EMPLOYMENT AGREEMENT
This is an agreement (the "Agreement") between Xxxxx Equity, Inc. (the
"Company"), a Florida corporation with its principal place of business at
Jacksonville, Florida, and Xxxxxx X. Xxxxxx, Xx., of Jacksonville, Florida (the
"Executive"), effective as of June 21, 1996 (the "Effective Date").
WHEREAS, the operations of the Company require direction and leadership
in a variety of areas; and
WHEREAS, the Executive has experience and expertise, including service
with the Company as a senior executive, that qualify him to provide that
direction and leadership, and the Company therefore wishes to employ him as its
Chairman and chief executive officer, and he wishes to accept such employment.
NOW, THEREFORE, the parties agree as follows:
1. Employment. Subject to the terms and conditions set forth in this
Agreement, the Company hereby offers and the Executive hereby accepts
employment.
2. Term. Subject to earlier termination as provided in Section 5 below,
the term of the Executive's employment hereunder (the "Term of Employment")
shall be a period starting on June 21, 1996 and ending on the third anniversary
of the beginning of the Term of Employment or, if later, the 180th day following
the date on which either the Company or the Executive gives written notice to
the other that he or it is terminating the Term of Employment under this
Agreement. The Term of Employment may be otherwise extended or renewed only by a
written agreement signed by the Executive and an expressly authorized
representative of the Company.
3. Capacity and Performance. During the Term of Employment, the
Executive shall:
(a) serve the Company on a full-time basis as its Chairman and chief
executive officer with his principal place of employment at the Company's
executive offices in Jacksonville, Florida;
(b) perform such duties and responsibilities on behalf of the Company
as may be designated from time to time by the Board of Directors of the Company
(the "Board") consistent with the position of Chairman and chief executive
officer;
(c) devote substantially all of his business time and his best efforts,
business judgment, skill and knowledge exclusively to the advancement of the
business and interests of the Company and to the discharge of his duties and
responsibilities under this Agreement, and he shall not engage in any other
business activity or serve in any industry, trade, professional,
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governmental or academic position during the Term of Employment, except (i)
service as a director of business, industry, trade, professional, governmental
or academic organizations which service does not interfere in any material way
with the performance of the Executive's duties and responsibilities hereunder;
and (ii) as may otherwise be expressly approved by the Board.
(d) The Company agrees to use its best efforts to cause the election of
the Executive to the Board during the Term of Employment.
4. Compensation and Benefits.
(a) Base Salary. During the Term of Employment, the Company shall pay
the Executive base salary ("Base Salary") at the rate of $250,000 per year,
prorated for any partial period. All Base Salary shall be payable in accordance
with the payroll practices of the Company for its executives and subject to
increase from time to time by the Board (or its Compensation Committee) in its
sole discretion.
(b) Discretionary Bonuses. The Executive will be considered for
year-end bonuses if the Company performs well, and will be treated the same as
all executives who are included in Schedule B of the Company's Supplemental
Executive Retirement Plan for Executives of the Company (the "SERP") for such
purpose, but the determination whether or not any such bonuses will be paid
shall be in the sole discretion of the Compensation Committee of the Board,
provided that in the event of the disability or death of Executive or his
termination by the Company other than for Cause, Executive shall be paid an
amount at least equal to a Stipulated Bonus. A Stipulated Bonus shall be equal
to the average bonus paid to Executive in respect of the three years prior to
termination for death, disability or other than for Cause (or such lesser time
as Executive has been employed by the Company), prorated through the date of
termination in the case of death or disability or for the balance of the Term of
Employment in the case of termination other than for Cause (disregarding such
termination).
(c) Vacations. During the Term of Employment the Executive shall be
entitled to five weeks of vacation per year, prorated for partial calendar
years, to be taken at such times and intervals as he wishes, subject to the
reasonable business needs of the Company. The Executive shall be entitled to
cash compensation for vacation time not taken only to the extent approved by the
Board.
(d) Other Benefits. During the Term of Employment the Executive shall
be entitled to participate in all employee benefit plans (including insurance
plans) of the Company that cover senior executives of the Company generally. The
Executive's participation shall be subject to (i) the terms of the applicable
plan documents and (ii) generally applicable Company policies. The Company may
alter, modify, supplement or delete its employee benefit plans at any time as it
sees fit, without recourse by the Executive.
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(e) Business Expenses. The Company shall pay or reimburse the Executive
for all reasonable, customary business expenses incurred or paid by the
Executive in the performance of the duties and responsibilities of his position,
subject to any restrictions on such expenses set by the Board or in Company
policies and to such reasonable substantiation and documentation as may be
required by the Company.
5. Termination of Employment.
(a) Death. If the Executive dies during the Term of Employment, the
Company shall have no further obligations under this Agreement other than to pay
to the Executive's estate Base Salary through the end of the calendar month of
his death, any Stipulated Bonus as provided for herein, and any other
compensation hereunder that has been earned but not paid. The Company agrees to
keep in force during the Term of Employment group life insurance, substantially
equivalent to that in effect generally for the Company's executives on the
Effective Date.
(b) Disability. The Company may terminate the Executive's employment by
written notice in the event that, for any reason, he becomes disabled, either
physically or psychologically, and is unable to perform substantially all of his
duties and responsibilities under this Agreement for 180 days during any period
of 365 consecutive days. In the event of such a termination, the Company shall
have no further obligations under this Agreement other than to pay to the
Executive Base Salary through the end of the calendar month of his termination,
any Stipulated Bonus as provided for herein, and any other compensation
hereunder that has been earned but not paid. The Company agrees to keep in force
during the Term of Employment group disability income insurance, substantially
equivalent to that in effect generally for the Company's executives on the
Effective Date.
The Executive may, and at the request of the Company shall, submit to a
medical examination by a physician selected by the Company, to whom the
Executive or his duly appointed guardian has no reasonable objection, to
determine whether the Executive is disabled. Such determination shall be
conclusive. If the Executive fails to submit to such medical examination, the
Company's determination of the Executive's disability shall be conclusive.
(c) Termination by the Company for Cause. The Company may terminate the
Executive's employment hereunder for Cause at any time upon written notice
setting forth in reasonable detail the nature of the Cause. The following, as
determined by the Board in its reasonable judgment, will constitute Cause:
(i) fraud, embezzlement or other material dishonesty by the
Executive with respect to the Company; or
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(ii) the Executive's conviction of, or plea of nolo contendere
to, a felony or other crime involving moral turpitude.
Upon termination of the Executive's employment for Cause, the Company shall have
no further obligations under this Agreement other than to pay to the Executive
any Base Salary and any other amounts that have been earned but not paid.
(d) Termination by the Company Other Than for Cause. The Company may
terminate the Executive's employment hereunder other than for Cause at any time
upon written notice. In the event of such termination, the Company shall:
(i) at the election of the Executive, either continue to pay
Base Salary to the Executive during the remainder of the Term of
Employment or pay to him the present value (using the prime rate as
reported in The Wall Street Journal on the date of termination to
calculate the discount factor) of such Base Salary in a lump sum;
(ii) at the election of the Executive, either continue to
contribute to the cost of the Executive's participation in the
Company's medical and life insurance arrangements during the remainder
of the Term of Employment or pay to him in a lump sum the present value
(determined as provided in clause (i) above) of the greater of the
Company's contribution to such cost or the amount required to purchase
individual coverage with substantially equivalent benefits if Executive
is no longer eligible to participate in such medical and life insurance
arrangements, provided that if the Executive as a result of such
termination of employment is then eligible under the terms of the SERP
to receive medical benefits as provided for therein, the Executive
shall not be entitled to participation or payment under this Section
5(d)(ii) with respect to medical insurance arrangements;
(iii) pay to Executive any other compensation hereunder that
has been earned but not paid including any Stipulated Bonus; and
(iv) treat the Executive as having satisfied the vesting
requirements of the Supplemental Executive Retirement Plan for
Executives of the Company (the "SERP"), the provisions of Section
3.2(a) of the SERP to the contrary notwithstanding, and with respect to
stock options awarded to Executive such that options which would
otherwise become vested during the full Term of Employment shall become
immediately vested upon such termination.
The Company shall have no other obligations under this Agreement. The Executive
shall have no obligation to mitigate.
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(e) Termination by the Executive.
(i) If the Executive terminates his employment during the
Term of Employment because the Company has breached this Agreement by
failing to pay Base Salary in accordance with Section 4(a) or failing
to pay other compensation or expenses contemplated hereby or because
the Company otherwise commits a material breach of its obligations to
the Executive hereunder (including the Company's not using its best
efforts to cause the Executive to be elected as a director with the
result that the Executive ceases to be a director of the Company
notwithstanding his willingness to serve, assignment of duties and
responsibilities inconsistent with his position, any change in his
permanent place of employment or any other action that is materially
inconsistent with Executive's position as a senior executive and a
director of the Company), the termination shall, for purposes of this
Agreement, be treated as a termination by the Company other than for
Cause and governed by Section 5(d).
(ii) If the Executive terminates his employment with the
Company for any other reason, the Company shall have no further
obligations under this Agreement other than to pay to the Executive any
Base Salary that has been earned but not paid.
(f) Gross-up Payment. The payments and benefits called for by this
agreement are not in any way conditioned on a change of ownership or control of
the Company. The Company intends such payments and benefits to be reasonable
compensation for services rendered by the Executive, and intends that the
Executive receive the full economic benefit of such payments and benefits.
Therefore, in the event that it is determined that any payment or benefit
provided by the Company to or for the benefit of Executive, either under this
Agreement or otherwise, will be subject to the excise tax imposed by section
4999 of the Internal Revenue Code or any successor provision ("section 4999"),
the Company will, prior to the date on which any amount of the excise tax must
be paid or withheld, make an additional lump-sum payment (the "gross-up
payment") to Executive. The gross-up payment will be sufficient, after giving
effect to all federal, state and other taxes and charges (including interest and
penalties, if any) with respect to the gross-up payment, to make Executive whole
for all taxes (including withholding taxes) and any associated interest and
penalties, imposed under or as a result of section 4999.
Determinations under this Section 5(f) will be made by the Company's
independent auditors unless Executive has reasonable objections to the use of
that firm, in which case the determinations will be made by a comparable firm
chosen by Executive after consultation with the Company (the firm making the
determinations to be referred to as the "Firm"). The determinations of the Firm
will be binding upon the Company and Executive except as the determinations are
established in resolution (including by settlement) of a controversy with the
Internal Revenue Service to have been incorrect. All fees and expenses of the
Firm will be paid by the Company.
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If the Internal Revenue Service asserts a claim that, if successful,
would require the Company to make a gross-up payment or an additional gross-up
payment, the Company and Executive will cooperate fully in resolving the
controversy with the Internal Revenue Service. The Company will make or advance
such gross-up payments as are necessary to prevent Executive from having to bear
the cost of payments made to the Internal Revenue Service in the course of, or
as a result of, the controversy. The Firm will determine the amount of such
gross-up payments or advances and will determine after resolution of the
controversy whether any advances must be returned by Executive to the Company.
The Company will bear all expenses of the controversy and will gross Executive
up for any additional taxes that may be imposed upon Executive as a result of
its payment of such expenses.
6. Nondisclosure. During the Term of Employment, the Executive may
become aware of information which is nonpublic, confidential or proprietary in
nature with respect to the Company or with respect to other companies, persons,
entities, ventures or business opportunities in which the Company has, or, if it
were disclosed to the Company, the Company might have, an interest
("Confidential Information"). All Confidential Information will be kept strictly
confidential by the Executive and the Executive shall not: (a) copy, reproduce,
distribute or disclose any Confidential Information to any third party except in
the course of his employment by the Company; (b) use any Confidential
Information for any purpose other than in connection with his employment by the
Company; or (c) use any Confidential Information in any way that is detrimental
to the Company.
Confidential Information shall not include information which the
Executive can demonstrate: (a) is or becomes generally available to the public
other than by breach by the Executive of his agreement herein; (b) is disclosed
by the Executive, pursuant to obligations under law, regulation or court order;
or (c) was prior to the Effective Date, or thereafter becomes, known to the
Executive on a nonconfidential basis.
Upon termination of the Executive's employment, he shall immediately
return or destroy all Confidential Information, including all notes, copies,
reproductions, summaries, analyses, or extracts thereof, then in his possession.
Such return or destruction shall not abrogate the continuing obligations of the
Executive under this Agreement.
In the event that the Executive is requested or required (by
interrogatories, requests for information or documents, subpoena, civil
investigative demand or similar process) to disclose any Confidential
Information, he shall provide the Company with prompt written notice so that it
may seek a protective order or other appropriate remedy. In the event such
protection or other remedy is not obtained, the Executive shall furnish only
that portion of the Confidential Information which he is advised by counsel is
legally required and shall exercise best efforts to obtain assurance that
confidential treatment will be accorded to such Confidential Information.
The Executive agrees that until the expiration of five years from the
date of termination of his employment by the Company, he will not without the
prior written approval of the Company (i) in any manner acquire, agree to
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acquire or make any proposal to acquire, directly or indirectly, any securities,
assets or property of the Company or any of its subsidiaries, whether such
agreement or proposal is with the Executive or with a third party, other than
shares of common stock he is entitled to acquire under the terms of this
Agreement or any Company stock option, bonus, or other employee or director
benefit plan, (ii) propose to enter into, directly or indirectly, any merger or
other business combination involving the Company or any of its subsidiaries,
(iii) make, or in any way participate, directly or indirectly, in any
"solicitation" of "proxies" (as such terms are used in the proxy rules of the
Securities and Exchange Commission) to vote, or seek to advise or influence any
person with respect to the voting of, any voting securities of the Company or
any of its subsidiaries, (iv) form, join or in any way participate in a "group"
(within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934)
with respect to any voting securities of the other party or any of its
subsidiaries, (v) otherwise act, alone or in concert with others, to seek to
control or influence the management, board of directors or policies of the
Company, (vi) disclose any intention, plan or arrangement inconsistent with the
foregoing or (vii) advise, encourage, provide assistance (including financial
assistance) to or hold discussions with any other persons in connection with any
of the foregoing.
The Executive hereby acknowledges that he is aware that the United
States securities laws prohibit any person who has material, nonpublic
information concerning the Company from purchasing or selling securities of the
Company or from communicating such information to any other person under
circumstances in which it is reasonably foreseeable that such person is likely
to purchase or sell such securities. The obligations of the Executive stated in
this Section 6 shall, except where expressly limited as to time, continue
without limit as to time and without regard to the employment status of the
Executive.
7. Conflicting Agreements. The Executive hereby represents and warrants
that the execution of this Agreement and the performance of his obligations
hereunder will not breach or be in conflict with any other agreement to which he
is a party or is bound and that he is not now subject to any covenants against
competition or similar covenants that would affect the performance of his
obligations hereunder. The Executive will not disclose to or use on behalf of
the Company any proprietary information of a third party without such party's
consent.
8. Withholding. All payments made by the Company under this Agreement
shall be reduced by any tax or other amounts required to be withheld by the
Company under applicable law.
9. Cost of Enforcement. The Company shall pay reasonable costs and
expenses (including fees and expenses of counsel) incurred by the Executive in
connection with an action to enforce his rights under this Agreement in which
action the Executive prevails.
10. Indemnification. The Company shall, to the maximum extent permitted
from time to time under the law of the State of Florida, indemnify and upon
request shall advance expenses to the Executive in the event he is or was a
party or is threatened to be made a party to any threatened, pending or
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completed action, suit, proceeding or claim, whether civil, criminal,
administrative or investigative, by reason of the fact that he is or was or has
agreed to be a director, officer or employee of the Company or while a director,
officer or employee is or was serving at the request of the Company as a
director, officer, partner, trustee, employee or agent of any corporation,
partnership, joint venture, trust or other enterprise, including service with
respect to employee benefit plans, against expenses (including attorney's fees
and expenses), judgments, fines, penalties and amounts paid in settlement
incurred in connection with the investigation, preparation to defend or defense
of such action, suit, proceeding or claim; provided, however, that the foregoing
shall not require the Company to indemnify or advance expenses to the Executive
in connection with any action, suit, proceeding, claim or counterclaim initiated
by or on behalf of the Executive. The Executive shall be deemed to have met the
standard of conduct required for such indemnification unless the contrary shall
be established. The provisions of this Section 10 shall be in addition to any
right of indemnification to which the Executive may be entitled under the
Company's charter or by-laws, pursuant to any other contract, or by operation of
law.
11. Assignment. Except as provided in this Section 11, neither the
Company nor the Executive may make any assignment of this Agreement or any
interest herein, by operation of law or otherwise, without the prior written
consent of the other. The Company may without the consent of the Executive
assign its rights and obligations under this Agreement to any wholly-owned
subsidiary of the Company or to any corporation or other business entity into
which the Company has merged or with which it has consolidated or which has
acquired substantially all of the Company's assets, provided that no such
assignment shall relieve the Company of its obligations under this Agreement.
This Agreement shall inure to the benefit of and be binding upon the Company and
the Executive, their respective successors, executors, administrators, heirs and
permitted assigns.
12. Entire Agreement. This Agreement constitutes the entire agreement
between the parties and supersedes all prior communications, agreements and
understandings, written or oral, with respect to the subject matter hereof. The
Executive may have other rights and obligations under other agreements,
insurance policies and plans and employee benefit and welfare plans of the
Company, including, without limitation, the SERP.
13. Amendment. This Agreement may be amended or modified only by a
written instrument signed by the Executive and by an expressly authorized
representative of the Company.
14. Governing Law. This is a Florida contract and shall be construed
and enforced under and be governed in all respects by the laws of the State of
Florida.
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IN WITNESS WHEREOF, this Agreement has been executed as a sealed
instrument by the Company, by its duly authorized representative, and by the
Executive, as of the date first above written.
XXXXXX X. XXXXXX, XX. XXXXX EQUITY, INC.
By:
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