EXHIBIT 10.34
EMPLOYMENT AGREEMENT
This Agreement is made as of the last date indicated below by and
between PHILIP D. FREEMAN whose residence is located at 3403
Hunters Stand, San Antonio, Texas 78230 (hereafter "Executive") and
INTELOGIC TRACE, INC. located at 8415 Datapoint Drive, San Antonio,
Texas 78229 (hereafter "I T").
1. The Employment Clause
I T hereby agrees to and does hereby employ the Executive, and the
Executive hereby agrees to and does hereby continue in the employ of I
T, for the period set forth in paragraph 2 below (the Period of
Employment), in the position and with the duties and responsibilities
set forth in paragraph 3 below, and upon the other terms and conditions
set forth in this Agreement.
2. Period of Employment
The Period of Employment shall commence on the date of this Agreement
and, subject only to the provisions of Paragraphs 9 and 10 below,
relating, respectively, to death and disability, shall continue until
the close of business two (2) years from the date last written below or
such later date as shall result from a written agreement executed by
both parties to this Agreement. In the event that the Executive shall
continue in the full-time employment of I T after such two (2) year
period or such later date without a written extension of this
Agreement, such continued employment shall be for successive annual
periods and shall be subject to the terms and conditions of this
Agreement and the period of Employment shall include the period during
which the Executive in fact so continues in such employment.
3. The Position
a. It is contemplated that during the Period of Employment
the Executive shall continue to serve as Senior Vice
President, General Counsel and Secretary.
b. At all times during the Period of Employment, the
Executive shall hold a position of responsibility and
importance, with the functions, duties and the
responsibilities of an officer of I T. It is expressly
understood that nothing in the foregoing shall preclude
the President and Chief Executive Officer from making
such organizational and reporting changes as the
President and Chief Executive Officer may, in good faith,
deem desirable and for the good of I T.
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4. The Performance Clause
Throughout the Period of Employment, the Executive agrees to devote
Executive's full time and undivided attention during normal business
hours to the business and affairs of I T and, in particular, to
performance of all the duties and responsibilities as Vice President,
General Counsel and Secretary of I T and its subsidiaries and
divisions, except for reasonable vacations and except for illness or
incapacity; but nothing in this Agreement shall preclude the Executive
from devoting reasonable periods required for
a) serving as a director, trustee or member of a
committee of any organization involving no conflict
of interest with the interests of I T;
b) delivering lectures, fulfilling speaking
engagements, teaching at educational institutions
or business organizations;
c) engaging in charitable and community activities;
and
d) managing Executive's personal investments,
provided that such activities do not, individually or together,
interfere with the regular performance of duties and responsibilities
under this Agreement.
5. The Compensation Clause
a. For all services to be rendered by the Executive in any
capacity during the Period of Employment, including, without
limitation, services as an executive, officer, director or
member of any committee of I T and its subsidiaries, divisions
and affiliates, the Executive shall be paid as compensation:
i) a base or fixed salary, payable not less often than
at the end of each bi-weekly period, at the rate of
$5,446.40 per bi-weekly period; and
ii) An annual incentive award or bonus earned under I T's
Management Incentive Compensation Plan or such
equivalent successor plan as may be adopted by
I T.
iii) for the 1995 fiscal year, the Management Incentive
Compensation Plan shall provide that Executive
shall be entitled to a bonus of .75% of I T's net
operating income from operations up to $5 million
and 1% of all net operating income above $5
million, subject to a maximum annual payment of
$75,000, which will be paid quarterly based upon
year-to-date performance within twenty (20) days of
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the publication of I T's 1995 quarterly results
provided that Executive is actively employed on such
date.
b. Any increase in salary pursuant to (a) above or in annual
incentive awards or other compensation shall in no way
diminish any other obligations of I T under this Agreement.
c. The compensation provided for in paragraph (a) above, together
with the perquisites and benefits set forth in paragraphs 6
and 7 below, are in addition to the benefits provided for in
paragraph 8 of this Agreement.
d. I T shall promptly establish a new qualified employee stock
option plan substantially similar to the 1985 Employee Stock
Option Plan of I T. Executive shall be provided with a grant
of stock options under the new stock option plan. The quantity
and vesting schedule shall be mutually agreed upon with the
quantity to be commensurate with the office of the Executive.
6. Provisions for Perquisites
During the Period of Employment the Executive shall be entitled to
perquisites, including, without limitation, an appropriate office,
secretarial and clerical staff, and fringe benefits accorded executives
of equal rank including, without limitation, the Executive Benefit
Plan, including tax preparation assistance, $650 per month automobile
allowance, and payment or reimbursement of club initiation fees, dues
and charges, in each case at least equal to those attached to
Executive's office on the date of this Agreement, as well as to
reimbursement, upon proper accounting, of reasonable expenses and
disbursements incurred by Executive in the course of Executive's
duties.
7. Participation in Management Incentive Compensation Plan
During the Period of Employment, the Executive shall be and continue to
be a full participant in the Incentive Stock Option Plan of I T and in
any and all other executive incentive and compensation plans in which
executives of I T participate, both those that are in effect on the
date of this Agreement and any equivalent successor plans that may be
adopted by I T. Nothing in this Agreement shall preclude improvement of
reward opportunities in such plans or other plans in accordance with
the practice of I T.
8. Employment Benefit Plans
a. The Executive, Executive's dependents and beneficiaries,
including, without limitation, any beneficiary of a joint
and survivor or other optional method of payment
applicable to the payment of benefits under the 401(k)
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Plan of I T, as defined in paragraph (c) below, shall be
entitled to all payments and benefits and service credit for
benefits during the Period of Employment to which officers of
I T, their dependents and beneficiaries are entitled as the
result of the employment under the terms of employee benefit
plans and practices of I T, including, without limitation, the
401(k) Plan of I T, as defined in paragraph (c) below, its
death benefit plans (consisting of its Executive Benefit Plan
for Management Employees providing term life insurance,
accidental death and dismemberment insurance, and travel
accident insurance), its disability benefit plans providing
salary continuation, sickness and accident and long-term
disability benefits, its standard medical, dental and health
(subject to a maximum of $10,000 per year under the Executive
Medical Plan), and welfare plans and other present or
equivalent successor plans and practices of I T, its
subsidiaries and divisions, for which officers, their
dependents, and beneficiaries, are eligible and to all
payments or other benefits under any such plan or practice
subsequent to the Period of Employment as a result of
participation in such plan or practice during the Period of
Employment.
b. Nothing in this Agreement shall preclude I T from
amending or terminating any employee benefit plan or
practice, but it being the intent of the parties that the
Executive shall continue to be entitled during the Period
of Employment to perquisites as set forth in paragraph 6
above at least equal to those attached to Executive's
position on the date of this Agreement, nothing in this
Agreement shall operate or be construed to reduce, or
authorize a reduction, without the Executive's written
consent, in the level of such perquisites and benefits
taken as a whole. If and to the extent that such
perquisites, benefits, and service credits are not
payable or provided under any such plans or practices by
reason of such amendment or termination thereof, I T
itself shall pay or provide therefor.
9. Effect of Death
In the event of the death of the Executive during the Period of
Employment, the legal representative of the Executive shall be entitled
to the base or fixed salary provided for in paragraph 5(a)(i) above for
the month in which death shall have occurred, at the rate being paid at
the time of death, and the Period of Employment shall be deemed to have
ended as of the close of business on the last day of the month in which
death shall have occurred but without prejudice to any payments
otherwise due in respect of the Executive's death.
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10. Effect of Disability
a. In the event of the Disability of the Executive during
the Period of Employment, the Executive shall be entitled
to an amount equal to the base or fixed salary provided
for in paragraph 5(a)(i) above, at the rate being paid at
the time of the commencement of Disability, for the
period of such Disability but not in excess of twelve
(12) months from the end of the period that establishes
such Disability, as described in paragraph 10(c) below.
b. The amount of any payments due under paragraph 10(a) shall be
reduced by any payments to which the Executive may be entitled
for the same period because of disability under any disability
or pension plan of I T or of any division, subsidiary, or
affiliate thereof, or as the result of workers' compensation
or non-occupational disability payments.
c. The term "Disability", as used in this Agreement, shall
mean an illness or accident occurring during the Period
of Employment which prevents the Executive from
performing Executive's duties under this Agreement for a
period of six (6) consecutive months. The Period of
Employment shall be deemed to have ended as of the close
of business on the last day of such six (6) month period
but without prejudice to any payments due the Executive
in respect of disability under paragraph 10(a) or
otherwise due to Executive or Executive's legal
representative or beneficiary.
11. Provision of Severance Allowance
a. In the event of termination of the employment of the
Executive by I T during the Period of Employment for any
reason other than for Cause, as defined in paragraph
11(c) below, I T shall pay the Executive a severance
allowance commencing on the last day of each month
following termination of Executive's employment and
continuing on the last day of each month thereafter for
a period of twelve (12) consecutive months. Such
severance allowance shall be an amount equal to the fixed
or base salary of the Executive at the time of the
termination of Executive's employment plus a pro rata
amount based upon Executive's last preceding Management
Incentive Compensation award. The Board of Directors,
upon the recommendation of the Compensation Committee,
may extend the period of severance. In addition to the
foregoing, Executive shall be entitled to a lump-sum
payment of $10,000 upon the termination of Executive's
employment.
b. During the period that the payments provided for in
paragraph 11(a) are required to be made, the Executive,
Executive's dependents, and beneficiaries shall continue
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to be entitled to benefits and perquisites (excepting any
incentive compensation or future grants of stock options or
service credit for benefits under the pension program of I T)
to the same extent as if the Executive were still employed
during such period. If and to the extent that such benefits
shall not be payable under any such plan by reason of the
Executive's no longer being an employee of I T, I T shall
itself pay or provide for payment of such benefits to the
Executive, Executive's dependents and beneficiaries.
c. For the purpose of paragraph 11(a) above and any other
provision of this Agreement, termination of the
Executive's employment shall be deemed to have been for
Cause only
i) if termination of Executive's employment shall have
been the result of an act or acts of fraud, theft or
embezzlement on the part of the Executive which, if
convicted, would constitute a felony and which
results or which is intended to result directly or
indirectly in gain or personal enrichment of
Executive at the expense of I T, or
ii) if the Executive shall breach the provisions set
forth in the Memorandum of Employment between
Executive and I T, or
iii) if termination of Executive's employment results
from Executive's unreasonable neglect or refusal of
Executive to perform the duties appropriate to
Executive's position and Executive has been given
written notice by the Board of Directors of I T or
an authorized committee thereof with respect to
such neglect or refusal and Executive continues to
unreasonably refuse or neglect the performance of
the duties specified, or
iv) if there has been a breach by the Executive during
the Period of Employment of the provisions of
paragraph 4 above, relating to the time to be
devoted to the affairs of I T, and with respect to
any alleged breach of paragraph 4 hereof, the
Executive shall have substantially failed to remedy
such alleged breach within thirty (30) days from
Executive's receipt of written notice from the
Secretary of I T pursuant to resolution duly
adopted by the Board of Directors of I T or an
authorized committee thereof after notice to the
Executive and an opportunity to be heard demanding
that Executive remedy such alleged breach, or shall
have failed to take all reasonable steps to that
end during such thirty-day period and thereafter.
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d. During the period that Executive accepts the severance
allowance provided herein, Executive agrees not to directly
recruit or solicit any employee of I T or actively participate
in the solicitation of any employee of I T.
e. In order to obtain the severance allowance provided for in
this Article, Executive shall submit a Request for Severance
identical to Exhibit A hereof. I T shall have no obligation to
pay any severance allowance unless and until Executive shall
have submitted the Request for Severance.
f. The acceptance of the aforementioned payments by Executive
shall constitute the exclusive remedy of Executive with
respect to any claim Executive may have against I T for
termination of the employment of Executive or I T's breach of
this Agreement.
12. No Trust Created
Nothing contained in this Agreement and no action taken pursuant to the
provisions of this Agreement shall create or be construed to create a
trust fund of any kind. Any funds which may be set aside or provided
for in this Agreement shall continue for all purposes to be a part of
the general funds of I T and no person other than I T shall by virtue
of the provisions of this Agreement have any interest in such funds. To
the extent that any person acquires a right to receive payments from I
T under this Agreement, such right shall be no greater than the right
of any unsecured general creditor of I T.
13. Successor In Interest
This Agreement and the rights and obligations hereunder shall be
binding upon and inure to the benefit of the parties hereto and their
respective legal representatives, and shall also bind and inure to the
benefit of any successor of I T by merger or consolidation or any
purchaser or assignee of all or substantially all of its assets, but,
except to any such successor, purchaser or assignee of I T, neither
this Agreement nor any rights or benefits hereunder may be assigned by
either party hereto.
14. Invalid Provision
In the event that any provision or portion of this Agreement shall be
determined to be invalid or unenforceable for any reason, the remaining
provisions of this Agreement shall remain in full force and effect to
the fullest extent permitted by law.
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15. Arbitration of Disputes
The parties agree that any controversy or claim arising out of or
relating to this Agreement, or any dispute arising out of the
interpretation or application of this Agreement, which the parties
hereto are unable to resolve, shall be finally resolved and settled
exclusively by arbitration in San Antonio, Texas by a single arbitrator
under the American Arbitration Association's Commercial Arbitration
Rules then obtaining and in accordance with the substantive laws of the
State of Texas. If the parties cannot agree upon an arbitrator out of
the panel for the sole purpose of selecting an arbitrator, then each
party shall choose its own independent representative and those
independent representatives shall in turn choose the single arbitrator
within thirty (30) days of the date of the selection of the first
independent representative. The parties severally recognize and consent
to the jurisdiction over each of them by the Courts of the State of
Texas. The legal expenses of Executive shall be reimbursed to Executive
if an award is rendered in favor of Executive or if the arbitrator
finds that Executive exercised good faith in demanding arbitration of
any such dispute.
16. Governing Laws
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Texas applicable to agreements
made and to be performed entirely in Texas.
17. Entire Agreement
This Agreement shall constitute the entire agreement between the
parties superseding all prior agreements, and may not be modified or
amended and no waiver shall be effective unless by written document
signed by both parties hereto; provided, however,that any increase in
base salary, as provided in paragraph 5 hereof shall become an
amendment to this Agreement when approved by the Compensation Committee
of the Board of Directors of I T and recorded in the approved minutes
of such meeting. This Agreement shall become effective as of the date
of Confirmation of the reorganization plan of I T and at such time
shall supersede the Agreement of January 27, 1986, as amended on July
31, 1992 and June 1, 1994.
Executed as of the 1st day of December, 1994.
INTELOGIC TRACE, INC.
PHILIP D. FREEMAN By: MARK S. HELWEGE
Philip D. Freeman
"Executive"
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