EMPLOYMENT AGREEMENT
THIS EMPLOYMNET AGREEMENT (the "Agreement"), dated as of March 18, 2004
(the "Effective Date"), is entered into between XXXX X. XXXXXXXXX, residing at
0000 XX 000xx Xxxxxx, Xxxxxxxx, Xxxxxxx 00000 ("Executive"), and ADSOUTH
PARTNERS, INC., a Florida Corporation, having its principal office at 000 Xxxx
Xxxxxx xxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxx Xxxxx, Xxxxxxx 00000 (the "Company").
Whereas, the Company and Executive desire to provide for the employment
of Executive by the Company on the terms set forth herein.
IT IS AGREED:
1. Employment, Duties and Acceptance
1.1. The Company hereby employs Executive as its President to supervise and
control the day-to-day operations of the Company. In such capacity,
Executive shall use his reasonable efforts to carry out all reasonable
orders and resolutions of the Company's Board of Directors ("Board")
within the scope of the Executive's supervision and control (unless
any such order for resolution shall provide otherwise), and, in
general, shall perform all duties incident to the office of President.
1.2. Executive accepts such employment and agrees to devote substantially
all of his business time, energies and attention to the performance of
his duties as President and, during the Term of this Agreement shall
not engage in any for profit business engaged in by the Company or its
subsidiaries. Notwithstanding anything contained in this Agreement to
the contrary, Executive may devote time to civic, charitable and
community affairs so long as such activities do not interfere with or
conflict with his duties as President of the Company.
1.3. The office from which Executive shall perform his duties under the
Agreement shall at all times be located within Broward County or Palm
Beach County, Florida. In the event the Company desires to re-locate
the Company's offices outside of Broward County or Palm Beach County,
Florida the Company shall first obtain prior written consent of
Executive.
2. Compensation and Benefits.
2.1. Salary. Commencing April 5, 2004, the Company shall pay Executive an
aggregate base salary ("Salary") equal to $175,000 per annum. The
Board shall meet at least annually to review Executives performance
hereunder and based upon such review and such other factors as the
Board may consider, at the sole and absolute discretion of the Board,
the Board may determine to increase but not decrease Executive's
Salary. Executive's annual Salary shall be paid in equal, periodic
installments, in accordance with the Company's normal payroll
procedures applicable to its most senior executive officers and shall
be subject to withholding taxes and other normal payroll deductions.
2.2. Bonuses. The Board shall meet at least annually to review Executives
performance hereunder and based upon such review and such other
factors as the Board may consider, at the sole and absolute discretion
of the Board, the Board may determine whether or not to award
Executive a bonus.
2.3. Sales Commissions.
(a) Smart Jets. In the event the Company enters into an
agreement with Smart Jets, Inc. ("Smart Jets"), Company agrees to
pay Executive a commission equal One Third (1/3) of any
commissions received by the Company in connection with its
business relationship with Smart Jets (the "Smart Jets
Commission"). Additionally, Company agrees to pay to executive
one half of the first payment received from Smart jets, up to a
maximum of $20,000.
(b) Cash Commission. During the term of this Agreement and
in addition to any other amounts payable to Executive hereunder,
Company agrees to pay Executive a commission (the "Cash
Commission") equal to Five percent (5%) of the gross sales
generated by the Company as a result of Executive's efforts.
Notwithstanding the foregoing, Executive acknowledges and agrees
that no Cash Commission shall be shall be payable to Executive
for sales generated by the Company's business or clients existing
on the Effective Date. Company shall pay Executive the Cash
Commission in immediately available funds no later than thirty
days after the end of each month for the sales generated by the
Company during that month.
(c) Stock Commission. During the term of this Agreement and
in addition to any other amounts payable to Executive hereunder,
Company agrees to pay Executive a commission (the "Stock
Commission") equal to Five Percent (5%) of the gross sales
generated by the Company as a result of Executive's efforts.
Notwithstanding the foregoing, Executive acknowledges and agrees
that no Stock Commission shall be payable to Executive for sales
generated by the Company's business or clients existing on the
Effective Date. Company shall pay Executive the Stock Commission
in the form of Company Common Stock no later than thirty days
after the end of each month for the sales generated by the
Company during that month. The number of shares of the Company
Common Stock to be delivered to Executive hereunder shall be
determined by dividing the Company's gross sales during each
applicable month, by the average closing price of one share of
the Company's Common Stock during the applicable month. All of
the shares of Common Stock to be issued under this Section will,
upon issuance, constitute validly authorized, fully paid and
non-assessable shares of Company and shall not be subject to
liens, security interests, or encumbrances or options or
agreements with respect thereto, created by Company or its
Affiliates.
2.4. One-Time Bonuses.
(a) Stock Payment. Within ten days after approval of the
Company's 2004 Employee Stock Plan by the SEC, Company shall
deliver to Executive a one-time payment of $100,000, payable in
shares of the Company's Common Stock (the "Signing Bonus
Shares"). The number of Signing Bonus Shares to be delivered to
Executive under this Section 2.4 shall be calculated by dividing
$100,000, by the average closing price of one share of the
Company's Common Stock during the ten trading days immediately
preceding the date of this Agreement (the "Per Share Price"). All
of the Signing Bonus Shares to be issued will, upon issuance,
constitute validly authorized, fully paid and non-assessable
shares of Company and shall not be subject to liens, security
interests, or encumbrances or options or agreements with respect
thereto, created by Company or its Affiliates. Additionally, all
of such shares shall be the subject of an effective registration
statement filed on Form S-8 with the SEC and shall be freely
tradable.
(b) Cash Payment. Simultaneous with the execution of
this Agreement, the Company shall pay to Executive a one-time
cash payment equal to Fifty Thousand Dollars ($50,000).
2.5. Stock Options. Simultaneous with the execution of this Agreement, the
Company shall grant Executive the option (the "Option") to purchase
One Million (1,000,000) shares of the Company's capital stock at an
exercise price equal to the average closing price of one share of the
Company's capital stock at an exercise price equal to the average
closing price of one share of the Company's Common Stock during the
ten trading days immediately preceding the date of this Agreement. The
Option shall immediately vest and become exercisable and shall remain
exercisable until one year after the date of grant.
2.6. Benefits. Executive shall be entitled to such medical, dental,
disability, life insurance and other benefits (the "Benefits") and
perquisites no less favorable than such as are afforded to other
senior executives of the Company generally.
Executive shall be entitled to four weeks of vacation in each
calendar year, inclusive of time off for illness. Notwithstanding
the foregoing, Company shall, at a minimum be responsible for all
costs associated with providing health insurance for Executive
and his immediate family under a health plan acceptable to
Executive
2.7. Expenses. The Company will pay or reimburse Executive for all
transportation, hotel and other expenses reasonably incurred by
Executive on business trips and for all other reasonable out-of-pocket
expenses actually incurred by him in the conduct of the business of
the Company against reasonably detailed vouchers submitted with
respect to any such expenses approved in accordance with the Company's
customary procedures applicable to its most senior executive officers.
The Company shall also provide Executive with a corporate credit card
from a major issuer (i.e., American Express, MasterCard or Visa
International) to facilitate payment of such expenses.
2.8. Automobile Allowance. Commencing April 2004, the Company will pay to
Executive a monthly automobile allowance in the amount of $1,800 per
month.
3. Term and Termination.
3.1. Employment Term. The term of this Agreement commences as of the
Effective Date and shall expire three (3) years thereafter (the
"Termination Date"), unless sooner terminated or extended as herein
provided (the "Initial Term"). This Agreement shall automatically
renew for an additional three-year period unless either party provides
the other with at least three months' prior written notice of its
intent to not renew this Agreement prior to the Termination Date (the
"Renewal Term"). Thereafter this Agreement shall automatically renew
until either party provides the other with written notice of its
intent upon not less than 90 days prior written notice.
3.2. Death. If Executive dies during the term of this Agreement, this
Agreement shall thereupon terminate; provided, however, the Company
shall pay to Executive's estate and/or beneficiaries, as the case may
be, an amount equal to the sum of (i) the then Salary of Executive
hereunder; and (ii) the bonus earned by the Executive during the
immediately preceding calendar year of Executive's death.
3.3. Disability The Company, by notice to Executive, may terminate this
Agreement if Executive shall fail because of catastrophic illness or
incapacity to render, for six consecutive months, services of the
character contemplated by this Agreement ("Permanent Disability").
Notwithstanding such termination, the Company, shall continue to pay
to Executive fifty percent (50%) of the Salary due Executive pursuant
to Section 2.1 hereof until the first anniversary of the termination
date. If the Company provides the Executive with written notice
indicating that it disputes whether or not Executive has experienced a
Permanent Disability, then the matter shall be referred to binding
arbitration; provided, however, that the scope of such arbitration
shall be limited to the determination of the Permanent Disability of
the Executive within the meaning of this Agreement. Such arbitration
shall take place in Palm Beach County, Florida and shall be held in
accordance with the rules of the American Arbitration Association,
except that the matter shall be heard and determined by three
arbitrators, one of whom shall be a duly licensed physician appointed
by Executive, one of whom shall be a duly licensed physician appointed
by the Company, and one of whom shall be a neutral Chairman appointed
by the foregoing physicians. The determination of the arbitrators
shall be by the concurrence of the majority of the arbitrators, which
determination shall be final, conclusive and binding upon all of the
parties hereto. The cost of any such arbitration shall be borne by the
non-prevailing party in any such arbitration.
3.4. Termination by Company for Cause. The Company, by notice to
Executive, may terminate this Agreement for cause. In the event
Executive terminates this Agreement for Cause, the Company shall pay
to Executive the Salary earned but not paid prior to the date of
termination. For purposes of this Section 3.4, "cause" shall be
defined as: (a) the refusal or failure by Executive to carry out
specific directions of the Board which are (i) of a material nature
and (ii) consistent with his status as president; (b) the commission
by Executive of a material breach of any of the provisions of this
Agreement; (c) common law fraud (which shall include misappropriation
of Company assets) of a material nature by Executive in his relations
with the Company or any of its subsidiaries or affiliates, or with any
customer or business contact of the Company or any of its subsidiaries
or affiliates; or (d) the conviction of Executive of any crime
involving an act of moral turpitude. Notwithstanding the foregoing, no
"cause" for termination shall be deemed to exist with respect to
Executive's acts described in clauses (a) or (b) above unless the
Company shall have given written notice to Executive specifying the
"cause" with reasonable particularity and, within fifteen business
days after such notice, Executive shall not have cured or eliminated
the problem or thing giving rise to such "cause".
3.5. Termination by Executive for Good Reason.
(a) Executive may terminate this Agreement for "Good Reason" as
hereinafter defined. If executive terminates this Agreement for
Good Reason, Company shall, within thirty days after termination
of this Agreement. Pay Executive, in a lump sum, the Salary which
Executive would have received through the first anniversary of the
expiration date. Additionally, Executive shall receive or continue
to receive as soon as practicable in accordance with the terms of
this Agreement:
(i) such payments under applicable plans or programs,
including but not limited to those referred to in
Section 2 hereof, to which
Executive is entitled pursuant to the terms of such
plans or programs through the date of termination;
(ii) payment in respect of accrued by unused vacation days
(the "Vacation Payment") and compensation earned but
not yet paid (the "Compensation Payment") which
amount shall be paid in a cash lump sum within (30)
days if the date of termination; and
(iii) continued coverage, at the Company's expense until
the first anniversary of the expiration date, all
employee health, dental, disability and life
insurance plans in which the Executive participates
as of the date of termination in accordance with the
respective terms thereof.
(b) For purposes of this Agreement, "Good Reason" shall mean any of
the following events (without Executive's express prior written
consent):
(i) Any breach by Company of any provision of this Agreement,
including any material reduction by Company of Executive's
duties or responsibilities (except in connection with the
termination of Executive's employment for Cause, as a
result of Permanent Disability, as a result of Executive's
death or by Executive other than for Good Reason;
(ii) Moving the principal executive offices of Company or the
place of Executive's employment to a location outside of
Broward County or Palm Beach County, Florida, or
(iii) Upon a Change of Control of Company (as such term is
hereinafter defined).
(c) For purposes of this Agreement, a "Change in Control" shall be
deemed to have occurred if (i) there shall be consummated (A) any
consolidation or merger of the Company in which the Company is not
the continuing or surviving corporation or pursuant to which
shares of the Company's common stock would be converted into cash,
securities or other property, other than a merger of the Company
in which the holders of the Company's common stock immediately
prior to the merger have substantially the same proportionate
ownership of common stock of the surviving corporation immediately
after the merger, or (B) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions)
of all or substantially all the assets of the Company.
3.6. Termination by Executive Without Good Reason. In the event Executive
terminates this Agreement without Good Reason, the Company shall pay
to Executive the salary earned but not paid prior to the date of
termination. Notwithstanding the foregoing, in the event Executive
terminates this Agreement without Good Reason within six months after
the Effective Date, Executive shall reimburse Company (the Termination
Reimbursement") an amount equal to X in the following formula: X =
($150,000/Z, where Z is the difference between (i) six months and (ii)
the number of months after the Effective Date before which Executive
terminated this Agreement without Good Reason.
Company acknowledges and agrees that No Termination Reimbursement shall
be payable under this Section if Executive terminates after the date
that is six months after the Effective Date. Executive shall have the
option to deliver the Termination Reimbursement to the Company in cash
or Adsouth Common Stock, the number of shares to be delivered shall be
determined based upon the Per Share Price (as defined in Section
2.4(a))
For example in the event Executive terminates this Agreement without
Good Reason three months after the Effective Date, the Termination
Reimbursement shall be equal to $50,000 determined as follows:
150,000/(6-3).
4. Protection of Confidential Information.
4.1. Executive acknowledges that:
(a) As a result of his current employment with the Company, Executive
has obtained and will obtain secret and confidential information
concerning the business of the Company and/or its subsidiaries and
affiliates, referred to collectively in this Section 4 as the
"Company"), including, without limitation, financial information,
designs and other proprietary rights, trade secrets and
"Know-how," customers and sources of supply ("Confidential
Information").
(b) The Company will suffer substantial damage that will be difficult
to compute if, during the period of his employment with the
Company or thereafter, Executive should divulge Confidential
Information.
(c) The provisions of this Agreement are reasonable and necessary for
the protection of the business of the Company.
4.2. Executive agrees that he will not at any time, either during the term
of this Agreement or thereafter, divulge to any person or entity any
Confidential Information obtained or learned by him as a result of his
employment with, or prior retention by, the Company, except (a) in the
course of performing his duties hereunder, (b) with the Company's
express written consent; (c) to the extent that any such information
is in the pubic domain other than as a result of Executive's breach of
any of his obligations hereunder; or (d) where required to be
disclosed by court order, subpoena or other government process. If
Executive shall be
required to make disclosure pursuant to the provisions of clause (d)
of the preceding sentence, Executive promptly, but in no event more
than 72 hours after learning of such subpoena, court order, or other
government process, shall notify, by personal delivery or by
electronic means, confirmed by mail, the Company and, at the Company's
expense, Executive shall: (i) take all reasonably necessary and lawful
steps required by the Company to defend against the enforcement of
such subpoena, court order or other government process, and (ii)
permit the Company to intervene and participate with counsel of its
choice in any proceeding relating to the enforcement thereof.
4.3. Upon termination of his employment with the Company, Executive will
promptly deliver to the Company (or confirm in writing that all such
information has been destroyed) all confidential memoranda, notes,
records, reports, manuals, drawings, blueprints and other documents
(and all copies thereof) relating to the business of the Company and
all property associated therewith, which he may then possess or have
under his control; provided, however, subject to Executive's
obligations under this Section 4, that Executive shall be entitled to
retain copies of such documents reasonably necessary to document his
financial relationship (both past and future) with the Company.
4.4. If Executive commits a breach, or threatens to commit a breach, of any
of the provisions of Section 4.2, the Company shall have the right and
remedy to have the provisions of this Agreement specifically enforced
by any court having equity jurisdiction, it being acknowledged and
agreed by Executive that the services being rendered hereunder to the
Company are of a special, unique and extraordinary character and that
any such breach or threatened breach will cause irreparable injury to
the Company and that money damages will not provide an adequate remedy
to the Company; and
Each of the rights and remedies enumerated in this Section 4.4 shall be
independent of the other, and shall be severally enforceable, and such
rights and
remedies shall in addition to, and not in lieu of, any rights and
remedies available to the Company under law or equity.
4.5. The provisions of Section 4 shall survive the termination of this
Agreement for any reason.
5. Definitions.
As used in this Agreement:
5.1. "Affiliate" shall mean any entity that, directly or indirectly, is
controlled by, controlling, or under common control with the Company.
6. Miscellaneous Provisions.
6.1. All notices provided for in this Agreement shall be in writing, and
shall be deemed to have been duly given when delivered personally to
the party to receive the same,, or when sent by a nationally
recognized next-day courier, addressed to the party to receive the
same at his or its address set forth below, or such other address as
the party to receive shall have specified by written notice given in
the manner provided for in this Section 6.1. All notices shall be
deemed to have been given as of the date of personal delivery,
transmittal or courier delivery thereof.
If to Executive:
Xxxx X. Xxxxxxxxx
Xxxxxxxx, Xxxxxxx 00000
Marked: "Personal and Confidential"
With a Copy to:
Xxxxx & Xxxxx, P.A.
0000 Xxxx Xxxxxxxx Xxxxx xxxx
Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxx, Esq.
If to the Company:
Adsouth Partners, Inc.
000 Xxxx Xxxxxx Xxxxxxx Xxxx.
Xxxxx 000
Xxxx Xxxxx, XX 00000
With a copy to:
Feldhake, August & Xxxxxxxxx LLP
00000 XxxXxxxxx Xxxx.
Xxxxx 000
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
Attn: Xxxxxxx X. August, Esquire
6.2. This Agreement sets forth the entire agreement of the parties relating
to the employment of Executive and is intended to supersede all prior
negotiations, understandings and agreements. No provisions of this
Agreement may be waived or changed except by a writing by the party
against whom such waiver or change is sought to be enforced. The
failure of any party to require performance of any provision hereof
shall in no manner affect the right at a later time to enforce such
provision.
6.3. All questions with respect to the construction of this Agreement, and
the rights and obligations of the parties hereunder, shall be
determined in accordance with the laws of the State of Florida.
6.4. This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of the Company. This Agreement shall not be
assignable by Executive, but shall inure to the benefit of and be
binding upon Executive's heirs and legal representatives.
6.5. Should any provision of this Agreement become legally unenforceable,
no other provision of this Agreement shall be affected, and this
Agreement shall continue as if the Agreement had been executed absent
the unenforceable provision.
6.6. In the event that a suit for collection of any damages resulting from,
or for the injunction of any action constituting, a breach of any of
the terms or provisions of this Agreement, then the prevailing party
shall pay all reasonable costs, fees (including reasonable attorneys;
fees) and expenses of the non-prevailing party.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written.
EXECUTIVE
______________________________________
Xxxx X. Xxxxxxxxx
ADSOUTH PARTNERS, INC.
______________________________________
Xxxx X. Xxxxxx
Chairman/Chief Executive Officer
AMENDMENT
Reference is made to that certain Employment Agreement dated the 18th
of March 2004, by and between Xxxx X. Xxxxxxxxx ("Executive") and Adsouth
Partners, Inc. ("Company") such agreement being hereinafter referred to as the
Employment Agreement.
Paragraph 1.4 is added as follows:
"1.4 Executive shall be responsible for overseeing the establishment
and operations of a web based advertising business to be operated as a division
of the Company."
Section 2.9 is added as follows. of the Agreement is hereby amended to
read as follows:
"2.9 As compensation for overseeing the establishment and operations a
web based advertising business, Executive shall receive 500,000 shares of the
Company's common stock."
March 31, 2004
EXECUTIVE
_____________________________________
Xxxx Xxxxxxxxx
COMPANY
_____________________________________
Xxxx X. Xxxxxx, Chairman/CEO
Adsouth Partners, Inc.
