THIS AGREEMENT IS SUBJECT TO ARBITRATION
UNDER THE TEXAS GENERAL ARBITRATION ACT
AGREEMENT made this 30th day of December, 1994, between Execu-Staff
International Limited, a New Mexico corporation, hereinafter referred to as
the Corporation, and Harry K. Myers and John N. Stogner, hereinafter referred
to as the Management Team and American Teletronics, Inc., the acquiring
In consideration of the mutual promises herein contained, the parties
hereto agree as follows:
It is the desire of American Teletronics, Inc., as a condition of the
acquisition of the assets of Execu-Staff International Limited, for Execu-
taff International Limited to have in place a management contract with an
experienced management team including at least one senior corporate officer
with public company experience.
Accordingly, it is the desire of the Corporation to engage the services
of the Management Team, as the Chairman of the Board and the President of the
Corporation, to be responsible for managing all business activities for the
Corporation (including but not limited to financing, accounting, marketing,
sales, operations, planning, budgeting, personnel and purchasing) at all the
Accordingly, it is the desire of the Management Team to manage the
Corporation and to be officers and directors of the Corporation.
1. The respective duties and obligations of the parties hereto shall be for
a period of five years commencing on December 1, 1994, and renewing annually
at the anniversary date of this agreement for additional one year periods
unless written notice to the contrary is delivered by one of the parties to
the others not later than thirty (30) days prior to the anniversary date of
December 1 of each year.
2. The Management Team shall make themselves available to the Corporation a
minimum of fifty (50%) percent of the time or not less than 1,000 hours per
annum for each Management Team member.
Authority of the Management Team
3. The Management Team shall have the full authority normally and
customarily granted to the Chairman of the Board and the President of a
company, which is listed on any public stock exchange and shall be subject to
the By-Laws of ATI and the direction of the Board of Directors.
4. With regard to the services to be performed by the Management Team
pursuant to the terms of this agreement, the Management Team shall not be
liable to the Corporation, or to anyone who may claim any right due to his
relationship with the Corporation, for any acts or omissions in the
performance of said services on the part of the Management Team, except when
said acts or omissions of the Management Team are due to their willful
misconduct or culpable negligence. The Corporation shall hold the Management
Team free and harmless from any obligations, costs, claims, judgments,
attorneys' fees, and attachments arising from or growing out of the services
rendered to the Corporation pursuant to the terms of this agreement or in any
way connected with the rendering of said services, except when the same shall
arise due to the willful misconduct or culpable negligence of the Management
Team, and the Management Team are adjudged to be guilty of willful misconduct
or culpable negligence by a court of competent jurisdiction.
5. It is recognized and admitted that none of the entities that are being
combined into ATI have made a profit within the last three years. It is
further recognized that in order to attract capital from conventional sources
and capital markets that it is necessary to have a competent and committed
Management Team in place. It is further, recognized and admitted that the
current members of the Management Team are giving up other more lucrative
compensation opportunities to commit to the term of this agreement.
Accordingly, the Management Team shall receive an annual compensation from the
Corporation a sum for the performance of the management services to be
rendered to the Corporation pursuant to the terms of this agreement which
shall be equal to twenty (20%) percent of the pretax profits of the
Corporation. The Pretax Profit of the Corporation shall be defined as all
revenues of the Corporation minus all normal expenses of the Corporation,
including interest on the debt incurred to acquire the Corporation and
amortization of goodwill created by the acquisition of the Corporation. For
purposes of this calculation corporate allocations shall not be deducted from
revenues. Such amount shall be paid quarterly and adjusted annually by an
audit of outside independent auditors.
The Corporation acknowledges that the Management Team currently receives
compensation from another related company and that this compensation is in
addition to that compensation.
The Management Team may at its option take whatever amount of compensation it
earns in the form of whatever consideration it determines provided that the
medium chosen does not adversely effect ESI or ATI.
6. As concluded by the parties hereto upon the advice of counsel, and as
evidenced by the signatures of the parties hereto, any controversy between the
parties hereto involving the construction or application of any of the terms,
covenants, or conditions of this agreement, shall on the written request of
one party served upon the other, be submitted to arbitration, and such
arbitration shall comply with and be governed by the provisions of the Texas
General Arbitration Act, Articles 224 through 238-6 of the Revised Civil
Statutes of Texas.
Failure to Act by One Member of the Management Team
7. It is understood and agreed that any management service performed by
either member of the Management Team, pursuant to the provisions of this
agreement, shall constitute the performance of management service of both
members of the Management Team. If, for any reason, one or the other of the
Management Team is unable or unwilling to act or perform pursuant to the terms
of this agreement, such event shall not void this agreement or diminish its
effect, and the performance on the part of the other Management Team shall
constitute full and complete performance of this agreement on the part of the
8. If any action at law or equity is necessary to enforce or interpret the
terms of this agreement, the prevailing party shall be entitled to reasonable
attorney's fees, costs, and necessary disbursements in addition to any other
relief to which he may be entitled.
Texas Law to Apply
9. This agreement shall be construed under and in accordance with the laws
of the State of Texas, and all obligations of the parties created hereunder
are performable in Dallas County, Texas.
10. This agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, executors, administrators, legal
representatives, successors, and assigns where permitted by this agreement.
11. In case any one or more of the provisions contained in this agreement
shall for any reason be held to be invalid, illegal, or unenforceable in any
respect, such invalidity, illegality, or unenforceability shall not affect any
other provision thereof, and this agreement shall be construed as if such
invalid, illegal, or unenforceable provision had never been contained herein.
Prior Agreements Superseded
12. This agreement constitutes the sole and only agreement of the parties
hereto and supersedes any prior understandings or written or oral agreements
between the parties respecting the within subject matter.
Executed at Dallas, Texas, on the day and year first above mentioned.
Execu-Staff International, Limited
Harry K. Myers, Individually
John N. Stogner, Individually
American Teletronics, Inc.
James L. Hawley, II
Its Chairman of the Board