EMPLOYMENT AGREEMENT
This agreement (hereinafter the "Agreement") entered into as of the
1st day of May, 1996, by and between USA FINANCE, INC., a Delaware
corporation (the "Company"), and XXXXXXX X. XXXXXXXXXX, a resident of Florida
("Xxxxxxxxxx").
W I T N E S S E T H:
WHEREAS, the Company and Xxxxxxxxxx desire to enter into this
Agreement to establish the terms under which Xxxxxxxxxx will be employed by the
Company.
NOW, THEREFORE, in consideration of the mutual promises and
covenants herein contained and intending to be legally bound hereby, the parties
hereto agree as follows:
ARTICLE 1
EMPLOYMENT AND DUTIES
1.1 The Company agrees to and does hereby employ Xxxxxxxxxx as the Chief
Executive Officer of the Company and further agrees to appoint Xxxxxxxxxx to the
Board of Directors of the Company, and Xxxxxxxxxx agrees to and does hereby
accept employment from the Company in the capacity of Chief Executive Officer,
for the three (3) year period commencing on May 1, 1996, (the "Employment Date")
and ending on April 30, 1999, or the earlier termination of this Agreement as
provided for herein (the "Employment Period").
1.2 Xxxxxxxxxx shall devote his full time and best efforts, skill, and
attention to the business and affairs of the Company, and shall perform and
carry out for the Company such duties and responsibilities which are consistent
with his position as the Chief Executive Officer and otherwise as the board of
directors of the Company (the "Board") shall direct. Such duties shall include,
but shall not be limited to: (1) the supervision of other employees of the
Company, (2) promotion of the Company and its services, and (3) when necessary,
making recommendations to the Board concerning the operations of the Company.
Xxxxxxxxxx shall extend his best efforts to execute upon the Company's annual
business plan and budget, to the extent such a business plan and budget are
developed by the Company and adopted by the Board.
1.3 During the Employment Period, Xxxxxxxxxx shall not engage in any
commercial activities which in any way compete with the business of the Company
or which in any way interfere with the performance of his duties as assigned.
ARTICLE 2
COMPENSATION
2.1 As compensation for the services to be rendered by Xxxxxxxxxx to the
Company hereunder, the Company agrees to compensate Xxxxxxxxxx at an annual base
salary in an amount equal to $94,000. Xxxxxxxxxx'x salary shall be payable
biweekly or at such other regular intervals as the Company shall determine to
pay all of its other employees. Commencing on the 60th day after the Company has
obtained additional bank financing in the sum of at least $15,000,000 ,
Xxxxxxxxxx'x annual base salary shall be increased to $114,000.
2.2 As additional compensation hereunder, the Company shall grant to
Xxxxxxxxxx stock options (the "Options") to purchase a total of 410,000 shares
of the Company's common stock (the "Option Shares") in accordance with the terms
and conditions as set forth in a certain Stock Option Agreement (the "Option
Agreement") by and between the Company and Xxxxxxxxxx dated even date herewith.
ARTICLE 3
WORKING CONDITIONS AND BENEFITS
3.1 During the Employment Period, Xxxxxxxxxx shall be entitled, subject to
the terms and conditions of the particular plan and programs, to all fringe
benefits programs generally made available to all other senior executives of the
Company, including, the right to participate in any pension, profit sharing,
retirement, major medical, group health, disability, accident and life
insurance. In view of Xxxxxxxxxx'x need to frequently utilize his automobile for
Company business, the Company has also agreed to pay the insurance on the
automobile utilized by Xxxxxxxxxx for Company business which amount shall not
exceed $1,200 per annum.
3.2 Xxxxxxxxxx shall receive four weeks of vacation with full pay for each
12 month period during the term of this Agreement provided however, that no more
than two weeks of vacation shall be taken consecutively or within any two -month
period without approval by an affirmative vote of a majority of the Board.
3.3 Xxxxxxxxxx shall be employed by the Company at executive offices
maintained by the Company. Xxxxxxxxxx shall travel on the Company's behalf to
the extent reasonably necessary.
3.4 The Company shall provide to Xxxxxxxxxx, to the fullest extent
provided for under the laws of the Company's state of incorporation and the
Company's By-laws, indemnification for any claim or lawsuit which may be
asserted against Xxxxxxxxxx when acting in such capacity for the Company,
provided that said indemnification is not in violation of any of the following:
(a) Federal or state law or (b) rule or regulation of the Securities and
Exchange Commission.
3.5 The Company shall reimburse Xxxxxxxxxx upon submission of appropriate
receipts, for all moving expenses incurred by Xxxxxxxxxx in connection with the
relocation of his principal residence from Connecticut to Florida to begin
employment with the Company.
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3.6 The Company will pay or reimburse Xxxxxxxxxx for all reasonable and
necessary out-of-pocket expenses incurred by him in the performance of his
duties hereunder, including all of his travel, hotel, meal and other incidental
expenses during his travel on behalf of the Company. Xxxxxxxxxx shall keep
detailed and accurate records of expenses incurred in connection with the
performance of his duties hereunder and reimbursement therefor shall be in
accordance with policies and procedures to be established from time to time by
the Board.
3.7 The Company shall use its best efforts to cause Xxxxxxxxxx to be
nominated for election to the Company's Board of Directors at each annual
meeting of the Company's stockholders during the term of this Agreement.
ARTICLE 4
TERMINATION
4.1 At any time during the Employment Period, upon approval by the
affirmative vote of at least seventy-five percent of the members of the Board,
the Company shall have the right to terminate Xxxxxxxxxx'x employment under this
Agreement for any reason by providing Xxxxxxxxxx with thirty (30) days notice.
Upon any termination of Xxxxxxxxxx'x employment by the Company prior to April
30, 1999, other than for cause, death or disability, Xxxxxxxxxx shall be
entitled to: (i) received a severance payment equal to three (3) months salary
at the rate in effect on the date Xxxxxxxxxx receives notice of the termination;
and (ii) receive reimbursement of all moving expenses, upon submission of
appropriate receipts, for the relocation of his principal residence from Florida
to Connecticut, provided such relocation occurs within twelve months from the
date of termination.
4.2 At any time during the Employment Period, the Company may terminate
this Agreement for cause without notice upon the affirmative vote of a majority
of the Board. For purposes of this Agreement, "cause" shall include: (i) a
material breach of this Agreement, (ii) failing to substantially conform to a
material policy of the Company within 30 days after receiving written notice of
a violation thereof, (iii) committing a fraud or act of dishonesty which would
discredit or have an adverse effect or impact on the Company, and (iv) any act
of willful misconduct, malfeasance, misfeasance or nonfeasance while in the
Company's employ. However, "cause" shall not include disagreements with the
Company over business strategies, policies or procedures or innocent errors of
omission or commission. In the event of termination of this Agreement for cause,
the Company shall only be obligated to pay Xxxxxxxxxx'x salary through the date
of such termination.
4.3 In the event of Xxxxxxxxxx'x death during the Employment Period, this
Agreement shall terminate and Xxxxxxxxxx'x right to receive compensation
hereunder shall cease, except that Xxxxxxxxxx'x personal representative(s) shall
be entitled to receive Xxxxxxxxxx'x salary in effect on the date of termination
pursuant to Paragraph 2.1 hereof pro-rated through the date of death.
4.4 In the event that Xxxxxxxxxx shall be determined to be "disabled" (as
hereinafter defined), the Company shall have the right to terminate Xxxxxxxxxx'x
employment under this
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Agreement. In such event, the Company shall give written notice to Xxxxxxxxxx
specifying the reason for such termination and the date on which the termination
of Xxxxxxxxxx'x employment shall be effective (which date shall not be less than
thirty (30) days after the date of notice). In the event that Xxxxxxxxxx'x
employment shall be terminated as a result of his becoming disabled, Xxxxxxxxxx
shall continue to receive all of his salary as if Xxxxxxxxxx was terminated for
reasons other than for cause pursuant to Paragraph 4.1 hereof; provided,
however, that Xxxxxxxxxx'x salary shall be reduced by any amounts received by
Xxxxxxxxxx under any policy or policies of disability income insurance the
premiums for which were paid by the Company. Xxxxxxxxxx shall be determined to
be "disabled" upon the date that Xxxxxxxxxx is declared legally incompetent
under the laws of the State of Florida, or on the date that the Company receives
a written opinion from a physician designated by the Company to the effect that
Xxxxxxxxxx has incurred a mental or physical condition that can reasonably be
expected to prevent him from carrying out his material duties under this
Agreement for a period of three months or longer from the date of such opinion.
Xxxxxxxxxx hereby covenants and agrees to cooperate with any physician so
designated by the Company to determine whether he is disabled, provided that any
physician so designated shall consult with any physician designated by (or on
behalf of) Xxxxxxxxxx.
4.5 Termination of Xxxxxxxxxx'x employment shall not operate to relieve
him of any remaining obligations hereunder, including, but not limited to,
Article 5 hereof, and all such obligations are binding upon his heirs,
executors, administrators or other legal representatives. This Agreement is
personal to Xxxxxxxxxx and may not be assigned by him without the prior written
consent of the Company.
ARTICLE 5
CONFIDENTIALITY, NON-COMPETE AND NO RAID
5.1 During the Employment Period and at all times hereafter, Xxxxxxxxxx
shall not use for his personal benefit, or disclose, communicate or divulge to,
or use for the direct or indirect benefit of any person, firm, association or
company other than the Company, any subsidiary thereof, or any successors in
interest thereof (collectively, the "Company Group"), any confidential
information regarding the business methods, business policies, procedures,
techniques, research or development projects or results, trade secrets,
inventions, or other confidential knowledge or processes of or developed by a
member of the Company Group, or any names and addresses of customers or clients
or any data on or relating to past, present or prospective customers or clients
or any other information relating to or dealing with the business operations or
activities of a member of the Company Group, made known to Xxxxxxxxxx or learned
or acquired by Xxxxxxxxxx while employed by the Company. All advertising, sales,
marketing and other materials or articles of information, including without
limitation customer sales analyses, invoices, price lists or information,
samples or any other materials or data of any kind furnished to Xxxxxxxxxx by
Company or developed by Xxxxxxxxxx or otherwise in connection with Xxxxxxxxxx'x
services hereunder are and shall remain the sole and confidential property of
the Company. If Company requests the return of such materials at any time during
or at or after the termination of Xxxxxxxxxx'x employment, Xxxxxxxxxx shall
immediately deliver the same to the Company.
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5.2 During the Employment Period and for the two-year period thereafter,
Xxxxxxxxxx shall not enter into any employment, consulting arrangement, agency
or association with, or engage in as proprietor, partner, stockholder or other
like capacity of, any business or activity that engages in a business similar to
or competitive with any business undertaken by the Company except as a
stockholder in a publicly held corporation in which Xxxxxxxxxx does not own more
than 5% of any class of stock.
5.3 In consideration of the transactions contemplated by this Agreement,
Xxxxxxxxxx agrees that he shall not, during the two-year period immediately
following the date of his termination of employment for any reason, directly or
indirectly induce or attempt to influence any current or future employee of the
Company or any subsidiary thereof, or any successors in interest of the Company
(collectively the "Company Group") to terminate his or her employment with a
member of the Company Group. Xxxxxxxxxx hereby agrees that a breach of this
covenant will, among other remedies, require him to forfeit all severance and
other payments received or to be received by him as a result of his termination
of employment pursuant to Article 4 hereof.
5.4 It is the desire and intent of the parties to this Agreement that the
provisions of this Article 5 shall be enforced to the fullest extent permissible
under the laws of the State of Florida. If any particular provisions or portion
of this Article shall be adjudicated to be invalid or unenforceable, this
Article shall be deemed amended to delete therefrom or restrict the application
of such provision or portion adjudicated to be invalid or unenforceable to the
extent (but only to the extent) required to render such provision or portion
valid and enforceable, such amendment to apply only with respect to the
operation of such Article in the particular jurisdiction in which such
adjudication is made.
ARTICLE 6
NOTICES
as
6.1 All notices required or permitted under this Agreement shall be in
writing and delivered by any method providing for proof of delivery. Any notice
shall be deemed to have been given on the date of receipt. Notices shall be
delivered to the parties at the following addresses until a different address
has been designated by notice to the other party:
If to the Company:
USA Finance, Inc.
0000 Xxxx Xxxxxx Xxxx
Xxxxx Xxxxx, XX 00000
If to Xxxxxxxxxx:
Xxxxxxx X. Xxxxxxxxxx
0000 X.X. 0xx Xxxxx
Xxxx Xxxxx, XX 00000
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ARTICLE 7
MISCELLANEOUS
7.1 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
7.2 Entire Agreement. This Agreement contains the entire agreement among
the parties hereto with respect to the subject matter hereof, and no
modification hereof shall be effective unless in writing and signed by the party
against which it is sought to be enforced. This Agreement supersedes all prior
understandings, negotiations and agreements relating to the subject matter
hereof.
7.3 Expenses. Each of the parties hereto shall bear such party's own
expenses in connection with this Agreement and the transactions contemplated
hereby.
7.4 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida, applicable to agreements made
and to be performed entirely within such state.
7.5 Headings. The headings in this Agreement are solely for convenience of
reference and shall not affect the interpretation of any of the provisions
hereof.
7.6 Severability. If any provision herein contained shall be held to be
illegal, invalid or unenforceable, the remainder of this Agreement shall remain
in full force and effect and, such holding shall not affect the validity or
enforceability of the other provisions of this Agreement. If any provision shall
be held to be invalid, illegal or unenforceable with respect to particular
circumstances, it shall remain in full force and effect in all other
circumstances.
7.7 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the Company and its successors and assigns, and upon Xxxxxxxxxx, and
his executors, administrators, legal representatives, heirs and assigns.
7.8 Arbitration. Any controversy, claim or dispute arising between the
parties hereto including, but not limited to, those arising out of or related to
this Agreement or Xxxxxxxxxx'x employment with the Company shall be determined
by binding arbitration applying the laws of the State of Florida as set forth in
Section 7.4 hereof. Any arbitration pursuant to this Agreement shall be
conducted in the county in which the headquarters of the Company is located,
which as of the date hereof is Date County, State of Florida, under the rules of
the American Arbitration Association. The arbitration and any award rendered
therein shall be final and binding upon the parties and may be entered in any
court of competent jurisdiction. Nothing in this Section 7.8 will prevent either
party from resorting to judicial proceedings of interim injunctive relief under
the laws of the State of Florida from a court of competent jurisdiction is
necessary to prevent a serious and irreparable injury to one of the parties.
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7.9 Waiver. The waiver by either party of any breach or violation of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach. To be effective, any waiver must be contained in a written
instrument signed by the party waiving compliance by the other party of the term
or covenant as specified. The waiver by either party of the breach of any term
or covenant contained herein, whether by conduct or otherwise, in any one or
more instances, shall not be deemed to be, or construed as, a further or
continuing waiver of any such breach or a waiver of the breach of any other term
or covenant contained in this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Employment
Agreement to be executed as of the day first above written.
USA FINANCE, INC.
By: /s/ Xxxx Xxxxxxxx, President
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XXXXXXX X. XXXXXXXXXX
/s/ Xxxxxxx X. Xxxxxxxxxx
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Signature
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