Exhibit 6.3
EMPLOYMENT AGREEMENT
This Employment Agreement (Agreement) effective on the 1st day of August 1999,
and entered into between 1-800-AutoTow, Inc., a Delaware corporation
("Company"), and Xxxxxx X. Xxxxxxx, ("Employee").
RECITALS
A. Company is a corporation engaged in the business of providing towing and
other services in the transportation industry. Employee is an individual
possessing unique management and operating talents of value to the Company.
B. Company desires to employ Employee as Senior Vice President, COO of Company
and in such other capacities as agreed on from time to time in writing by
Employee and Company, and Employee desires to accept such employment, all
on the terms and conditions set forth in this Agreement.
C. Company and Employee each desire to prevent other competitive businesses
from securing Employee's services and utilizing Employee's experience,
background, confidential information and inventions as hereinafter set
forth.
AGREEMENT
In consideration of the foregoing recitals and the covenants and
agreements of the parties contained herein, the parties do hereby agree as
follows:
1. Employment: Company hereby hires Employee to perform the duties and render
the services hereinafter set forth in Section 2, for a period of three (3)
years, commencing August 1, 1999 (the "Employment Term"), subject to earlier
termination as herein provided, and Employee hereby accepts said employment and
agrees to perform said services during the term of this Agreement. This
Agreement may be terminated by the Company prior to the expiration of its
initial three-year term only as set forth below. Unless this Agreement is so
terminated, or unless the Company elects not to renew this Agreement at the end
of its initial three-year term, or any subsequent term, by giving notice to
Employee of such non-renewal at least 90 days prior to the end of such term,
this Agreement shall be automatically renewed on the same terms for successive
one year periods.
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2. Duties: Employee agrees to render to the Company the services as Senior Vice
President, COO of the Company as outlined in Attachment A.
3. Compensation: As compensation for his services to be performed hereunder,
Company shall provide Employee with the following compensation and benefits:
(a) Base Salary: For all services rendered by Employee to Company
hereunder, Employee's base salary shall be $ 125,000.00 per
year, which shall commence the 1st day of August, 1999,
subject to annual adjustment, payable in accordance with the
Company's payroll practices as in effect from time to time,
and subject to such withholding as is required by law.
(b) Bonus: In addition to the base salary specified above,
Employee may be paid a bonus which shall be in an amount, and
payable in a manner, as defined in exhibit B attached.
(c) Vacation: Employee shall be entitled to 2 weeks paid vacation
during the first year of this Agreement and then shall be 3
weeks the next year and then 4 weeks thereafter. If the
vacation is not used during the year earned, it will be lost
and not carried forward into subsequent years.
(d) Life Insurance: Company shall provide Employee, at the
Company's cost, with a Term Life Insurance Policy on the life
of Employee (assuming insurability), in an amount equal
$325,000.00.
(e) Business Expenses: The Company shall reimburse Employee for
all reasonable business expenses incurred by Employee in the
course of performing services for the Company subject to the
Company written guidelines.
(f) Stock Options: Employee shall be granted an option to purchase
2,160,939 shares of common stock (per the attached earnback
spreadsheet, "Attachment C"), par value $.001 per share at an
option price of $.20 per share, of Company subject to the
terms and conditions of the stock option agreement attached
hereto as "Attachment B." The terms and conditions of such
stock option agreement are incorporated herein by reference.
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(g) Other Benefits: Company shall provide Employee with such other
employment benefits, including without limitation, medical
insurance and disability insurance, as is provided by Company
to its other executive employees.
4. Termination: This Agreement and Employee's employment are subject to
immediate termination at any time as follows:
(a) Death: This Agreement shall terminate immediately upon
Employee's death, in which event the Company's only obligation
shall be payment of all compensation due Employee for services
rendered by Employee prior to the date of his death to
Employee's estate or beneficiary.
(b) Disability: The Company may terminate Employee's employment in
the event that Employee is disabled from performing all
assigned duties under this Agreement due to illness or injury
for a period in excess of three (3) consecutive months, in
which event the Company's only obligation shall be to pay all
compensation due Employee for services rendered by Employee
prior to the date of his termination.
(c) Termination of Employment With Cause: The Company may
terminate Employee's employment immediately upon written
notice to Employee in the event Employee (1) is convicted of a
felony by a court of competent jurisdiction; (2) commits any
gross misconduct, willful breach, or habitual neglect of his
duties; (3) willfully violates any policy or procedure of the
Company that causes a material adverse effect on the Company;
or (4) uses illegal or controlled substances. In any event,
the Company's sole obligation to Employee shall be payment of
all compensation due Employee for services rendered by
Employee prior to notice of termination under this subsection.
The Company shall give thirty (30) days notice to cure any
conduct set forth herein unless the Board of Directors, in its
sole discretion, determines that a cure is not deemed possible
or appropriate.
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(d) Termination Without Cause: The Company in its sole discretion
may terminate Employee's employment without cause or prior
warning immediately upon written notice to Employee in which
event the Company's only obligation shall be to pay all
compensation owing for services rendered by Employee prior to
notice of termination, and to continue paying Employee's base
salary, life and disability insurance, and the cost of
continued health care coverage for Employee for a period of 12
months after the notice of termination. Any accrued bonus
shall be calculated on a period-to-date basis and prorated to
date of termination. All stock options which have not vested
at the time of termination without cause shall be immediately
vested.
(e) Resignation: Upon resignation, Employee shall only be entitled
to compensation earned as of the date of resignation. Any
stock options that have not been vested as of the date of
resignation shall be forfeited. Employee shall give 60 days
notice of resignation in order for an appropriate transition.
Employee agrees to cooperate with the Company upon reasonable
request during the 60 day period and shall receive salary
during this period of transition.
(h) Change in control: "Should a change in control of the Company
occur and your employment terminates either voluntarily or
involuntarily, and this Employment Agreement terminates either
voluntarily or involuntarily, Employee shall then be entitled
to receive the then existing salary with all benefits in
existence at the time of termination continuing for a period
of 12 months and furthermore, all inchoate options will
automatically vest. Employee shall have no duty to seek
employment or otherwise mitigate the amount of compensation
paid to him under the terms of this agreement nor shall any
amounts received by him with respect to other employment
reduce the amount of such compensation.
(i) Company's Sole Obligation: In the event of any termination
pursuant to this Section, the payment of the amounts set forth
in subsections (a) through (f) above as applicable constitute
the sole obligations of the Company and are in lieu of any
damages or other compensation that Employee may claim in
connection with employment with the Company.
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(h) Return of Company Property: Upon termination of employment for
any reason, Employee shall immediately return to the Company
without condition all files, records, keys, and other property
of the Company.
5. Confidentiality: Employee acknowledges and agrees that Employee has been
entrusted with trade secrets and proprietary information regarding the products,
processes, methods of manufacture and delivery, know-how, designs, formula, work
in progress, research and development, computer software and data bases,
copyrights, trademarks, patents, marketing techniques, and future business
plans, as well as customer lists and information concerning the identity, needs,
and desires of actual and potential customers of the Company and its
subsidiaries, joint ventures, partners, and other affiliated persons and
entities ("Confidential Information"), all of which derive significant economic
value from not being generally known to others outside the Company.
(a) During the entire term of Employee's employment with the
Company, and for two (2) years thereafter, Employee shall not
disclose or exploit any Confidential Information except as
necessary in the performance of Employee's duties under this
Agreement or with the Company's express written consent.
(b) During the entire term of Employee's employment by the Company
and for one (1) year thereafter, Employee shall not induce or
attempt to induce any employee of the Company to leave the
Company's employ except for the sole benefit of the Company or
with its express written consent.
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(c) Employee acknowledges and agrees that any violation of this
Section would cause immediate irreparable damage to the
Company, and that it shall be extremely difficult or
impossible to determine the amount of damage caused to the
Company. Employee therefore consents to the issuance of a
temporary restraining order, preliminary and permanent
injunction, and other appropriate relief to restrain any
actual or threatened violation of this Section, without
limiting any other remedies the Company may have. Employee
agrees to the sole and exclusive jurisdiction of the Circuit
Court for Palm Beach County, Florida should any dispute arise
out of the employment relationship as defined herein.
6. Developments: Any and all patents, copyrights, trademarks, inventions,
discoveries, development, or trade secrets developed or perfected by Employee
during or as the result of Employee's employment with the Company shall
constitute the sole and exclusive property of the Company. Employee shall
disclose all such matters to the Company, assign all right, title and interest
Employee may have in copyright, trademark, or other legal protection.
7. Non-Competition:
(a) Employee covenants and agrees that while in the employment of
Company and for one (1) year after the termination or
expiration of this Agreement, Employee shall not, for his own
account or either as agent, consultant, servant or employee,
or as a shareholder of any corporation or member of any firm,
own, manage, operate, join, control, or participate in the
ownership, management, operation or control of any individual,
or that division or part of any entity or business that
develops and markets towing for the transportation industry
and services (such as automated dispatching) for the vehicle
towing, transportation and recovery services within or without
the United States which competes with the Company in a
particular geographic area.
(b) In the event of an actual or threatened breach by Employee of
any of the provisions in Paragraph 7(a) hereof, Company shall
be entitled to an injunction restraining Employee from the
prohibited conduct without the necessity of establishing
irreparable injury to Company unless required under Florida
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law. If a court of competent jurisdiction should hold that the
duration and/or scope (geographic or otherwise) of the
covenants contained in Paragraph 7(a) hereof are in violation
of Florida law, then, to the extent permitted under Florida
law, the Circuit Court for Palm Beach County shall enforce all
such covenants (geographic and otherwise) to the fullest
extent permitted under Florida law and the parties hereto
agree to be bound by same. Nothing herein stated shall be
construed as prohibiting Company from pursuing any other
remedies available to it for such breach or threatened breach,
including the recovery of damages from Employee. In any action
or proceeding to enforce the provisions of this Paragraph 7,
or seeking damages for breach or threatened breach of this
Paragraph 7, the prevailing party shall be reimbursed by the
other party for all costs incurred in such action or
proceeding including, without limitation, all court costs and
filing fees, and all reasonable attorneys' fees, incurred
either at the trial level or at all appellate levels. Such
reimbursement, if any, shall be paid within thirty (30)
calendar days after the rendition of a final order in such
action or proceeding.
(c) The existence of any claim or cause of action by Employee
against Company, shall not constitute a defense to the
enforcement by Company of the foregoing restrictive covenant.
(d) In the event Company obtains an injunction against Employee
arising from Employee's violation of any of the covenants set
forth in this Paragraph 7, then all of the terms of and
covenants in this Paragraph 7 shall automatically be extended
for a period of one (1) year, with such extension period
commencing, without Order of Court or any writing or other
action by the parties hereto, on the date that an injunction
Order is entered against Employee in any such action or
proceeding to enforce the provisions of this Paragraph 7.
8. Conflict of Interest: During the term of this Agreement, Employee shall
devote Employee's full working time, ability, and attention to the business of
the Company, and shall not accept other employment or engage in any other
outside business activity which interferes with the performance of Employee's
duties and responsibilities under this Agreement or which involves actual or
potential competition with the business of the Company, except with the express
written consent of the Company.
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9. Company's Right to Disclose: During Employee's employment hereunder and at
all times subsequent thereto, Employee hereby grants to Company the right to
notify all future employers of Employee of the non-competition restrictions on
Employee contained in this Agreement, and Employee hereby holds harmless and
indemnifies Company from any liability to Company which may arise from any such
disclosure.
10. Assignment: This Agreement may not be assigned by Employee, but may be
assigned by the Company to any successor in interest to its business. This
Agreement shall bind and inure to the benefit of the Company's successors and
assigns, as well as Employee's heirs, executors, administrators, and legal
representatives.
11. Notices: All notices and other communications under this Agreement shall be
in writing and shall be delivered personally or mailed by registered mail,
return receipt requested and shall be deemed given when so delivered or mailed,
to a party at such address as a party may, from time to time, designate in
writing to the other party. The initial addresses for notices are as follows:
Employer: 1-800-AutoTow, Inc.
0000 X. Xxxxxxxx Xxx. Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Employee: Xxxxxx X. Xxxxxxx
000 Xxxxxxx Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
12. Severability: In the event any provision of this Agreement is void or
unenforceable, the remaining provisions shall continue in full force and effect.
13. Waiver: No waiver of any breach of this Agreement shall constitute a waiver
of any subsequent breach.
14. Applicable Law: This Agreement shall be construed according to the laws of
the State of Florida. In the event action be brought to enforce any provisions
of this Agreement in the Circuit Court for Palm Beach County, the prevailing
party shall be entitled to reasonable attorneys' fees as fixed by the court.
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15. Headings: The paragraph and subparagraph headings herein are for convenience
only and shall not affect the construction hereof.
16. Miscellaneous:
(a) The Employee acknowledges and agrees that the Company's remedy
at law for any breach of any of his obligations hereunder
would be inadequate, and agrees and consents that temporary
and permanent injunctive relief may be granted in any
proceeding that may be brought to enforce any provision of
this Agreement without the necessity of proof of actual damage
and without any bond or other security being required. Such
remedies shall not be exclusive and shall be in addition to
any other remedy, which the Company may have.
(b) This Agreement constitutes the entire Agreement between the
parties regarding the above matters, and each party
acknowledges that there are no other written or verbal
Agreements or understandings relating to such subject matter
between the Employee and the Company or between the Employee
and any other individuals or entities other than those set
forth herein. No amendment to this Agreement shall be
effective unless it is in writing and signed by both the
parties hereto. All prior written or oral agreements
concerning the relationship between the Company and the
Employee are merged in this agreement and are of no legal
effect.
(c) This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original for all
purposes hereof.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands on
this 27th day of July, 1999.
"Company" "Employee"
1-800-AutoTow, Inc. Xxxxxx X. Xxxxxxx
/s/ Xxxx X. Xxxxxxxxx /s/ Xxxxxx X. Xxxxxxx
--------------------- ------------------------
Xxxx X. Xxxxxxxxx Xxxxxx X. Xxxxxxx
President & CEO Employee/Senior V.P./COO
Attachment C
Stock Option Vesting Schedule
Total Shares Immediate Vest Year 1 Vest Year 2 Vest
------------ -------------- ----------- -----------
2,160,939 720,313 720,313 720,313
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