EMPLOYMENT CONTRACT
EMPLOYMENT CONTRACT, dated as of June 7, 1994, between
TEMTEX INDUSTRIES, INC., a Delaware corporation with offices at
3010 LBJ Freeway, Suite 650, L.B.-55, Dallas, Texas 75234 (the
"Company"), and ROGER N. STIVERS, residing at 12520 Matisse
Lane, Dallas, Texas 75230 (the "Executive").
RECITALS:
A. The Company desires to continue to employ Executive as
an executive officer of the Company.
B. Executive has agreed to continue his employment with
the Company pursuant to the terms and conditions of this
Agreement.
NOW, THEREFORE, in consideration of the foregoing premises
and other good and valuable consideration, the sufficiency of
which is hereby acknowledged, the Company and Executive hereby
agree as follows:
1. TERM AND RENEWAL.
The Company agrees to employ Executive, and the Executive
agrees to serve, on the
terms and conditions of this Agreement for a period commencing
on June 7, 1994 and ending three (3) years from the starting
date, or such shorter period as may be provided for herein. On
each anniversary of this Agreement, the term shall be extended
for an additional period of one (1) year unless the Board of
Directors elects, at the directors' meeting immediately
following the annual stockholders' meeting, not to extend this
Agreement. In the event that this Agreement is not extended by
the Board of Directors, this Agreement shall remain in effect
for only the remainder of the term then in effect.
Notwithstanding the foregoing, this Agreement shall not be
extended beyond the time that Executive has attained the normal
retirement age (which shall be no earlier than age 65)
established by the Board of Directors for the Company's
executives. The period during which Executive is employed
hereunder is hereafter referred to as the "Employment Period."
2. DUTIES AND SERVICES.
During the Employment Period, Executive shall be employed
as the Vice-President and
Chief Financial Officer of the Company and shall also perform
services in a responsible executive or managerial capacity for
any of the Company's subsidiary corporations when and as
requested by the Company. In performance of his duties,
Executive shall be subject to the direction of the Chief
Executive Officer and the Board of Directors of the Company.
Executive agrees to his employment as described in this Section
2 and agrees to devote all of his business time and efforts to
the performance of his duties under this Agreement. Executive
shall be available to travel as the needs of the business
require.
3. COMPENSATI0N.
As compensation for his services hereunder, the Company
shall pay Executive, during
the Employment Period, a base salary payable in equal monthly
installments at the annual rate of $105,00. Executive shall
also participate in any bonus programs for the Company's
executive officers, as provided by the Board of Directors.
During the term of this Agreement, the Company may increase the
base salary payable to the Executive, but cannot reduce the
base amount of Executive's salary. Executive will also be
eligible to participate in the regular employee benefit
programs now or hereafter established by the Company and in any
special executive benefits and perquisites established by the
Company's Board of Directors.
4. EXPENSES.
Executive shall be entitled to reimbursement for travel
and other out-of-pocket expenses
incurred by Executive in the performance of his duties
hereunder, upon submission and approval of written statements
and bills in accordance with the then regular procedures of the
Company. Executive shall be entitled to reasonable vacations
in accordance with the then regular procedures of the Company
governing executives.
5. NONCOMPETITION.
Executive agrees that (a) he will not during the Employment
Period engage in, or
otherwise directly or indirectly be employed by, or act as a
consultant or lender to, or be a director, officer, employee,
owner or partner of, any other business or organization that
directly or indirectly competes with the business of the
Company or any of its subsidiaries and (b) for a period of two
(2) years after he voluntarily terminates this Agreement,
Executive shall not directly or indirectly compete with or be
engaged in the same business as the Company or any of its
subsidiaries or be employed by, or act as consultant or lender
to, or be a director, officer, employee, owner, or partner of,
any business or organization which, at the time of such
cessation, directly or indirectly competes with or is engaged
in the same business as the Company or any of its subsidiaries;
provided, however, that notwithstanding the foregoing, the
provisions of this Section 5 will not be deemed breached merely
because Executive (i) owns not more than 1 percent of the
outstanding equity securities of an entity, if, at the time of
its acquisition by Executive, such securities are listed on a
national securities exchange, is reported on NASDAQ, or is
regularly traded in the over-the-counter market by a member of
a national securities exchange or (ii) Executive becomes
employed by a company or other entity which manufacturers,
sells or distributes products which compete with products of
the Company if such company or other entity has total revenues
of more than $100,000,000 and the products produced by such
company or other entity which compete with the products of the
Company constitute less than 15% of the total revenues of such
company or other entity and Executive's duties and
responsibilities are completely segregated from the competitive
products, or (iii) Executive becomes employed by a company or
other entity which manufactures, sells or distributes products
which compete with the products manufactured, sold or
distributed by the Company provided that such products
contribute less than 15% of the total revenues of the Company.
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6. CONFIDENTIAL INFORMATION.
All confidential information which Executive may now
possess, may obtain from the
Company or its subsidiaries during or after the Employment
Period, or may create prior to the end of the Employment Period
or otherwise relating to the financial condition, results of
operations, business, properties, assets, liabilities, or future
prospects of the Company or of any customer or supplier of any
of them shall not be published, disclosed, or made accessible by
him to any other person or entity either during or after the
termination of his employment or used by him except during the
Employment Period in the business and for the benefit of the
Company and its subsidiaries, in each case without prior written
permission of the Company. Executive shall deliver to the
Company all tangible evidence of such confidential information
prior to or at the termination of his employment. The
provisions of this Section 6 shall survive the termination of
this Agreement by either party.
7. TERMINATI0N.
(a) Executive's Death. If Executive shall die during
the Employment Period, this Agreement shall terminate, except
that Executive's estate shall be entitled to receive the base
salary payable to Executive, accrued to the last day of the
month in which his death occurs, together with any death
benefits provided under employee benefit plans maintained by the
Company.
(b) Executive's Disability. If, during the Employment
Period, Executive shall become physically or mentally disabled,
whether totally or partially, so that he is prevented from
performing his usual duties and services hereunder for a period
of six (6) consecutive or nonconsecutive months during any
twelve (12) month period, this Agreement shall terminate
effective on such incapacity, and Executive (or his legal
representatives) shall be entitled only to the base compensation
earned pro rata to the date of termination with no entitlement
to any base salary after the date of termination; provided,
however, that Executive shall be entitled to receive all
benefits to which he may be entitled pursuant to the Company's
employee benefit plans.
(c) Termination by the Company Without Cause. This
Agreement may be terminated by the Company without cause upon
thirty (30) days' prior written notice thereof given to
Executive. In the event of termination without cause, the
company shall for a period of one (1) year continue to pay
Executive the base salary effective at the time of termination
in accordance with the Company's regular payroll cycle.
Additionally, Executive shall be entitled to continue to
participate in all regular employee benefit plans of the Company
for a period of one (1) year following termination without
cause.
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(d) Termination by the Company for Cause. This Agreement
may be terminated by the Company "for cause", as defined below,
by delivering to Executive written notice describing the cause
and granting Executive thirty (30) days to respond to the Board
of Directors. If this Agreement is terminated by the Company
for cause, Executive shall only be entitled to the base salary
earned by him to the date of termination with no entitlement to
any base salary continuation payments or benefits continuation
(except as otherwise provided by the terms of an employee
benefit plan of the Company). The determination as to whether
termination shall be for cause shall be made by the Board of
Directors of the Company in the exercise of its business
judgment. Termination of this Agreement by the Company for
cause shall be deemed to have occurred only if:
(i) termination shall have been the result of an
act or acts of dishonesty on the Executive's part
constituting a felony or intended to result
directly or indirectly in substantial gain or
personal enrichment to him at the expense of the
Company; or
(ii) termination shall have been the result of
the Executive's wilful and continued failure
substantially to perform his duties and
responsibilities as an officer of the Company
(other than such failure resulting from his
incapacity due to physical or mental illness)
after a demand for substantial performance is
delivered to the Executive by the Board of
Directors of the Company which specifically
identifies the manner in which such Board
believes that the Executive has not substantially
performed his duties and the Executive is given a
reasonable time after such demand substantially
to perform his duties.
Executive's employment shall in no event be considered
to have been terminated by the Company for cause if the act or
failure to act upon which the termination is based (A) was done
or omitted to be done without intent of gaining therefrom
directly or indirectly a profit to which the Executive was not
legally entitled and as a result of his good faith belief that
such act or failure to act was in or was not opposed to the
interests of the Company, or (B) is an act or failure to act in
respect of which the Executive meets the applicable standard of
conduct prescribed for indemnification or reimbursement of
expenses under the Bylaws of the Company or the laws of its
state of incorporation.
(e) Voluntary Termination by Executive. Executive may
terminate this Agreement at any time upon delivering thirty (30)
days' written notice to the Company. In the event of such
voluntary termination other than for "good reason", as
hereinafter defined, Executive shall be entitled to his base
salary earned to the date of his resignation, but no base salary
continuation payment or benefits continuation (except as
provided by the terms of the Company's employee benefit plans).
On or after the date the Company receives notice of Executive's
resignation (other than resignation for good reason), the
Company may, at its option, pay Executive his base salary
through the effective date of his resignation and terminate his
employment immediately.
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Termination by Executive For Good Reason. Executive
may at any time voluntarily terminate his employment for "good
reason", as defined below, upon thirty (30) days written notice
thereof to the Company. In the event of such voluntary
termination for "good reason", Executive shall be deemed to have
been terminated without cause with the same payments and
benefits set forth in Section 7(c) being applicable to
Executive's termination under this Section 7(f).
For purposes of this Agreement, "good reason" shall
mean the occurrence of any of the following events:
(i) removal from the offices Executive holds on the
date of this Agreement or a material reduction in
Executive's authority or responsibility, but not
including termination of Executive "for cause";
(ii) reduction in the base salary payable to
Executive; or
(iii) the Company otherwise commits a material
breach of this Agreement.
8. CHANGE OF CONTROL.
(a) Concerns Regarding Change of Control. Executive and
the Company agree that the circumstances surrounding a "Change
of Control," as hereinafter defined, impose unique risks to the
Company and the Executive and that in response to the unique
circumstances surrounding a Change of Control, the provisions of
this Agreement shall separately consider the parties rights' and
obligations in the event that a Change of Control occurs. This
Section 8 shall be applicable whether or not a Change of Control
is contemplated at this time. Notwithstanding any other
provision of this Agreement, the severance payments and
benefits, if any, payable to Executive shall be determined
solely by reference to this Section 8 in the event that a Change
of Control has occurred, or if Executive is "involuntarily
terminated," as hereinafter defined, in contemplation of a
Change of Control.
(b) Voluntary Termination Following a Change of Control.
If a Change of Control has occurred, Executive shall have ninety
(90) days in which to terminate his employment. If Executive
voluntarily terminates his employment within ninety (90) days
following a Change of Control he shall be entitled to receive
one (1) year's base salary as a lump sum payment. Upon payment
of the severance compensation described in the preceding
sentence, the Company will have no future obligation to
Executive under this Agreement. Except as otherwise provided in
Section 8(c), if Executive does not voluntarily terminate his
employment within ninety (90) days of a Change of Control,
Executive shall not be entitled to any severance compensation if
he voluntarily terminates his employment after that time.
(c) Involuntary Termination in Contemplation of, or Within
Three Years Following, a Change of Control. If Executive is
involuntarily terminated, other than for cause, as defined in
Section 7(d), in contemplation of, or within three (3) years
following, a Change of Control, the Company shall pay Executive
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(i) a lump sum severance payment equal to two and one-half
(2-1/2) times Executive's base salary in effect at the time of
involuntary termination, payable as a lump sum, and (ii)
continuation of all employee benefits, executive benefits and
perquisites, or benefits reasonably equivalent thereto, for a
period of two and one-half (2-1/2) years. Notwithstanding the
foregoing, in no event shall Executive's severance compensation
exceed 2.99 times his five-year average annual compensation as
set forth in Section 280(G) of the Internal Revenue Code of
1986, as, amended, or any successor to such section.
For purposes of this Agreement, the following shall be
deemed to constitute involuntary termination:
(i) dismissal of Executive (except termination for
cause as defined in Section 7(d) hereof);
(ii) reduction in Executive's base salary;
(iii) reduction in the level of employee benefits
received by Executive, unless substituted with
reasonably comparable benefits;
(iv) requesting Executive to relocate more than 100
miles from his current location other than the
relocation of Executive in connection with the
relocation of the Company's corporate
headquarters or relocation to another existing
facility of the Company;
(v) removal from the offices Executive holds on the
date of this Agreement or a material reduction in
Executive's authority or responsibility; or
(vi) the Company otherwise commits a material
breach of this Agreement.
In the event that within dim (3) years following a
Change of Control, Executive is terminated for cause, Executive
shall only be entitled to his base &salary up until the last
date
of employment pursuant to the date of termination for cause.
(d) Termination of this Agreement More Than Three
Years After a Change of Control. The parties, rights and
obligations arising from a termination of this Agreement,
whether by Executive or the Company, that occurs more than three
(3) years following a Change of Control shall be governed by
Section 7 of this Agreement.
(e) Definition of Change of Control. For purposes of this
Agreement, a Change of Control shall be deemed to exist upon the
occurrence of any of the following:
(i) any "Person" (as such term is used in Section
13(d) and Section 14(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange
Act"), other dm James E. Upfield, Romona Upfield
or the executor(s) of the estates of James E.
Upfield or Romona Upfield, respectively, is or
becomes a 'beneficial owner" (as defined in
Section 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company
representing more than twenty-five percent (25%)
of the combined voting power of the Company's
outstanding securities;
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(ii) at any time during the twenty-four (24)
month period following a merger, tender offer,
consolidation, sale of assets or contested
election, or any combination of such
transactions, at least a majority of the
Company's Board of Directors shall cease to be
"continuing directors" (meaning directors of the
Company prior to such transaction or who
subsequently became directors and whose election
or nomination for election by the Company's
stockholders, was approved by a vote of at least
two-thirds of the directors then still in office
prior to such transaction);
(iii) the Company's stockholders approve a plan of
complete liquidation of the Company or an
agreement of sale or disposition by the Company
of all or substantially all of the Company's
assets
(f) No Mitigation of Compensation. Executive shall not be
required to mitigate any severance payments received under this
Section 8 due to his employment with a successor organization.
(g) Executive's Legal Fees. The Company shall pay any
attorneys' fees incurred by Executive in reasonably seeking to
enforce the terms of this Section 8.
9. SURVIVAL.
The covenants, agreements, representations, and warranties
contained in or made
pursuant to this Agreement shall survive Executive's termination
of employment.
10. MODIFICATION.
This Agreement sets forth the entire understanding of the
parties with respect to the subject matter hereof, supersedes
all existing agreements between them concerning such subject
matter, and may be modified only by a written instrument duly
executed by each party.
11. N0TICES.
Any notice or other communication required or permitted to
be given hereunder shall be in writing and shall be mailed by
certified mail, return receipt requested, or by Federal Express,
Express Mail, or similar overnight delivery or courier service
or delivered (in person or by telecopy, telex, or similar
telecommunications equipment) against receipt to the party to
whom it is to be given at the address of such party set forth in
the preamble to this Agreement (or to such other address as the
party shall have furnished in writing in accordance with the
provisions of this Section 11). Any notice given to the Company
shall be addressed to the attention of the Corporate Secretary.
Notice to the estate of Executive shall be sufficient if
addressed to Executive as provided in this Section 11. Any
notice or other communication given by certified mail shall be
deemed given at the time of certification thereof, except for a
notice changing a party's address which shall be deemed given at
the time of receipt thereof. Any notice given by other means
permitted by this Section 11 shall be deemed given at the time
of receipt thereof
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12. WAIVER
Any waiver by either party of a breach of any provision of
this Agreement shall not operate as or be construed to be a
waiver of any other breach of that provision or of any breach of
any other provision of this Agreement. The failure of a party
to insist upon strict adherence to any term of this Agreement on
one or more occasions shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement. Any
waiver must be in writing.
13. BINDING EFFECT.
Executive's rights and obligations under this Agreement
shall not be transferable by assignment or otherwise, such
rights shall not be subject to commutation, encumbrance, or the
claims of Executive's creditors, and any attempt to do any of
the foregoing shall be void. The provisions of this Agreement
shall be binding upon and inure to the benefit of Executive and
his heirs and personal representatives, shall be binding upon
and inure to the benefit of the Company and its successors and
assigns.
14. HEADINGS.
The headings of this Agreement are solely for the
convenience of reference and shall be given no effect in the
construction or interpretation of this Agreement.
15. COUNTERPARTS; GOVERNING LAW.
This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
It shall be governed by and construed in accordance with the
laws of the State of Texas, without giving effect to the
conflict of laws rules. Any action, suit, or proceeding arising
out of, based on, or in connection with this Agreement, any
document or instrument delivered pursuant to, in connection
with, or simultaneously with this Agreement, any breach of this
Agreement or any such document or instrument, or any transaction
contemplated hereby or thereby may be brought only in the
District Courts of Dallas County, Texas or the United States
District Court for the Northern District of Texas, Dallas
Division and each party covenants and agrees not to assert, by
way of motion, as a defense, or otherwise, in any such action,
suit, proceeding, any claim that such party is not subject
personally to the jurisdiction of such court, that such party's
property is exempt or immune from attachment or execution, that
the action, suit or proceeding is brought in an inconvenient
forum, that the venue of the action, suit, or proceeding is
improper, or that this Agreement or the subject matter hereof
may not be enforced in or by such court.
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IN WITNESS THEREOF, the parties have duly executed this
Agreement as of the date first above written.
COMPANY:
TEMTEX INDUSTRIES, INC.
By:_____________________
Name:___________________
Title:__________________
EXECUTIVE:
_________________________
ROGER N, STIVERS