Exhibit 10.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into this 1st day of
December, 2001 (the "Effective Date"), by and between MALACOLOGY, INC., a
corporation (the "Employer"), and XXXXX X. XXX, residing at 0000 Xxxxxxx Xxxx
Xxxxx, Xxxxxxx, Xxxxxxx (the "Employee").
W I T N E S S E T H:
1. Employment. The Employer hereby employs the Employee, and the
Employee hereby accepts such employment, upon the terms and subject to the
conditions set forth in this Agreement.
2. Term. The term of employment under this Agreement shall begin as of
the Effective Date and terminate on such date as hereinafter provided; provided,
however that the parties agree that, notwithstanding any other provision of this
Agreement, this Agreement and the employment of the Employee under this
Agreement shall not extend beyond the date on which the Employee reaches
sixty-five (65) years of age ("Retirement").
3. Compensation; Reimbursement, Etc.
(a) Salary. The Employer shall pay to the Employee as
compensation for all services rendered by the Employee for each one (1)
year term of this Agreement a basic salary of Two Hundred Fifty
Thousand and 00/100 Dollars ($250,000) (the "Basic Salary"), or such
other sum as the parties may agree on from time to time, payable in
bi-weekly installments. The Basic Salary shall increase by $25,000 per
year on the first, second, third and fourth anniversary dates of the
Effective Date. On the fifth anniversary date of the Effective Date and
every anniversary date thereafter, the parties shall negotiate, in good
faith, an increase in the Basic Salary. If paying the Basic Salary to
the Employee would result in financial distress to the Employer, as
determined in the reasonable discretion by the Employer's board of
directors (the "Board"), then the Employer may defer all or a portion
of the Basic Salary (the "Deferred Salary"), with the Deferred Salary
accruing interest at rate of ten percent (10%) per annum. The Deferred
Salary shall be paid to the Employee immediately upon the Board's
reasonable determination that the payment of all or a portion of the
Deferred Salary, plus interest, will not result in financial distress
to the Employer; provided, however, that, notwithstanding the
foregoing, all of the Deferred Salary plus accrued interest shall be
payable immediately upon the termination of the Employee's employment
for any reasons other than for good cause. The rate of salary may be
increased beyond the amounts set forth above at any time, as the Board
may determine, based on earnings, increased activities of the Employer,
or such other factors as the Board may deem appropriate from time to
time. The compensation provided for in this Section 3(a) shall be in
addition to any pension or profit sharing payments set aside or
allocated for the benefit of the Employee.
(b) Expenses. The Employer shall reimburse the Employee on a
monthly basis for all reasonable expenses incurred by the Employee in
the performance of his duties under this Agreement; provided, however,
that the Employee shall have previously furnished to the Employer an
itemized account in substantiation of such expenditures.
(c) Vacation. During the term of his employment, the Employee
will be entitled to such reasonable periods of vacation as the
Compensation Committee of the Board (the "Compensation Committee") and
the Employee may agree upon, but not less than four (4) weeks every
year. Such vacation shall be taken at such time as the Employee may
from time to time reasonably decide, provided such time, in the opinion
of the Compensation Committee acting reasonably, does not materially
interfere with the Employee's duties hereunder. The Employee will not
be permitted to carry forward any unused vacation time into the next
calendar year without the approval of the Board.
(d) Insurance and Fringe Benefits. The Employee shall be
entitled to such insurance and other fringe benefits as may be provided
from time to time by the Employer to other senior executives and such
other benefits, if any, as currently provided to the Employee.
(e) Automobile. The Employer shall provide the Employee with
an automobile leased by the Employer and the Employer shall pay for all
gas, oil, insurance, maintenance, repair and other expenses incurred by
the Employee in the operation and maintenance of his automobile. At the
expiration of the Employer's lease of such automobile, the Employer
shall provide the Employee with an equivalent automobile as chosen by
the Employee. The parties shall account for the Employee's use of the
automobile in the manner required by the rules and regulations
promulgated by the Internal Revenue Service.
(f) Incentive Compensation. The Employee will participate in
an incentive compensation plan designed specifically for him. The
Employee will be paid an annual bonus of sixty percent (60%) of the
Basic Salary (the "Annual Bonus") from the Employer's earnings before
tax and the Annual Bonus but after extraordinary items, all determined
in accordance with generally accepted accounting principles (the
"Employer's Net Profit"), payable within thirty (30) days after the end
of each fiscal year; provided, however, that the Annual Bonus will be
reduced to the extent that it exceeds the Employer's Net Profit.
(g) Stock Options. The Employee will be entitled to
participate in any stock option program offered by the Employer to its
senior executives (the "Stock Option Plan"). The Stock Option Plan will
be designed considering stock option programs offered to senior
executives of comparable international companies.
(h) Indemnification. The Employer shall indemnify and hold
harmless the Employee from any damage or liability of any nature,
including, but not limited to, all costs and expenses (including
attorneys' and legal assistants' fees before and at trial and in
appellate proceedings and in any arbitration proceedings) that may be
imposed upon the Employee because of (i) the Employee's actions or
omissions while performing his duties as an employee of the Employer or
(ii) claims arising from Employee's positions as a shareholder,
employee, officer or director of Xxxx International Trading Company,
even if such claims arose prior to Employer's employment of the
Employee.
4. Duties. The Employee is engaged as the Chief Executive
Officer/Chairman. In addition, the Employee shall have such other duties and
hold such other offices as may from time to time be reasonably assigned to him
by the Board of Directors of the Employer.
5. Extent of Services. During the term of his employment under this
Agreement, the Employee shall devote such time, energy and attention during
regular business hours to the benefit and business of the Employer as may be
reasonably necessary in performing his duties pursuant to this Agreement and
shall not be employed by any other person or engage in any other business or
occupation. The Employer agrees that the Employee will be free to hold equity
interests in businesses that do not compete with the business of the Employer.
6. Illness or Incapacity, Termination on Death, Etc.
(a) Death of Employee. All rights of the Employee under this
Agreement shall terminate upon his death (other than rights accrued
prior thereto). The Employer shall pay to the estate of the Employee
such compensation as would otherwise have been payable to the Employee
up to the end of the month in which his death occurs. The Employer
shall have no additional financial obligation under this Agreement to
the Employee or his estate.
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(b) Disability.
(i) Temporary Disability. During any period of
disability, illness or incapacity during the term of this
Agreement which renders the Employee at least temporarily
unable to perform the services required under this Agreement,
the Employee shall receive the compensation payable under
Section 3(a) of this Agreement plus any bonus compensation
earned but not yet paid, less any benefits received by him
under any insurance carried by or provided by the Employer.
All rights of the Employee under this Agreement (other than
rights already accrued) shall terminate as provided below upon
the Employee's permanent disability (as defined below).
(ii) Permanent Disability. The term "permanent
disability" as used in this Agreement shall mean the inability
of the Employee, as determined by the Board of Directors of
the Employer, by reason of physical or mental disability to
perform the duties required of him under this Agreement for a
period of one hundred and eighty (180) days in any two-year
period. Successive periods of disability, illness or
incapacity will be considered separate periods unless the
later period of disability, illness or incapacity is due to
the same or related cause and commences less than six months
from the ending of the previous period of disability. Upon
such determination, the Board of Directors may terminate the
Employee's employment under this Agreement upon ten (10) days'
prior written notice. If any determination of the Board of
Directors with respect to permanent disability is disputed by
the Employee, the parties hereto agree to abide by the
decision of a panel of three physicians. The Employee and
Employer shall each appoint one member, and the third member
of the panel shall be appointed by the other two members. The
Employee agrees to make himself available for and submit to
examinations by such physicians as may be directed by the
Employer.
7. Other Terminations.
(a) Resignation by the Employee. The Employee may resign his
employment hereunder upon written notice given ninety (90) days prior
to the effective date of the Employee's resignation.
(b) Termination of Employment for Good Cause.
(i) The Employer may terminate the employment of the
Employee hereunder without notice for good cause (as defined
below).
(ii) The term "good cause" as used in this Agreement
shall mean a conviction of any crime of moral turpitude and
substantial dependence, as reasonably determined by the Board
of Directors of the Employer, on any addictive substance,
including but not limited to alcohol, amphetamines,
barbiturates, methadone, cannabis, cocaine, PCP, THC, LSD or
illegal or narcotic drugs. If any determination of substantial
dependence by the Board of Directors is disputed by the
Employee, the parties hereto agree to abide by the decision of
a panel of three physicians selected in the manner provided in
Section 6(b)(ii) of this Agreement. The Employee agrees to
make himself available for and submit to examinations by such
physicians as may be directed by the Employer.
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(c) Compensation Payable if Resignation or Termination for
Good Cause. If the employment of the Employee is terminated pursuant to
this Section 7(a) or (b) , the Employer shall pay to the Employee any
compensation earned but not paid to the Employee prior to such
termination. Such payment shall be in full and complete discharge of
any and all liabilities or obligations of the Employer to the Employee
hereunder, and the Employee shall be entitled to no further benefits
under this Agreement.
(d) Termination of Employee's Employment Without Good Cause.
The Employer shall have the right to terminate the Employee's
employment hereunder at any time without good cause whereupon:
(i) the Employer shall pay to the Employee an amount
equal to three (3) times the Employee's Basic Salary (the
"Guaranteed Amount") within thirty (30) days after the date
the Employee's employment is terminated (th e"Date of
Termination").
(ii) if the Employee holds any options granted to him
pursuant to the Stock Option Plan, the date to exercise such
options shall be extended until the date that is thirty (30)
months from the Date of Termination, if such date is beyond
the expiration date under such options.
(iii) the Employer shall pay the Employee a bonus
equal to the greater of (A) the Annual Bonus for the prior
fiscal year, or (B) the average of all Annual Bonuses received
by the Employee from the three (3) previous fiscal years or
the fiscal years in which the Employee was employed by the
Employer, if less, within thirty (30) days after the Date of
Termination.
(iv) the Employer shall pay to the Employee all
outstanding and accrued salary and vacation pay to the Date of
Termination within thirty (30) days after the Date of
Termination and reimburse the Employee for all proper expenses
incurred by the Employee in carrying out his duties to the
Employer prior to the Date of Termination.
(v) if, at the Date of Termination, there were any
memberships in any clubs, social or athletic organizations
paid for by the Employer that were for the regular use of the
Employee, the Employer will not take any action to terminate
such memberships, but need not renew any such membership that
expires.
(vi) prior to or contemporaneously with the payments
set forth in subsections (i) (iii) and (iv) above, the
Employee shall deliver a release in favor of the Employer, its
subsidiaries, and their respective directors, officers and
shareholders and the Employer shall deliver a release in favor
of the Employee in the form contemplated by "Schedule A"
attached hereto.
(vii) The Employer agrees to make payments
contemplated by this Section 7(d) irrespective of whether the
Employee finds (or seeks) alternative employment.
(e) Constructive Dismissal. In the event that (i) the Employer
materially alters the Employee's remuneration, title, reporting
relationship or responsibilities without the consent of the Employee or
(ii) the parties are unable to agree on a Basic Salary on or after the
fifth anniversary date of the Effective Date and the Employee has acted
in good faith in such negotiations (collectively, a "Constructive
Dismissal"), the Employer shall make all the payments and provide the
benefits specified in Section 7(d) hereof, from and after the date of
the Constructive Dismissal.
(f) No Payment if Good Cause, Permanent Disability, Death,
Resignation or Retirement. The Employer shall not have any obligation
to make any of the payments described in Section 7(d), or to extend the
date for exercising any outstanding stock options, if:
(i) the Employee's employment with the Employer has
been terminated for good cause;
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(ii) the Employee suffers a permanent disability;
(iii) the Employee's employment terminates because of
death or retirement; or
(iv) the Employee resigns from employment and a
Constructive Dismissal has not occurred prior to the
Employee's resignation.
(g) Tendering Resignation. The Employee agrees that after
termination of his employment, he will, upon the request of the
Employer, tender his resignation from any position he may hold as an
officer or director of the Employer or its subsidiaries. Doing so will
not reduce the obligations of the Employer described herein.
(h) Delivery of Records. Upon any termination of employment,
the Employee shall, within ten (10) business days, deliver or cause to
be delivered to the Employer all books, documents, effects, monies,
securities, or other property belonging to the Employer or its
subsidiaries or for which the Employer or its subsidiaries are liable
to others, which are in the possession, charge, control, custody of the
Employee.
8. Confidentiality. The Employee agrees to keep in strict secrecy and
confidence any and all information the Employee assimilates or to which he has
access during his employment by the Employer and which has not been publicly
disclosed and is not a matter of common knowledge in the fields of work of the
Employer. The Employee agrees that both during and for 6 months after the term
of his employment by the Employer, he will not, without prior written consent of
the Employer, disclose any such confidential information to any third person,
partnership, joint venture, company, corporation or other organization.
9. Noncompetition and Nonsolicitation.
(a) Noncompetition. During the term of the Employee's
employment, whether pursuant to this Agreement, except as contemplated
herein, and for a period of six (6) months after the termination of his
employment with the Employer unless such termination is caused by a
Constructive Dismissal, the Employee shall not, directly or indirectly,
within any State of the United States or Province or Territory of
Canada, enter into, engage in, be employed by, or consult with any
business in the telecom industry. The restrictions of this Section 9
shall extend to any and all activities of the Employee, whether as an
independent contractor, partner or joint venturer, or as an officer,
director, stockholder, agent, employee or salesman for any person,
firm, partnership, corporation or other entity, or otherwise. The
restrictions of this Section 9 shall not be violated by the ownership
of no more than 2% of the outstanding securities of any company whose
stock is traded on a national securities exchange or is quoted in the
Automated Quotation System of the National Association of Securities
Dealers (NASDAQ).
(b) Nonsolicitation. During his employment with the Employer,
except as contemplated herein, and for a period of 6 months following
the termination of his employment with the Employer unless such
termination is caused by a Constructive Dismissal, the Employee agrees
he will refrain from and will not, directly or indirectly, as
independent contractor, employee, consultant, agent, partner, joint
venturer, or otherwise, (1) solicit any of the employees of the
Employer to terminate their employment or (2) solicit the current
customers or suppliers of the Employer or any of its subsidiaries. In
this Section 9(b), (i) "customer" shall mean any customer with which
the Employer or its subsidiaries will have transacted business within a
period of one (1) year prior to the Date of Termination, and (ii)
"supplier" shall mean any supplier with which the Employer or its
subsidiaries which exist at the Date of Termination and any supplier
with which the Employer or its subsidiaries have done business within a
period of one (1) year prior to the Date of Termination. The Employee
acknowledges and agrees that all of the covenants and restrictions in
Sections 9(a) and (b) are reasonable and valid.
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10. Specific Performance. The Employee agrees that damages at law will
be an insufficient remedy to the Employer if the Employee violates the terms of
Sections 8 or 9 of this Agreement and that the Employer would suffer irreparable
damage as a result of such violation. Accordingly, it is agreed that the
Employer shall be entitled, upon application to a court of competent
jurisdiction, to obtain injunctive relief to enforce the provisions of such
Sections, which injunctive relief shall be in addition to any other rights or
remedies available to the Employer. The Employee agrees to pay to the Employer
all costs and expenses incurred by the Employer relating to the enforcement of
the terms of Sections sections 8 or 9 of this Agreement, including reasonable
fees and disbursements of counsel (both at trial and in appellate proceedings).
11. Legal Representation. The parties acknowledge to each other that
they have been represented by separate legal counsel in connection with the
negotiation and finalization of this Agreement.
12. Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
13. Compliance with other Agreements. The parties represent and warrant
to each other that the execution of this Agreement by them and their performance
of their obligations hereunder will not conflict with, result in the breach of
any provision of or the termination of or constitute a default under any
Agreement to which the Employee or Employer, as the case may be, is a party or
by which the Employee or Employer, as the case may be, is or may be bound.
14. Waiver of Breach. The waiver by the Employer of a breach of any of
the provisions of this Agreement by the Employee shall not be construed as a
waiver of any subsequent breach by the Employee.
15. Attorney Fees. If either party engages the services of an attorney
to enforce rights under this Agreement, the prevailing party in any action shall
be entitled to recover all reasonable costs and expenses (including reasonable
attorneys' and legal assistants' fees before and at trial and in appellate
proceedings and in any arbitration proceedings).
16. Binding Effect; Assignment. The rights and obligations of the
Employer under this Agreement shall inure to the benefit of and shall be binding
upon the successors and assigns of the Employer. This Agreement is a personal
employment contract and the rights, obligations and interests of the Employee
hereunder may not be sold, assigned, transferred, pledged or hypothecated.
17. Entire Agreement. This Agreement contains the entire agreement and
supersedes all prior agreements and understandings, oral or written, with
respect to the subject matter hereof. This Agreement may be changed only by an
agreement in writing signed by the party against whom any waiver, change,
amendment, modification or discharge is sought.
18. Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.
19. Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Florida.
20. Venue. The parties to this Agreement agree that jurisdiction and
venue of any action brought pursuant to this Agreement, to enforce the terms
hereof or otherwise with respect to the relationships between the parties
created or extended pursuant hereto, shall exclusively lie in the Circuit Court
of the Thirteenth Judicial Circuit of the State of Florida in and for
Hillsborough County.
21. Notices. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and if sent by certified or
registered mail, first class, return receipt requested, to the parties at the
following addresses:
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To the Employer: Malacology, Inc.
0000 Xxxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
Fax: 000-000-0000
With a copy to: Xxxxxx & Xxxxxxxxx, LLP
000 Xxxxxxx Xxx., Xxxxx 000
Xxxxxx Xxxx, XX 00000
Fax: 000-000-0000
If to the Employee: Xxxxx X. Xxx
0000 Xxxxxxx Xxxx Xxxxx
Xxxxxxx, Xxxxxxx, 00000
With a copy to: Xxxxxxx X. XxXxxxxx, Esquire
Trenam, Kemker, Scharf, Barkin
Xxxx, X'Xxxxx & Xxxxxx, P.A.
Xxxx Xxxxxx Xxx 0000
Xxxxx, Xxxxxxx 00000
Fax: 000-000-0000
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective the day and year first above written.
MALACOLOGY, INC.
By: /s/ Xxxxx X. Xxx
--------------------------------
Xxxxx X. Xxx, Chairman/CEO
EMPLOYEE:
/s/ Xxxxx X. Xxx
--------------------------------
XXXXX X. XXX
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