EMPLOYMENT AGREEMENT
THIS AGREEMENT (this "Agreement") is made as of October 23,
2000, between Xxxxxx Xxxxxxx, Inc., a Florida corporation (the "Company"), and
Xxxxx Xxxx ("Executive").
In consideration of the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. EMPLOYMENT. The Company shall employ Executive, and
Executive hereby accepts employment with the Company, upon the terms and
conditions set forth in this Agreement for the period beginning on the date
hereof and ending on the Termination Date, as defined in Section 4 hereof (the
"Employment Period").
2. POSITION AND DUTIES.
(a) During the Employment Period, Executive shall initially
serve as Senior Vice President and Chief Financial Officer, and shall have the
duties and responsibilities customarily associated with such position.
(b) Executive shall initially report to Xxxx X. Xxxx,
President and Chief Executive Officer, and Executive shall devote his reasonable
best efforts and his full business time and attention (except for permitted
vacation periods, periods of illness or other incapacity) to the business and
affairs of the Company.
(c) For purposes of this Agreement, all references to
"Company" shall include any corporation of which the securities having a
majority of the voting power in electing directors are, at the time of
determination, owned by the Company, directly or through one or more
subsidiaries.
3. BASE SALARY AND BENEFITS.
(a) Executive's base salary shall be $225,000 per annum (the
"Base Salary"), which salary shall be payable in regular installments in
accordance with the Company's general payroll practices (but at least monthly)
and shall be subject to required withholding. In addition, during the Employment
Period, Executive shall be entitled to participate in all of the Company's
employee benefit programs for which employees of the Company are generally
eligible, including annual grants of stock options under the Company's
Nonqualified Stock Option Plan and other stock option plans that the Company may
adopt from time to time (all such plans, as they may be adopted and amended from
time to time being hereinafter referred to collectively as the "Stock Option
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Plan"), at a level commensurate with Executive's position in the Company. In
addition, upon execution hereof by the Company and Executive, Executive will
receive a grant of options to purchase up to 100,000 shares of the Company's
Common Stock ("Initial Grant"), subject to the terms and conditions of the Stock
Option Plan and such other terms and conditions as are customary for option
grants by the Company. Such options will have an exercise price per share of
Fair Market Value. "Fair Market Value" for purposes of the Initial Grant, means
the closing price of the Common Stock on The Nasdaq Stock Market on the business
day immediately preceding Executive's first day of employment with the Company.
(c) The Company shall reimburse Executive for all reasonable
expenses incurred by him in the course of performing his duties under this
Agreement which are consistent with the Company's policies in effect from time
to time for senior executives with respect to travel, entertainment and other
business expenses, subject to the Company's requirements for its executives with
respect to reporting and documentation of such expenses.
(d) In addition to the Base Salary, Executive shall be
eligible to receive a bonus (the "Bonus") at the end of each fiscal year during
the Employment Period based upon Executive's performance and the Company's
financial results. The Bonus will be prorated for any partial year during the
Employment Period.
4. TERM AND TERMINATION.
(a) This Agreement shall terminate on the second anniversary
of the date hereof (the "Expiration Date") unless terminated earlier (i) by
Executive's resignation with or without Good Reason or Executive's death or
Disability or (ii) by the Company with or without Cause. The date on which
Executive's employment with the Company is terminated is referred to herein as
the "Termination Date."
(b) (i) If Executive's employment with the Company is
terminated by the Company without Cause or by Executive with Good Reason, (x)
Executive shall be entitled to receive his Base Salary and Bonus through the
Expiration Date, determined and payable after the end of the applicable year in
accordance with Section 3 above, and (y) all stock options granted to Executive
under the Stock Option Plan which are not vested at such time and would have
vested on or prior to the Expiration Date shall automatically, and without
further action, become vested as of the Termination Date, and all such options
(together with all of Executive's then vested stock options) shall remain
exercisable until the later to occur of (I) the Expiration Date and (II) the
expiration of such stock options pursuant to the terms of the Stock Option Plan.
(ii) If Executive's employment with the Company is
terminated for any reason other than as described in item (i) above, Executive
shall be entitled to receive his Base Salary through the Termination Date.
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(c) All of Executive's rights to benefits shall cease upon the
Termination Date.
(d) For purposes of this Agreement, the following terms shall
have the meanings set forth below:
"Cause" shall mean (i) the conviction of Executive for a
felony or a crime involving moral turpitude or the plea of guilty or no lo
contendre by Executive to a charge of any such crime, (ii) Executive's theft or
embezzlement, or attempted theft or embezzlement, of money or property of the
Company, (iii) Executive's perpetration or attempted perpetration of fraud, or
Executive's participation in a fraud or an attempted fraud, on the Company or
Executive's unauthorized appropriation or attempted appropriation of any
tangible or intangible material assets or property of the Company, (iv)
Executive's dishonesty with respect to any matter concerning the Company or (v)
Executive's substantial and repeated failure to perform his duties hereunder in
accordance with the reasonable directions of the Company.
"Disability" shall mean the inability, due to illness,
accident, injury, physical or mental incapacity or other disability, of
Executive to carry out effectively his duties and obligations to the Company or
to participate effectively and actively in the management of the Company for a
period of at least 90 consecutive days or for shorter periods aggregating at
least 120 days (whether or not consecutive) during any twelve-month period, as
determined in the reasonable and good faith judgment of the Company.
"Good Reason" shall mean the Company's willful and material
breach of this Agreement.
(e) A termination of this Agreement pursuant to its terms on
the Expiration Date shall not, in and of itself, constitute a termination of
Executive's employment with the Company. At such time, unless the Company or the
Executive terminate Executive's employment with the Company, Executive shall
become an employee at-will of the Company.
5. CONFIDENTIAL INFORMATION. Executive acknowledges that the
information, observations and data obtained by him while employed by the Company
concerning the business or affairs of the Company reasonably considered of a
confidential nature ("Confidential Information") are the property of the
Company. Therefore, Executive agrees that he shall not disclose to any
unauthorized person or use for his own purposes any Confidential Information
without the prior written consent of the Company, unless and to the extent that
the aforementioned matters become generally known to and available for use by
the public other than as a result of Executive's acts or omissions, or is
otherwise known to Executive from independent sources prior to or outside of
Executive's employment with the Company. Executive shall deliver to the Company
at the termination of the Employment Period, or at any other time the Company
may reasonably request, all memoranda, notes, plans, records, reports, computer
tapes, printouts and software and other documents and data (and copies thereof)
relating to the Confidential Information or the business of the Company which he
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may then possess or have under his control. Nothing herein shall prohibit
Executive's disclosure of Confidential Information as directed by judicial,
administrative or other governmental law, rule, regulation or order provided
that Executive shall, to the extent possible, give immediate notice to the
Company of any disclosure of Confidential Information so required so that the
Company may seek a protective order.
6. NON-COMPETE, NON-SOLICITATION.
(a) In further consideration of the compensation to be paid to
Executive hereunder, Executive acknowledges that in the course of his employment
with the Company he shall become familiar with the Company's trade secrets and
with other Confidential Information concerning the Company and that his services
shall be of special, unique and extraordinary value to the Company. Therefore,
Executive agrees that, during the Employment Period and for two years thereafter
(the "Noncompete Period"), he shall not directly or indirectly own any interest
in, manage, control, participate in, consult with, render services for, or in
any manner engage in any business competing with the businesses of the Company,
as such businesses exist or are in process on the date of the termination of
Executive's employment, within any geographical area in which the Company
engages or plans to engage in such businesses. Nothing herein shall prohibit
Executive from being a passive owner of not more than 2% of the outstanding
stock of any class of a corporation which is publicly traded, so long as
Executive has no active participation in the business of such corporation.
(b) During the Noncompete Period, Executive shall not directly
or indirectly through another entity (i) induce or attempt to induce any
employee of the Company to leave the employ of the Company, or in any way
interfere with the relationship between the Company and any employee thereof,
(ii) hire any person who was an employee of the Company at any time during the
Employment Period (unless such employee was terminated by the Company), or (iii)
induce or attempt to induce any customer, supplier, licensee, licensor,
franchisee or other business relation of the Company to cease doing business
with the Company, or in any way interfere with the relationship between any such
customer, supplier, licensee or business relation and the Company.
(c) If, at the time of enforcement of this Section 6, a court
shall hold that the duration, scope or area restrictions stated herein are
unreasonable under circumstances then existing, the parties agree that the
maximum duration, scope or area reasonable under such circumstances shall be
substituted for the stated duration, scope or area and that the court shall be
allowed to revise the restrictions contained herein to cover the maximum period,
scope and area permitted by law. Executive agrees that the restrictions
contained in this Section 6 are reasonable.
(d) In the event of the breach or a threatened breach by
Executive of any of the provisions of this Section 6, the Company, in addition
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and supplementary to other rights and remedies existing in its favor, may apply
to any court of law or equity of competent jurisdiction for specific performance
and/or injunctive or other relief in order to enforce or prevent any violations
of the provisions hereof (without posting a bond or other security). In
addition, in the event of an alleged breach or violation by Executive of this
Section 6, the Noncompete Period shall be tolled until such breach or violation
has been duly cured.
7. MUTUAL REPRESENTATIONS. Executive and the Company each
represents and warrants to the other that (i) the execution, delivery and
performance of this Agreement by such party do not and shall not conflict with,
breach, violate or cause a default under any contract, agreement, instrument,
order, judgment or decree to which such party is a party or by which it is
bound, (ii) such party is not a party to or bound by any employment agreement,
noncompete agreement or confidentiality agreement with any other person or
entity that would be breached or violated by such party's execution and delivery
or performance of this Agreement and (iii) upon the execution and delivery of
this Agreement by such party, this Agreement shall be the valid and binding
obligation of such party, enforceable against such party in accordance with its
terms. Such party hereby acknowledges and represents that it has consulted with
independent legal counsel regarding his rights and obligations under this
Agreement and that he fully understands the terms and conditions contained
herein.
8. SURVIVAL. Sections 5 and 6 and Sections 9 through 16
shall survive and continue in full force in accordance with their terms
notwithstanding any termination of the Employment Period.
9. NOTICES. Any notice provided for in this Agreement
shall be in writing and shall be either personally delivered, or mailed by first
class mail, return receipt requested, to the recipient at the address below
indicated:
NOTICES TO EXECUTIVE:
--------------------
------------
------------
------------
NOTICES TO THE COMPANY:
----------------------
Xxxxxx Xxxxxxx, Inc.
0000 Xxxxx Xxxxx
Xxxxx 000
Attention: President
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If sent via regular U.S. mail to:
X.X. Xxx 000000
Xxxx Xxxxxxxxxx, XX 00000-0000
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement shall be deemed to have been given when so delivered
or three (3) days after so mailed.
10. SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
11. COMPLETE AGREEMENT. This Agreement embodies with respect
to the subject matter hereof the complete agreement and understanding among the
parties and supersedes and preempts with respect to the subject matter hereof
any prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
12. NO STRICT CONSTRUCTION. The language used in this
Agreement shall be deemed to be the language chosen by the parties hereto to
express their mutual intent, and no rule of strict construction shall be applied
against any party, it being understood that Section 6(c) contemplates that a
court of competent jurisdiction shall be entitled to "blue pencil" or conform
the express language of Section 6(a) if necessary in order to comply with
Florida law.
13. COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
14. SUCCESSORS AND ASSIGNS. This Agreement is intended to bind
and inure to the benefit of and be enforceable by Executive, the Company and
their respective heirs, successors and assigns, except that (x) Executive may
not assign his rights or delegate his obligations hereunder without the prior
written consent of the Company and (y) other than in connection with sale of the
Company (whether by merger, consolidation, sale of all of the Company's stock or
sale of all or substantially all of the Company's assets), the Company may not
assign its rights to Executive's services hereunder to any third party.
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15. CHOICE OF LAW. All issues and questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by, and construed in accordance with, the laws of the State of
Florida, without giving effect to any choice of law or conflict of law rules or
provisions (whether of the State of Florida or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than the State
of Florida.
16. AMENDMENT AND WAIVER. The provisions of this Agreement may
be amended or waived only with the prior written consent of the Company and
Executive, and no course of conduct or failure or delay in enforcing the
provisions of this Agreement shall affect the validity, binding effect or
enforceability of this Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
XXXXXX XXXXXXX, INC.
By __________________________
Name:
Title:
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Xxxxx Xxxx
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