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EXHIBIT 10.6
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made as of November 8, 1999 by and between
PEACHTREE FIBEROPTICS, INC., a Delaware corporation (the "Company"), and XXXXXXX
X. XXXXXXX ("Employee").
WITNESSETH:
WHEREAS, Employee wishes to be employed by the Company with the duties
and responsibilities as hereinafter described, and the Company desires to assure
itself of the availability of Employee's services in such capacity.
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the Company and Employee hereby agree as follows:
1. EMPLOYMENT. The Company hereby agrees to employ Employee, and
Employee hereby agrees to serve the Company, upon the terms and conditions
hereinafter set forth.
2. TERM. The employment of Employee by the Company pursuant to
this Agreement shall be for a three (3) year period commencing on the date
hereof and shall automatically be extended for an additional one year period on
the first year anniversary date of this Agreement (November 8, 2000) and each
anniversary date thereafter (November 8th of each year beginning in 2001) unless
the Company's has provided notice of non-renewal thirty (30) days prior an
anniversary date as directed by a majority vote of the Board of Directors (the
"Term"). For example, in the event the Company has provided notice of
non-renewal 30 days prior to November 8, 2000, there will be only two (2) years
remaining in the Term; in the event the Company did not provide such notice
thirty (30) days prior to November 8, 2000, then the Term shall be extended to
November 8, 2003 so that on November 8, 2000 the total Term is three (3) years;
in no event following such notice by the Company will the remaining Term be less
than two (2) years.
3. DUTIES. Employee shall, subject to overall direction
consistent with the legal authority of the Board of Directors of the Company
(the "Board"), serve as, and have all power and authority inherent in the
offices of Chairman and Chief Operating Officer of the Company and shall be
responsible for those areas in the conduct of the business reasonably assigned
to him by the Board. Employee shall devote substantially all his business time
and efforts to the business of the Company; provided, however, that it is
understood and agreed that, while Employee may devote time to other business
matters in which he has an interest, in the event of a conflict, Employee's
first and primary responsibility shall be to the performance of his duties for
the Company.
4. COMPENSATION AND OTHER PROVISIONS. Employee shall be entitled
to the compensation and benefits hereinafter described in subparagraphs (a)
through (e) (such compensation and benefits being hereinafter referred to as
"Compensation Benefits").
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(a) BASE SALARY. The Company shall pay to Employee an
initial base salary of $150,000 per annum for the first year of this Agreement
and shall increase five percent (5%) per annum beginning one year from the date
of this Agreement and each year thereafter ("Base Salary"). The Base Salary and
Employee's other compensation will be reviewed by the Board at least annually
and may be increased (but not decreased) from time to time as the Board may
determine.
(b) PARTICIPATION IN BENEFIT PLANS. During the Service
Period, Employee shall be eligible to participate in all employee benefit plans
and arrangements now in effect or which may hereafter be established, including,
without limitation, all life, group insurance and medical care plans and all
disability, retirement and other employee benefit plans of the Company.
(c) OTHER PROVISIONS. Employee shall be entitled to four
(4) weeks paid vacation per annum and shall receive an automobile allowance of
not less than $1,000 per month. Employee shall be reimbursed for all reasonable
expenses incurred by him in the performance of his duties, including, but not
limited to, cellular telephone, entertainment, travel and other expenses deemed
reasonably necessary by Employee in his sole and absolute discretion.
(d) DISCRETIONARY BONUSES. Employee shall be entitled to
receive annual and/or interim cash bonuses and/or other bonuses when and in such
amounts as may be determined by the Board in its sole and reasonable discretion
based upon Employee's performance, the Company's performance and/or other
factors; provided, that, the Board shall meet at least annually to review
Employee's bonus entitlements.
(e) INCENTIVE COMPENSATION. Employee shall receive
monthly payments equal to that percentage of the Available Cash (defined in
Schedule A) of each applicable operating unit, division and subsidiary of the
Company, as more fully described on Schedule A attached hereto. Notwithstanding
the foregoing, subject to the mutual written agreement of Employee and the
Company, Employee may receive lesser percentages of Available Cash with respect
to one or more specified operating divisions, units or subsidiaries, as the case
may be, for specified periods of time to be mutually agreed between Employee and
the Company.
(f) STOCK OPTIONS. In the event the Company has not put
in place by June 1, 2000 the special Class B of voting common stock as described
in the Share Exchange Agreement entered into as of November 8, 1999 or the
Employee has otherwise waived in writing his rights to receive such special
Class B of voting common stock and thus elect to retain the current class of
common stock Employee beneficially owns and received pursuant to such Share
Exchange Agreement, upon the earlier of June 1, 2000 or the date of such waiver,
the Company and Employee agree to enter into the Stock Option Agreement attached
hereto as Exhibit B pursuant to which the Company shall grant to Employee
certain options to purchase common stock of the Company upon such terms and
conditions set forth therein
5. SEVERANCE AND CHANGE OF CONTROL PROVISIONS. Upon the
occurrence of a Triggering Event (as hereinafter defined), Employee shall be
entitled to the immediate receipt of Severance Payments and Benefits (as
hereinafter defined) from the Company in accordance with the terms hereinafter
set forth:
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(a) TRIGGERING EVENT. The occurrence of any of the
following events shall be defined as a "Triggering Event" for purposes hereof:
(1) The involuntary termination of Employee's
employment (other than for Cause (as hereinafter defined)) at any time prior to
the expiration of the Term or within two (2) years following a Change of Control
(as hereinafter defined);
(2) The voluntary resignation of Employee for
any reason whatsoever within ninety (90) days following a Change of Control; or
(3) The voluntary resignation of Employee for
"good reason," which for purposes hereof shall include, without limitation, (i)
a demotion, (ii) a reduction in salary, benefits, bonuses, incentives or
perquisites, (iii) the relocation of the principal office of the Company or the
relocation of Employee outside of the Dade, Broward or Palm Beach Counties in
Florida, or (iv) a material increase in business travel.
(4) The death or Disability of the Employee (as
defined herein).
(b) CHANGE OF CONTROL. For purposes of this Agreement,
the term "Change of Control" shall mean the occurrence of any of the following
events:
(1) Thirty percent (30%) or more of the
Company's voting stock shall be acquired by any person (other than Employee),
entity or affiliated group;
(2) An unapproved change to the majority control
of the Company's board of directors;
(3) Any merger, consolidation or business
combination pursuant to which the Company is not the surviving corporation or
thirty percent (30%) or more of the Company's voting stock shall be owned or
controlled by any person (other than Employee), entity or affiliated group;
(4) A liquidation or dissolution of the Company;
or
(5) The sale of all or substantially all of the
Company's assets.
(c) SEVERANCE PAYMENTS AND BENEFITS. For purposes of this
Agreement, the term "Severance Payments and Benefits" shall mean:
(1) Employee shall receive a lump sum payment
equal to: two (2) multiplied by the sum of Employee's highest annual Base Salary
plus the highest bonus, incentive and other compensation payments received by
Employee in respect of any year within the three (3) year period preceding the
Triggering Event (or the annualized sum of Employee's Base Salary plus the
maximum amount of bonuses and incentives which Employee could have been entitled
during the year in which the Triggering Event occurred);
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(2) All stock options, warrants, other stock
appreciation rights and other similar securities shall become immediately and
fully vested and all conditions applicable to all contingently issued options,
warrants, stock appreciation rights and other similar securities shall be deemed
waived by the Company;
(3) All benefits applicable to Employee and his
family members as described in Sections 5(a) and (b) of the Agreement shall
continue for a period of two (2) years following the Triggering Event or through
the expiration of the Term (as if the Triggering Event had not occurred),
whichever is later;
(4) In the event that Severance Payments and
Benefits are deemed to be "excess parachute payments" as defined under Section
280G of the Internal Revenue Code, then the Company shall pay to Employee an
additional lump sum cash payment as shall be necessary to provide Employee with
the same "after-tax" compensation and benefits as if no such excise tax had been
imposed.
(5) The Company shall pay as and when due any
and all attorneys' fees and costs that Employee may incur in connection with the
enforcement of his rights under this Agreement or any dispute or settlement in
connection herewith;
(6) Severance Payments and Benefits will not be
subject to mitigation in any respect; and
(7) The non-competition and non-solicitation
periods described in Section 13 of this Agreement shall be reduced from one (1)
year to three (3) months (other than by virtue of the expiration of the Term of
this Agreement).
(d) STOCK OPTIONS, WARRANTS AND STOCK APPRECIATION
RIGHTS. Notwithstanding the foregoing, all stock options, warrants, stock
appreciation rights and other other similar securities shall immediately vest
upon the occurrence of a Change of Control and at such time all conditions
applicable to contingently issued options, warrants, stock appreciation rights
and other securities shall be deemed waived by the Company.
6. TERMINATION. Employee's employment hereunder shall terminate
as a result of any of the following events:
(a) Employee's death;
(b) Employee shall be unable to perform his duties
hereunder by reason of illness, accident or other physical or mental disability
for a continuous period of at least nine months or an aggregate of twelve months
during any continuous eighteen month period ("Disability");
(c) voluntary termination by Employee; or
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(d) for Cause, where "Cause" shall mean: (i) final
non-appealable adjudication of Employee of a felony; or (ii) the reasonable
determination of eighty (80%) percent of the entire Board (other than Employee)
that Employee has engaged in material intentional misconduct or the gross
neglect of his duties, which has a continuing material adverse effect on the
business of the Company.
Any termination pursuant to subparagraph (b), (c) or (d) of
this Section shall be communicated by a written notice ("Notice of
Termination"), such notice to set forth with specificity the grounds for
termination if the result of "Cause". Employee's employment under this Agreement
shall be deemed to have terminated as follows: (i) if Employee's employment is
terminated pursuant to subparagraph (a) above, on the date of his death; (ii) if
Employee's employment is terminated pursuant to subparagraph (b) or (d) above,
on the date on which Notice of Termination is given; and (iii) if Employee's
employment is terminated pursuant to subparagraph (c) above, thirty (30) days
after the date on which a Notice of Termination is given. The date on which
termination is deemed to have occurred pursuant to this paragraph is hereinafter
referred to as the "Date of Termination".
7. PAYMENTS ON TERMINATION. In the event that Employee's
employment is terminated pursuant to Section 6 above, the Company shall pay to
Employee his full Base Salary through the Date of Termination together with all
incentive compensation, benefits and other compensation, if any, due and owing
as of that date, plus any Severance and Benefit Payments to which Employee may
be entitled hereunder.
8. BOARD OF DIRECTORS. The Company shall use its best efforts to
cause Employee to be elected as a member of the Board of Directors of the
Company and each of its subsidiaries at all times during the Term. Employee
shall agree to faithfully serve the Company as a member of all such Boards upon
election.
9. LIFE INSURANCE. If requested by the Company, Employee shall
submit to such physical examinations and otherwise take such actions and execute
and deliver such documents as may be reasonably necessary to enable the Company
to obtain life insurance on the life of Employee for the benefit of the Company.
10. REPRESENTATIONS AND WARRANTIES. Employee represents and
warrants to the Company that he is under no contractual or other restriction or
obligation that would prevent the performance of his duties hereunder or
interfere with the rights of the Company hereunder.
11. DISCLOSURE AND PROTECTION OF CONFIDENTIAL INFORMATION.
(a) For purposes of this Agreement, "Confidential
Information" means knowledge, information and material which is proprietary to
the Company, of which Employee may obtain knowledge or access through or as a
result of his employment by the Company (including information conceived,
originated, discovered or developed in whole or in part by Employee).
Confidential Information includes, but is not limited to, (i) technical
knowledge, information and material such as trade secrets, processes, formulas,
data, know-how, improvements, inventions, computer programs, drawings, patents,
and experimental and development work techniques, and (ii) marketing and other
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information, such as supplier lists, customer lists, marketing and business
plans, business or technical needs of customers, consultants, licensees or
suppliers and their methods of doing business, arrangements with customers,
consultants, licensees or suppliers, manuals and personnel records or data.
Confidential Information also includes any information described above which the
Company obtains from another party and which the Company treats as proprietary
or designates as confidential, whether or not owned or developed by the Company.
Notwithstanding the foregoing, any information which is or becomes available to
the general public otherwise than by breach of this Section 11 shall not
constitute Confidential Information for purposes of this Agreement.
(b) During the term of this Agreement and thereafter,
Employee agrees, to hold in confidence all Confidential Information and not to
use such information for Employee's own benefit or to reveal, report, publish,
disclose or transfer, directly or indirectly, any Confidential Information to
any person or entity, or to utilize any Confidential Information for any
purpose, except in the course of Employee's work for the Company.
(c) Employee will abide by any and all security rules and
regulations, whether formal or informal, that may from time to time be imposed
by the Company for the protection of Confidential Information, and will inform
the Company of any defects in, or improvements that could be made to, such rules
and regulations.
(d) Employee will notify the Company in writing
immediately upon receipt of any subpoena, notice to produce, or other compulsory
order or process of any court of law or government agency if such document
requires or may require disclosure or other transfer of Confidential
Information.
(e) Upon termination of employment, Employee will deliver
to the Company any and all records and tangible property that contain
Confidential Information that are in his possession or under his control.
12. COVENANT NOT TO COMPETE.
(a) In consideration for the Company entering into this
Agreement, Employee covenants and agrees that during the Term and for a one (1)
year period thereafter, Employee will not, without the express prior written
consent of the Company, directly or indirectly, compete with the business of the
Company anywhere within the United States of America. Employee will undertake no
activities that may lead Employee to compete with or to acquire rival,
conflicting or antagonistic interests to those of the Company with respect to
the business of the Company, whether alone, as a partner, or as an officer,
director, employee, independent contractor, consultant or shareholder holding 5%
or more of the outstanding voting stock of any other corporation, or as a
trustee, fiduciary or other representative of any other person or entity.
(b) During the Service Period and for a period of one (1)
year after termination of employment, Employee will not, directly or indirectly,
solicit or induce any other employee of the Company or any parent or affiliate
to leave his or her employment, or solicit or induce any consultant or
independent contractor to sever that person's relationship with the Company.
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(c) If any court shall determine that the duration or
geographical limit of any covenant contained in this Section 12 is
unenforceable, it is the intention of the parties that covenant shall not
thereby be terminated but shall be deemed amended to the extent required to
render it valid and enforceable, such amendment to apply only in the
jurisdiction of the court that has made such adjudication.
(d) Employee acknowledges and agrees that the covenants
contained in Sections 11 and 12 hereof are of the essence in this Agreement,
that each of such covenants is reasonable and necessary to protect and preserve
the interests, properties, and business of the Company, and that irreparable
loss and damage will be suffered by the Company should Employee breach any of
such covenants. Employee further represents and acknowledges that he shall not
be precluded from gainful engagement in a satisfactory fashion by the
enforcement of these provisions.
13. AVAILABILITY OF INJUNCTIVE RELIEF. Employee acknowledges and
agrees that any breach by him of the provisions of Sections 11 or 12 hereof will
cause the Company irreparable injury and damage for which it cannot be
adequately compensated in damages. Employee therefore expressly agrees that the
Company shall be entitled to seek injunctive and/or other equitable relief, on a
temporary or permanent basis to prevent any anticipatory or continuing breach of
this Agreement or any part hereof, and is secured as an enforcement. Nothing
herein shall be construed as a waiver by the Company of any right it may have or
hereafter acquired to monetary damages by reason of any injury to its property,
business or reputation or otherwise arising out of any wrongful act or omission
of it.
14. SURVIVAL. The covenants, agreements, representations and
warranties contained in or made pursuant to this Agreement shall survive
Employee's termination of employment, irrespective of any investigation made by
or on behalf of any party.
15. MODIFICATION. This Agreement sets forth the entire
understanding of the parties with respect to the subject matter hereof,
supersedes all existing agreements between them concerning such subject matter,
and may be modified only by a written instrument duly executed by each party.
16. NOTICES. Any notice required or permitted hereunder shall be
deemed validly given if delivered by hand, verified overnight delivery, or by
first class, certified mail to the following addresses (or to such other address
as the addressee shall notify in writing to the other party):
If to Employee: Xxxxxxx X. Xxxxxxx
00 Xxxxxx Xxxxx
Xxxx Xxxxx Xxxxxxx, Xxxxxxx 00000
If to the Company: Peachtree Fiberoptics, Inc.
0000 XXX Xxxx., Xxxxx 000
Xxxx Xxxxx Xxxxxxx, Xxxxxxx 00000
Attention: President
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with a copy to: Xxxxxxx X. Xxxxxxxxx, Esq.
Cohen, Berke, Xxxxxxxxx,
Xxxxxx & Kondell, P.A.
0000 Xxxxx Xxxxxxxx Xxxxx, 00xx Xxxxx
Xxxxx, Xxxxxxx 00000
17. WAIVER. Any waiver by either party of a breach of any
provision of this Agreement shall not operate as or be construed to be a waiver
of any other breach of such provision or of any breach of any other provision of
this Agreement. The failure of a party to insist upon strict adherence to any
term of this Agreement on one or more occasions shall not be considered a waiver
or deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. All waivers must be in writing.
18. BINDING EFFECT. the Company's rights and obligations under
this Agreement shall not be transferable by assignment or otherwise, and any
attempt to do any of the foregoing shall be void. The provisions of this
Agreement shall be binding upon the Employee and his heirs and personal
representatives, and shall be binding upon and inure to the benefit of the
Company, its successors and assigns.
19. HEADINGS. The headings in this Agreement are solely for
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
20. GOVERNING LAW; VENUE. This Agreement is to be performed in the
State of Florida, and the validity, construction and enforcement of, and the
remedies under, this Agreement shall be governed in accordance with the laws of
the State of Florida, without giving effect to any choice of laws principles. In
the event of any litigation arising out of or relating to this Agreement,
exclusive venue shall be in Xxxx Xxxx Xxxxx - Xxxx Xxxxx Xxxxxx, Xxxxxxx.
21. ENTIRE AGREEMENT. This writing constitutes the binding and
entire agreement of the parties superseding and extinguishing all prior
agreements or understandings regarding the subject matter hereof, and may not be
modified without the written agreement by the parties.
22. INVALIDITY. The invalidity or unenforceability of any term of
this Agreement shall not invalidate, make unenforceable or otherwise affect any
other term of this Agreement, which shall remain in full force and effect.
23. ATTORNEYS' FEES. In the event any dispute or litigation arises
hereunder between any of the parties hereto, the prevailing party shall be
entitled to all reasonable costs and expenses incurred by it in connection
therewith (including, without limitation, all reasonable attorneys' fees and
costs incurred before and at any trial or other proceeding and at all tribunal
levels), as well as all other relief granted in any suit or other proceeding.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first hereinabove written.
EMPLOYER:
PEACHTREE FIBEROPTICS, INC., a Delaware
corporation
By: /s/ XXXXXX XXXXXX
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Xxxxxx Xxxxxx
Title: Director
EMPLOYEE:
/s/ XXXXXXX XXXXXXX
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Xxxxxxx X. Xxxxxxx
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