Exhibit 10.2
AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (this "Agreement") is made and
entered into with an effective date of June 1, 1999 (the "Effective Date"),
between XxxXxxXxxxxxx.xxx, Inc., a Florida corporation, whose principal place of
business is 0000 X.X. 00xx Xxxxxx, Xxxx Xxxxxxxxxx, Xxxxxxx 00000 (the
"Company") and Xxxxxxxxxxx Xxxxx, an individual whose address is 2901-H Xxxxxxx,
Xxxxxxx, Xxxxxxxx 00000 (the "Executive").
RECITALS
WHEREAS, the Company is a Florida corporation and is principally
engaged in the business of marketing, distributing and selling prescription and
non-prescription pet medications and pet-related products for household pets
(the "Business").
WHEREAS, the Company desires to employ the Executive and the Executive
desires to be employed by the Company.
WHEREAS, the Company has established a valuable reputation and goodwill
in its business, with expertise in all aspects of the Business.
WHEREAS, the Executive, by virtue of the Executive's employment with
the Company, will become familiar with and possessed with the manner, methods,
trade secrets and other confidential information pertaining to the Company's
business, including the Company's client base.
NOW, THEREFORE, in consideration of the mutual agreements herein made,
the Company and the Executive do hereby agree as follows:
1. Recitals. The above recitals are true, correct, and are herein
incorporated by reference.
2. Employment. The Company hereby employs the Executive, and the
Executive hereby accepts employment, upon the terms and conditions hereinafter
set forth.
3. Authority and Power During Employment Period.
a. Duties and Responsibilities. During the term of this Agreement,
the Executive shall serve as Chief Operating Officer of the Company and shall
have such responsibilities and duties as are customarily undertaken by
individuals in similar positions.
b. Time Devoted. Throughout the Term of the Agreement, the Executive
shall devote substantially all of the Executive's business time and attention to
the business and affairs of the Company consistent with the Executive's position
with the Company, except for reasonable vacations, illness or incapacity.
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4. Term. The Term of employment hereunder will commence on the
Effective Date as set forth above and on the fifth anniversary of the Effective
Date, and may be extended for additional one (1) year periods (each a "Renewal
Term") by written notice given by the Company to the Executive at least 60 days
before the expiration of the Term or the Renewal Term, as the case may be,
unless this Agreement shall have been terminated pursuant to Section 6 of this
Agreement.
5. Compensation and Benefits.
a. Salary. The Executive shall be paid a base salary, payable in
accordance with the Company's policies from time to time for senior executives,
at an annual rate of Eighty Thousand Dollars ($80,000), subject to increase from
time to time upon the review and determination of the Board of Directors, which
review shall be conducted no less frequent than annually.
b. Incentive Compensation. The Executive may be entitled to receive
certain incentive compensation from time to time based upon performance criteria
to be mutually agreed upon by the Executive and the Company.
c. Options.
i. The Executive shall be granted 300,000 incentive stock
options (the "Options") to purchase shares of the Company's Common Stock at an
exercise price of $7.00 per share, being the fair market value of the Company's
Common Stock on the trading day immediately preceding the date which the parties
hereto reached an agreement concerning Executive's employment by the Company,
giving effect to the subsequent forward split of the Company's Common Stock.
Such Options are granted under the Company's 1998 Stock Option Plan and pursuant
to the form of Option attached hereto as Exhibit A and incorporated herein by
such reference. The Options shall be exercisable from the date of vesting and
shall vest, subject to the continued employment of the Executive, (i) 50,000
Options on the date of this Agreement, (ii) 50,000 Options on the first
anniversary of the Effective Date of this Agreement , (iii) 50,000 Options on
the second anniversary of the Effective Date of this Agreement, (iv) 50,000
Options on the third anniversary of the Effective Date of this Agreement, (v)
50,000 Options on the fourth anniversary of the Effective Date of this
Agreement, and (vi) the remaining 50,000 options on the fifth anniversary of the
Effective Date of this Agreement. The Options shall expire five (5) years from
the date of vesting.
ii. In the event of a termination of Executive and (i) a sale of
all or substantially all of the assets of the Company; or (ii) a merger, stock
exchange or other form of business combination (the "Business Combination") the
result of which being that the shareholders of the Company immediately preceding
such transaction will own, after the consummation of such Business Combination,
less that 51% of the then issued and outstanding voting securities of the
Company, then, in such event, on the effective date of either the sale of all or
substantially all of the Company's assets or a Business
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Combination, all Options not theretofore vested shall immediately vest and
become exercisable.
iii. In addition to the Options set forth in Section 5c(i)
hereof, on the earlier of (i) the fiscal year ending March 31, 2001 if the
Company should report (a) Revenues (as hereinafter defined) of at least
Forty-Three Million Dollars ($43,000,000); or (b) Income From Operations (as
hereinafter defined) of at least Five Million Dollars ($5,000,000); or (ii)
March 31, 2004, the Executive shall be entitled to a incentive options to
purchase up to an additional thirty thousand (30,000) shares of Common Stock of
the Company. Such options, which shall be exercisable for a period of five (5)
years from the date of grant at an exercise price of the lower of Fair Market
Value or $15.00 per share, shall be granted under the Company's 1998 Stock
Option Plan. In the event the Company makes any acquisitions of existing
businesses, then this paragraph shall be null and void, and thereafter the
Company and Executive will mutually decide upon revised options to be granted
pursuant to this paragraph. For the purposes of this Agreement, "Revenues" shall
mean the total gross revenues of the Company from all sources and "Income From
Operations" shall mean the Revenues less the cost of the Revenues and all
selling, general and administrative expenses as reflected on the Company's
audited financial statements for the periods therein. The audited financial
statements of the Company, accompanied by the accountant's report of the
Company's then principal independent accountants for such fiscal year, shall be
conclusive as to the determination of the satisfaction of the aforedescribed
performance based criteria. In the event the Company should meet such
performance based criteria, the options shall be granted to the Executive on the
date the audited financial statements are issued by the Company's principal
independent accountants.
iv. For the purposes of this Agreement, "Fair Market Value"
shall be equal to the closing price of the Company's Common Stock as reported on
the OTC Bulletin Board or the primary exchange on which the Company's Common
Stock shall be quoted.
d. Executive Benefits. The Executive shall be entitled to
participate in all benefit programs of the Company currently existing or
hereafter made available to executive and/or salaried employees including, but
not limited to, stock option plans, pension and other retirement plans, group
life insurance, hospitalization, surgical and major medical coverage, sick
leave, salary continuation, vacation and holidays, long-term disability, and
other fringe benefits. Until the Company shall have established, and the
Executive has become eligible for coverage under, health insurance coverage for
its employees, the Company shall, within thirty (30) days of payment by the
Executive, reimburse the Executive for all premiums paid by the Executive for
the lesser of (a) the cost to the Executive to continue his current medical,
dental and vision insurance under COBRA and his current long term disability
insurance policy, or (b) the cost to Executive to secure individual medical,
dental and vision insurance and long term disability insurance providing
benefits comparable to those available under Executive's current medical,
dental, vision and long term disability coverage.
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e. Vacation. During each fiscal year of the Company, the Executive
shall be entitled to such amount of vacation as determined by the Board of
Directors consistent with the Executive's position and length of service to the
Company.
f. Business Expense Reimbursement. During the Term of employment,
the Executive shall be entitled to receive proper reimbursement for all
reasonable, out of-pocket expenses incurred by the Executive (in accordance with
the policies and procedures established by the Company) in performing services
hereunder, provided the Executive properly accounts therefor.
6. Consequences of Termination of Employment.
a. Disability. In the event of the Executive's disability, the
Company may terminate this Agreement and the Executive shall be entitled to
compensation in accordance with the Company's disability compensation practice
for its senior officers. "Disability," for the purposes of this Agreement, shall
be deemed to have occurred in the event (A) the Executive is unable by reason of
sickness or accident, to perform his duties under this Agreement for an
aggregate of 90 days in any 12-month period or 45 consecutive days, or (B) the
Executive has a guardian of the person or estate appointed by a court of
competent jurisdiction. Termination due to disability shall be deemed to have
occurred upon the first day of the month following the determination of
disability as defined in the preceding sentence.
b. Termination by the Company for Cause.
i. Nothing herein shall prevent the Company from terminating the
Executive for "Cause," as hereinafter defined. The Executive shall continue to
receive salary only for the period ending with the date of such termination as
provided in this Section 6b. Any rights and benefits the Executive may have in
respect of any other compensation shall be determined in accordance with the
terms of such other compensation arrangements or such plans or programs.
ii. "Cause" shall mean (A) committing or participating in an
injurious act of fraud, gross neglect, material misrepresentation, embezzlement
or dishonesty against the Company; (B) committing or participating in any other
injurious act or omission wantonly, willfully, recklessly or in a manner which
was grossly negligent against the Company, monetarily or otherwise; (C) engaging
in a criminal enterprise involving moral turpitude; (D) conviction of an act or
acts constituting a felony under the laws of the United States or any state
thereof; or (E) if applicable, loss of any state or federal license required for
the Executive to perform the Executive's material duties or responsibilities for
the Company; or (F) any assignment of this Agreement by the Executive in
violation of Section 14 of this Agreement.
iii. Notwithstanding anything else contained in this Agreement,
this Agreement will not be deemed to have been terminated for Cause unless and
until there
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shall have been delivered to the Executive a notice of termination stating that
the Executive committed one of the types of conduct set forth in this Section 6b
contained in this Agreement and specifying the particulars thereof.
c. Voluntary Termination. Notwithstanding anything contained herein
to the contrary, this Agreement may be terminated (i) at any time upon the
mutual written consent of the Company and the Executive; or (ii) by either party
upon giving 90 days' prior written notice to the other party. During such 90 day
period, the Executive shall continue to perform the Executive's duties pursuant
to this Agreement, and the Company shall continue to compensate the Executive in
accordance with this Agreement.
d. Death. In the event of the death of the Executive during the Term
of the Agreement, compensation shall be paid to the Executive's designated
beneficiary, or, in the absence of such designation, to the estate or other
legal representative of the Executive for a period of six (6) months from and
after the date of death. Other death benefits will be determined in accordance
with the terms of the Company's benefit programs and plans.
e. Termination for "Good Reason". The Executive may terminate his
employment under this Agreement for "Good Reason." For purposes of this Section
6e, the Executive shall have "Good Reason" to terminate his employment at any
time during the term of this Agreement upon thirty (30) days prior written
notice to the Company if the Company (i) removes the Executive from or fails to
re-elect the Executive to the office of Chief Operating Officer of the Company
without the Executive's prior written consent, (ii) reduces his salary or
materially fails to comply with Section 5 of this Agreement, or (iii) requires
the Executive to be based at any office or locations of the Company other than
those located in Broward County, Florida. In the event of such a termination,
the Executive shall be entitled to the balance of his salary payable pursuant to
Section 5a hereof, the Options pursuant to Section 5c hereof and the executive
benefits pursuant to Section 5d hereof.
7. Covenant Not to Compete and Non-Disclosure of Information.
a. Covenant Not to Compete. The Executive acknowledges and
recognizes the highly competitive nature of the Company's business and that the
goodwill, continued patronage, and specifically the names and addresses of the
Company's Clients (as hereinafter defined) constitute a substantial asset of the
Company having been acquired through considerable time, money and effort.
Accordingly, in consideration of the execution of this Agreement, the Executive
agrees to the following:
i. That during the Restricted Period (as hereinafter defined) and
within the Restricted Area (as hereinafter defined), the Executive will not,
individually or in conjunction with others, directly or indirectly, engage in
any Business Activities (as hereinafter defined), whether as an officer,
director, proprietor, employer, partner, independent contractor, investor (other
than as a holder solely as an investment of less
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than one (1%) percent of the outstanding capital stock of a publicly traded
corporation), consultant, advisor, agent or otherwise.
ii. That during the Restricted Period and within the Restricted
Area, the Executive will not, directly or indirectly, compete with the Company
by soliciting, inducing or influencing any of the Company's Clients which have a
business relationship with the Company during the Restricted Period to
discontinue or reduce the extent of such relationship with the Company.
iii. That during the Restricted Period and within the Restricted
Area, the Executive will not (A) directly or indirectly recruit, solicit or
otherwise influence any employee or agent of the Company to discontinue such
employment or agency relationship with the Company, or (B) employ or seek to
employ, or cause any business which competes directly or indirectly with the
Business Activities of the Company (the "Competitive Business") to employ or
seek to employ for any Competitive Business any person who is then (or was at
any time within six (6) months prior to the date Executive or the Competitive
Business employs or seeks to employ such person) employed by the Company.
b. Non-Disclosure of Information. The Executive acknowledges that
the Company's trade secrets, private or secret processes, methods and ideas, as
they exist from time to time, customer lists and information concerning the
Company's products, services, training methods, development, technical
information, marketing activities and procedures, credit and financial data
concerning the Company and/or the Company's Clients (the "Proprietary
Information") are valuable, special and unique assets of the Company, access to
and knowledge of which are essential to the performance of the Executive
hereunder. In light of the highly competitive nature of the industry in which
the Company's business is conducted, the Executive agrees that all Proprietary
Information, heretofore or in the future obtained by the Executive as a result
of the Executive's association with the Company shall be considered
confidential.
In recognition of this fact, the Executive agrees that the Executive,
during the Restricted Period, will not use or disclose any of such Proprietary
Information for the Executive's own purposes or for the benefit of any person or
other entity or organization (except the Company) under any circumstances unless
such Proprietary Information has been publicly disclosed generally or, unless
upon written advice of legal counsel reasonably satisfactory to the Company, the
Executive is legally required to disclose such Proprietary Information.
Documents (as hereinafter defined) prepared by the Executive or that come into
the Executive's possession during the Executive's association with the Company
are and remain the property of the Company, and when this Agreement terminates,
such Documents shall be returned to the Company at the Company's principal place
of business, as provided in the Notices provision (Section 10) of this
Agreement.
c. Documents. "Documents" shall mean all original written,
recorded, or graphic matters whatsoever relating to the business conducted by
the Company, and any
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and all copies thereof, including, but not limited to: papers; books; records;
tangible things; correspondence; communications; telex messages; memoranda;
work-papers; reports; affidavits; statements; summaries; analyses; evaluations;
client records and information; agreements; agendas; advertisements;
instructions; charges; manuals; brochures; publications; directories; industry
lists; schedules; price lists; client lists; statistical records; training
manuals; computer printouts; books of account, records and invoices reflecting
business operations; all things similar to any of the foregoing however
denominated. In all cases where originals are not available, the term
"Documents" shall also mean identical copies of original documents or
non-identical copies thereof.
d. Company's Clients. The "Company's Clients" shall be deemed to be
any persons, partnerships, corporations, professional associations or other
organizations for whom the Company has performed Business Activities.
e. Restrictive Period. The "Restrictive Period" shall be deemed to
be eighteen (18) months following termination of this Agreement.
f. Restricted Area. The Restricted Area shall be deemed to mean
within Broward County, Miami-Dade County, Monroe County and Palm Beach County,
Florida and within any other county of any state in which the Company is
providing service at the time of termination.
g. Business Activities. "Business Activities" shall be deemed to
include the Business, any business activities concerning marketing, distributing
and selling prescription and non-prescription pet medications and pet related
products provided by the Company and any additional activities which the Company
or any of its affiliates may be engaged in at the time of termination.
h. Covenants as Essential Elements of this Agreement. It is
understood by and between the parties hereto that the foregoing covenants
contained in Sections 7a and 7b are essential elements of this Agreement, and
that but for the agreement by the Executive to comply with such covenants, the
Company would not have agreed to enter into this Agreement. Such covenants by
the Executive shall be construed to be agreements independent of any other
provisions of this Agreement. The existence of any other claim or cause of
action, whether predicated on any other provision in this Agreement, or
otherwise, as a result of the relationship between the parties shall not
constitute a defense to the enforcement of such covenants against the Executive.
i. Survival After Termination of Agreement. Notwithstanding anything
to the contrary contained in this Agreement, the covenants in Sections 7a and 7b
shall survive the termination of this Agreement and the Executive's employment
with the Company.
j. Remedies. The Executive acknowledges and agrees that the
Company's remedy at law for a breach or threatened breach of any of the
provisions of
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Section 7a or 7b herein would be inadequate and the breach shall be per se
deemed as causing irreparable harm to the Company. In recognition of this fact,
in the event of a breach or threatened breach by the Executive of any of the
provisions of Section 7a or 7b, the Executive agrees that, in addition to any
remedy at law available to the Company including, but not limited to, monetary
damages, and the Company, without posting any bond, shall be entitled to obtain
equitable relief in the form of specific performance, temporary restraining
order, temporary or permanent injunction or any other equitable remedy which may
then be available to the Company. Nothing herein contained shall be construed as
prohibiting the Company from pursuing any other remedies available to it for
such breach or threatened breach.
8. Indemnification.
a. The Company hereby acknowledges that the position of Chief
Operating Officer is an executive officer position within the meaning of the
Company's By-laws. The Executive shall be entitled to indemnification for his
acts or omissions in his capacity as Chief Operating Officer of the Company to
the fullest extent permitted by current or future Florida law (but only to the
extent such future law provides for broader indemnification rights than
permitted prior to the enactment thereof), including the provisions thereof
relating to the advancement of expenses. In addition to the foregoing, the
Company agrees that it shall, at all times during the term of this Agreement,
maintain director and officer liability insurance, with the Executive as a named
insured, in an amount that is reasonable for companies of a size and engaged in
a business comparable to the Company. In no event shall the Company maintain
director and officer liability insurance with coverage limits that are less than
those the Company currently has in place.
b. After the termination of this Agreement, the Executive shall
continue to be entitled to indemnification of the Company (including the
advancement of expenses) with respect to matters occurring on or prior to the
date of termination of the Executive's employment with the Company to the
fullest extent provided under current or future Florida law (but the extent such
future law provides for broader indemnification rights than permitted prior to
the enactment thereof), including the provisions thereof relating to the
advancement of expenses. Such reasonable expenses, including attorneys' fees,
that may be shall be paid by the Company on a current basis in accordance with
such advance under such current or future Florida law. To the extent that any
such payments by the Company pursuant to the Company's Articles of Incorporation
and/or Bylaws may be subject to repayment by the Executive pursuant to the
provisions of such Florida law, such repayment shall be due and payable by the
Executive to the Company within twelve (12) months after the termination of all
proceedings, if any, which relate to such repayment.
c. The provisions of this Section 8 shall inure to the benefit of
the heirs, legal representatives and estate of the Executive.
9. Withholding. Anything to the contrary notwithstanding, all payments
required to be made by the Company hereunder to the Executive or the Executive's
estate or
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beneficiaries shall be subject to the withholding of such amounts, if any,
relating to tax and other payroll deductions as the Company may reasonably
determine it should withhold pursuant to any applicable law or regulation. In
lieu of withholding such amounts, the Company may accept other arrangements
pursuant to which it is satisfied that such tax and other payroll obligations
will be satisfied in a manner complying with applicable law or regulation.
10. Notices. Any notice required or permitted to be given under the
terms of this Agreement shall be sufficient if in writing and if sent postage
prepaid by registered or certified mail, return receipt requested; by overnight
delivery; by courier; or by confirmed telecopy, in the case of the Executive to
the Executive's last place of business or residence as shown on the records of
the Company, or in the case of the Company to its principal office as set forth
in the first paragraph of this Agreement, or at such other place as it may
designate. Any notices shall be deemed given upon receipt thereof.
11. Waiver. Unless agreed in writing, the failure of either party, at
any time, to require performance by the other of any provisions hereunder shall
not affect its right thereafter to enforce the same, nor shall a waiver by
either party of any breach of any provision hereof be taken or held to be a
waiver of any other preceding or succeeding breach of any term or provision of
this Agreement. No extension of time for the performance of any obligation or
act shall be deemed to be an extension of time for the performance of any other
obligation or act hereunder.
12. Completeness and Modification. This Agreement constitutes the
entire understanding between the parties hereto superseding all prior and
contemporaneous agreements or understandings among the parties hereto concerning
the Employment Agreement. This Agreement may be amended, modified, superseded or
canceled, and any of the terms, covenants, representations, warranties or
conditions hereof may be waived, only by a written instrument executed by the
parties or, in the case of a waiver, by the party to be charged.
13. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute but one agreement.
14. Binding Effect/Assignment. This Agreement shall be binding upon the
parties hereto, their heirs, legal representatives, successors and assigns. This
Agreement shall not be assignable by the Executive or the Company, except that
it shall be assigned by the Company in connection with the sale, transfer or
other disposition of its business.
15. Governing Law. This Agreement shall become valid when executed and
accepted by Company. The parties agree that it shall be deemed made and entered
into in the State of Florida and shall be governed and construed under and in
accordance with the laws of the State of Florida, without regard to the
conflicts of laws and principle thereof. Anything in this Agreement to the
contrary notwithstanding, the Executive shall conduct the
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Executive's business in a lawful manner and faithfully comply with applicable
laws or regulations of the state, city or other political subdivision in which
the Executive is located.
16. Further Assurances. All parties hereto shall execute and deliver
such other instruments and do such other acts as may be necessary to carry out
the intent and purposes of this Agreement.
17. Headings. The headings of the sections are for convenience only and
shall not control or affect the meaning or construction or limit the scope or
intent of any of the provisions of this Agreement.
19. Severability. The invalidity or unenforceability, in whole or in
part, of any covenant, promise or undertaking, or any section, subsection,
paragraph, sentence, clause, phase or word or of any provision of this Agreement
shall not affect the validity or enforceability of the remaining portions
thereof.
20. Enforcement. Should it become necessary for any party to institute
legal action to enforce the terms and conditions of this Agreement, the
successful party will be awarded reasonable attorneys' fees at all trial and
appellate levels, expenses and costs.
21. Venue. Company and Executive acknowledges and agree that the U.S.
District for the Southern District of Florida, or if such court lacks
jurisdiction, the 17th Judicial Circuit (or its successor) in and for Broward
County, Florida, shall be the venue and exclusive proper forum in which to
adjudicate any case or controversy arising either, directly or indirectly, under
or in connection with this Agreement and the parties further agree that, in the
event of litigation arising out of or in connection with this Agreement in these
courts, they will not contest or challenge the jurisdiction or venue of these
courts.
22. Construction. This Agreement shall be construed within the fair
meaning of each of its terms and not against the party drafting the document.
[THE BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK]
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THE EXECUTIVE ACKNOWLEDGES THAT THE EXECUTIVE HAS READ ALL OF THE TERMS OF THIS
AGREEMENT, UNDERSTANDS THE AGREEMENT, AND AGREES TO ABIDE BY ITS TERMS AND
CONDITIONS.
IN WITNESS WHEREOF, the parties have executed this Agreement as of date
set forth in the first paragraph of this Agreement.
Witness: THE COMPANY:
XXXXXXXXXXXXX.XXX, INC.
--------------------------- By: /s/ Xxxx X. Xxxxx, M.D.
------------------------------
Xxxx X. Xxxxx, M.D., President
Witness: THE EXECUTIVE
--------------------------- /s/ Xxxxxxxxxxx Xxxxx
----------------------------------
Xxxxxxxxxxx Xxxxx
