FindWhat.com EMPLOYMENT AGREEMENT
exhibit 10.2
XxxxXxxx.xxx
THIS EMPLOYMENT AGREEMENT is made this 1st day of February 2004, (this “Agreement”) between
XxxxXxxx.xxx (“XxxxXxxx.xxx” or the “Company”), a Nevada corporation, and Xxxx X. Xxxxxxx
(“Executive”).
A. The Company wishes to employ Executive and Executive wishes to be employed by the Company
on the terms and conditions set forth in this Agreement.
In consideration of the foregoing, and of Executive’s employment, the parties agree as
follows:
1. Employment. Executive’s employment with XxxxXxxx.xxx shall be upon the terms and conditions
hereinafter set forth to become effective upon execution of this Agreement (the “Effective Time”).
2. Duties.
(a) From the date of this Agreement until August 1, 2004 (“Commute Period”), Executive shall
(i) be employed as the Vice President of the Company reporting to the Company’s Chief Operating
Officer, (ii) perform such other or additional duties and responsibilities consistent with
Executive’s title(s), status, and position as the Chief Operating Officer or Board of Directors of
XxxxXxxx.xxx may, from time to time, prescribe, and (iii) be based out of his residence in the
metropolitan Columbus, Ohio area, provided, however, that the Company shall maintain a furnished
apartment for Executive in Ft. Xxxxxx, and Executive shall travel to and from Ft. Xxxxxx, Florida
as necessary or required in connection with the performance of his duties. On or before August 1,
2004, Executive shall relocate to Ft. Xxxxxx, Florida, and by October 31, 2004, the Company will
promote Executive to Senior Vice President and General Counsel. In this capacity, Executive will
serve as the Company’s chief legal officer and will provide legal advice, representation and
counsel to the Company with respect to its business and affairs, and perform such other or
additional duties and responsibilities consistent with Executive’s title(s), status, and position
as the Chief Operating Officer or Board of Directors of XxxxXxxx.xxx may, from time to time,
prescribe.
(b) So long as employed under this Agreement, Executive agrees to devote full time and efforts
exclusively on behalf of the Company and to competently, diligently and effectively discharge all
duties of Executive hereunder. Executive shall not be prohibited from
engaging in such personal, charitable, or other nonemployment activities as do not interfere
with full time employment hereunder and which do not violate the other provisions of this
Agreement. Executive further agrees to comply fully with all reasonable policies of the Company as
are from time to time in effect.
(c) After August 1, 2004, the Executive shall be based out of the Company’s Ft. Xxxxx, Florida
office. If the Company decides to move its operations more than 35 miles from its current offices
in Fort Xxxxx, Florida, Executive shall not be required to relocate and, to the extent the
Executive cannot perform his duties hereunder as a result of such a move, his non-performance will
not constitute Cause (as defined below).
3. Compensation.
(a) As full compensation for all services rendered to the Company pursuant to this Agreement,
in whatever capacity rendered, (i) the Company will pay to Executive during the term hereof a
minimum base salary at the rate of $225,000 per year (the “Basic Salary”), payable in accordance
with the usual payroll practices of the Company, and (ii) pursuant to Section 3(b), the Company
will issue to Executive 40,000 options for the Company’s common stock. The Basic Salary thereafter
may be increased, but not decreased, from time to time, by the Board of Directors in connection
with reviews of Executive’s performance occurring no less frequently than annually and pursuant to
the same review process employed by the Board of Directors for the Company’s other executive
officers; provided, however, that the Company will have no obligation to perform such review before
April 1, 2005.
(b) On the date hereof and pursuant to the Company’s FindWhat 1999 Stock Incentive Plan, the
XxxxXxxx.xxx Non-Qualified Stock Option Agreement dated February 1, 2004 between the Company and
Executive, and the XxxxXxxx.xxx Incentive Stock Option Agreement dated February 1, 2004 between the
Company and Executive, the Company will issue to Executive options to acquire an aggregate of
40,000 shares of the Company’s Common Stock, of which options to acquire a total of 10,000 shares
of the Company’s Common Stock will vest on each of the first four anniversaries of this Agreement.
(c) Executive will be entitled to receive incentive compensation pursuant to the terms of
plans adopted by the Board of Directors or its Compensation Committee from time to time. The Board
of Directors or its Compensation Committee, as applicable, shall review Executive’s performance on
an annual basis and pursuant to the same review process employed by the Board of Directors for the
Company’s other executive officers; provided, however, that the Company will have no obligation to
perform such review before April 1, 2005. In connection with such annual review, the Executive may
be entitled to receive additional stock option grants. Such options will be granted, if at all, in
the sole discretion of the Board of Directors or its Compensation Committee on terms and conditions
they determine. Notwithstanding the foregoing, (i) if the Executive’s employment with the Company
is terminated by the Company without Cause (as defined below) or by Executive for Good Reason (as
defined below), or (ii) there is a Change in Control of the Company (as defined below), any stock
options granted to Executive on or after the Effective Time shall immediately fully vest and remain
exercisable during the Exercise Period (as defined in the XxxxXxxx.xxx Non-Qualified Stock Option
Agreement dated February 1, 2004 between the Company and
Executive, and the XxxxXxxx.xxx Incentive
Stock Option Agreement dated February 1, 2004 between the Company and Executive) as if the
Executive were still employed by the Company.
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4. Business Expenses. The Company shall promptly pay directly, or reimburse Executive for,
all business expenses to the extent such expenses are paid or incurred by Executive during the term
of employment in accordance with Company policy in effect from time to time and to the extent such
expenses are reasonable and necessary to the conduct by Executive of the Company’s business and
properly substantiated. In addition, the Company will reimburse Executive for (a) during the
Commute Period, all travel expenses between Ohio and Ft. Xxxxxx, Florida and the cost of a
furnished apartment in Ft. Xxxxxx, Florida for Executive’s use, (b) bar dues and bar registration
fees payable to the Ohio and Florida State bar associations, (c) continuing legal education fees
and related costs and expenses, and (d) up to $20,000 of reasonable expenses that Executive incurs
in relocating his household from metropolitan Columbus, Ohio area to Florida; provided, however,
that the Company will not pay realtors’ or brokers’ fees and commissions in connection with the
sale of his existing residence in Ohio or the purchase of a new residence in Florida.
5. Benefits. During the term of this Agreement and Executive’s employment hereunder, the
Company shall provide to Executive such insurance, vacation, sick leave and other like benefits as
are provided to other executive officers of the Company from time to time. Executive will use
his reasonable best efforts to schedule vacation periods to minimize disruption of the Company’s
business.
6. Term; Termination.
(a) The Company shall employ the Executive, and the Executive accepts such employment, for an
initial term commencing on the date of this Agreement and ending on the first anniversary of the
date of this Agreement. Thereafter, this Agreement shall be extended automatically for additional
twelve-month periods, unless terminated as described herein. Executive’s employment may be
terminated at any time as provided in this Section 6. For purposes of this Section 6, “Termination
Date” shall mean the date on which any notice period required under this Section 6 expires or, if
no notice period is specified in this Section 6, the effective date of the termination referenced
in the notice.
(b) The Company may terminate Executive’s employment without Cause (as defined below) upon
giving 30 days’ advance written notice to Executive. If Executive’s employment is terminated
without Cause under this Section 6(b), the Executive shall be entitled to receive (A) the earned
but unpaid portion of Executive’s Basic Salary and pro rata portion of Executive’s bonus, if any,
through the Termination Date; (B) over a period of twelve (12) months following the Termination
Date (the “Severance Period”) an amount equal to the sum of his (i) Basic Salary at the time of the
Termination Date, plus (ii) the Termination Bonus (as defined below); (C) any other amounts or
benefits owing to Executive under the then applicable employee benefit, long term incentive or
equity plans and programs of the Company, which shall be paid or treated in accordance with Section
3 hereof and otherwise in accordance with the terms of such plans and programs; and (D) benefits,
(including, without limitation health, life,
disability and pension) as if Executive were an employee during the Severance Period.
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(c) The Company may terminate Executive’s employment upon a determination by the Company that
“Cause” exists for Executive’s termination and the Company serves written notice of such
termination upon Executive. As used in this Agreement, the term Cause shall refer only to any one
or more of the following grounds:
(i) commission of a material and substantive act of theft, including, but not limited
to, misappropriation of funds or any property of the Company;
(ii) intentional engagement in activities or conduct clearly injurious to the best
interests or reputation of the Company which in fact result in material and substantial
injury to the Company;
(iii) refusal to perform his assigned duties and responsibilities (so long as the
Company does not assign any duties or responsibilities which would give the Executive Good
Reason to terminate his employment as described in Section 6(e)) after receipt by Executive
of written detailed notice and reasonable opportunity to cure;
(iv) gross insubordination by Executive, which shall consist only of a willful refusal
to comply with a lawful written directive to Executive issued pursuant to a duly authorized
resolution adopted by the Board of Directors (so long as the directive does not give the
Executive Good Reason to terminate his employment as described in Section 6(e));
(v) the clear violation of any of the material terms and conditions of this Agreement
or any written agreement or agreements Executive may from time to time have with the Company
(following 30 days’ written notice from the Company specifying the violation and Executive’s
failure to cure such violation within such 30 day period);
(vi) Executive’s substantial dependence, as determined by the Board of Directors of the
Company, on alcohol or any narcotic drug or other controlled or illegal substance which
materially and substantially prevents Executive from performing his duties hereunder;
(vii) the final and unappealable conviction of Executive of a crime which is a felony
or a misdemeanor involving an act of moral turpitude, or a misdemeanor committed in
connection with his employment by the Company, which causes the Company a substantial
detriment; and
(viii) Executive fails to have established a permanent residence in Florida by August
1, 2004.
In the event of a termination under this Section 6(c), the Company will pay Executive the earned
but unpaid portion of Executive’s Basic Salary through the Termination Date. If any determination
of substantial dependence under Section 6(c)(vi) is disputed by the Executive, the
parties hereto agree to abide by the decision of a panel of three
physicians appointed in the manner as specified in Section 6(d) of this Agreement.
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If any determination of “Cause” is made
under items 6(c), (i), (ii), (iii), (iv), (v), or (vii) which Executive contests, Executive shall
have the opportunity, within 30 days of such determination, to personally appear in front of the
Board of Directors and present his case to the Board of Directors and have the Board of Directors
reconsider the determination of Cause.
(d) Executive’s employment shall terminate upon the death or permanent disability of
Executive. For purposes hereof, “permanent disability,” shall mean the inability of the Executive,
as determined by the Board of Directors of XxxxXxxx.xxx, by reason of physical or mental illness to
perform the duties required of him under this Agreement for more than 120 days in any 360 day
period. Upon a determination by the Board of Directors of XxxxXxxx.xxx that Executive’s employment
shall be terminated under this Section 6(d), the Board of Directors shall give Executive 30 days’
prior written notice of the termination. If Executive disputes a determination of the Board of
Directors under this Section 6(d), the parties agree to abide by the decision of a panel of three
physicians. XxxxXxxx.xxx will select a physician, Executive will select a physician and the
physicians selected by XxxxXxxx.xxx and Executive will select a third physician. Executive agrees
to make himself available for and submit to examinations by such physicians as may be directed by
the Company. Failure to submit to any examination shall constitute a breach of a material part of
this Agreement. In the event of termination due to death or permanent disability, the Company will
pay Executive, or his legal representative, the earned but unpaid portion of Executive’s Basic
Salary through the Termination Date and the earned but unpaid portion of any vested incentive
compensation under and consistent with plans adopted by the Company prior to the Termination Date.
(e) The Executive may terminate his employment for Good Reason (as defined below) upon giving
30 days advance written notice to the Company. If Executive’s employment is terminated with Good
Reason under this Section 6(e), the Executive shall be entitled to receive (A) the earned but
unpaid portion of Executive’s Basic Salary and pro rata portion of Executive’s bonus, if any,
through the Termination Date; (B) over a period of twelve (12) months after the Termination Date an
amount equal to the sum of his (i) Basic Salary at the time of the Termination Date, plus (ii) the
Termination Bonus (as defined below); (C) any other amounts or benefits owing to Executive under
the then applicable employee benefit, long term incentive or equity plans and programs of the
Company, which shall be paid or treated in accordance with Section 3 hereof and otherwise in
accordance with the terms of such plans and programs; and (D) benefits, (including, without
limitation health, life, disability and pension) as if Executive were an employee during the
Severance Period. As used in this Agreement, the term “Good Reason” means any one or more of the
following grounds:
| (i) | a change in Executive’s title(s), status, position or responsibilities without Executive’s written consent, which does not represent a promotion from his existing status, position or responsibilities, despite Executive’s written notice to the Company of his objection to such change and the Company’s failure to address such notice in a reasonable fashion within 30 days of such notice; |
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| (ii) | the assignment to Executive of any duties or responsibilities which are inconsistent with his status, position or responsibilities as set forth in Section 2 hereof, despite Executive’s written notice to the Company of his objection to such change and the Company’s failure to address such notice in a reasonable fashion within 30 days of such notice; | ||
| (iii) | if there is a reduction in Executive’s Basic Salary; | ||
| (iv) | if there is a Change in Control of the Company and Executive terminates his employment during the “Window Period” (as defined below); | ||
| (v) | a breach by the Company of any material term or provision of this Agreement; | ||
| (vi) | a relocation of the Company’s offices in Fort Xxxxx, Florida to a location more than 35 miles from the current location; or | ||
| (vii) | the Company fails to promote Executive to Senior Vice President and General Counsel by October 31, 2004. |
(f) The Executive may terminate his employment for any reason (other than Good Reason) upon
giving 30 days’ advance written notice to the Company. If Executive’s employment is so terminated
under this Section 6(f), the Company will pay Executive the earned but unpaid portion of
Executive’s Basic Salary through the Termination Date and the earned but unpaid portion of any
vested incentive compensation under and consistent with plans adopted by the Company prior to the
Termination Date.
(g) In the event of the Executive’s death during the Severance Period, payments of Basic
Salary under this paragraph 6 and payments under the Company’s employee benefit plan(s) shall
continue to be made in accordance with their terms during the remainder of the Severance Period to
the beneficiary designated in writing for such purpose by the Executive or, if no such beneficiary
is specifically designated, to the Executive’s estate.
(h) As used in this Agreement, the term “Bonus” shall mean any bonus, incentive compensation
or any other cash benefit paid or payable to the Executive under any incentive compensation grant
or plan, excluding signing bonuses and the Company’s stock option plan. For purposes of this
Agreement, the Executive’s “Termination Bonus” shall be equal to the amount of the Executive’s
Bonus for the four (4) fiscal quarters immediately preceding the Termination Date, provided,
however, if there has been a Change in Control of the Company the Termination Bonus shall be an
amount equal to the greater of (i) the preceding calculation or (ii) Executive’s Bonus for the four
(4) fiscal quarters immediately preceding the Change in Control of the Company.
(i) As used in this Agreement, the term “Window Period” shall mean the period of time after a
Change in Control in which Executive can terminate his employment with the Company for any reason
and the termination shall be deemed a termination for Good Reason
for purposes of this Agreement. The Window Period begins
180 days after a Change in Control and lasts for thirty (30) days.
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(j) As used in this Agreement, the term “Change in Control” shall mean the occurrence of any
one of the following events:
(i) any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of
the Company representing thirty-five percent (35%) or more, excluding in the calculation of
Beneficial Ownership securities acquired directly from the Company, of the combined voting power of
the Company’s then outstanding voting securities;
(ii) any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of
the Company representing fifty-one percent (51%) or more of the combined voting power of the
Company’s then outstanding voting securities;
(iii) the following individuals cease for any reason to constitute a majority of the number of
directors then serving: individuals who, on the Effective Time, constitute the Board and any new
director (other than a director whose initial assumption of office is in connection with an actual
or threatened election contest, including but not limited to a consent solicitation, relating to
the election of directors of the Company) whose appointment or election by the Board or nomination
for election by the Company’s stockholders was approved or recommended by a vote of the at least
two-thirds (2/3) of the directors then still in office who either were directors on the Effective
Time or whose appointment, election or nomination for election was previously so approved or
recommended;
(iv) there is a consummated merger or consolidation of the Company or any direct or indirect
subsidiary of the Company with any other corporation, other than (A) a merger or consolidation
which would result in the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted into voting
securities of the surviving or parent entity) more than fifty percent (50%) of the combined voting
power of the voting securities of the Company or such surviving or parent equity outstanding
immediately after such merger or consolidation or (B) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in which no Person, directly
or indirectly, acquired twenty-five percent (25%) or more of the combined voting power of the
Company’s then outstanding securities (not including in the securities beneficially owned by such
Person any securities acquired directly from the Company or its Affiliates); or
(v) the stock holders of the Company approve a plan of complete liquidation of the Company or
there is consummated an agreement for the sale or disposition by the Company of all or
substantially all of the Company’s assets (or any transaction having a similar effect), other than
a sale or disposition by the Company of all or substantially all of the Company’s assets to an
entity, at least fifty percent (50%) of the combined voting power of the voting securities of which
are owned by stockholders of the Company in substantially the same proportions as their ownership
of the Company immediately prior to such sale.
For purposes of this Section 6, the following terms shall have the following meanings:
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(i) “Affiliate” shall mean an affiliate of the Company, as defined in Rule 12b-2 promulgated
under Section 12 of the Securities Exchange Act of 1934, as amended from time to time (the
“Exchange Act”);
(ii) “Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the Exchange Act;
(iii) “Person” shall have the meaning set forth in Section 3(a)(9) of the Exchange Act, as
modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (1)
the Company, (2) a trustee or other fiduciary holding securities under an employee benefit plan of
the Company, (3) an underwriter temporarily holding securities pursuant to an offering of such
securities or (4) a corporation owned, directly or indirectly, by the stockholders of the Company
in substantially the same proportions as their ownership of shares of Common Stock of the Company.
7. Indemnity.
(a) Subject only to the exclusions set forth in Section 7(b) hereof, the Company hereby agrees
to hold harmless and indemnify Executive against any and all expenses (including attorneys’ fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred by Executive in
connection with any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (excluding an action by or in the right of the Company)
to which Executive is, was or at any time becomes a party, or is threatened to be made a party, by
reason of the fact that Executive is, was or at any time becomes a director, officer, employee or
agent of the Company, or is or was serving or at any time serves at the request of the Company as a
director, officer, employee or agent of another corporation, partnership, joint venture, trust or
other enterprise.
(b) The Company hereof shall not indemnify Executive pursuant to Section 7(a):
(i) except to the extent the aggregate losses to be indemnified hereunder exceed the
amount of such losses for which Executive is indemnified pursuant to any directors and
officers liability insurance purchased and maintained by the Company;
(ii) in respect to remuneration paid to Executive if it shall be determined by a final
judgment or other final adjudication that such remuneration was in violation of law;
(iii) on account of any suit in which judgment is rendered against Executive for an
accounting of profits made from the purchase or sale by Executive of securities of the
Company pursuant to the provisions of Section 16(b) of the Securities
Exchange Act of 1934 and amendments thereto or similar provisions of any federal, state
or local statutory law;
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(iv) on account of Executive’s material breach of any provision of this Agreement;
(v) on account of Executive’s act or omission being finally adjudged to involve
intentional misconduct, a knowing violation of law, or grossly negligent conduct; or
(vi) if a final decision by a Court having jurisdiction in the matter shall determine
that such indemnification is not lawful.
(c) All agreements and obligations of the Company contained herein shall continue during the
period Executive is a director, officer, employee or agent of the Company (or is or was serving at
the request of the Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise) and shall continue thereafter so long as
Executive shall be subject to any possible claim or threatened, pending or completed action, suit
or proceeding, whether civil, criminal or investigative, by reason of the fact that Executive was
an officer or director of the Company or serving in any other capacity referred to herein.
(d) Promptly after receipt by Executive of notice of the commencement of any action, suit or
proceeding, Executive will, if a claim in respect thereof is to be made against the Company under
this Section 7, notify the Company of the commencement thereof; but the omission so to notify the
Company will not relieve it from any liability which it may have to Executive otherwise than under
this Section 7. With respect to any such action, suit or proceeding as to which Executive notifies
the Company under this Section 7(d):
(i) The Company will be entitled to participate therein at its own expense.
(ii) Except as otherwise provided below, to the extent that it may wish, the Company
jointly with any other indemnifying party similarly notified will be entitled to assume the
defense thereof, with counsel selected by the Company. After notice from the Company to
Executive of its election so to assume the defense thereof, the Company will not be liable
to Executive under this Section 7 for any legal or other expenses subsequently incurred by
Executive in connection with the defense thereof other than reasonable costs of
investigation or as otherwise provided below. Executive shall have the right to employ his
counsel in such action, suit or proceeding but the fees and expenses of such counsel
incurred after notice from the Company of its assumption of the defense thereof shall be at
the expense of Executive, unless (A) the employment of counsel by Executive has been
authorized by the Company, or (B) the Company shall not in fact have employed counsel to
assume the defense of such action, in each of which cases the fees and expenses of counsel
shall be at the expense of the Company. The
Company shall not be entitled to assume the defense of any action, suit or proceeding
brought by or on behalf of the Company.
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(iii) The Company shall not be liable to indemnify Executive under this Agreement for
any amounts paid in settlement of any action or claim effected without its written consent.
The Company shall not settle in any manner that would impose any penalty or limitation on
Executive without Executive’s written consent. Neither the Company nor Executive will
unreasonably withhold their consent to any proposed settlement.
(e) Executive agrees that Executive will reimburse the Company for all customary and
reasonable expenses paid by the Company in defending any civil or criminal action, suit or
proceeding against Executive in the event and only to the extent that it shall be ultimately
determined that Executive is not entitled to be indemnified by the Company for such expenses under
the provisions of Nevada law (or the laws of the Company’s state of incorporation at the time),
federal securities laws, the Company’s By-laws or this Agreement.
8. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be
determined that any payment, award, benefit or distribution (or any acceleration of any payment,
award, benefit or distribution) by the Company (or any of its affiliated entities) or any entity
which effectuates a Change in Control (or any of its affiliated entities) to or for the benefit of
Executive (whether pursuant to the terms of this Agreement or otherwise, but determined without
regard to any additional payments required under this Section 8) (the “Payments”) would be subject
to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the
“Code”), or any interest or penalties are incurred by Executive with respect to such excise tax
(such excise tax, together with any such interest and penalties, are hereinafter collectively
referred to as the “Excise Tax”), then the Company shall pay to Executive an additional payment (a
“Gross-Up Payment”) in an amount such that after payment by Executive of all taxes (including any
Excise Tax) imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment
equal to the sum of (x) the Excise Tax imposed upon the Payments and (y) the product of any
deductions disallowed because of the inclusion of the Gross-up Payment in Executive’s adjusted
gross income and the highest applicable marginal rate of federal income taxation for the calendar
year in which the Gross-up Payment is to be made. For purposes of determining the amount of the
Gross-up Payment, the Executive shall be deemed to (i) pay federal income taxes at the highest
marginal rates of federal income taxation for the calendar year in which the Gross-up Payment is to
be made, and (ii) pay applicable state and local income taxes at the highest marginal rate of
taxation for the calendar year in which the Gross-up Payment is to be made, net of the maximum
reduction in federal income taxes which could be obtained from deduction of such state and local
taxes. Notwithstanding the foregoing provisions of this Section 8(a), if it shall be determined
that Executive is entitled to a Gross-Up Payment, but that the Payments would not be subject to the
Excise Tax if the Payments were reduced by an amount that is less than 5% of the portion of the
Payments that would be treated as “parachute payments” under Section 280G of the Code, then the
amounts payable to Executive under this Agreement shall be reduced (but not below zero) to the
maximum amount that could
be paid to Executive without giving rise to the Excise Tax (the “Safe Harbor Cap”), and no Gross-Up
Payment shall be made to Executive. The reduction of the amounts payable hereunder, if applicable,
shall be made by reducing first the payments under Section 8,
unless an alternative method of
reduction is elected by Executive. For purposes of reducing the Payments to the Safe Harbor Cap,
only amounts payable under this Agreement (and no other Payments) shall be reduced.
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If the reduction of the amounts payable hereunder would not result in a reduction of the
Payments to the Safe Harbor Cap, no amounts payable under this Agreement shall be reduced pursuant
to this provision.
(b) Subject to the provisions of Section 8(a), all determinations required to be made under
this Section 8(b), including whether and when a Gross-Up Payment is required, the amount of such
Gross-Up Payment, the reduction of the Payments to the Safe Harbor Cap and the assumptions to be
utilized in arriving at such determinations, shall be made by the public accounting firm that is
retained by the Company as of the date immediately prior to the Change in Control (the “Accounting
Firm”) which shall provide detailed supporting calculations both to the Company and Executive
within fifteen (15) business days of the receipt of notice from the Company or the Executive that
there has been a Payment, or such earlier time as is requested by the Company (collectively, the
“Determination”). In the event that the Accounting Firm is serving as accountant or auditor for the
individual, entity or group effecting the Change in Control, Executive may appoint another
nationally recognized public accounting firm to make the determinations required hereunder (which
accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses
of the Accounting Firm shall be borne solely by the Company and the Company shall enter into any
agreement requested by the Accounting Firm in connection with the performance of the services
hereunder. The Gross-up Payment under this Section 8 with respect to any Payments shall be made no
later than thirty (30) days following such Payment. If the Accounting Firm determines that no
Excise Tax is payable by Executive, it shall furnish Executive with a written opinion to such
effect, and to the effect that failure to report the Excise Tax, if any, on Executive’s applicable
federal income tax return will not result in the imposition of a negligence or similar penalty. In
the event the Accounting Firm determines that the Payments shall be reduced to the Safe Harbor Cap,
it shall furnish Executive with a written opinion to such effect. The Determination by the
Accounting Firm shall be binding upon the Company and Executive. As a result of the uncertainty in
the application of Section 4999 of the Code at the time of the Determination, it is possible that
Gross-up Payments which will not have been made by the Company should have been made
(“Underpayment”) or Gross-up Payments are made by the Company which should not have been made
(“Overpayment”), consistent with the calculations required to be made hereunder. In the event that
the Executive thereafter is required to make payment of any Excise Tax or additional Excise Tax,
the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such
Underpayment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code)
shall be promptly paid by the Company to or for the benefit of Executive. In the event the amount
of the Gross-up Payment exceeds the amount necessary to reimburse the Executive for his Excise Tax,
the Accounting Firm shall determine the amount of the Overpayment that has been made and any such
Overpayment (together with interest at the rate provided in Section 1274(b)(2) of the Code) shall
be promptly paid by Executive (to the extent he has received a
refund if the applicable Excise Tax has been paid to the Internal Revenue Service) to or for the
benefit of the Company. Executive shall cooperate, to the extent his expenses are reimbursed by the
Company, with any reasonable requests by the Company in connection
with any contests or disputes
with the Internal Revenue Service in connection with the Excise Tax.
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9. Assignment. This Agreement is personal to Executive and Executive may not assign or
delegate any of his rights or obligations hereunder. Subject to the foregoing, this Agreement
shall be binding upon and inure to the benefit of the respective parties hereto, their heirs,
executors, administrators, successors and assigns.
10. Waiver. Neither any failure nor any delay by any party in exercising any right, power or
privilege under this Agreement or any of the documents referred to in this Agreement will operate
as a waiver of such right, power or privilege, and no single or partial exercise of any such right,
power or privilege will preclude any other or further exercise of such right, power or privilege or
the exercise of any other right, power or privilege. To the maximum extent permitted by applicable
law, (a) no claim or right arising out of this Agreement or any of the documents referred to in
this Agreement can be discharged by one party, in whole or in part, by a waiver or renunciation of
the claim or right unless in a written document signed by the other party, (b) no waiver that may
be given by a party will be applicable except in the specific instance for which it is given, and
(c) no notice to or demand on one party will be deemed to be a waiver of any obligation of that
party or of the right of the party giving such notice or demand to take further action without
notice or demand as provided in this Agreement or the documents referred to in this Agreement.
11. Notices. Any and all notices required or permitted to be given under this Agreement will
be sufficient and deemed effective three (3) days following deposit in the United States mail if
furnished in writing and sent by certified mail to Executive at:
XxxxXxxx.xxx
0000 Xxxxxxxxx Xxxxxxx Xxxx., Xxxxx 000
Xxxx Xxxxx, XX 00000
0000 Xxxxxxxxx Xxxxxxx Xxxx., Xxxxx 000
Xxxx Xxxxx, XX 00000
with a copy to:
Xxxxx X. Xxxxxxx
Xxxxxxx, Xxxxxxx & Xxxxx LLP
00 X. Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxx 00000
Xxxxxxx, Xxxxxxx & Xxxxx LLP
00 X. Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxx 00000
and to the Company at:
XxxxXxxx.xxx
0000 Xxxxxxxxx Xxxxxxx Xxxx., Xxxxx 000
Xxxx Xxxxx, XX 00000
Attention: Chief Executive Officer
0000 Xxxxxxxxx Xxxxxxx Xxxx., Xxxxx 000
Xxxx Xxxxx, XX 00000
Attention: Chief Executive Officer
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with a copy to:
Xxxxxx X. Xxxxxxxxxx, Esq.
Xxxxx & XxXxxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Xxxxx & XxXxxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
or such subsequent addresses as one party may designate in writing to the other parties.
12. Governing Law. This Agreement shall be interpreted, construed and governed according to
the laws of the State of Florida.
13. Amendment. This Agreement may be amended in any and every respect only by agreement in
writing executed by both parties hereto.
14. Section Headings. Section headings contained in this Agreement are for convenience only
and shall not be considered in construing any provision hereof.
15. Entire Agreement. With the exception of the Confidentiality, Assignment and
Noncompetition Agreement, dated February 1, 2004, and any stock option agreements between Executive
and the Company, this Agreement terminates, cancels and supersedes all previous employment or other
agreements relating to the employment of Executive with the Company or any predecessor, written or
oral, and this Agreement contains the entire understanding of the parties with respect to the
subject matter of this Agreement. This Agreement was fully reviewed and negotiated on behalf of
each party and shall not be construed against the interest of either party as the drafter of this
Agreement. EMPLOYEE ACKNOWLEDGES THAT, BEFORE SIGNING THIS AGREEMENT, HE HAS READ THE ENTIRE
AGREEMENT AND HAS THIS DAY RECEIVED A COPY HEREOF.
16. Severability. The invalidity or unenforceability of any one or more provisions of this
Agreement shall not affect the validity or enforceability of any other provisions of this Agreement
or parts thereof.
17. Survival. The last sentence of Section 3, Sections 6, 7 and 8 of this Agreement and this
Section 17 shall survive any termination or expiration of this Agreement.
| EXECUTIVE: | ||||
| /s/ Xxxx X. Xxxxxxx | ||||
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| XXXXXXXX.XXX | ||||||
| By: | /s/ Xxxxxxx X. Xxxxx | |||||
| Its: | Chief Operating Officer and | |||||
| Chief Financial Officer | ||||||
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