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Exhibit 10.8
AGREEMENT
Agreement made as of the 1st day of August, 1999, by and
between Brooke Group Ltd., a corporation incorporated under the laws of the
State of Delaware, with its principal place of business at 000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxx, Xxxxxxx 00000 (the "Company"), and Xxxxxxxx X. Xxx Xxxxxx,
residing at 0000 Xxxxxxxx Xxxxxx, Xxx. #0000, Xxxxx, Xxxxxxx 00000 (the
"Executive").
W I T N E S S E T H :
WHEREAS, the Company desires to employ Executive as its Vice
President, Treasurer and Chief Financial Officer and Executive is willing to
serve in such capacities;
WHEREAS, the Company and Executive desire to set forth the
terms and conditions of such employment.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements herein contained, the Company and Executive
agree as follows:
1. EMPLOYMENT.
The Company hereby agrees to employ Executive, and Executive
agrees to be employed by the Company, on the terms and conditions herein
contained as its Vice President, Treasurer and Chief Financial Officer and in
such other executive capacities with the Company and its affiliated entities as
assigned from time to time by more senior executives of the Company. The
Executive shall devote substantially all of her business time, energy, skill and
efforts to the performance of her duties hereunder and shall faithfully and
diligently serve the Company. The foregoing shall not prevent Executive from
participating in not-for-profit activities or from managing her passive personal
investments provided that these activities do not materially interfere with
Executive's obligations hereunder.
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2. TERM OF EMPLOYMENT.
Executive's employment under this Agreement shall be for a
term commencing on August 1, 1999 (the "Effective Date") and, subject to earlier
termination as provided in Section 7 below, terminating on August 1, 2000 (the
"Initial Term"). The Initial Term shall be extended for successive one-year
periods (the "Additional Terms") unless terminated at the end of the Initial
Term or any Additional Term by either party upon ninety (90) days prior written
notice given to the other party (the Initial Term and any Additional Terms shall
be referred to as the "Employment Term"). Notwithstanding anything else herein,
the provisions of Section 8 hereof shall survive and remain in effect
notwithstanding the termination of the Employment Term or a breach by the
Company of this Agreement or any of its terms.
3. COMPENSATION.
(a) As compensation for her services under this
Agreement, the Company shall pay Executive a salary at the rate of One Hundred
and Fifty-five Thousand Dollars ($155,000) per year (the "Base Salary"), payable
in equal installments (not less frequently than monthly) and subject to
withholding in accordance with the Company's normal payroll practices. The
Executive's Base Salary shall be reviewed annually by the Company and may be
increased, but not decreased, in the Company's sole discretion.
(b) In addition to the Base Salary, the Company
may, in its sole discretion, pay Executive bonuses from time to time.
4. BENEFITS AND FRINGES.
During the Employment Term, Executive shall be entitled to
such benefits and fringes, if any, as are generally provided from time to time
by the Company to its executive employees of a comparable level, including any
life or medical insurance plans and pension and other similar plans, provided
that the Executive shall be provided with life insurance at least equal to her
Base Salary (provided she is insurable at standard rates).
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5. EXPENSES.
The Company shall reimburse Executive in accordance with its
expense reimbursement policy as in effect from time to time for all reasonable
expenses including at least 40 hours of continuing professional education per
annum incurred by Executive in connection with the performance of her duties
under this Agreement upon the presentation by Executive of an itemized account
of such expenses and appropriate receipts.
6. VACATION.
During the Employment Term, Executive shall be entitled to
vacation in accordance with the Company's practices, provided that Executive
shall not be entitled to less than four weeks paid vacation in each full
contract year.
7. EARLIER TERMINATION.
(a) Executive's employment under this Agreement and
the Employment Term shall terminate prior to August 1, 2000 as follows:
(i) automatically on the date of Executive's
death.
(ii) Upon written notice given by the
Company to the Executive if Executive is unable to perform her material duties
hereunder for 180 days (whether or not continuous) during any period of 360
consecutive days by reason of physical or mental disability.
(iii) Upon written notice by the Company to
the Executive for Cause. Cause shall mean (A) the Executive's conviction
(treating a nolo contendere plea as a conviction) of a felony (whether or not
any right of appeal has been or may be exercised); (B) willful refusal to
attempt to properly perform her obligations under this Agreement, or follow the
direction of the Board of Directors of the Company (the "Board") or a more
senior executive of the Company, which in either case is not remedied promptly
after receipt by the Executive of written notice from the Company specifying the
details thereof, provided the refusal to follow a direction shall not be Cause
if the Executive in good faith believes that such
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direction is not legal or ethical and promptly notifies the Company in writing
of such belief; (C) the Executive's gross negligence or willful misconduct with
regard to the Company or its affiliated entities, their business, assets or
employees; (D) the Executive's breach of fiduciary duty owed to the Company or
any subsidiary thereof, including, without limitation the obligations set forth
in Section 8 hereof; or (E) any other breach by the Executive of a material
provision of this Agreement that remains uncured for ten (10) days after written
notice thereof is given to the Executive. Upon a termination for Cause, the
Executive (and her representative) shall be given the opportunity to appear
before the Board to explain why the Executive believes that Cause did not occur.
Such appearance shall be scheduled on no less than twenty (20) and no more than
forty (40) days notice to Executive. In the event the Board agrees with the
Executive, which shall be a determination made in its sole discretion, the
Executive shall be retroactively reinstated in her position.
(iv) Upon written notice by the Company
without Cause.
(v) Upon the voluntary resignation of the
Executive without Good Reason upon sixty (60) days prior written notice to the
Company (which the Company may in its sole discretion make effective earlier).
(b) Upon such earlier termination of the Employment
Term the Executive shall be entitled to receive any unpaid salary and accrued
vacation through her date of termination and any benefits under any benefit plan
in accordance with the terms of said plan. In addition, if the termination is
pursuant to (a)(iv) above or non-renewal of the Employment Term by the Company
pursuant to Section 2 above, the Executive shall receive, provided she signs a
release of all claims arising out of her employment with the Company or
termination thereof (other than her right to indemnification, which shall
survive) in such form as reasonably requested by the Company, severance pay in a
lump sum equal to the amount of Base Salary she would have received if she was
employed until one year after termination of the Employment Term. Such lump sum
severance shall be paid within ten (10) business days after the Executive's
execution of the aforesaid release. In the event termination is pursuant to
(a)(ii) alone, the Executive shall receive in monthly payments for one (1) year
thereafter her Base Salary reduced by any disability benefits or worker's
compensation salary replacement she receives from any program sponsored or made
available by the Company or a
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governmental entity. In addition, until the earlier of (i) Executive commencing
other full-time employment or (ii) 12 months after the end of the Employment
Term, to the extent the Executive or her dependents are eligible for COBRA
coverage, the Company shall pay for such coverage. The Company and its
affiliated entities shall have no other obligations to the Executive.
8. CONFIDENTIAL INFORMATION AND NON-COMPETITION.
(a) Executive acknowledges that as a result of her
employment by the Company, Executive will obtain secret and confidential
information as to the Company and its affiliated entities, that the Company and
its affiliated entities will suffer substantial damage, which would be difficult
to ascertain, if Executive shall enter into Competition, as defined below, with
the Company or any affiliated entity and that because of the nature of the
information that will be known to Executive it is necessary for the Company to
be protected by the prohibition against Competition set forth herein, as well as
the Confidentiality restrictions set forth herein. Executive acknowledges that
the provisions of this Agreement are reasonable and necessary for the protection
of the business of the Company and its affiliated entities and that part of the
compensation paid under this Agreement is in consideration for the agreements in
this Section 8.
(b) Competition shall mean:
(i) participating, directly or indirectly,
as an individual proprietor, partner, stockholder, officer, employee, director,
joint venturer, investor, lender, consultant or in any capacity whatsoever
(within the United States of America, Canada, or in any country where the
Company or its affiliates do business) in a business in competition with any
operating business conducted by the Company or its affiliated entities; with
regard to which Executive worked or otherwise had responsibilities or had access
to material Confidential Information while employed by the Company or its
affiliated entities or an investment opportunity within the provisions of
subpart (E) below; provided, however, that such participation shall not include:
(A) the mere ownership of not more than one percent (1%) of the total
outstanding stock of a publicly held company; (B) the performance of services
for any enterprise to the extent such services are not performed, directly or
indirectly, for a
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business in the aforesaid Competition; (C) any activity engaged in with the
prior written approval of the Chief Executive Officer of the Company; (D) the
practicing of accounting in an accounting firm that represents such competing
business provided that Executive does not personally represent such competing
business; or (E) investment banking activities (including without limitation
with an investment entity for its own account or a fund operated by it) provided
such activities do not involve any investment opportunity that the Company or
any affiliated entity is considering or advising on at the time of termination
of the Employment Term either for its own account, any fund managed by it or for
any customer or potential customer of the Company or such entity.
(ii) recruiting, soliciting or inducing, of
any nonclerical employee or employees of the Company or its affiliated entities
to terminate their employment with, or otherwise cease their relationship with,
the Company or its affiliated entities or hiring or assisting another person or
entity to hire any nonclerical employee of the Company or its affiliated
entities or any person who within six (6) months before had been a nonclerical
employee of the Company or any of its affiliated entities. Notwithstanding the
foregoing, if requested by an entity with which Executive is not affiliated,
Executive may serve as a reference for any person who at the time of the request
is not an employee of the Company or any of its affiliated entities.
(iii) If any restriction set forth with
regard to Competition is found by any court of competent jurisdiction, or an
arbitrator, to be unenforceable because it extends for too long a period of time
or over too great a range of activities or in too broad a geographic area, it
shall be interpreted to extend over the maximum period of time, range of
activities or geographic area as to which it may be enforceable.
(c) During and after the Employment Term, Executive
shall hold in a fiduciary capacity for the benefit of the Company and its
affiliated entities all secret or confidential information, knowledge or data
relating to the Company and its affiliates, and their respective businesses,
including any confidential information as to customers of the Company or its
affiliated entities, (i) obtained by Executive during her employment by the
Company or its affiliated entities and (ii) not otherwise public knowledge or
known within the Company's or affiliated entity's industry. Executive shall not,
without prior written consent of
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the Company, unless compelled pursuant to the order of a court or other
governmental or legal body having jurisdiction over such matter, communicate or
divulge any such information, knowledge or data to anyone other than the Company
and those designated by it. In the event Executive is compelled by order of a
court or other governmental or legal body to communicate or divulge any such
information, knowledge or data to anyone other than the Company and those
designated by it, Executive shall promptly notify the Company of any such order
and shall cooperate fully with the Company in protecting such information to the
extent possible under applicable law.
(d) Upon termination of Executive's employment with
the Company and its affiliated entities, or at any other time as the Company may
request, Executive will promptly deliver to the Company all documents (whether
prepared by the Company, an affiliated entity, Executive or a third party)
relating to the Company or an affiliated entity or any of their businesses or
property which Executive may possess or have under her direction or control.
(e) During the Employment Term and for one (1) year
thereafter, Executive will not enter into Competition with the Company or its
affiliated entities.
(f) In the event of a breach or potential breach of
this Section 8, Executive acknowledges that the Company and its affiliated
entities will be caused irreparable injury and that money damages may not be an
adequate remedy and agree that the Company and its affiliated entities shall be
entitled to injunctive relief (in addition to its other remedies at law) to have
the provisions of this Section 8 enforced.
9. EXECUTIVE REPRESENTATION
Executive represents and warrants that she is under no
contractual or other limitation from entering into this Agreement and performing
her obligations hereunder.
10. INDEMNIFICATION
The Executive shall be entitled to be indemnified by the
Company for her actions as an officer, director, employee, agent or fiduciary of
the Company or its affiliated
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entities to the fullest extent permitted by applicable law and shall have legal
fees and other expenses paid to her in advance of final disposition of a
proceeding provided she executes an undertaking to repay such amounts if, and to
the extent, required to do so by applicable law. The Company shall cover the
Executive under any directors and officers liability insurance policy to the
same extent as its other senior officers.
11. ENTIRE AGREEMENT; MODIFICATION.
This Agreement constitutes the full and complete understanding
of the parties hereto and will supersede all prior agreements and
understandings, oral or written, with respect to the subject matter hereof. Each
party to this Agreement acknowledges that no representations, inducements,
promises or agreements, oral or otherwise, have been made by either party, or
anyone acting on behalf of either party, which are not embodied herein and that
no other agreement, statement or promise not contained in this Agreement shall
be valid or binding. This Agreement may not be modified or amended except by an
instrument in writing signed by the party against whom or which enforcement may
be sought.
12. SEVERABILITY.
Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this Agreement or
affecting the validity or enforceability of any of the terms of provisions of
this Agreement in any other jurisdiction.
13. WAIVER OF BREACH.
The waiver by any party of a breach of any provisions of this
Agreement, which waiver must be in writing to be effective, shall not operate as
or be construed as a waiver of any subsequent breach.
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14. NOTICES
All notices hereunder shall be in writing and shall be deemed
to have been duly given when delivered by hand, or one day after sending by
express mail or other "overnight mail service," or three days after sending by
certified or registered mail, postage prepaid, return receipt requested. Notice
shall be sent as follows: if to Executive, to the address as listed in the
Company's records; and if to the Company, to the Company at its office or set
forth at the head of this Agreement, to the attention of the Chairman. Either
party may change the notice address by notice given as aforesaid.
15. ASSIGNABILITY; BINDING EFFECT.
This Agreement shall be binding upon and inure to the benefit
of Executive and Executive's legal representatives, heirs and distributees, and
shall be binding upon and inure to the benefit of the Company, its successors
and assigns. This Agreement may not be assigned by the Executive. This Agreement
may not be assigned by the Company except in connection with a merger or a sale
by the Company of all or substantially all of its assets and then only provided
the assignee specifically assumes in writing all of the Company's obligations
hereunder.
16. GOVERNING LAW.
(a) All issues pertaining to the validity,
construction, execution and performance of this Agreement shall be construed and
governed in accordance with the laws of the State of Florida, without giving
effect to the conflict or choice of law provisions thereof.
(b) Any dispute or controversy with regard to this
Agreement, other then injunctive relief pursuant to Section 8, shall be settled
by arbitration in Miami, Florida before the American Arbitration Association
("AAA") in accordance with the rules of Commercial Arbitration of the AAA. The
decision of the arbitrators shall be final and binding upon the parties hereto
and may be entered in any court having jurisdiction. The parties shall each bear
fifty (50) percent of the cost of the AAA and the arbitrators, but each party
shall bear its or her own legal expenses.
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17. HEADINGS.
The headings in this Agreement are intended solely for
convenience or reference and shall be given no effect in the construction or
interpretation of this Agreement.
18. COUNTERPARTS.
This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, the Company has caused this Agreement to
be duly executed and Executive has hereunto set her hand as of the date first
set forth above.
BROOKE GROUP LTD.
By: /s/ Xxxxxxx X. XxXxx
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Name: Xxxxxxx X. XxXxx
Title: Chairman, President and
Chief Executive Officer
By: /s/ Xxxxxxxx X. Xxx Xxxxxx
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Xxxxxxxx X. Xxx Xxxxxx
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