive covenants
contained in paragraphs 6(a)(i), (ii) and (iii) upon the expiration of the three
(3) year restricted period following the date of the termination of the
Employee's employment with the Company.
8. Nonpiracy of Employees. The Employee agrees that for a
period of one (1) year after the termination of his employment with the Company
he will not, either directly or indirectly, in any manner or by any guise,
recruit, solicit, divert, or take away nor attempt to recruit, solicit, divert,
or take away any employee(s) of the Company.
9. Remedies. The Employee hereby acknowledges that each and
every violation by him of the provisions of paragraphs 6, 7 and 8 hereof will
cause the Company irreparable harm and damage and agrees that the Company shall
be entitled to injunctive relief, by way of a temporary restraining order and
preliminary and permanent injunctions, to restrain the Employee from each and
every violation then occurring and from each and every future violation or
threatened violation of such provisions during the time then remaining in either
the three (3) year restricted period set forth in paragraphs 6 and 7 or the one
(1) year period set forth in paragraph 8, in addition to all other equitable and
legal remedies available to the Company against him.
10. Miscellaneous.
(a) For purposes of this Agreement, the following
terms shall be defined as follows:
(i) The term "client" shall be defined to
mean and shall include each individual, corporation,
partnership, association, limited liability company or limited
liability partnership or any other business organization or
entity for which the Company has provided architectural or
engineering services, consultation or assistance at any time
during the term of the Employee's
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employment or at any time during the three (3) year restricted
period provided for in paragraph 6 hereof.
(ii) The term "business" shall include, but
shall not be limited to, any and all kinds of architectural
and engineering services and any other services or assistance
provided by the Company to its clients at any time during the
term of Employee's employment hereunder or at any time during
the three (3) year restricted period provided for in paragraph
6 hereof.
(iii) The terms "solicit" or "soliciting" or
"solicited" or "solicitation" shall be defined to mean to
endeavor to obtain the business of a client of the Company
either by asking, requesting, persuading, imploring, courting,
importuning or wooing the client orally or in writing in any
manner whatsoever or by responding in any manner whatsoever to
any inquiry or other communication whatsoever initiated by or
on behalf of a client in any way relating to the architectural
or engineering needs of the client (including, but not limited
to, the submission of a formal bid or proposal for the
business of the client).
(iv) The term "Company," for purposes of
paragraphs 6, 7 and 8 hereof, shall be defined to mean and
include HLM Design, Inc. and any and all affiliated entities,
whether owned by, controlled by or under common control with
HLM Design, Inc., or for which HLM Design, Inc. performs
managerial and/or administrative services pursuant to a
written agreement.
(b) The Employee acknowledges that prior to or as a
part of receiving the Stock Options he was informed fully by the
Company and he understood and agreed that he would be required to enter
into this Agreement containing the nonpiracy provisions and restrictive
covenants set forth herein in consideration of and as a condition
precedent thereto. The Employee acknowledges he has executed this
Agreement freely and voluntarily and that it is fully binding and
enforceable and effective as of the effective date of the grant of the
Stock Options, even though it may have been signed by him and/or the
Company subsequent to such date.
(c) This Agreement shall be governed by and construed
in accordance with the laws of the State of North Carolina. Any
litigation under this Agreement must be brought in the State of North
Carolina notwithstanding that the Employee may not at that time be a
resident of North Carolina and cannot be served with process within the
State of North Carolina. The Employee
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hereby irrevocably consents to the jurisdiction of the courts of North
Carolina (whether state or federal) over his person.
(d) All pronouns and any variations thereof refer to
the masculine, feminine or neuter, singular or plural, as the identity
of the person or persons may require.
(e) This Agreement shall be binding upon and inure to
the benefit of the parties hereto, their respective representatives,
successors and assigns; provided, however, this is an Agreement for the
personal services of the Employee and these services may only be
provided by the Employee.
(f) The provisions of this Agreement shall be
separable and a determination that any provision of this Agreement is
either unenforceable or void shall not affect the validity of any other
provision of this Agreement. Wherever possible all provisions shall be
interpreted so as not to be unenforceable and any court of competent
jurisdiction is authorized and directed by the parties to enforce any
otherwise unenforceable provision in part, to modify it, to enforce it
only to a degree and not fully, or otherwise to enforce that provision
only in a manner and to an extent, or for a shorter period of time,
that renders the provision valid or enforceable. The intent of the
parties is that this Agreement be enforceable and enforced to the
maximum extent possible after excising (or deeming excised) all invalid
or unenforceable provisions, whether or not the remaining provisions
are grammatically correct.
(g) This Agreement sets forth the entire
understanding between the parties and all prior or contemporaneous
written or oral agreements with respect to the subject matter hereof
are merged herein. This Agreement cannot be amended except by a writing
signed by both parties hereto. No waiver of any term or provision shall
be deemed to be a waiver of any subsequent breach of any term or
provision hereof.
(h) All notices, consents, waivers, and other
communications under this Agreement must be in writing and will be
deemed to have been duly given when (a) delivered by hand (with written
confirmation of receipt); or (b) when received by the addressee if sent
by a nationally recognized overnight delivery service (receipt
requested), in each case to the appropriate addresses set forth below
(or to such other addresses as a party may designate by notice to the
other party):
Xxxxxx X. Xxxxxxx
0000 Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
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HLM Design, Inc.
Suite 2950
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as by law provided, effective as of the day of January, 1998.
HLM DESIGN, INC.
By: /s/ Xxxxxx Xxxxxx
Title:____________________________
/s/ Xxxxxx X. Xxxxxxx (SEAL)
---------------------------------
XXXXXX X. XXXXXXX, Employee
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AMENDMENT NUMBER ONE
TO EMPLOYMENT AGREEMENT
THIS AMENDMENT NUMBER ONE TO EMPLOYMENT AGREEMENT originally entered
into as of the 15th day of January, 1998 (the "Agreement") by and between HLM
DESIGN, INC. (the "Company") and XXXXXX X. XXXXXXX, an individual residing at
0000 Xxxxxxxx Xxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 (the "Employee").
The parties to the Agreement desire to amend certain provisions of the
Agreement, and, in further consideration of the mutual covenants contained
herein and therein and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and Employee agree as
follows:
1. The first sentence of Paragraph 3 of the Agreement shall be amended
to read as follows:
"The Company shall pay the Employee a monthly automobile
allowance of One Thousand Dollars ($1,000.00) per month,
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from which the Employee shall pay all expenses of providing his own
automobile for business purposes, including, but not limited to, fuel,
maintenance, repairs, taxes and insurance."
2. In all other respects, the Agreement shall remain unchanged and in
full force and effect.
IN WITNESS WHEREOF, the parties have caused this First Amendment to be
executed as by law provided, effective as of the 19th day of May, 1998.
HLM DESIGN, INC.
/s/ Xxxxxx X. Xxxxxx
By: ________________________________________
Title: _____________________________________
/s/ Xxxxxx X. Xxxxxxx (SEAL)
____________________________
XXXXXX X. XXXXXXX, Employee
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