EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made and entered into
as of this day of , 1998 by and between AMERITRUST HOLDINGS, INC., a
Florida corporation (the "Company") and XXXXX XXXXXXXX ("Employee").
W I T N E S S E T H:
WHEREAS, Employee is experienced in the development, marketing and
operating a mortgage banking company, and
WHEREAS, the Company desire to retain, engage and employ Employee and
Employee desires to be so retained, engaged and employed by the Company in the
capacity of President upon the terms and conditions set forth in this
Agreement, and
WHEREAS, Employee by reason of the nature of Employee's duties and
responsibilities will be provided access to the Company's confidential and
proprietary information which the Company and its parent, Finantra Capital,
Inc. desires to maintain confidential.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained here, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:
1. The above and foregoing recitals are true and correct and are
incorporated herein.
2. Relationship of the Parties: The Company hereby employs, hires and
engages Employee as its President and the Employee hereby accepts and
agrees to such hiring, engagement and employment subject to the
supervision and pursuant to the orders, advice and discretion of the
Company's Board of Directors. The
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Employee shall also perform such other duties as are customarily
performed by one holding such position in other, same or similar
businesses as that engaged in by the Employer.
3. Duties" During the term of the Employee's employment, the Employee
shall be responsible for the development, refinement and
implementation of the Company's mortgage programs and the compliance
of such programs with governmental laws, rules and regulations. The
Employee shall work on a full-time basis and carry out his employment
in a good and professional manner and to the reasonable satisfaction
of the Company's Board of Directors.
4. Term: The term of the Employee's employment shall be for a term of
five (5) years commencing upon the execution of this Agreement and
subject to the termination provisions set forth in this Agreement,
provided however, that the term of this Agreement shall be
automatically extended for an additional one (1) year term unless the
Company or Employee gives written notice to the other no later than
thirty (30) days prior to the expiration of any term electing to
decline such extension.
5. Compensation:
5.1 The company covenants and agrees that in consideration of the
services performed and to be performed hereunder, it will pay
to employee, during the term of Employee's employment under
this Agreement, at the Company's regular and customary
intervals for payment of compensation to employees, but not
less than twice per month, an annual base salary in the sum
of $75,000.00 during the first three years of this Agreement.
Commencing in the fourth employment year and each year
thereafter, the
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Employee shall be entitled to an annual increase in salary in
the sum of $5,000.00 per year.
5.2 Override Commissions: Employee shall be entitled to an
override commission on each residential mortgage transaction
made by Employer in an amount equal to 4% of the gross
revenues derived by employer and all mortgage related
companies. Gross revenue shall consist solely of the income
derived from original fees, loan discount fees, par-plus or
service release premiums. Commissions shall be paid monthly
within fifteen (150) days following the close of the month in
which the commission was earned and received.
5.3 Bonus: The Employee during the term of his employment shall
be entitled to a bonus equal to ten (10%) percent of the
Company's pre-tax net profit. The employee's bonus shall be
monthly, within fifteen (15) days of the end of the previous
month. Any overpayment shall be repaid to the Company by the
Employee. The Bonus funds received by the Employee shall be
used to amortize and pay his outstanding debts due Internal
Revenue Service and others. *
6. Benefits: The Employee shall be entitled to the following benefits
during the period of his employment hereunder:
6.1 Employee shall be entitled in accordance with the Company's
general policies for executives to participate in health,
casualty, disability and life insurance programs and any
other benefits as are made available from time to time by the
Company to other employees or executives.
* The Bonus funds described in this paragraph shall be used in full to amortize
and pay the Employee's liability on the monies owed to Xxxx Xxxxxxxx on the
Promissory Notes having an outstanding balance as of the date hereof in the sum
of $126,000.00; to the Internal Revenue Service in an amount to be negotiated
for unpaid payroll taxes which accrued by SunTrust Financial Corp. and the
monies due Xxxxx Xxxxxxx and Xxxxx Xxxxxx and Ameritrust Holdings, Inc. in the
amount of $117,000.00. Upon payment in full of the obligations described herein
the bonus payable to Employee pursuant to this section 5.3 shall cease and no
longer be payable.
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6.2 During the term of his employment the Employee shall be
entitled to reimbursement of all reasonable expenses actually
paid or incurred by Employee in the course of an pursuant to
the performance of his duties hereunder. Any single expense
in excess of Five Hundred and 00/100 ($500.00) Dollars shall
be verbally approved in advance by the Board Chairman or
other person designated by the Company to approve such
expenditure.
6.3 Employee shall be entitled to two (2) weeks paid vacation in
any twelve (12) month period during the term of this
Agreement. Paid vacation shall be prorated in any calendar
year during which the employee is employed under this
Agreement for less than an entire year. The Employee shall
also be entitled to all paid holidays given by the Company to
its executives or employees. In the event any annual accrued
vacation time is unused at the conclusion of a calendar year,
the unused time may be carried over into the next calendar
year or years until utilized.
6.4 Car Allowance: Employee shall receive a monthly car allowance
in the sum of $500.00 per month for the use of his automobile
on Company business. The Company agrees to reimburse fuel,
maintenance, and automobile insurance for employee. Employee
acknowledges liability coverage of not less than $300,000.00.
6.5 The Employee shall have annual five (5) sick days, which if
not used in any year shall be non-cumulative.
6.6 The Company shall reimburse Employee for his cellular phone
charges and his business telephone line installed in his
home.
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7. Incentive Stock Option Program: Employee shall be entitled to
participate in the Incentive Stock Option program of the Company's
parent, Finantra Capital, Inc. on an annual basis beginning with the
calendar year January 1, 1999. The number of incentive stock options
distributable by the Company to the Employee will be based upon the
Company's annual net pre-tax income as follows:
If the Net Pre-Tax Income of the Company is in excess of:
NET PRE-TAX INCOME ISO GRANT
500,000 25,000
750,000 50,000
1,000,000 75,000
1,250,000 100,000
1,500,000 125,000
1,750,000 150,000
2,000,000 175,000
2,250,000 200,000
Notwithstanding the above distribution schedule, should the
Company achieve net pre-tax income in the calendar year 1999 of at
least $250,000.00, Employee shall be granted 50,000 ISO's. This
exception to the distribution schedule shall only apply to the
calendar year 1999.
The Incentive Stock Option Program shall be funded with
common shares of the Company's parent, Finantra Capital, Inc. The
ISO's shall have a vesting period of six months and an exercise period
of eighteen (18) months from the date of issuance. The exercise price
of the options shall be equal to the closing price of the stock on the
date of issuance multiplied by 65%. Payment shall be due in full upon
the exercise of the option by the Employee.
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8. Disability: In the event that Employee shall become incapacitated by
reason of mental or physical disability during the term of his
employment such that he is prevented from performing his principal
duties and services hereunder for a period of sixty (60) consecutive
days or for shorter periods aggregating ninety (90) days during any
twelve (12) month period, the Company thereafter shall have the right
to terminate Employee's employment under this Agreement by sending
written notice of such termination to the Employee or his legal
representative and thereupon his employment shall hereunder
immediately terminate. Upon such termination Employee shall be
entitled to receive and shall be paid by the Company his salary in
effect on the date of termination paid at the Company's regular and
customary intervals for the payment of salaries for the lesser of
three (3) months or the remaining terms of this Agreement. In
addition, during such period, Employee shall continue to receive his
benefits described in this Agreement as in effect at the date of
termination. Immediately following the expiration of such applicable
period the employee shall no longer be entitled to further Company
benefits. The employee agrees to accept the payments described herein
I full discharge and release of the Company of and from any further
obligations under this Agreement. Such discharge and release shall not
affect any rights or remedies which may be available to Employee or
the Company otherwise than under this Agreement.
9. Termination:
9.1 Cause: The Company shall have the right to terminate the
employment of Employee hereunder at any time for cause [as
used herein, "cause"] if:
9.1.1 Employee shall be convicted by a court of competent
and final
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jurisdiction of any crime [whether or not involving
the Company] which constitute a felony in the
jurisdiction involved or otherwise commit acts of
moral turpitude in such a manner as to adversely
reflect upon the reputation of the Company; or
9.1.2. Employee shall commit any act of embezzlement or
similar material dishonest and injurious conduct
against the Company; or
9.1.3. Employee shall demonstrate reckless disregard or
grossly negligent and injurious conduct in
connection with the performance of, or a gross
disregard for, his duties and responsibilities
under, or assigned pursuant to this Agreement; or
9.1.4. In the event, commencing four months following the
Commencement date of this Agreement, the net monthly
sales volume of the Company is less than 75% of the
Company's projected sales goals per month as set
forth on Exhibit attached hereto in any consecutive
three month period, or the net annual sales volume
is less than 75% of the Company's annual projected
sales.
9.1.5. Employee is in material default in the performance
of his obligations, services or duties under this
Agreement and such default continues for a period of
fifteen (15) days after written notice to Employee.
9.2 Mutual Agreement: Company and Employee may mutually agree to
terminate this Agreement.
9.3 In the event that the employment of Employee shall be
terminated by the Company, Employee shall be entitled to
receive his salary then in effect through the date of such
termination. Employee shall
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accept the payments pursuant to this paragraph in full
discharge and release of the company of and from any further
obligations under this Agreement. Nothing contained in this
paragraph shall constitute a waiver or release by the Company
of any rights or claims it may have against the employee,
including, but not limited to, any claims or rights pursuant
to the provisions set forth in this Agreement.
10. Best Efforts of Employee: The Employee agrees that employee will, at
all times, faithfully, industriously and to the best of his ability,
experience and talents, perform all of the express and implicit terms
hereof, to the reasonable satisfaction of the Company and its Board of
directors. It is understood that the Employee must devote his full
time and effort to the business of the Company and may not render the
same or similar services or duties during the term hereof to a
business which is the same or similar to that of the Company.
10.B. Employer's Covenant.
The corporation (parent company) will assist Xx. Xxxxxxxx in
performance of his duties through employment of appropriate staff of
employees and professionals and sufficient working capital to reach
the corporation business objectives.
11. Employee's Limitations on Ability to Make Company Commitments: The
employee shall have the legal authority to enter into contracts and
commitments for and on behalf of the Company. However, the Employee
shall not enter into any contract or commitment on behalf of the
Company which would violate the parameters of the Company's
underwriting guidelines or be in derogation of the express
requirements of the Company's credit committee with respect to any
loan made
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by the Company or an expense in excess of One Thousand ($1,000.00)
Dollars for non-business related expenditures without the express
written consent of the Company's Board of Directors or the Company's
Credit Committee.
12. Trust Funds: All money belonging to the Company which comes into the
possession of Employee shall be received by Employee in trust for the
Company and Employee shall immediately deliver said funds to the
Company for deposit. All of such funds shall be considered "Trust
Funds."
13. Covenants, Representations and Warranties of Employee: The Employee
represents and warrants to the Company as follows:
13.1 Employee has the power and authority to enter into this
Agreement and perform its duties hereunder.
13.2 Employee shall use his best efforts to comply with all laws,
regulations, rules and ordinances pertaining to the Company's
business.
13.3 Employee shall weekly, or at such other interval designated
by the company, deliver to the Chairman of the Board of the
Company and its parent, activity reports which shall identify
all clients and financial activity of the company in forms
prescribed by the company.
14. Restrictive Covenants:
14.1 Employee recognizes and acknowledges that as a consequence of
his duties hereunder, Employee will be provided access to or
will come in contact with confidential information of or
regarding the Company and its parent, Finantra Capital, Inc.,
from time to time. Accordingly, Employee agrees that he will
not, during or after the term of his employment except with
prior written consent of the Company, disclose any
confidential
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information relating to the Company or its Parent. The
provisions of this section shall not apply to information
which Employee is required to disclose bylaw or by order a
court of competent jurisdiction, but only to the extent
required by law or by order and when reasonably possible,
only if Employee shall give the Company prior notice of such
intended disclosure so that the company has the opportunity
to seek a protective order if it deems such appropriate.
14.2 As used in this Agreement, "confidential information" shall
mean and include studies, plans, reports, records,
promotional materials, agreements, memoranda, documents,
information related to Company activities, systems, finances,
client lists, research data, personnel data, financing
sources, and such other related information not of a public
knowledge.
14.3 For so long as the Employee is employed hereunder, Employee
shall not engage either as principal, agent or consultant, or
through any corporation, firm or organization in which he is
or may be an officer, director, employee, shareholder,
partner, member or with which he is otherwise affiliated in
any business for profit which is engaged in any activity or
business similar to that of the Employer.
14.4 The Employee covenants and agrees that for a period of two
(2) years from the date of his termination of employment with
the company, either voluntary or involuntary, that he will
not directly or indirectly solicit or aid in the solicitation
of any company client who has done business with the Company
during the period of time that the Employee was in the employ
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of the Company. This provision shall apply to Broward and
Dade Counties.
14.5 It is agreed by the Employee that should he violate the
provisions of this section, the Company shall have the right
to obtain an Order from a court of competent jurisdiction
enjoining him from violating any and all of the provisions of
this section or of this Agreement and the Company's
application for such a writ of injunction shall be deemed
without prejudice to any and all other rights, remedies or
actions which may accrue in favor of the Company as a result
of the Employee's breach of this provision or of the terms of
this Agreement. In the event the Company is required to
institute any litigation concerning the terms and conditions
of this section or of this Agreement, the prevailing party
shall be entitled to reimbursement of all reasonable
attorney's fees and costs at both the trial and the appellate
court level. The Employee further agrees that in the event of
litigation venue shall be only be proper in Dade County,
Florida.
15. Notices: All notices, requests, demands, waivers, consents, approvals
or other communications required or permitted hereunder shall be in
writing and shall be deemed to have been given when received if
delivered personally or by recognized overnight carrier, or three (3)
days after being sent if sent by Certified or Registered Mail, postage
prepaid, Return Receipt Requested, to the following addresses:
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If to the Company: Ameritrust Holdings, Inc.
Attention: Xxxxxx X. Press, Chairman
0000 Xxxxx xx Xxxx Xxxxxxxxx
Xxxxx Xxxxxx, Xxxxxxx 00000
With a copy to: Xxxxxxx X. Xxxxxxx, Esquire
0000 Xxxxx xx Xxxx Xxxxxxxxx
Xxxxx Xxxxxx, Xxxxxxx 00000
If to the Employee: Xxxxx Xxxxxxxx
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Any party may by notice change the address to which notice or
other communications to it are to be delivered or mailed.
16. Miscellaneous Provisions:
16.1 Captions and Paragraph Headings. Captions and paragraph
headings contained in this Contract are for convenience and
reference only and in no way define, describe, extend or
limit the copy or intent of this Contract nor the intent of
any provision hereof.
16.2 Counterparts: This Contract may be executed in one or more
counterparts, each of which shall be deemed an original, but
all of which shall constitute one and the same Contract.
16.3 Binding Effect: This Contract shall enure to the benefit of
and shall be binding upon the parties hereto and their
respective heirs, personal representatives, successors and
assigns. However, under no circumstances shall this Contract
be assignable by Employee.
16.4 Entire Agreement: This contract constitute the entire
understanding agreement between the parties and may not be
changed, altered or
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modified, except by an instrument in writing signed by all
parties against whom and enforcement of such Contract would
be sought. In the event any provision of this Contract shall
be determined by appropriate judicial authority to be illegal
or otherwise invalid, such provision, shall be given its
nearest legal meaning or be construed or deleted as such
authority determines. The remainder of this Contract shall be
construed to be in full force and effect. This Contract shall
not be modified unless said modification is in writing and
signed by the party to be charged.
16.5 Governing Law and Venue: This Contract shall be construed and
interpreted according to the laws of the State of Florida,
Venue for any litigation hereunder shall be in Dade County,
Florida.
16.6 Joint Preparation: The preparation of this Contract has been
a joint effort of the parties and the resulting documents
shall not, solely as a matter of judicial construction, be
construed more severely against one of the parties than the
other.
16.7 Attorney's Fees: In the event of any litigation arising out
of or relating to this Contract, the unsuccessful party in
such litigation shall pay to the successful party all costs
and expenses incurred therein by the successful party,
including, without limitation, reasonable attorney's fees and
costs at the trial and xxxxxxxxx xxxxx xxxxx.
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