[EXHIBIT 10.4]
Employment Agreement
AGREEMENT made this 27th day of February 2004, by and
between Epicus Communications Group, Inc., a Florida corporation,
hereinafter sometimes called the "Employer", having its principal
place of business in West Palm Beach, Florida, and Xxxxxx
Xxxxxxx, of Palm Beach, Florida, hereinafter sometimes called the
"Employee".
WHEREAS, the Employee and Employer desire to set forth in
writing their contract with respect to Employee's employment by
Employer;
NOW, THEREFORE, in consideration of their mutual promises
set forth herein, the parties hereby agree as follows:
1. EMPLOYMENT. Employer hereby employs Employee, and
Employee hereby accepts such employment, upon the terms and
conditions set forth in this Agreement.
2. DUTIES AND AUTHORITY.
A. Employee will occupy the position of President and
Chief Executive Officer, (hereinafter referred to as "Position"
or "Assignment") with the Employer and may serve as a Director of
the Employer.
B. In this position, Employee will have the responsibility
and authority of Chief Executive Officer, subject to the control
of the Board of Directors, and have general supervision,
direction and control, as necessary, over the business and
affairs of the Corporation and its Employees. Employee will be
primarily responsible for carrying out all orders and resolutions
of the Board of Directors and such duties as may from time to
time be assigned to Employee by the Board of Directors.
C. In the absence of the Chairman of the Board at any
Shareholders or Board of Directors meeting, Employee will preside
over that Shareholders meeting and, in the event Employee is then
a Director of the Employer, will preside over the Board of
Directors meeting.
D. Employee agrees to devote his full time attention and
best efforts to the performance of employment hereunder.
3. TERM OF EMPLOYMENT. The term of employment shall begin
on the date of this Agreement, and shall extend for a period of
five (5) consecutive years or until terminated as provided
herein.
4. COMPENSATION. Employee will receive compensation
during the term of this Agreement as follows:
A. A base annual salary of Two Hundred Seventy Five
Thousand Dollars ($275,000) payable either bi-monthly or monthly
at the discretion of the Employer. The base salary shall be
adjusted at the end of each year of employment to reflect any
change in the cost of living by multiplying the salary for the
prior year by a fraction, the numerator of which is the National
Consumer Price Index (NCPI) for the month most recently released
by the Bureau of Labor Statistics of the United States Department
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of Labor and the denominator of which is the NCPI for the
identical month in the preceding year. If this index is
discontinued, changed or unavailable, Employer shall determine
and utilize a similar criterion for reflecting any increase in
the cost of living. Additionally, at its discretion, the Board
of Directors may elect to increase Employee's base annual salary
at any time during the term of this agreement.
B. An incentive salary (Bonus) equal to a minimum of three
percent (3%) of the adjusted net profits (hereinafter defined) of
the Employer during each fiscal year beginning or ending during
the term of this Agreement. Said Bonus to be paid to the
Employee in cash or company stock or any combination thereof with
the method of payment to be at the sole discretion of the
Employee. "Adjusted net profit" shall be the net profit before
federal and state income taxes, determined in accordance with
accepted accounting practices by the independent accounting firm
employed by the Employer as auditors and adjusted to exclude:
(i) any incentive salary payments paid pursuant to this
Agreement; (ii) any contributions to pension and/or profit-
sharing plans; (iii) any extraordinary gains or losses
(including, but not limited to, gains or losses on disposition of
assets); (iv) any refund or deficiency of federal and state
income taxes paid in a prior year; and (v) any provision for
federal or state income taxes made in prior years which is
subsequently determined as unnecessary. The determination of the
adjusted net profits made by the independent accounting firm
employed by the Employer shall be final and binding upon Employee
and the Employer. For the first and last fiscal years ending and
beginning, respectively, during the term of this Agreement, the
incentive salary shall be computed for the proportion of the
fiscal year coextensive with this Agreement. The incentive
salary shall be paid within sixty (60) days after the end of each
fiscal year. The maximum incentive salary payable for any one
year shall not exceed two hundred percent of Employee's base
annual salary unless authorized by the Board of Directors.
C. The Board of Directors and the Employee may agree to
waive the cost of living adjustment in (A) above or the incentive
pay in (B) above. Both parties must agree to waive these
requirements or the original clause shall stand in effect.
D. Due to the nature of the Corporation's business and its
unpredictable cash flow; for the good of the Corporation and at
the sole discretion of the Employee, Employee may elect to (a)
accept partial payment of Employee's base salary and/or bonus in
unrestricted, free-trading common stock of the Corporation, or
(b) accept partial payment of Employee's salary in cash with the
balance to be paid to Employee in cash upon demand at a later
date. Should Employee elect (a) above, the value of shares
issued in lieu of cash shall be determined by the average bid
price of the Corporation's common stock at the close of the
market for the 10 trading days prior to Employee's scheduled
payday as defined in (4.A.) of this agreement. The percentage,
if any, of salary and/or bonus taken in stock in lieu of cash is
at the sole discretion of the Employee. Should Employee elect
(b) above, the percentage of salary Employee agrees to accept as
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partial payment is at the sole discretion of Employee, as is the
due date of the payment of any balance of salary owed employee.
5. DEFERRED COMPENSATION. In the event that Employee
retires after performing services for the Employer up until
Employee reaches the age of 65 or retires at an earlier age with
the approval of the Employer, Employee will be entitled to
deferred compensation payments after retirement upon the
following terms and conditions:
A. For a period of twenty (20) years ("Retirement Period")
Employee will receive all of the following: (i). Base Payments
equal to thirty percent (30%) of the average total salary (base
salary plus incentive salary) due to Employee under the terms of
this agreement. ("Retirement Salary Base");
B. The deferred compensation payments shall be made in
equal monthly installments on the first day of each month,
starting the month following the month of retirement.
C. In the Event of the death of Employee prior to the
expiration of the "Retirement Period", the Employer will pay all
remaining Base Payments specified in subparagraph A(i), and no
other deferred compensation payments, to any beneficiary of
Employee designated by Employee in a written document filed with
the Employer, or in the absence of such designation, the estate
of Employee. The Employer may elect to pay these remaining Base
Payments in a lump sum or in the equal monthly installments
specified in subparagraph B.
D. Employee shall not sell, assign, transfer, or pledge,
or in any other way dispose of or encumber, voluntarily or
involuntarily, by gift, testamentary disposition, inheritance,
transfer to any inter-vivos trust, seizure and sale by legal
process, operation of law, bankruptcy, winding up of a
corporation, or otherwise, the right to receive any deferred
compensation pursuant to this Agreement.
6. RELOCATION. In the event Employee is transferred and
assigned to a new principal place of work located more than fifty
(50) miles from Employee's present residence, Employer will pay
for all reasonable relocation expenses including:
A. Transportation fares, meals, and lodging for Employee,
his spouse, and family from Employee's present residence to any
new residence located near the new principal place of work.
B. Moving of Employee's household goods and the personal
effects of Employee and Employee's family from Employee's present
residence to the new residence.
C. Lodging and meals for Employee and Employee's family
for a period of not more than sixty (60) consecutive days while
occupying temporary living quarters located near the new
principal place of work.
D. Round trip travel, meals and lodging expenses for
Employee's family for no more than two (2) house hunting trips to
locate a new residence, each trip not to exceed fourteen (14)
days; and
E. Expenses in connection with the sale of the residence
of Employee including Realtor fees, property appraisals, mortgage
prepayment penalties, termite inspector fees, title insurance
policy and revenue stamps, escrow fees, fees for drawing
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documents, state or local sales taxes, mortgage discount points
(if in lieu of a prepayment penalty), and seller's attorney's
fees (not to exceed one percent (1%) of the sales price). At the
option of Employee and in lieu of reimbursement for these
expenses, Employee may sell the residence of Employee to the
Employer at the fair market value of the residence determined by
an appraiser chosen by the Employer. The appraisal will be
performed within ten (10) days after notice of transfer and
notice of appraised value will be submitted by report to
Employee. Employee will have the right to sell the residence to
the Employer at the appraised price by giving notice of intent to
sell within thirty (30) days from the date of the appraisal
report. The term "residence" shall mean the property occupied by
Employee as the principal residence at the time of transfer and
does not include summer homes, multiple-family dwellings,
houseboats, boats, or airplanes but does include condominium or
cooperative apartment units and duplexes (two family) occupied by
Employee.
7. MEDICAL AND GROUP INSURANCE. At the expense of the
Employer, Employer agrees to include Employee in the group
medical and hospital plan of Employer, when such plan is
established, and will provide group life insurance for Employee
in the amount of not less than Three Hundred Fifty Thousand
Dollars ($350,000) during the term of employment.
8. VACATION, SICK/PERSONAL LEAVE. Employee shall be
entitled to four (4) weeks vacation during each year. The time
for the vacation shall be mutually agreed upon by Employee and
Employer. If vacation is not taken for the benefit of the
Employer, Employee shall be reimbursed at his base salary rate
for time not taken. Employee shall receive thirty (30) days
Sick/Personal Leave for each year of employment. Unused
Sick/Personal Leave will accrue and be retained by Employee to be
used at his discretion.
9. AUTOMOBILE. Employer will provide to Employee, during
the term of this agreement, the use of a new automobile of the
Employees choice, said automobile may be leased, rented or
purchased by Employer at Employer's discretion. Value of said
automobile shall be determined by the following guidelines: for
the initial automobile; a vehicle that could normally be
purchased with a 20% down payment and total monthly payments not
to exceed $900.00 for a period of five (5) years. Employer will
replace the automobile with a new, comparable vehicle every two
(2) years regardless of necessary payment increases due to price
increases of a comparable vehicle. Employer will pay all
automobile operating expenses incurred by Employee in the
performance of Employee's business duties. The Employer will
procure and maintain in force an automobile liability policy for
the automobile with coverage, including Employee, in the minimum
amount of One Million Dollars ($1,000,000) combined single limit
on bodily injury and property damage.
10. EXPENSE REIMBURSEMENT. Employee shall be entitled to
reimbursement for all reasonable expenses, including travel and
entertainment, incurred by Employee in the performance of
Employee's duties. Employee will maintain records and written
receipts as required by federal and state tax authorities to
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substantiate expenses as an income tax deduction for Employer and
shall submit vouchers for expenses for which reimbursement is
made.
11. LOW INTEREST LOAN.
A. From time to time, Employee may borrow sums from
Employer up to a maximum aggregate of Three Hundred Fifty
Thousand Dollars ($350,000) provided the Employer has excess
funds available for such purposes. The Board of Directors shall
establish the amount of such funds available annually. Each loan
shall be evidenced by a Promissory Note payable in not more than
sixty (60) monthly principal and interest installment payments
starting with the first day of the month following the month in
which the loan is made, with interest at the rate of three
percent (3%) per year on the unpaid balance of the loan or loans
outstanding.
B. In the event Employee xxxxxx employment with Employer
for reasons other than permanent disability, death, or retirement
while a loan or loans are outstanding, the unpaid principal
amount then outstanding shall be due and payable within thirty
(30) days after the date of termination. In the event severance
of employment is due to permanent disability, death, or
retirement, Employee, or the legal representative of Employee,
shall repay any outstanding loan in accordance with the terms of
the promissory note.
C. Should there be a default in the payment of any
installment of principal and interest when due, then the entire
sum of principal and interest, at the option of the Employer,
shall immediately become due and payable without demand or
notice. In case this note shall not be paid when due according
to its terms, Employee shall pay all costs of collection and
reasonable attorney's fees whether or not suit is filed on the
note.
12. PERMANENT DISABILITY.
A. In the event Employee becomes permanently disabled
(hereinafter defined) during employment with Employer, Employer
may terminate, subject to subparagraph 12B below, this agreement
by giving thirty (30) days notice to Employee of its intent to
terminate, and, unless Employee resumes performance of the duties
set forth in Paragraph 2 within five (5) days of the date of
notice and continues performance for the remainder of the notice
period, this agreement will terminate, subject to subparagraph
12B below, at the end of the thirty (30) day period.
"Permanently disabled" for the purpose of this agreement will
mean the inability, due to physical or mental ill health, or any
reason beyond the control of Employee to perform Employee's
duties for sixty (60) consecutive days or for an aggregate of
ninety (90) days during any one employment year irrespective of
whether such days are consecutive.
B. Upon termination of employment under the provisions of
subparagraph (12A) above, Employee will be entitled to any
deferred compensation to which the Employee may be entitled under
the provisions of Paragraph 5 herein paid to him upon giving
notice to the Employer. For the purposes of Paragraph 5,
termination under subparagraph (12A) of this agreement shall be
considered "retirement.
C. Employer shall maintain, at its expense, a disability
Policy covering Employee for a dollar amount specified by
Employee. This amount may not exceed one hundred percent (100%)
of the base salary. Benefits of this policy shall begin on the
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date the Employee's Sick/Personal Leave days are exhausted and
shall continue until the Employee's deferred compensation as
outlined in paragraph 5 of this agreement goes into effect.
13. DEATH. In the event that Employee dies during the term
of this agreement, this agreement shall immediately terminate
except as provided in paragraph 5C. herein.
14. TERMINATION.
A. This agreement may be terminated by Employer by giving
ten (10) days notice to Employee if Employee willfully breaches
or habitually neglects the duties to be performed under Paragraph
2, habitually engages in the use of illegal substances or the
excessive use of alcohol, or engages in any conduct which is
illegal or dishonest resulting in damage to the reputation of
Employer.
B. This agreement may be terminated by Employee, without
cause, by giving ninety (90) days notice to Employer.
C. In the event employment is terminated pursuant to
subparagraphs (14A) or (14B), Employee will be entitled to only
base salary compensation earned prior to the date of termination
as provided for in Paragraph 3 of this agreement computed pro
rata up to and including the date of termination, plus one
twelfth (1/12) of one years base salary. Employee shall not
receive the incentive salary payments or the deferred
compensation payments provided for in Paragraphs 3(B) and 4,
respectively.
D. Should Employer wish to terminate the Employee for any
reason, other than those listed in subparagraph (14A) of this
agreement, Employee shall receive the compensation due for the
remainder of the Term of Employment (defined in paragraph (3) of
this agreement), said compensation shall be in a lump sum equal
to the total amount of the base salary as defined in subparagraph
(4A) of this agreement, in this case "cost of living" increases
would not be applicable. Employee would still receive the
"Bonus" as defined in paragraph (4B) of this agreement. Upon
termination as defined in this paragraph, Employee would,
regardless of age, tenure or Employer approval, immediately
become eligible to also receive Deferred Compensation as defined
in sub-paragraphs five A through five D (5A-5D) of this
agreement.
E. In the event Employer is acquired, is a non surviving
party in a merger, or transfers substantially all of its assets,
this agreement shall not be terminated and Employer agrees to
take all actions necessary to ensure that the transferee or
surviving company is bound by the provisions of this agreement.
15. NOTICES. Any notice provided for in this Agreement
shall be given in writing. Notices shall be effective from the
date of service, if served personally on the party to whom notice
is to be given, or on the second day after mailing, if mailed by
first class mail, postage prepaid. Notices shall be properly
addressed to the parties at their respective addresses:
Employer: 0000 Xxxxxxx Xxxxx , Xxxx Xxxx Xxxxx, XX 00000
Employee: 0000 Xxxxxxxx Xxxx, Xxxxxxx Xxxxx, XX 00000,xx to such
other address as either party may later specify by notice to the
other.
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16. ENTIRE AGREEMENT. This Agreement contains the entire
agreement and supersedes all prior agreements and
understandings., oral or written, with respect to the subject
matter hereof. This Agreement may be changed only by an
agreement in writing signed by the party against whom any waiver,
change, amendment or modification is sought.
17. WAIVER. The waiver by the Employer of a breach of any
of the provisions of this Agreement by the Employee shall not be
construed as a waiver of any subsequent breach by the Employee.
18. GOVERNING LAW; VENUE. This Agreement shall be construed
and enforced in accordance with the laws of the State of Florida.
Palm Beach County, Florida, shall be the proper venue for any
litigation arising out of this Agreement.
19. PARAGRAPH HEADINGS. Paragraph headings are for
convenience only and are not intended to expand or restrict the
scope or substance of the provisions of this Agreement.
20. ASSIGN ABILITY. The rights and obligations of the
Employer under this Agreement shall inure to the benefit of and
shall be binding upon the successors and assigns of the Employer.
This Agreement is a personal employment agreement and the rights,
obligations and interests of the Employee hereunder may not be
sold, assigned, transferred, pledged or hypothecated.
21. SEVERABILITY. If any provision of this Agreement is
held by a court of competent jurisdiction to be invalid or
unenforceable, the remainder of the Agreement shall remain in
full force and effect and shall in no way be impaired.
22. ARBITRATION. Any controversy or claim arising out of
or relating to this contract, or breach thereof, shall be settled
by arbitration in accordance with the Rules of the American
Arbitration Association and judgment upon the award rendered by
the arbitrators may be entered in any court having jurisdiction
thereof.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the 27th day of February, 2004.
/s/Xxxxxx Xxxxxxx ___________________________
Xxxxxx Xxxxxxx, Employee Witness
FOR EPICUS COMMUNICATIONS GROUP, INC.:
/s/Xxxxxx Xxxxxxxxx __________________________
Executive Vice President Witness
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