EMPLOYMENT AGREEMENT
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Agreement (the "Agreement") dated as of November 1, 1999 between
Xxxxxx Xxxxxxxxxx, Inc., a corporation of the State of Delaware with offices
located at 0000 X.X. 00xx Xxxxxx, Xxxx Xxxxxxxxxx, Xxxxxxx 00000 (hereinafter
called the "Company"), and Xxxxx Xxxxxx, residing, at 00000 Xxxxxx Xxxxx Xxxxx,
Xxxxxxxx, Xxxxxxx 00000 (hereinafter called the "Executive").
WITNESSETH
WHEREAS, the Company desires to continue the employment of the
Executive and the Executive is willing to be employed by the Company and accepts
such employment;
WHEREAS, the Company and the Executive (hereinafter sometimes referred
to as "the parties") are parties to an existing Employment Agreement extending
through March 31, 2000, which is hereby terminated without liability to either
party.
NOW THERFORE, in consideration of the mutual promises and covenants
herein contained intending to be legally bound, the parties do hereby agree as
follows:
1. Employment. The Company agrees to employ the Executive and the
Executive hereby accepts the terms and conditions hereinafter set forth, for a
period commencing on November 1, 1999 and ending on March 31, 2003 (the
"Initial Term") (unless terminated as specifically provided for in this
Agreement). Upon expiration of the Initial Term, the Executive's term of
employment shall be extended for an additional three (3) year period, unless
either party gives written notice of its intention not to renew this Agreement
at least six (6) months prior to the expiration of the Initial Term, in which
case the Executive's term of employment shall end upon such expiration.
2. Position and Duties. The Executive shall serve as Vice President of
International Sales of the Company and shall have the powers and duties as may
from time to time be prescribed by the Company's President and Board of
Directors (the "Board"), provided that the Executive's duties are consistent
with the Executive's position as a senior executive officer involved with the
general management of the Company. The Executive shall report to the President.
3. Place of Performance. In connection with his employment by the
Company, the Executive shall be based, and the duties to be performed, shall be
performed at the Company's principal executive offices located in Broward County
or Dade County, South Florida. Such office shall not be further relocated
without the Executives consent.
4. Compensation and Related Matters.
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(a) Base Salary: The Executive shall receive a base salary, exclusive
of benefits (the "Base Salary"), in substantially equal monthly or bi-weekly
installments as follows:
(i) For the period commencing on November 1, 1999 through
March 31, 2000, at the annual rate of $195,000; for the period commencing on
April 1, 2000 and ending on March 31, 2001, at the annual rate of $210,000; for
the periods commencing on April 1, 2001 and 2002 and ending on March 31, 2002
and 2003, respectively, at the immediate prior year's
annual rate, plus an increase based on performance, to be determined by the
Company's Chief Executive Officer.
(b) Expenses: During the term of his employment under this Agreement,
the Executive shall be entitled to receive prompt reimbursement for all
reasonable business expenses incurred by him in accordance with the policies and
procedures of the Company for reimbursement of business expenses by its senior
executive officers, provided that the Executive accounts for the expenses in
accordance with the Company's policies.
(c) Other Benefits: The Executive shall be entitled to participate in
or receive benefits under all executive benefit plans and arrangements made
available by the Company at any time to its employees and key management
executives. Nothing paid to the Executive under any plan or arrangement
presently in effect or made available in the future shall be deemed to be in
lieu of the Base Salary or any other obligation payable to the Executive
pursuant to this Agreement.
(d) Vacations: The Executive shall be entitled to the number of paid
vacation days in each fiscal year determined by the Company from time to time
for its senior executive officers, but not less than four weeks in any fiscal
year.
(e) Perquisites: The Executive shall be entitled to receive all
perquisites and fringe benefits provided or available to senior executive
officers of the Company in accordance with present practice and as may be
changed from time to time with respect to all senior executive officers of the
Company.
(f) Stock Options: The Executive will be granted non qualified stock
options (warrants) to purchase 60,000 shares of the Company's common stock at an
exercise price of $2.25 per share. The options (warrants) will be exercisable at
the rate of 20,000 shares each on March 31, 2001, 2002, and 2003, respectively.
The rights of the Executive with respect to any stock options (warrants) granted
to the Executive shall be determined exclusively by the plans and agreements
relating to the options (warrants) and this Agreement shall not affect in any
way the rights and obligations of the plans and agreements. Each option shall be
exercisable for a period of ten years after the date of grant unless earlier
terminated in accordance with its terms or those of the Agreement.
5. Noncompetition; unauthorized disclosure:
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(a) No material competition: Except with respect to services performed
under this Agreement on behalf of the Company, and subject to the obligations of
the Executive as an officer of the Company and the employment obligations of the
Executive under this Agreement, the Executive agrees that at no time during the
term of this Agreement or, for a period of one year immediately following any
termination of this Agreement for any reason, will he engage in any business if,
within thirty (30) days of the Executive advising the Company in writing of his
proposed business activity, the Board determines in good faith that such
proposed business activity is directly competitive with a material part of the
business of the Company and its subsidiaries (both present and future) and
such competitive business
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activity is reasonably likely to materially affect in an adverse manner the
consolidated sales, profits or financial condition of the Company.
(b) Unauthorized disclosures: During the period of his employment under
this Agreement, the Executive shall not, without the written consent of the
Board or a person authorized by the Board, disclose to any person, other than an
Executive of the Company or person to whom disclosure is reasonably necessary or
appropriate in connection with the performance by the Executive of his duties as
an executive of the company, any material confidential information obtained by
him while in the employ of the company with respect to any of the Company's
customers, suppliers, creditors, lenders, investment bankers or methods of
marketing, the disclosure of which he knows will materially damage the Company;
provided, however, that confidential information shall not include any
information known generally to the public (other than as a result of
unauthorized disclosure by the Executive) or any information of a type not
otherwise considered confidential by persons engaged in the same business or a
business similar to that conducted by the Company. For the period ending one
year following the termination of employment under this Agreement for any
reason, the Executive shall not disclose any confidential information of the
type described above except as determined by him to be reasonably necessary in
connection with any business or activity in which he is then engaged.
(c) Certain Provisions: The limitations of Section 5 (a) shall
terminate if upon termination of this Agreement for any reason the Company does
not fulfill its obligations as required by Section 7 of this Agreement; however,
such termination shall not affect the rights of the Executive to receive all
payments he is entitled to receive under Section 7. The provisions of Section 5
shall apply during the time the Executive is receiving any payments from the
Company as a result of a termination of this Agreement pursuant to Section 6
(b).
6. Termination. The Company may terminate the Executive's employment
under this Agreement prior to the expiration of the term set forth in Section 1
only under the following circumstances:
(a) Death. Upon the Executive's death.
(b) Disability. If , as a result of the Executive's incapacity due to
physical or mental illness, the Executive shall have been absent from his duties
under this Agreement on a full time basis for 120 calendar days during any
calendar year, then 30 days after written notice of termination is given to the
Executive (which may only be given after the end of the 120 day period),
provided that he has not returned to his duties under this Agreement on a full
time basis.
(c) Cause. For Cause. The Company shall have "Cause" to terminate the
Executive's employment under this Agreement upon (A) the willful and continued
failure by the Executive to substantially perform his duties under this
Agreement (other than any failure resulting from the Executive's incapacity due
to physical or mental illness) for thirty (30) days after written demand for
substantial performance is delivered by the Company specifically identifying the
manner in which the Company believes the Executive has not substantially
performed his duties, or (B) the willful engaging by the Executive in misconduct
(including embezzlement and criminal fraud) which is materially injurious to the
Company, or (C) the willful violation
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by the Executive of Section 5 of this Agreement, provided that the violation
results in material injury to the Company, or (D) the conviction of the
Executive of a felony. For purposes of this paragraph, no act, or failure to
act, by the Executive shall be considered "willful" unless done or omitted to be
done, by him not in good faith and without reasonable belief that his action or
omission was in the interest of the Company. The Executive shall not be deemed
to have been terminated for Cause unless and until there shall have been
delivered to the Executive a copy of a resolution, duly adopted by the
affirmative vote of a majority of the entire membership of the Board at a
meeting of the Board called and held for such purpose (after a reasonable
notice to the Executive and an opportunity for him, together with his counsel,
to be heard before the Board), finding that in the good faith opinion of the
Board the Executive was guilty of conduct set forth above in clause (A), (B),
(C) or (D) and specifying the particulars of the conduct in detail.
(d) Termination by the Executive. The Executive may terminate his
employment under this Agreement (i) for Good Reason (as defined below) or (ii)
if his health should become impaired to any extent that makes the continued
performance of his duties under this Agreement hazardous to his physical or
mental health or his life, provided that the Executive shall have furnished the
Company with a written statement from a qualified doctor to that effect and
provided further that at the Company's request and expense the Executive shall
submit to an examination by a doctor selected by the Company, and the doctor
shall have concurred in the conclusion of the Executive's doctor.
"Good Reason" means the Company has (through its Board or otherwise)
(A) limited the powers of the Executive in any manner not contemplated by
Section 2, (B) failed to comply with Section 3 or 4, (C) failed to cause any
successor as contemplated in Section 8 of this Agreement to assume this
Agreement, or (D) a change in control. The Executive shall give the Company 30
days prior written notice of his intent to terminate this Agreement as a result
of clause (A), (B), (C) or (D) and the Company shall have the right to cure
within the 30 day period. For purposes of this Agreement, a change in control
means the occurrence of one or more of the following events (whether or not
approved by the Board): (i) an event or series of events by which any person or
other entity or group of persons or other entities acting in concert as
determined in accordance with Section 13 (d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), whether or not applicable, together with
its or their affiliates or associates shall, as a result of a tender offer or
exchange offer, open market purchases, privately negotiated purchases, merger or
otherwise (including pursuant to receipt of revocable proxies) (A) be or become
directly or indirectly the beneficial owner (within the meaning of Rule 13d-3
and Rule 13d-5 under the Exchange Act, whether or not applicable, except that a
person shall be deemed to have beneficial ownership of all securities that such
person has the right to acquire whether such right is exercisable immediately or
only after the passage of time) of more than 30% of the combined voting power of
the then outstanding common stock of the Company or (B) otherwise have the
ability to elect, directly or indirectly, a majority of the members of the
Board.
(e) Notice of Termination. Any termination of the Executive's
employment by the Company or by the Executive (other than termination pursuant
to subsection (a) above) shall be communicated by written Notice of Termination
to the other party of this Agreement. "Notice of Termination" means a notice
which indicates the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances
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claimed to provide a basis for termination of the Executive's employment under
the provision so indicated.
(f) Date of Termination. Date of termination means (i) if the
Executive's employment is terminated by his death, the date of his death, (ii)
if the Executive's employment is terminated pursuant to subsection (b) above, 30
days after Notice of Termination is given (provided that the Executive shall not
have returned to the performance of his duties on a full-time basis during the
30 day period), (iii) if the Executive's employment is terminated pursuant to
subsection (c) above, the date specified in the Notice of Termination after the
expiration of any cure periods, and (iv) if the Executive's employment is
terminated for any other reason, the date on which Notice of Termination is
given.
7. Compensation Upon Termination or During Disability:
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(a) Upon the Executive's death, the Company shall pay to the person
designated by the Executive in a notice filed with the Company or, if no person
is designated, to his estate as a lump sum death benefit, his full Base Salary
for a period of six months after his death in addition to any payments the
Executive's spouse, beneficiaries or estate may be entitled to receive pursuant
to any pension, stock option or Executive benefit plan or life insurance policy
or similar plan or policy then maintained by the Company. Upon full payment of
all amounts required to be paid under this subsection, the Company shall have no
further obligation under this Agreement.
(b) During any period that the Executive fails to perform his duties
under this Agreement as a result of incapacity due to physical or mental
illness, the Executive shall continue to receive his full base salary until the
Executive's employment is terminated pursuant to Section 6 (b) of this
Agreement, or until the Executive terminates his employment pursuant to Section
6 (d) (ii) of this Agreement, whichever comes first. After termination, the
Executive shall receive in equal monthly installments 100% of his base salary at
the rate in effect at the time Notice of Termination is delivered for one year,
plus any disability payments otherwise payable by or pursuant to plans provided
by the Company ("Disability Payments")
(c) If the Executive's employment is terminated for Cause, the Company
shall pay the Executive his full base salary through the date of termination at
the rate in effect at the time Notice of Termination is delivered and the
Company shall have no further obligation to the Executive under this Agreement.
(d) If (A) in breach of this Agreement, the Company shall terminate the
Executive's employment other than pursuant to Sections 6 (b) or 6 (c) (it being
understood that a purported termination pursuant to Sections 6 (b) or 6 (c)
which is disputed and finally determined not to have been proper shall be a
termination by the Company in breach of this Agreement), or (B) the Executive
shall terminate his employment for Good Reason, then
(i) The Company shall pay the Executive his full base salary through
the date of termination at the rate then in effect at the time Notice of
Termination is given;
(ii) in lieu of any further salary payments to the Executive for
periods subsequent to the Date of Termination and in consideration of the rights
of the Company under Section 5 of this
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Agreement, the Company shall pay severance pay to the Executive on the fifth day
following the date of termination, in a lump sum amount equal to the entire
salary due until the end of the term of this Agreement based on an annual base
salary at the highest rate in effect during the twelve (12) months immediately
preceding the date of Termination.
(iii) In the event of a change in control of the Company as defined in
Section 6 (d), the Company shall pay in a lump sum payment (or
in monthly installments at the option of the Executive) the
greater of twice the amount of severance pay required in Section
7 (d) (ii) above, or three times the annual base salary at the
highest rate in effect during the twelve (12) months immediately
preceding the date of termination.
(iv) In the event of a change in control of the Company as defined in
Section 6 (d), the total number of outstanding unexercised options (warrants)
granted to the Executive under this Agreement or any previous employment or
other agreements, shall be doubled in quantity while retaining the original
exercise price.
(v) The Company shall pay all reasonable legal fees and expenses
incurred by the Executive in contesting or disputing any such termination or in
seeking to obtain or enforce any right or benefit in this Agreement.
(e) Unless the Executive is terminated for Cause, the Company shall
maintain in full force and effect, for the continued benefit of the Executive
for the greater of the remaining term of this Agreement or eighteen (18)
months after termination of this Agreement, all Executive health and
hospitalization plans and programs in which the Executive was entitled to
participate in immediately prior to the Date of Termination, provided that the
Executive's continued participation is possible under the general terms and
provisions of the plans and programs. If the Executive's participation in any
plan or program is barred, the Company shall arrange to provide the Executive
with benefits substantially similar to those which the Executive would otherwise
have been entitled to receive under the plan and program from which his
continued participation is barred.
(f) The Executive shall not be required to mitigate the amount of any
payment provided for in this Section 7 by seeking other employment or otherwise,
however, the amount of any payment provided for in this Section 7 shall not be
reduced by any compensation earned by the Executive as the result of employment
by another employer after the Date of Termination.
(g) In the event of a termination of this Agreement by the Executive
for Good Reason as a result of a change in control, the amount to be utilized in
Section 7 (d)(ii) shall be changed to the average compensation of the Executive
during this Agreement for the taxable years prior to such termination (all as
determined to compute the base amount for purposes of Section 280G of the
Internal Revenue Code of 1984, as amended).
8. Successors; Binding Agreement:
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(a) The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company, by agreement in form and substance
satisfactory to the Executive, to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. Failure of the
Company to obtain an assumption of this Agreement prior to or simultaneously
with the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle the Executive to compensation from the Company in
the same amount and on the same terms as he would be entitled to under this
Agreement if he terminated his employment for Good Reason, except for purposes
of implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the date of termination. As used in this Agreement,
"Company" shall mean the Company as previously defined and any successor to its
business and/or assets which executes and delivers the agreement provided for in
this Section 8 or which otherwise becomes bound by all the terms and provisions
of this Agreement by operation of law.
(b) This Agreement and all rights if the Executive under this Agreement
shall inure to the benefit of and be enforceable by the Executive's personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Executive should die while any
amounts would still be payable to him under this Agreement, including all
payments payable under Section 7, if he had continued to live, all such amounts
shall be paid in accordance with the terms of this Agreement to the Executive's
devisee, legatee, or other designee or, if there is no such designee, the
Executive's estate.
9. Notice: For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive: Xx. Xxxxx Xxxxxx
00000 Xxxxxx Xxxxx Xxxxx
Xxx. 0000
Xxxxxxxx, Xxxxxxx 00000
If to the Company: Xxxxxx Xxxxxxxxxx, Inc.
0000 X.X. 00xx Xxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxx
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except with notices of change of address which
shall be effective only upon receipt.
10. Entire Agreement: No provisions of this Agreement may be modified,
waived or discharged unless such is signed by the Executive and the officer of
the Company which is specifically designated by the Board. No Agreements or
representations, oral or otherwise, expressed or implied, with respect to the
subject matter of this Agreement have been made by
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either party which are not set forth expressly in this Agreement and this
Agreement supersedes any other employment agreement between the Company and the
Executive.
11. Waiver of Breach: No waiver by either party to this Agreement of,
or compliance with, any condition or provision of this Agreement to be performed
by such other party shall be deemed a waiver of any other provision or condition
at any prior or subsequent time.
12. Headings: The section headings contained in this Agreement have
been inserted only as a matter of convenience or reference and in no way define,
limit or describe the scope or intent of any provisions of this Agreement nor in
any way affect any of these provisions.
13. Governing Law: The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Florida, without giving effect to conflict of law principles.
14. Severability: The invalidity or unenforceability of any provision
or provisions of this Agreement shall not effect the validity or enforceability
of any other provision of this Agreement, which shall remain in full force and
effect.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date and year first above written.
ATTEST: XXXXXX XXXXXXXXXX, INC.
/s/ Xxxxx X. Xxxxxxxxxxx /s/ Xxxx Xxxxxx
___________________________ By:_____________________________________
Xxxx Xxxxxx, Chief Executive Officer
WITNESS:
/s/ Xxxxx X. Xxxxxxxx /s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx, Executive
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