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EXHIBIT 10.45
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into as of
December 17, 1998, between Xxxxxxxxx Industries, Inc., a Delaware corporation,
having its principal place of business at 0000 Xxxxxxxxxxxxx Xxxxxxx, Xxxxxxx,
Xxxxxxx 00000 (the "Company"), and Xxxxx Xxxxxx, an individual (the "Employee").
W I T N E S S E T H :
WHEREAS, the Company desires to provide for the employment of the
Employee, and the Employee desires to accept such employment, on the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the Company and the Employee hereby agree as follows:
1. Definitions.
(a) The "Board" shall mean the Board of Directors of the Company.
(b) The "Effective Date" shall mean January 4, 1999.
(c) The "Employment Period" shall mean the period commencing on the
Effective Date and continuing until the third year anniversary of the Effective
Date, unless earlier terminated in accordance with the terms of this Agreement.
(d) "GAAP" shall mean generally accepted accounting principles in the
United States as in effect from time to time.
(e) The "Executive Committee" shall mean the Executive Committee of the
Board of Directors of the Company.
2. Employment Period. The Company hereby agrees to employ the Employee,
and the Employee hereby agrees to be employed by the Company, for the duration
of the Employment Period and pursuant to the other terms and conditions provided
herein. This Agreement shall terminate at the end of the Employment Period,
unless earlier terminated under Section 5 below.
3. Terms of Employment.
(a) Position and Duties. During the Employment Period the Employee
shall serve as Director of Finance of the Company. The Employee shall perform
such duties as the Board of Directors, Chief Executive Officer and senior
officers of the Company shall from time to time determine. In the performance of
his duties, the Employee shall comply with the stated policies of the Company.
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(b) Location. The principal place of employment of the Employee shall
be the principal offices of the Company in Sunrise, Florida.
(c) Compensation.
(1) Base Salary. The Employee's annual salary (the "Salary") shall
be at the rate of $100,000 per annum, payable twice monthly, for the duration of
the Employee's employment hereunder.
(2) Regular Annual Company Bonus. Subject to paragraph (F) below,
for each calendar year commencing with the year ending December 31, 1999, during
which the Employee is employed by the Company:
(A) if the Company has Net Income (as hereinafter defined) for such
year of an amount equal to the Company's target net income as determined in the
sole discretion of the Board for such year (the "Target"), the Employee shall be
entitled to a bonus in the amount equal to $20,000.
(B) if the Company has Net Income for such year more than the
Target and less than 150% of the Target, the Employee shall be entitled to a
bonus as calculated below:
B = $20,000 + [$20,000 x (NI - T)]
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T
where:
B = the bonus earned in such year.
T = the Target for such year.
NI = the actual Net Income of the Company for such year as
determined in accordance with GAAP.
(C) if the Company has Net Income for such year of 150% of the
Target or more, the Employee shall be entitled to a bonus of $30,000.
(D) if the Company has Net Income for such year of less than 50% of
the Target, the Employee shall not be entitled to a bonus.
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(E) if the Company has Net Income for such year of at least 50% of
the Target but less than the Target, the Employee shall be entitled to a bonus
as calculated below:
B = $20,000 - [$20,000 x 2 x (T- NI)]
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T
where:
B = the bonus earned in such year.
T = the Target for such year.
NI = the actual Net Income of the Company for such year as
determined in accordance with GAAP.
(F) for any calendar year regarding which the Employee is entitled
to a Bonus under the foregoing provisions of this clause (ii) but during which
year the Employee did not work the entire calendar year, unless otherwise
provided herein, the Employee shall be entitled to a Bonus equal to the product
of the Bonus, as calculated under the foregoing provisions, multiplied by a
fraction, the numerator of which is the number of months during such calendar
year that the Employee was employed with the Company and the denominator of
which is twelve.
(3) Stock Options. Simultaneously with the commencement of the
Employment Period, the Company shall cause to be granted to the Employee an
option to purchase 20,000 shares of the common stock of Xxxxxxxxx Industries,
Inc., par value $.001 per share, of the Company at an exercise price per share
equal to the fair market value of the common stock on the date of the grant,
pursuant to an option agreement to be executed by the Company and the Employee.
(d) Benefits. In addition to the compensation payable to the Employee
as set forth in Section 3(c) above, during the Employment Period the Employee
shall be eligible for the following:
(i) Health Insurance. The Company shall provide health insurance
for the Employee and his dependents pursuant to such plans, if any, as
the Company provides to its contract employees generally. The provision
of the health insurance shall be subject to acceptance by the insurance
company of the Employee and his dependents to the Company's current
program or whatever other program the Board may decide to elect. The
Employee shall be solely responsible for all deductible and copayment
amounts due according to the health insurance. Upon termination of this
Agreement, all payments under this Section 3(d)(i) shall cease,
provided, however that the Employee shall be entitled to payments for
periods prior to the date of the termination and for which the Employee
has not yet been paid.
(ii) Other Benefits. The Employee shall be eligible for similar
incentive, stock option grants, 401(k), savings, welfare (including
without limitation medical and dental insurance) plans, practices,
policies and programs applicable on or after the Effective Date to
other contract employees of the Company as determined in the discretion
of the Board.
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(e) Vacation. During the Employment Period, the Employee shall be
entitled to paid vacation in accordance with the policies and practices
applicable on or after the Effective Date to other officers of the Company,
provided that the Employee shall be entitled to a minimum of two (2) weeks of
paid vacation per full calendar year (pro rated if the Employee serves for less
than the full calendar year). Vacation accrued but unused at the end of a
calendar year may be carried over into the following calendar year or years,
provided that unused vacation days shall be accrued up to a maximum of six
weeks.
(f) Holidays and Sick Leave. The Employee shall be entitled to all
holidays that are prescribed by the Company's policies and practices. The
Employee shall be entitled to seven (7) days paid sick leave per year (pro rated
if the Employee serves for less than the full calendar year). Unused sick leave
days may not be carried over to the following calendar year or years.
(g) Expenses. The Company shall pay or reimburse the Employee for
reasonable expenses incurred or paid by him during the Employment Period in the
performance of his services under this Agreement upon presentation of expense
statements or such other supporting information as may be required for other
officers of the Company in accordance with the Company's policy.
4. Employee's Obligations and Representations; Indemnity.
(a) During the Employment Period, and excluding any periods of vacation
and sick leave to which the Employee is entitled, the Employee agrees to devote
substantially all of his attention and time during normal business hours to the
business and affairs of the Company and to perform faithfully and efficiently
the responsibilities assigned to the Employee by the Company.
(b) The Employee represents and warrants to the Company that there are
no agreements or arrangements, whether written or oral, in effect which would
prevent the Employee from rendering exclusive service to the Company during the
Employment Period. The Employee further represents, warrants and agrees with the
Company that as of the Effective Date he has not made and will not make during
the Employment Period any commitment or do any act in conflict with this
Agreement, or take any action that might divert from the Company any opportunity
which would be in the scope of any present or future business of Xxxxxxxxx, the
Company or any subsidiary thereof.
(c) The Company shall indemnify and hold harmless the Employee from all
claims, losses, liabilities, damages and causes of action relating to or arising
out of the Employee's performance, duties and responsibilities to, for, or on
behalf of the Company to the extent provided by the Company's certificate of
incorporation and by-laws.
5. Termination.
(a) Death. This Agreement shall terminate automatically upon the
Employee's death. If the Employee's employment is terminated by reason of the
Employee's death, the Company shall have no further obligations to the
Employee's legal representatives under this Agreement, other than those
obligations accrued, earned or vested by the Employee as of the date
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of his death.
(b) Disability. If the Company determines in good faith that the
Employee has a "disability" (as defined below), it may give the Employee written
notice of its intention to terminate the Employee's employment. In such event,
the Employee's employment with the Company shall terminate effective on the 30th
day after receipt by the Employee of such notice. No such notice of termination
by reason of disability shall be given until the Employee has experienced a
period of two consecutive months of disability and the disability is continuing.
The notice of termination shall not be effective if the Employee returns to
full-time performance of his duties prior to the expiration of the 30-day notice
period. For purposes of this Agreement, "disability" shall mean a physical or
mental condition which, two months after its commencement, is determined to be
total and permanent by a physician selected by the Company. The Employee shall
be entitled to all compensation and benefits provided for under this Agreement
during the two-month waiting period for the disability determination and during
the 30-day notice of termination period. In the event that the Company provides
long-term disability benefits for the Employee, such benefits shall not commence
until after the employment of the Employee has been terminated and the Company
has ceased paying the Employee compensation pursuant to the foregoing sentence.
If the Employee's employment is terminated by reason of the Employee's
disability, this Agreement shall terminate without further obligations to the
Employee or the Employee's legal representatives under this Agreement, other
than those obligations accrued, earned or vested by the Employee as of the date
of the termination. In addition, the Employee and the Employee's family shall be
entitled to receive benefits, including without limitation disability benefits,
at least equal to the most favorable benefits provided by the Company to other
contract employees of the Company based on the terms of the benefit plans
referenced in Section 3(d) of this Agreement as in effect on the date the
Employee's disability commenced.
(c) Cause. During the Employment Period, the Company may terminate the
Employee's employment for "cause", as determined by the Board and as defined
below. For purposes of this Agreement, "cause" shall mean:
(i) an act or acts of fraud, embezzlement or any other act that
would constitute a felony under the laws of the State of Florida taken by the
Employee;
(ii) repeated violations by the Employee of his obligations under
Section 4(a) of this Agreement which are not remedied within a reasonable period
of time after receipt of written notice from the Company of such violations or a
breach by the Employee of his representations or obligations under any of
Sections 3(a), 4(b), 7, 8 or 9 of this Agreement; or
(iii) the indictment of the Employee of a crime, where the Company
reasonably believes it would impair the Employee's ability to perform his
services under this Agreement.
If the Employee's employment is terminated for cause, this Agreement shall
terminate without further obligations to the Employee under this Agreement,
other than those obligations accrued, earned or vested by the Employee as of the
date of the termination. The Employee shall not be entitled to any bonus in
respect of the year of termination in the event the Employee's employment is
terminated for cause pursuant to this Section 5(c).
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(d) Involuntary Termination. Notwithstanding anything herein to the
contrary, the Company shall have the right, at any time upon 30 days' prior
notice to the Employee, to terminate the Employment. If during the Employment
Period the Company terminates the Employee's employment other than for cause or
disability it shall be deemed to be an involuntary termination and the Company
shall pay to the Employee the following amounts:
(i) to the extent not theretofore paid, the Company shall pay the
Employee's Salary through the date of such involuntary termination and, when
calculated, the pro-rated Bonus as set forth in Section 3(c)(F) above; and
(ii) the Company shall pay the Employee on the date of such
involuntary termination an amount equal to two months of the Employee's Base
Salary and an amount equal to six months of the Employee's Base Salary in the
event of termination following a Change of Control; and
(iii) the Company shall pay in one cash lump sum any vacation days
accrued but unused as of the date of termination to be paid within 30 days of
such involuntary termination.
(e) Voluntary Termination. The Employee agrees to provide the Company
with 30 days notice prior to voluntarily terminating his employment. At the end
of such 30-day period, this Agreement shall terminate automatically and the
Company shall have no further obligations to the Employee under this Agreement,
other than those obligations accrued, earned or vested by the Employee as of the
date of the termination. The Employee shall not be entitled to any bonus in
respect of the year of termination in the event the Employee's employment is
terminated pursuant to this Section 5(e). The Employee acknowledges that he is
an integral and valuable employee to the Company and that the Company has
expended considerable time and effort in recruiting him and engaging him as an
employee of the Company.
6. Notice of Termination. Any notice of termination by the Company for
any reason or by the Employee for any reason shall be communicated by a written
notice which indicates (i) the specific termination provision in this Agreement
relied upon, (ii) the facts and circumstances claimed to provide a basis for
such termination, and (iii) the date or proposed date of termination.
7. Confidentiality
(a) Acknowledgement and Purposes. The Employee acknowledges that he has
learned, developed and had access to and during the Employment Period, he will
learn, develop and have access to Confidential Information relating to the
business and affairs of the Company and its affiliates. As used in this
Agreement, "Confidential Information" shall mean all trade secrets and other
confidential information concerning the Company and its affiliates including,
without limitation, information regarding the operations, future plans,
projected and historical sales, marketing, costs, production, growth and
distribution, any customer lists, customer information, information relating to
governmental relations, information relating to the products or services,
whether patentable or not.
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The Company is engaged in a highly competitive business; its
competitive position depends in great measure upon its ability to develop or
acquire and maintain the confidentiality of Confidential Information; and it may
have expended and is likely to continue to expend considerable efforts and
resources in the development or acquisition of Confidential Information.
Based upon the foregoing, the Employee recognizes that the unauthorized
disclosure of Confidential Information in violation of the terms hereof is
likely to result in serious and irrevocable harm to the Company.
(b) Restrictions on the Use of Confidential Information. The Employee
agrees and covenants as follows:
(i) All documents and other materials made or compiled by or made
available to the Employee prior to the date hereof or during the Employment
Period by the Company or any of its affiliates and any copies thereof, whether
or not containing Confidential Information, are and shall be the property of the
Company and shall, at the request of the Company be delivered to the Company by
the Employee immediately upon the conclusion of his engagement as an Employee.
Except as required in connection with the services to be performed hereunder,
the Employee agrees not to remove from the Company's premises, without
permission, any and all papers or drawings belonging to the Company, including
those prepared or worked on by him. The Employee will treat as trade secrets all
Confidential Information acquired by him prior to the date hereof or during the
Employment Period and shall not at any time use any Confidential Information for
his own benefit nor disclose it or any part of it to any other person, firm or
corporation not connected with the Company (i) without the prior written consent
of the Company or (ii) unless such disclosure is required by law or in response
to a legal order or (iii) unless such Confidential Information has become
generally available to the public other than through the breach the Employee of
the terms hereof.
(ii) All ideas, reports, and other creative works conceived by the
Employee during the Employment Period and relating to Confidential Information,
shall be disclosed to the Company and shall be the sole property of the Company.
8. Non-Competition. The Employee agrees that (a) during the Employment
Period and (b) unless the employment is terminated under Section 5(d) for two
(2) years thereafter he will not, anywhere in the world, directly or indirectly,
engage or participate or make any financial investments in or become employed by
or render advisory or other services to or for any person, firm or corporation,
or in connection with any business activity which directly or indirectly is in
competition with any of the business operations or activities of the Company or
its affiliates as of the date of termination of his employment or for any time
prior thereto. Nothing herein contained, however, shall restrict the Employee
from making any investments in any company (but without otherwise participating
in the activities of such company) whose stock is listed on a national
securities exchange or actively traded in the over-the-counter market, as long
as such investment does not give him the right to control or influence the
policy decisions of any such business or enterprise which is or might be
directly or indirectly in competition with any of such business operations or
activities of the Company or its affiliates.
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9. Restriction on Solicitation. The Employee agrees that during the
Employment Period and for two (2) years thereafter he will not:
(i) directly or indirectly solicit, raid, entice or induce any
employee of the Company to become an employee of any person, firm or corporation
which is, directly or indirectly, in competition with the business or activities
of the Company or,
(ii) directly or indirectly approach any such employee for these
purposes;
(iii) authorize or knowingly approve the taking of such actions by
other persons on behalf of any such person, firm or corporation, or assist any
such person, firm or corporation in taking such action; or
(iv) directly or indirectly solicit, raid, entice or induce any
person, firm or corporation who or which on the date hereof is, or at the time
during his employment with the Company shall be, a customer of the Company to
become a customer for the same or similar products which it purchased from the
Company, of any other person, firm or corporation, and the Employee shall not
approach any such customer for such purpose or authorize or knowingly approve
the taking of such actions by any other person.
10. Remedies. The Employee hereby acknowledges that in the event of a
breach or threatened breach by him of the provisions of Sections 7, 8 or 9 of
this Agreement, the Company would suffer irreparable harm for which there would
be no adequate remedy at law. Accordingly, the Employee agrees that in such
event, in addition to any other remedies which the Company may have in law or in
equity for money damages or other relief, the Company shall be entitled to
temporary and/or injunctive relief, without the necessity of proving damages, to
enforce the provisions hereof.
11. Successors. This Agreement is personal to the Employee and without
the prior written consent of the Company shall not be assignable by the
Employee. The Company may assign its rights and obligations hereunder, provided
that the Company will require the assignee to assume expressly and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform if no such assignment had taken place.
12. Binding Arbitration. In the event that the Company and the Employee
cannot agree on an interpretation of any provision of this Agreement, or in the
event that either of the parties fails to make any payments or otherwise fulfill
any obligations required by the terms of this Agreement, the Company and the
Employee agree to resolve any such dispute through arbitration in Broward
County, Florida, under the rules then obtaining of the American Arbitration
Association in the State of Florida.
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13. Miscellaneous.
(a) This Agreement shall be governed by and construed in accordance
with the laws of the State of Florida.
(b) The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect. This Agreement may not be amended or
modified otherwise than by a written agreement executed by the parties hereto or
their respective successors and legal representatives.
(c) All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been given if sent by
facsimile transmission, delivered by overnight or other carrier service, or
mailed, certified first class mail, postage prepaid, return receipt requested,
to the parties hereto at the following addresses:
If to the Company, to:
Xxxxxxxxx Industries, Inc.
0000 Xxxxxxxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Chief Executive Officer
If to the Employee, to:
Xxxxx Xxxxxx
or to such other address as either party shall have furnished to the other in
accordance herewith.
(d) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
(e) The Company may withhold from any amounts payable under this
Agreement such federal, state, local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
(f) A party's failure to insist upon strict Compliance with any
provision hereof shall not be deemed to be a waiver of such provision or any
other provision thereof.
(g) This Agreement embodies the entire agreement between the Company
and the Employee and supersedes all prior agreements and understandings, oral or
written, with respect to the subject matter hereof.
(h) This Agreement may be executed in counterparts, each of which shall
be deemed an original and all of which, together, shall constitute one and the
same instrument.
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IN WITNESS WHEREOF, the Employee has hereunto set his hand and,
pursuant to the authorization from the Board, the Company has caused these
presents to be executed in its name on its behalf, all as of the day and year
first above written.
XXXXXXXXX INDUSTRIES, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx, Chief Financial Officer
XXXXX XXXXXX
/s/ Xxxxx Xxxxxx
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