EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT (Agreement,) made and entered into as of the 1st
day of January, 1998, by and between CompuTrac, Inc., a corporation
organized under the laws of the State of Texas (CompuTrac), and Xxxxx
X. Xxxxxxxx, an individual residing in Frisco, Texas (the Executive).
Preliminary Statements:
A.CompuTrac is engaged in the design, development, and sale of
turnkey data and word processing systems for legal firms and
Executive is, and has been since he founded CompuTrac, actively
engaged in the promotion and operation of CompuTrac's business as
the Chief Executive Officer of CompuTrac.
B.The ability of the Executive is required in the conduct and
direction of the business of CompuTrac, and CompuTrac feels that
the success of the business will, to a great extent, be due to
the energy, skill and ability of Executive, and on that account
desires to assure itself of the continued services of Executive.
C.The creative abilities of the Executive in the business of
CompuTrac are unique and necessary at this time for the continued
success of CompuTrac.
D.The Board of Directors of CompuTrac has determined that it is in
the best interests of CompuTrac and its shareholders to assure
that CompuTrac will have the continued dedication of the
Executive, notwithstanding the possibility, threat, or occurrence
of a Change of Control (as defined below) of CompuTrac.
E.The Board of Directors of CompuTrac believes it is important to
diminish the inevitable distraction of the Executive by virtue of
the personal uncertainties and risks created by a pending or
threatened Change of Control, to encourage the Executive's full
attention and dedication to CompuTrac currently and in the event
of any threatened or pending Change of Control, and to provide
the Executive with compensation arrangements upon a Change of
Control which provide the Executive with individual financial
security and which are competitive with those of other
corporations.
F.Executive desires to continue in the service of CompuTrac and to
be actively engaged in the direction of CompuTrac's business.
NOW, THEREFORE, in consideration of the promises and of other
good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as follows:
1. Employment:
(i) CompuTrac agrees to continue to employee Executive and
Executive hereby agrees to continue to serve as the Chief
Executive Officer of CompuTrac during the term of this
Agreement. Executive shall have such duties, authority and
powers in this capacity and consistent therewith, as are
determined from time-to-time by the Board of Directors of
CompuTrac.
(ii) Consistent with his position, Executive agrees to perform
such duties as are assigned to him from time-to-time by the
Board of Directors and to devote substantially all of his
business time, effort and skill to the performance of his
duties and the promotion of the business of CompuTrac.
Consistent with his position, Executive further agrees to
attend to the business of CompuTrac and to do and perform
all the reasonable duties essential, necessary or desirable
to its efficient management, all as directed by the Board of
Directors of CompuTrac. The Executive will serve as an
officer and Director of CompuTrac, and any subsidiary,
during the term of this Agreement, without further
compensation. During his employment hereunder, Executive
agrees that his other business activities shall be less than
20% of his total business time and these activities shall
not interfere nor conflict with the reasonable performance
of his duties hereunder.
2. Term of Agreement:
Subject to the provisions of this Agreement, the term of
Executive's full-time employment hereunder shall commence January 1,
1998, and end December 31, 2002.
3. Compensation:
For all services rendered by the Executive under this Agreement,
during the term of full-time employment, CompuTrac shall pay and
Executive agrees to accept in full payment therefor, a base salary
(Base Salary) of $590,000.00 per year, plus the other benefits herein
provided.
(i) The Base Salary shall be payable in equal monthly
installments and shall be subject to merit increase during
the term of this Agreement at the sole discretion of the
Board of Directors of CompuTrac, with at least annual review
and a minimum mandatory annual increase commencing on
January 1, 1999, equivalent to the annual increase in the
Consumer Price Index for Dallas, Texas during the previous
calendar year.
(ii) During the term of this Agreement, Executive shall be
furnished with the use of an automobile selected by
Executive and having a fair market value of $75,000, and the
ordinary expenses of maintaining and operating same.
Executive shall be reimbursed for all reasonable expenses
incurred for travel, lodging, business entertainment, and
any other miscellaneous expenses incurred on behalf and for
the benefit of CompuTrac. Payment for such expenses shall
be made by CompuTrac on the basis of itemized statements
submitted by Executive reflecting such expense, with such
reasonable supporting data as CompuTrac may require to
fulfill its reporting obligations to all applicable
governmental agencies.
(iii) In recognition of the professional and social obligations
which are expected of the Executive in the exercise of his
duties in the promotion of the business of CompuTrac, the
Executive shall be furnished membership and payment of dues
in a local country club to be selected by Executive and
approved by the Board of Directors.
(iv) CompuTrac recognizes that Executive conducts a substantial
amount of business for CompuTrac from Executive's residence.
CompuTrac agrees to provide Executive, at CompuTrac's
expense, adequate telephone service and equipment to permit
Executive to continue to conduct same.
(v) Executive shall be eligible for all Executive benefits
afforded generally to executive employees of CompuTrac,
including participation in health and life insurance plans.
Executive and Executive's dependents shall be covered by
health, dental and orthodontic insurance, paid 100% by
CompuTrac. The Executive's estate or named beneficiary
shall be the beneficiary of $2,500,000, life insurance
policy(s) obtained by CompuTrac and all premiums paid by
CompuTrac. The $2,500,000 shall be net of (i.e. in addition
to) any monies or premiums due to CompuTrac from Executive
as a result of any split dollar or similar type policies.
Executive shall receive a minimum of four weeks paid
vacation per year, with such vacation time that is not
taken, accumulated or paid the cash equivalent of such time,
at the option of the Executive on an annual basis.
(vi) Executive shall be entitled to be considered for an annual
cash bonus (Bonus) for each fiscal year during which
Executive performs services under this Agreement. The Bonus
shall be determined by the Board of Directors, in its sole
discretion, based on the performance of Executive. The
Bonus shall not exceed the Base Salary provided by Section
3(i).
4. Certain Terminations:
Anything in this Agreement to the contrary notwithstanding, if
the Executive's employment with CompuTrac is terminated (a) other than
for Cause (as hereinafter defined,) disability, death or the
expiration of the term of this Agreement; or (b) by the Executive for
Good Reason (as hereinafter defined):
(i) CompuTrac shall pay to the Executive, in a cash lump sum and
within 30 days after the date of termination, the aggregate
of the following amounts:
- to the extent not theretofore paid, the Executive's Base
Salary through the date of termination; and
- the product of (x) the Bonus paid to the Executive for
the last full fiscal year, and (y) a fraction, the
numerator of which is the number of days in the current
fiscal year through the date of termination, and the
denominator of which is 365; and
- the product of three times (two times if the termination
occurs during the last year of this Agreement) the lump
sum of (i) the Base Salary and (ii) the highest Bonus
paid to Executive during any of the last two years prior
to termination; and
- in the case of compensation previously deferred by the
Executive, all amounts previously deferred (together with
any accrued interest thereon) and not yet paid by
CompuTrac, and any accrued vacation pay not yet paid by
CompuTrac; and
- all other amounts accrued or earned by the Executive
through the date of termination and amounts otherwise
owing under the then existing plans and policies at
CompuTrac; and
(ii) for the remainder of the term of this Agreement or such
longer period as any plan, program or policy may provide,
CompuTrac shall continue benefits to the Executive and/or
the Executive's spouse at least equal to those which would
have been provided to them in accordance with the plans,
programs and policies described in this Agreement if the
Executive's employment had not been terminated.
5. Certain Definitions:
For the purpose of this Agreement, a Change of Control shall mean
the occurrence of one or more of the following:
(i) Individuals who, as of the date hereof, constitute the Board
(as of the date hereof the Incumbent Board) cease for any
reason to constitute at least a majority of the Board,
provided that any person becoming a director subsequent to
the date hereof whose election or nomination for election by
CompuTrac's shareholders was approved by a vote of at least
a majority of the directors then comprising the Incumbent
Board (other than an election or nomination of an individual
whose initial assumption of office is in connection with an
actual or threatened election contest relating to the
election of the Directors of CompuTrac, as such terms are
used under rules promulgated under the Exchange Act) shall
be, for purposes of this Agreement, considered as though
such person were a member of the Incumbent Board; or
(ii) Approval by the stockholders of CompuTrac of a
reorganization, merger, consolidation, in each case, with
respect to which persons who were the stockholders of
CompuTrac immediately prior to such reorganization, merger
or consolidation do not, immediately thereafter, own more
than 50% of the combined voting power entitled to vote
generally in the election of directors of the reorganized,
merged or consolidated CompuTrac's then outstanding voting
securities, or a liquidation or dissolution of CompuTrac or
of the sale of all or substantially all of the assets of
CompuTrac.
For purposes of this Agreement, Cause means:
(i) acts of embezzlement by the Executive that are intended to
result in substantial personal enrichment of the Executive
at the expense of CompuTrac,
(ii) violations by the Executive of the Executive's obligations
under this Agreement which are willful and deliberate on the
Executive's part and which are not remedied in a reasonable
period of time after receipt of written notice from
CompuTrac specifying the acts and the required remedial
actions, or
(iii) the conviction of the Executive of a felony.
For purposes of this Agreement, Good Reason shall mean the
occurrence of one or more of the following:
(i) the assignment of the Executive of any duties inconsistent
with the Executive's position (including status, offices,
titles and reporting requirement), authority, duties or
responsibilities as contemplated by this Agreement, or any
other action by CompuTrac which results in a diminution in
such position, authority, duties or responsibilities,
excluding for this purpose inadvertent actions not taken in
bad faith and which are remedied by CompuTrac promptly after
receipt of written notice specifying the actions and the
required remedial action is given by the Executive;
(ii) any failure by CompuTrac to comply with any of the
provisions of this Agreement, other than inadvertent
failures not occurring in bad faith and which are remedied
by CompuTrac promptly after receipt of written notice
specifying the actions and the required remedial action is
given by the Executive;
(iii) CompuTrac's requiring the Executive to be based at any
office or location other than the Dallas Metroplex area,
except for travel reasonably required in the performance of
the Executive's responsibilities;
(iv) any purported termination by CompuTrac of the Executive's
employment otherwise than as expressly permitted by this
Agreement; or
(v) the occurrence of a Change of Control before a Section 18
Termination.
6. Disability:
If during the term of this Agreement, Executive shall fail to
perform his duties hereunder on account of illness or other incapacity
(except death,) and such illness or incapacity is continued for a
period of more than twelve (12) consecutive weeks, CompuTrac shall
have the right, on thirty (30) days' notice to Executive, to reduce
the pay of Executive to 50% of the Base Salary until Executive is able
to resume full duties under this Agreement or until the expiration of
the term of this Agreement, whichever is earlier. At such time as
Executive is able to resume the full duties required of him pursuant
to this Agreement, he shall, subject to the terms of this Agreement,
be reinstated to full Base Salary for the balance of the term of this
Agreement or until he again becomes disabled or incapacitated.
CompuTrac's obligations under this Section 6. Shall be reduced by the
amount of disability payments actually made to the Executive under
Social Security or insurance policies carried by CompuTrac.
7. Death:
In the event of the Executive's death, similar benefits to those
provided by Section 6. (50% Base Salary for the remaining term of this
Agreement) shall be paid to Executive's estate or designated
beneficiary. These benefits will be reduced by any insurance payments
made to the estate or designated beneficiary of Executive from
insurance policies carried by CompuTrac for the benefit of Executive's
estate or designated beneficiary, including, without limitation, the
policy required by Section 3(v).
8. Termination for Cause:
This Agreement is not terminable by CompuTrac except for Cause or
pursuant to a Section 18 Termination. In the event CompuTrac has
Cause to terminate this Agreement CompuTrac may terminate this
Agreement by providing Executive thirty (30) days written notice of
termination.
9. Non-Compete.
(i) Executive covenants and agrees, which covenant and agreement
is the essence of this Agreement, that during the period of
his employment and for a period of eighteen (18) months
after any termination other than for Good Reason or
termination upon the expiration of the term of this
Agreement, he will not at any time, directly or indirectly,
for himself or for or in conjunction with (whether through
being a controlling person or otherwise, or as agent for or
employee of, any person, partnership, association,
corporation or entity, compete with CompuTrac or affiliated
corporations (or any successor to its or their business by
merger, sale or otherwise,) in the design, development,
operation and/or sale of turnkey data and/or word processing
systems, and/or time-shared computer services for legal
firms.
(ii) The provisions of this Section 9 are not intended to
restrict the Executive from the practice of law following
termination of this Agreement, nor from providing consulting
services to the law firms for which the Executive will
receive professional fees.
10. Confidential Information - Certain Remedies:
The parties hereto recognize that the services to be performed by
Executive are special and unique and that Executive has acquired and
will acquire confidential information by virtue of his employment with
CompuTrac. Executive agrees to keep such information confidential.
In the event of any breach, threatened or actual, by Executive of his
covenant under Section 9 or Section 10., whether before or subsequent
to any termination of employment, it is expressly agreed that, as the
only remedy available to CompuTrac, CompuTrac shall be entitled as a
matter of right to a writ of injunction to prevent such breach without
the necessity of posting a bond. If Executive challenges the right of
CompuTrac to obtain an injunction and a Court of competent
jurisdiction determines that as a matter of law the remedy of
injunction is not available, CompuTrac may then seek compensatory
damages for any breach of Section 9. or 10.
11. Waiver:
Failure to insist upon strict compliance with any of the terms,
covenants or conditions hereof, shall not be deemed a waiver of such
term, covenant or condition, nor shall any waiver or relinquishment of
any right or power hereunder at any one or more times or in any one or
more instances, be deemed a waiver or relinquishment of the same or
any other right or power at any other time or in any other instance.
12. Amendment:
This Agreement may not be modified or amended in any manner or to
any extent, except by an instrument in writing duly signed by the
parties hereto.
13. Miscellaneous:
(i) CompuTrac shall not require any change of the normal conduct
of its business that would require the Executive to relocate
his residence outside of the Dallas, Texas area.
(ii) All inventions, tradenames, trademarks, copyrights,
improvements, processes, devices and computer software made,
discovered or developed by Executive during the term of his
employment with CompuTrac which may be directly or
indirectly useful in or which relate to any phase of the
business in which CompuTrac is engaged, is actively planning
to be engaged or in which CompuTrac or its predecessors have
been engaged, shall be the property of CompuTrac. Upon the
request and at the expense of CompuTrac, Executive shall
make application in due form to any domestic or foreign
registry requested by CompuTrac for patents, trademarks,
copyrights or similar protection and will assign to
CompuTrac all his rights, title and interest to said
inventions, improvements, processes, devices, computer
software, patents, trademarks, tradenames and copyr ights,
and sh all
(iii) execute any instruments necessary or which CompuTrac may
deem desirable and will cooperate with CompuTrac in all
respects in connection with any continuations, renewals or
reissues of patents, trademarks, tradenames, copyrights or
similar protection or in the conduct of any proceedings or
litigation in regard thereto. Upon termination of
employment with CompuTrac, Executive agrees to deliver to
CompuTrac all records, documents, data and computer media
records of CompuTrac in his possession or custody.
Notwithstanding the foregoing, upon termination of
employment for any reason, other than Cause, Executive shall
have a perpetual non-exclusive free license to use, improve,
sell or license any of computer software, invention,
process, device or improvement developed by or under the
direction of Executive during his employment with CompuTrac,
so long as Executive's activities in this area are not
directed to law firms or other markets in which CompuTrac is
then involved or is actively planning to be involved or are
competitive with the activities of CompuTrac at the time of
the termination of Employment.
(iv) Executive shall not be required to mitigate damages.
14. Notice:
Any and all notices to be sent hereunder shall be sufficient, if
in writing and deposited in the United States mail by certified or
registered mail, to the respective parties at the addresses shown
below:
CompuTrac: CompuTrac, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxx 00000-0000
Executive: Xxxxx X. Xxxxxxxx
000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxx 00000-0000
or to such other party and/or address as may be hereafter designated
in written notice from one party to the other.
15. Successors:
This Agreement shall be binding upon and inure to the benefit of
CompuTrac, its successors and assigns, upon any merger, consolidation
or sale of substantially all of the assets of CompuTrac. This
Agreement terminates and supersedes all existing agreements between
CompuTrac and Executive, relating to the performance of services by
Executive.
16. Governing Law:
This Agreement shall be deemed to be made in the State of Texas
and shall be construed in accordance with the laws of the State of
Texas.
17. Severability:
The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement. In the event any provision of Sections
9. and 10. Of this Agreement is deemed broader or to involve a longer
period of time than is enforceable under applicable law, then such
provision shall be forthwith amended to be the broadest and longest
provisions permitted by applicable law.
18. Termination by CompuTrac:
In the event that for any fiscal years ending on or after January
31, 1999, the consolidated after tax return rate of return on average
equity for CompuTrac for such fiscal year is less than the lower of
(i) the average yield for a 30 year U.S. Treasury Bond during the same
year plus 3% or (ii) the average yield for a one year U.S. Treasury
Note during the same year, plus 5%, the Board of Directors of
CompuTrac may, by written notice to Executive, reduce the term of this
Agreement to a date which is no earlier than one year from the date of
the receipt of such written notice (Section 18 Termination). The
average yield of government securities shall be determined by taking
the yield of such securities as reported in the Wall Street Journal
(national edition) for the last business day of each month during the
year being measured and obtaining the average of such end of the month
yields. The consolidated after tax rate of return on average equity
for CompuTrac shall be determined by taking the equity for CompuTrac
for the first day and the last day of the year being measured and
obtaining an average of those two numbers (Average Equity) and
dividing the net income after taxes for CompuTrac for the year being
measured by the Average Equity to obtain a rate of return. The equity
and the net income after taxes for CompuTrac, for purposes of this
Section 18, shall be derived from the audited financial statements of
CompuTrac, provided such financial statements are prepared based on
generally accepted accounting principles consistently applied.
19. Arbitration.
If CompuTrac notifies the Executive that Executive's
employment has been terminated under Section 8, the Executive may
demand that CompuTrac submit this matter to binding arbitration in
accordance with the binding Arbitration Rules of the American
Arbitration Association. If the Executive demands arbitration, both
parties shall cooperate to expedite such arbitration proceedings. If
the arbitrator finds that CompuTrac's actions are justified, then the
Executive shall be entitled only to the pay and benefits designated in
the following sentence of Section 19. after termination of employment
until the arbitration is concluded and each side shall bear its own
expenses for the arbitration. CompuTrac shall be required to maintain
and to pay the Executive during the pendency of the arbitration all
salary and benefits otherwise due Executive under this Agreement for
no longer than 180 days after the notice of termination is deemed
delivered to the Executive. If the Executive prevails in the
arbitration, the Executive shall be
entitled to all Executive's costs of arbitration including reasonable
attorney's fees and shall be entitled to any compensation lost pending
the outcome of the arbitration together with interest at ten percent
(10%) compounded monthly.
Dated this 4th day of February, 1998.
EMPLOYER:
CompuTrac, Inc.
_____________________________ ______________________________
Xxxxxx X. Xxxxxx, Director Xxxxxxx X. Xxxxxxxx, Director
EXECUTIVE:
______________________________
Xxxxx X. Xxxxxxxx
INDEMNITY AGREEMENT
This Agreement is made effective as of the 4th day of February,
1998, between CompuTrac, Inc., a Texas corporation (the Corporation),
and Xxxxx X. Xxxxxxxx (Director), with reference to the following
facts:
RECITALS:
WHEREAS, the Director is currently serving as a director of the
Corporation and the Corporation wishes the Director to continue in
such capacity; and
WHEREAS, the Corporation has indicated that it does not regard
the indemnities available under its bylaws and the insurance remaining
in effect as adequate to protect it against the risk associated with
claims of discrimination or sexual harassment that may be filed by
employees of the Corporation against the Corporation as a result of
the alleged conduct of the Director.
As a condition of employment, the Director hereby agrees to
indemnify the Corporation as follows:
1. The Director will hold harmless and indemnify the
Corporation and pay on behalf of the Corporation, any related entities
including parent, subsidiaries or affiliates, and the employees,
officers, trustees, and directors of any of them, any amount which the
Corporation is or becomes legally obligated to pay because any act or
omission which the Director commits solely when acting in his capacity
as a Director of the Corporation in violation of (i) the Age
Discrimination and Employment Act of 1967, as amended, which prohibits
age discrimination in employment; (ii) Title VII of the Civil Rights
Act of 1964, as amended, which prohibits sexual harassment and
discrimination in employment based on race, color, national origin,
religion, or sex; (iii) the Equal Pay Act, which prohibits paying men
and women unequal pay for equal work; (iv) the American with
Disabilities Act of 1990, which prohibits discrimination against
disabled persons; (v) the Family and Medical Leave Act of 1993, which
provides for certain leave rights; (vi) the Vocational Rehabilitation
Act of 1973, which prohibits discrimination against handicapped
persons; or (vii) the policies and procedures of the Corporation
prohibiting acts of sexual harassment and discrimination.
2. The payments which the Director will be obligated to make
hereunder shall include, among other things, settlements and costs,
cost and investigation (excluding salaries of officers or employees of
the Corporation), costs of defense of legal actions, claims or
proceedings and appeals therefrom, and costs of attachment or similar
bonds; provided however, that the Director shall not be obligated to
pay fines or other obligations or fees imposed by law or otherwise
make any payments hereunder which he is prohibited by applicable law
from paying as indemnity or for any other reason.
3. If a claim under this Agreement is not paid by the
Director, or on his behalf, within ninety (90) days after the written
claim has been received by the Director, the Corporation may at any
time thereafter bring an arbitration claim against the Director to
recover the unpaid amount of the claim and if successful, in whole or
in part, the Corporation shall also be entitled to be paid the expense
of prosecuting such claim.
4. In the event of payment under this Agreement, the
Director shall be subrogated to the extent of such payment to all of
the rights of recovery of the Corporation, which shall execute all
papers required and shall do everything that may be necessary to
secure such rights, including the execution of such documents
necessary to enable the Director effectively to bring an arbitration
claim to enforce such rights.
5. The Director shall NOT be liable under this Agreement to
make any payment in connection with any claim made against the
Corporation:
a. For which payment is actually made to or in behalf of the
Corporation under a valid and collectable insurance policy,
except with respect to any excess beyond the amount of
payment under such insurance;
b. If it is determined by a court of competent jurisdiction or
arbitrator that the alleged conduct of the Director did not
constitute a violation of any statute, law, policy, or
procedure enumerated in Paragraph 1 of this Agreement;
c. For which the Corporation fails to provide notice of a claim
timely or to do what is otherwise required by its insurance
policies;
d. For which the Corporation is entitled to indemnity and/or
payment by reason of having given notice of any
circumstances which might give rise to a claim under any
policy of insurance, the terms which have expired prior to
the effective date of this Agreement;
e. For which the Corporation is indemnified by the Director
otherwise than pursuant to this Agreement;
f. Based upon or attributable to the Corporation gaining in
fact any profit or advantage to which it was not legally
entitled; and
g. Brought about or contributed to by the dishonesty or
wrongful conduct of any director, officer, employee, agent
or representative of the Corporation seeking payment
hereunder; however, notwithstanding the foregoing, the
Corporation shall be protected under this Agreement as to
any claims upon which suit may be brought against it by
reason of any alleged dishonesty or wrongful conduct on the
part of any director, officer, employee, agent or
representative of the Corporation, unless a judgment or
other final adjudication thereof adverse to the Corporation
shall establish that the acts of active and deliberate
dishonesty had been committed with actual dishonest purpose
and intent, which acts were material to the cause of action
so adjudicated.
h. For any act or event prior to the effective date of this
agreement.
i. For any act or event for which all of the conditions
precedent required hereunder have not been met prior to the
Directors termination of Employment with the Corporation.
6. No cost, charges, or expenses for which indemnity shall
be sought hereunder shall be incurred without the Director's consent,
which consent shall not be unreasonably withheld.
7. The Corporation, as a condition precedent to its right to
be indemnified under this Agreement, shall give to the Director notice
in writing within five (5) days of receipt of any claim made against
it for which indemnity will or could be sought under this Agreement.
Notice to the Director shall be sent via hand delivery to Xxxxx X.
Xxxxxxxx, 00 Xxxxxxxxxx Xxx, Xxxxxx, Xxxxx 00000. In addition, the
Corporation shall give the Director such information and cooperation
as he may reasonably require and as shall be within the authority of
the Corporation.
8. Costs and expenses (including attorney's fees) incurred
by the Corporation in defending and investigating any action, suit,
proceeding, or investigation shall be paid by the Director in advance
of the final disposition of such matter. The Corporation shall repay
any such advances in the event that it is ultimately determined that
the Corporation is not entitled to indemnification under the terms of
this Agreement within thirty (30) days of determination.
Notwithstanding the foregoing or any other provision of this
Agreement, no advance shall be made by the Director if a determination
is reasonably and properly made by him that, based upon the facts
known to the Director at the time such determination is made, the
Corporation acted in bad faith, and as a result of such actions by the
Corporation, it is more likely than not that it will ultimately be
determined that the Corporation is not entitled to indemnification
under the terms of the Agreement.
9. The Corporation, as a condition precedent to its right to
be indemnified under this Agreement , and as a condition precedent to
asserting any claim against the Director, must first pass a corporate
resolution, agreed to by a majority vote of disinterested non employee
directors of the Corporation. In order to comply with the terms of
this agreement, the resolution must (a) authorize a claim against the
Director, and (b) specify the exact amount of the authorized claim,
and (c) set forth in detail the facts and circumstances upon which the
claim is based and (d) be signed by the directors voting in favor of
same, and (d) be hand delivered to the Director within 5 days after
the passage of same. Any claim against the Director shall be limited;
both terms of amount and scope, to the contents of said resolution.
The right of indemnification shall belong solely to the Corporation.
No entity, shareholder or individual director of the Corporation, may
file an arbitration demand or otherwise make claim against the
Director under this Agreement. It is the specific intent of this
agreement to exclude all third party beneficiaries. It is also the
specific intent of this agreement to prohibit any and all persons or
entities, other than the board of directors acting in behalf of the
Corporation, from asserting or making any claim against the Director
under the terms of this agreement.
10. Any claim or controversy arising out of or relating to
this Agreement that cannot be settled amicably by agreement of the
parties hereto, shall be finally settled by binding arbitration before
the American Arbitration Association in accordance with the Commercial
Rules of Arbitration of the American Arbitration Association, then in
force, by one arbitrator appointed in accordance with those rules;
provided, however, that arbitration proceedings may not be instituted
until the party alleging breach of this Agreement by the other party
has given written notice to the other party and has allowed the other
party not less than sixty (60) days from the date of such notice to
remedy any alleged breach and the other party has failed to do so.
The arbitrators shall be appointed by the American Arbitration
Association. The place of the arbitration shall be Dallas, Texas.
The award rendered shall be final and binding upon both parties.
Judgment upon the award may be entered in any court having
jurisdiction, or application may be made to such court for judicial
acceptance of the award and/or an order of enforcement, as the case
may be. The prevailing party in this arbitration proceeding shall be
entitled to receive its reasonable attorneys' fees and expenses. All
reasonable costs of arbitration shall be borne by the losing party.
11. Nothing herein shall be deemed to diminish or otherwise
restrict the right of the Corporation to indemnification under any
provision of the Certificate of Incorporation or Bylaws of the
Corporation or under Texas law.
12. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, excluding its choice
of law provisions.
13. This Agreement may be signed and executed in multiple
counterparts, each one of which shall be deemed to be an original, and
the parties may sign a facsimile of this Agreement, which shall be
deemed to be an original.
14. This Agreement supersedes any and all prior agreements
between the parties pertaining to the subject matter hereof.
15. The Director and the Corporation have engaged and
acknowledged that they have had the opportunity to consult with
counsel concerning this Agreement, that they have read and fully
understand the terms of this Agreement or have had it analyzed by
their respective counsel with sufficient time and that they are fully
aware of its contents and of its legal effect. The Director and the
Corporation agree that this Agreement shall not be construed against
the other party on the grounds that such party drafted this Agreement.
The Director and the Corporation enter into this Agreement freely and
voluntarily and with a full understanding of its terms.
16. If any of the provisions, terms, clauses, or waivers or
releases of claims or rights contained in this Agreement are declared
illegal, unenforceable, or ineffective in a legal or other forum or
proceeding, which the Director and the Corporation agree shall be
construed and interpreted under the laws of the State of Texas, such
provisions, terms, clauses, and waivers and releases of claims and
rights contained in this Agreement shall remain valid and binding upon
both parties and the parties agree that there shall be added to this
Agreement such provisions, terms, clauses, waivers, as are legal,
enforceable, and effective, and which most clearly effectuate the
intent and effect of those provisions declared ineffective in whole or
part.
17. This Agreement may not be changed, modified, and/or
altered except by writing signed by the Director and the Corporation.
18. The Director acknowledges that he has been advised to
consult with counsel.
19. This Agreement shall be binding upon all successors and
assigns of the Corporation (including any transferring of all or
substantially all of its assets by any successor by merger or
operation of law) and shall inure to the benefit of the heirs,
personal representative, and estate of the Director.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement
to be duly executed and signed as of the day and year first above
written.
THIS AGREEMENT CONTAINS A MANDATORY ARBITRATION PROVISION CONTAINED IN
PARAGRAPH 10.
THE DIRECTOR ACKNOWLEDGES THAT HE HAS READ THIS AGREEMENT, UNDERSTANDS
IT AND HAS VOLUNTARILY ENTERED INTO IT.
COMPUTRAC, INC. DIRECTOR
By: _____________________ _______________________
Xxxxxx X. XxXxxx Xxxxx X. Xxxxxxxx
Title: President
