EMPLOYMENT AGREEMENT
WESTMARK GROUP HOLDINGS, INC., a Delaware corporation, and WESTMARK
MORTGAGE CORPORATION, a California corporation, located at 000 X.X. Xxxxx
Xxxxxx, Xxxxx 0, Xxxxxx Xxxxx, Xxxxxxx 00000 (hereinafter collectively referred
to as the "Employer") and XXX XXXXX (hereinafter referred to as "Employee") in
consideration of the mutual promises made herein agree as follows:
ARTICLE I
TERM OF EMPLOYMENT
Section 1.01 Specified Term: The Employer hereby employs Employee and
Employee hereby accepts employment with Employer for a period of three (3)
months commencing July 1, 1997 and terminating September 30, 1997 as an advisor
as set forth below. The term of employment will be extended by mutual agreement
for an additional thirty (30) months.
Section 1.02 Earlier Termination: This agreement may be terminated
earlier as hereinafter provided.
ARTICLE II
DUTIES AND OBLIGATIONS OF EMPLOYEE
Section 2.01 Title and Description of Duties: Employee shall serve as
an Adviser to Westmark Group Holdings, Inc. and its subsidiaries, specifically
with regard to corporate finance, mergers and acquisitions, capital raises,
financial audits, accounting due diligence and miscellaneous tax and legal
matters. In that capacity Employee shall do and perform all services, acts or
things necessary or advisable to fulfill the duties of Advisor and shall be
subject to the direction of the policies established by the Board of Directors
of Employer.
Section 2.02 Loyal and Conscientious Performance of Duties: Employee
agrees that to the best of his ability and experience he will at all times
loyally and conscientiously perform all of the duties and obligations required
of him, either express or implied, by the terms of this agreement.
Section 2.03 Satisfaction of Performance of Duties: Employee's
performance of his duties hereunder shall at all times be rendered to Employer's
satisfaction. Employee expressly agrees that Employer shall be the sole judge as
to whether the services of Employee are satisfactory pursuant to the performance
guidelines established by the board of directors.
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Section 2.04 Adherence to Employer's Rules: At all times during the
performance of this contract, Employee shall strictly adhere to and obey all of
Employer's rules and regulations governing the conduct of its Employee's now in
effect or as subsequently modified.
Section 2.05 Devotion of Entire Time to Employer's Business: Employee
shall devote his full productive time, ability and attention to the business of
Employer during the term of this contract. Furthermore, during the term of this
agreement, Employee shall not, whether directly or indirectly, render any
services of commercial or professional nature to any other person or
organization, whether for compensation or otherwise, without the prior consent
of Employer's Board of Directors. This agreement shall not be interpreted to
prohibit Employee from making passive personal investments or conducting private
business affairs if those activities do not in any way interfere with the
services required under this agreement. However, Employee shall not directly or
indirectly acquire, hold or retain any interest in any business competing with
or similar in nature to the business of Employer.
Section 2.06 Non-Competition during Term of Employment Contract:
During the term of this contract Employee shall not, directly or indirectly,
either as an employee, employer, consultant, agent, principal, partner,
stockholder, corporate officer, director or in any other individual or
representative capacity, engage or participate in any business that is in
competition in any matter whatsoever with the business of Employer.
Section 2.07 Unfair Competition after Termination of Employment:
Employee acknowledges and agrees that the sale or unauthorized use or disclosure
of any of Employer's trade secrets obtained by Employee during his employment
with Employer, including information concerning Employer's current products and
any future or proposed products or services, the fact that those products or
services are planned, under the consideration, or in production, as well as any
description of the features of those products or services, constitutes unfair
competition. Employee promises and agrees not to engage in any unfair
competition with Employer either during the term of this agreement or at any
time thereafter.
Section 2.08 Soliciting Customers after Termination of Employment:
Employee acknowledges and agrees that the names and addresses of Employer's
customers constitute trade secrets of Employer and that the sale or unauthorized
use or disclosure of any of Employer's trade secrets obtained by Employee during
his employment with Employer constitutes unfair competition. Employee promises
and agrees not to engage in any unfair competition with Employer for a period of
two (2) years immediately following the termination of said employment with
Employer. Employee shall not, directly or indirectly, make known to any person,
firm or corporation the names or addresses of the customers of Employer or any
other information pertaining to them or call on, solicit, take away or attempt
to call on, solicit or take away any of the
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customers of Employer on whom Employee called or with whom Employee became
acquainted during his employment with Employer, either for himself or for any
other person, firm or corporation.
Section 2.09 Uniqueness of Employee's Services: Employee hereby
represents and agrees that the services to be performed under the terms of this
contract are of a special, unique, unusual, extraordinary and intellectual
character that gives them a peculiar value, the loss of which cannot be
reasonably or adequately compensated in damages in an action at law. Employee
therefore expressly agrees that Employer, in addition to any other rights or
remedies which Employer may possess, shall be entitled to injunctive and other
equitable relief to prevent or remedy a breach of this contract by Employee.
Section 2. 10 Confidentiality: In the course of the performance of
Employee's duties hereunder, Employee recognizes and acknowledges that Employee
may have access to certain confidential and proprietary information of Employer
or any of its affiliates. Without the prior written consent of Employer,
Employee shall not disclose any such confidential or proprietary information to
any person or firm, corporation, association, or other entity for any reason or
purpose whatsoever, and shall not use such information, directly or indirectly,
for Employee's own behalf or on behalf of any other party. Employee agrees and
affirms that all such information is the sole property of Employer and that at
the termination and/or expiration of this agreement, at Employer's written
request, Employee shall promptly return to Employer any and all such information
so requested by Employer.
The provisions of this section shall not, however, prohibit Employee
from disclosing to others or using in any manner information that:
A. Has been published or has become part of the public domain;
B. Has been furnished or made known to Employee by third parties
(other than those acting directly or indirectly for or on behalf of
Employee) as a matter of legal right without restriction on its use
or disclosure;
C. Was in the possession of Employee prior to obtaining such
information from Employer in connection with the performance of
this agreement; or
D. Is required to be disclosed by law.
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ARTICLE III
OBLIGATIONS OF EMPLOYER
Section 3.01 General Description: Employer shall provide Employee
with the compensation, incentives and benefits specified elsewhere in this
agreement or as established by Employer from time to time.
Section 3.02 Office and Staff: Employer shall provide Employee with
stenographic help, office equipment and supplies and other facilities and
services suitable to Employee's position and adequate for the performance of his
duties.
ARTICLE IV
COMPENSATION OF EMPLOYEE
Section 4.01 Monthly Salary: As compensation for the services to be
rendered by Employee hereunder, Employer shall pay Employee a monthly salary in
the sum of $10,000 in weekly, semimonthly or monthly installments in accordance
with the standard payment policies of Employer. Employer and Employee mutually
agree that Employee shall receive $9,000 per month of the total salary and
$1,000 per month shall accrue for no more than a total of three (3) months. Said
accrued salary shall be paid in full at the end of the initial term of the
employment agreement. Employee shall receive such annual increases in salary as
may be determined in Employer's sole discretion. In the event of an extension of
the employment term, Employee shall be entitled to an annual salary of one
hundred thirty-two thousand dollars ($132,000) after twelve months and one
hundred forty-four thousand dollars ($144,000) after twenty-four months.
Section 4.02 Deductions: Employer shall have the right to deduct or
withhold from the compensation due to Employee hereunder any and all sums
required for federal income and social security taxes and all state or local
taxes now applicable or that may be enacted and become applicable in the future.
ARTICLE V
EMPLOYEE BENEFITS
Section 5.01 Health Care Benefits: Employer shall provide Employee and
Employee shall be entitled to participate in the hospital, surgical, medical and
dental plan in existence through Westmark Group Holdings, Inc. as of the date of
this agreement or such other hospital, surgical, medical and dental plan as may
be provided by Employer from and after the date of this agreement. In lieu of
the hospital, surgical, medical and dental benefits provided by Employer,
Employee shall have the right to maintain his existing hospital, surgical,
medical and dental policies at Employer's expense provided, however, that said
expense shall not exceed the expense
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that Employer would otherwise incur to maintain Employee on Employer's health
care benefit policies.
Section 5.02 Life Insurance: Employer agrees to include Employee and
Employee shall participate in the group term life insurance policy in effect as
of the date of this agreement through Westmark Group Holdings, Inc., if any,
or such other group life insurance policy provided by Employer from and after
the date of this agreement.
Section 5.03 Automobile Allowance: Employee shall be entitled to an
automobile allowance of $400 per month during the term of this agreement or any
extension thereof. Employer shall also pay all expenses and insurance relevant
to the use of said automobile. Employer shall have the option to provide
Employee with an automobile during the term of this employment with the expenses
thereof to be paid by Employer.
Section 5.04 Stock Option: Immediately upon the execution of this
Agreement, Employer and Employee shall enter into a Stock Option Agreement,
pursuant to which Employer shall issue options to Executive to acquire 400,000
shares of the common stock of Westmark Group Holdings, Inc. Said options shall
vest immediately at an exercise price of $1.00. Said vested options may be
exercised on or after the following dates:
100,000 shares on March 31, 1998
50,000 shares on October 31, 1998
100,000 shares on March 31, 1999
50,000 shares on October 31, 1999
100,000 shares on March 31, 2000
In the event of a sale, divestiture, spin-off or transfer of all or
substantially all of the assets or stock of Westmark Mortgage Corporation, all
options granted hereunder to Executive shall immediately become exercisable.
Provided, however, that no option shall be exercisable after the expiration of
ten years from the date said option was granted.
Section 5.05 Vacation: Employee will be entitled to four weeks paid
vacation per year subject to the policies and procedures of Employer. Unused
accrued vacation time may be carried forward to subsequent years and/or will be
paid in full upon termination of this agreement.
Section 5.06 Other Benefits: During the term of this agreement or any
extension thereof, Employee shall be entitled to receive, in addition to and not
in lieu of base salary, bonus or other compensation, such other benefits and
normal perquisites
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as Employer currently provides or such other additional benefits as the company
may provide for its executive officers in the future. Employee shall be entitled
to participate in a bonus plan which shall be promulgated by the Board of
Directors of Employer prior to the expiration of the initial term of this
agreement.
Section 5.07 Expenses: Upon submission of a detailed statement and
reasonable documentation, Employer will reimburse Employee in the same manner as
other executive officers for all reasonable, necessary or appropriate
out-of-pocket travel and other expenses incurred by Employee in rendering
services pursuant to this agreement.
ARTICLE VI
TRADE SECRETS
Section 6.01 Restrictions on Use of Trade Secrets and Records: During
the term of employment under this agreement, Employee will have access to and
become acquainted with various trade secrets consisting of formulas, patterns,
devices, secret inventions, processes, and compilations of information, records
and specifications all of which are owned by Employer and regularly used in the
operation of Employer's business. All files, records, documents, drawings,
specifications, equipment and similar items relating to the business of
Employer, whether they are prepared by Employee or come into Employee's
possession in any other way and whether or not they contain or constitute, trade
secrets owned by Employer, are and shall remain the exclusive property of
Employer and shall not be removed from the premises of Employer under any
circumstances whatsoever without the prior written consent of Employer. Employee
promises and agrees that he shall not misuse, misappropriate or disclose any of
the trade secrets described herein, directly or indirectly, or use them in any
way either during the term of this agreement or at any time thereafter, except
as required in the course of his employment.
ARTICLE VII
TERMINATION OF EMPLOYMENT
Section 7.01 Termination for Cause: Employer reserves the right to
terminate this agreement if Employee willfully breaches or neglects the duties
which he is required to perform under the terms of this agreement. Employer
shall not terminate this agreement pursuant to the foregoing unless Employer
shall first deliver to Employee a notice which specifically identifies such
breach or neglect and Employee shall have cured the same within 30 days after
receipt of the written notice. Employer shall further have the right to
terminate Employee if Employee commits acts of dishonesty, fraud or
misrepresentation that would prevent the effective performance of Employee's
duties. This agreement shall further terminate immediately on the
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occurrence of any of the following events:
A. The death of Employee;
B. The loss by Employee of legal capacity;
C. Employee becomes permanently disabled because of sickness,
physical or mental disability or any other reason so that
Employee shall be unable to complete duties under this agreement.
"Permanently disabled" shall mean any disability that continues
for 180 days in any twelve month period, certified by a licensed
physician mutually agreed upon by, Employer and Employee.
Employer may at its option terminate this agreement for the reasons
stated in this section by giving written notice of termination to Employee
without prejudice to any other remedy to which Employer may be entitled either
at law, in equity, or under this agreement. The notice of termination required
by this section shall specify the ground for the termination and shall be
supported by statement of all relevant facts. In the event of termination for
cause by Employer, Employee shall be entitled to compensation or benefits earned
up to and including the date of termination.
Section 7.02 Termination without Cause: This agreement is a guaranteed
contract and is not subject to termination by Employer other than for cause as
set forth herein above. In the event of termination by Employer, without cause,
prior to the end of the term of employment, Employee shall be entitled to a lump
sum payment equal to the monthly compensation provided for in this agreement
multiplied by the number of months remaining in the term of this agreement or
any extension thereof, together with all benefits, reimbursements or other
rights to which Employee has become entitled.
Section 7.03 Change of Control: In the event of a change of control as
set forth below, while Employee is employed by Employer after the initial term
of employment, and in the further event Employee's employment is terminated
without cause, as defined herein above, Employer shall pay to Employee a lump
sum payment equal to the monthly compensation provided for in this agreement
multiplied by the number of months remaining in the term of this agreement or
any extension thereof, together with all benefits, reimbursements or other
rights to which Employee has become entitled. Change of control shall be defined
as follows:
A. Any "person," including a "group" as determined in accordance
with Section 13 (d) (3) of the Securities Exchange Act of 1934
(the "Exchange Act"), becomes, in a single transaction or series
of transactions, the beneficial owner, directly or indirectly, of
securities representing a Control Percentage (as hereinafter
defined) of the
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combined voting power of the then outstanding securities of the
corporation not including a transaction caused by or resulting
from the affirmative vote of a majority of the current members of
the Board of Directors of Westmark Group Holdings, Inc. (subject
to Section 7.03, B.);
B. The membership of the board of directors as it exists at the
time of this Agreement changes such that the current members of
the board no longer constitute a majority of the board of
directors not including a change caused by or resulting from any
current board member's death or resignation pursuant to Section
7.05 hereinafter, or the affirmative vote of a majority of the
current members of the Board of Directors of Westmark Group
Holdings, Inc.;
C. The corporation is merged or consolidated with other
corporations in a single transaction or series of transactions
and as a result of such merger or consolidation a Control
Percentage of the outstanding voting securities of the surviving
or resulting corporation shall no longer be owned in the
aggregate by the stockholders who owned stock in the corporation
as of the date prior to the merger or consolidation not including
a merger or consolidation caused by or resulting from the
affirmative vote of a majority of the current members of the
Board of Directors of Westmark Group Holdings, Inc. (subject to
Section 7.03, B.). The term "Control Percentage" shall mean at
least 35% in the event the applicable securities are registered
under the Securities Exchange Act of 1934, as amended ("Exchange
Act"), or at least 35% in the event the applicable securities
are not registered under the Exchange Act.
D. The corporation transfers all of its assets to another
corporation or to any other person or entity, including but not
limited to the transfer of the mortgage operations through a sale
of assets or stock, spin-off, divestiture or initial public
offering not including a transfer of assets or stock caused by or
resulting from the affirmative vote of a majority of the current
members of the Board of Directors of Westmark Group Holdings,
Inc. (subject to Section 7.03, B.).
E. In the event of a change of control as set forth above, and
Employee is requested to remain with the surviving or successor
corporation or business, with the same compensation and
commensurate duties as previously retained by Employee subject to
the same terms and conditions of this agreement, and Employee
rejects such request for continuing employment, said Employee
shall be entitled to a lump sum severance payment equal to the
compensation provided in Paragraph 7.02 regarding termination
without cause. Provided, however, that
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Employee shall not reject such request for continuing employment
without a reasonable basis.
Section 7.04 Termination by Employee: Employee may terminate his
employment for "good reason" upon the occurrence of any one or more of the
following:
A. The Employee may terminate his employment for "Good Reason"
if:
(i) He is assigned, without his express written consent,
any duties inconsistent with his positions, duties,
responsibilities, or status with Employer as of the date
hereof, or a change in his reporting responsibilities or
titles in effect as of the date hereof;
(ii) His compensation is reduced;
(iii) Employer shall file a petition in bankruptcy or
re-organization under the federal bankruptcy statutes or an
involuntary petition is filed against Employer and not
removed or withdrawn within sixty (60) days, or Employer
does not pay any salary or expense due hereunder and then
fails either to pay such amount within thirty (30) days
after written notice from Employee, or to contest in good
faith such notice. Further, if such contest is not resolved
within sixty (60) days, the dispute shall be submitted to
arbitration pursuant to the then existing rules of the
American Arbitration Association; or
(iv) Employer commits any material breach of this
agreement, which breach is not cured by Employer within
thirty (30) days of written notice of said breach from
Employee.
(v) In the event Employee terminates his employment for
good reason as hereinabove set forth, Employee shall be
entitled to a lump sum payment equal to the monthly
compensation provided for in this agreement multiplied by
the number of months remaining in the term of this
agreement or any extension thereof, together with all
benefits, reimbursements or other rights to which Employee
has become entitled.
B. Voluntary Termination By Employee: Employee shall have the
right to terminate this agreement for any reason other than
change of control or good reason as set forth hereinabove, upon
sixty (60) days written notice to Employer. In the event of
voluntary termination by Employee other than for good reason or
change of control, Employee shall be entitled to
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any compensation or benefits due and owing to Employee up to the
date of termination.
Section 7.05 Effect on Compensation: In the event that this agreement is
terminated prior to the completion of the term of employment specified herein,
Employee shall be entitled to the compensation earned by and vested in him prior
to the date of termination as provided for in this agreement, computed pro-rata
up to and including that date. Employee shall be entitled to no further
compensation or benefits as of the date of termination, except as hereinabove
set forth.
ARTICLE VII
GENERAL PROVISIONS
Section 8.01 Notices: Any notices to be given by either party to the
other shall be in writing and may be transmitted either by personal delivery or
by mail, registered or certified, postage prepaid, with return receipt
requested. Mailed notices shall be addressed to the parties at the addresses
appearing on the signature page of this agreement. Each party may change their
address by written notice in accordance with this section. Notices delivered
personally shall be deemed communicated as of the date of actual receipt. Mailed
notices shall be deemed communicated as of three (3) days after the date of
mailing.
Section 8.02 Attorney's Fees and Costs: In the event of any action at
law or in equity with respect to any of the terms or conditions of this
agreement, the prevailing party shall be entitled to reasonable attorney's fees,
costs and necessary disbursements in addition to any other relief to which that
party may be entitled. This provision shall be construed as applicable to the
entire contract.
Section 8.03 Entire Agreement: This agreement supersedes any and all
other agreements either oral or in writing between the parties hereto with
respect to the employment of Employee by Employer and contains all of the
covenants and agreements between the parties with respect to that employment in
any manner whatsoever. Each party to this agreement acknowledges that no
representations, inducements, promises or agreements orally or otherwise have
been made by any party or anyone acting on behalf of any party which are not
embodied herein and that no other agreement, statement or promise not contained
in this agreement shall be valid or binding.
Section 8.04 Modifications: Any modifications to this agreement will be
effective only if it is in writing signed by the party to be charged.
Section 8.05 Effect of Waiver: The failure of either party to insist on
strict compliance with any of the terms, covenants or conditions of this
agreement by the other party shall not be deemed a waiver of that term, covenant
or condition, nor shall
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any waiver or relinquishment of any right or power at any one time or times be
deemed a waiver or relinquishment of that right or power for all or any other
times.
Section 8.06 Partial Invalidity: If any provision in this agreement is
held by a Court of competent jurisdiction to be invalid, void or unenforceable,
the remaining provisions shall nevertheless continue in full force without being
impaired or invalidated in any way.
Section 8.07 Law Governing Agreement: This agreement shall be governed
by and construed in accordance with the laws of the State of Florida, and venue
for any action between the parties shall be in the County of Palm Beach.
Section 8.08 Sums Due Deceased Employee: If Employee dies prior to the
expiration of the term of his employment, any sums that may be due him from
Employer under this agreement as of the date of death shall be paid to
Employee's executors, administrators, heirs, personal representatives,
successors and assigns.
Executed on the 1st day of July, 1997 at Delray Beach, Florida.
EMPLOYER:
WESTMARK GROUP HOLDINGS, INC. WESTMARK MORTGAGE CORPORATION
By: /s/ Xxxx Xxxxxxxxxx By: /s/ Xxxxxx Story III
---------------------------- -----------------------------
Xxxx Xxxxxxxxxx Xxxxxx Story III
Its: C.E.O. Its: President
EMPLOYEE:
/s/ Xxx Xxxxx
----------------------------
Xxx Xxxxx
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