RESTATED EMPLOYMENT AGREEMENT
Exhibit 10.4
RESTATED
AGREEMENT made as of the 15th day of
January 2007 and between Xxx Xxxxxx, an individual residing in Orlando, FL
(hereinafter referred to as "Executive") and THE AMACORE GROUP, INC.,
a Delaware corporation with offices in Tampa, Florida (hereinafter called the
"Company").
W
I T N E S S E T H
WHEREAS, the Company and Executive
wish to modify Executive’s Employment Agreement with the Company;
and
WHEREAS, the Board of Directors, at
its December 6, 2007 meeting, has approved the modifications desired;
and
WHEREAS, the parties wish to restate
the Employment Agreement so that same incorporates the modifications;
and
NOW, THEREFORE, in consideration of
the mutual covenants and agreements herein contained, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. Employment
Term, Duties and Acceptance
(a)
Company hereby retains Executive as Company's President for a period
of three (3) years, commencing on the date hereof (the "Employment Period"),
subject to earlier termination as hereinafter provided, to render his services
to Company upon the terms and conditions herein contained, in such executive
capacity. In such executive capacity, Executive shall report and be responsible
to the Company's Chief Executive Officer and the Company’s Board of
Directors.
(b)
Executive hereby accepts the foregoing employment and agrees to render his
services to Company on a full-time basis in such a manner as to reflect his best
efforts to the end that the Company's operations are properly managed. In
furtherance of Executive performing the duties assigned to him under this
Agreement, the Company agrees to provide Executive with a support staff
reasonably required by Executive so as to enable him to carry out such duties
subject to the Company having sufficient capital to do so.
2. Compensation
(a)
During the first year of the term of this Agreement, Executive shall receive
compensation of $360,000 per year. This compensation may, at
Executive's election, be accrued, in whole or in part, if the Company has
insufficient funds to pay same. Executive’s compensation shall be
payable in accordance with the general payroll practices of the Company as are
from time to time, in effect, less such deductions or amounts as shall be
required to be withheld by applicable law or regulation. On each yearly
anniversary date of the execution of this Agreement (hereinafter
sometimes called the "Anniversary Date," in each yearly instance) the Board of
Directors shall review the services provided by Executive to determine the
amount that Executive's salary shall be increased for the forthcoming yearly
period. Such increase shall be no less than an amount equal to the percentage
increase in the Consumer Price Index or such other similar index reflective of
the cost of living increase in the Orlando, Florida metropolitan area from the
beginning of yearly period to the end of the yearly period with respect to the
Consumer Price Index applicable to the said metropolitan area, times Executive's
base compensation in effect during the said yearly period. The sum resulting by
way of this increase to the Executive's base compensation shall, for the then
immediately succeeding period be considered the Executive's base compensation.
The Board of Directors shall also determine on an annual (fiscal or calendar
year, as the case may be) basis, the amount, if any, of bonus or incentives to
be paid to Executive. Provided, however, that Executive shall receive a special
bonus ("special bonus") in an amount equal to one (1) percent of the Company's
pre-tax profits from the preceding year (as determined by the application of
generally accepted accounting principles), up to the first one-million dollars
of such profits; plus an additional sum equal to two, and (2) percent of the
Company's pre-tax profits for all sums over one-million dollars The
special bonus shall be paid within thirty (30) days following determination
thereof, which determination shall be made as soon as practicable.
(b)
Executive shall receive a sign-on bonus of one-million five-hundred thousand
(1,500,000) shares of the Company’s Class A common stock (the “shares”) which
shares shall be issued and vested in the Executive on the 91st day
following the execution of this Agreement. Provided, however, that
the Company may extend such issuance and vesting in the event Executive has not
generated for the Company the revenues identified in paragraphs “4.(c)” and
“5.(b)” below. In the event the Company files a form of Registration
Statement, as that term is generally understood, registering shares
of its Class A common stock at any time following the issuance of the shares to
Executive but prior to a date being one year thereafter, the Company shall, at
Executive’s request, include Executive’s shares in such Registration Statement
provided the Executive agrees to sell such shares only in accordance with the
then existing Rule 144 selling formula for shares held more than one year but
less than two years. Unless otherwise directed by the Company,
Executive agrees to sell such shares only through Mr. Xxx Xxxxxxx, a registered
broker, or through such other broker or brokerage company designated by the
Company. This provision shall survive the termination, for any
reason, or expiration of this Agreement.
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(c)
Executive shall be entitled to reasonable paid vacation time, sick leave and
time to attend professional meetings comparable to that offered the executives
in comparable positions.
(d)
Executive shall be entitled (subject to the terms and conditions of particular
plans and programs) to all fringe benefits afforded to other senior executives
of the Company, including, but not by way of limitation, bonuses and the right
to participate in any pension, stock option, retirement, major medical, group
health, disability, accident and life insurance, relocation reimbursement, and
other employee benefit programs made generally available, from time to time, by
the Company.
(e)
Company shall pay or reimburse Executive for reasonable expenses incurred in the
performance of his services under this Agreement during the Employment Period,
upon presentation of expense statements, vouchers or such other supporting
documentation as may reasonably be required.
(f) Anything
contained herein to the contrary notwithstanding, it is specifically understood
that Executive’s salary shall, until such time as the Company builds up
sufficient capital with which to pay same, be paid directly from revenues
generated by Executive and/or Xxx Xxxxxxx. In this connection, it is
further specifically understood that a material inducement for the Company to
enter into this Agreement is the accuracies of the representations contained in
paragraph “5.(a) through 5.(d)” hereof. With that in mind, the
parties specifically acknowledge their understanding that if revenues produced
by Executive and/or Xxx Xxxxxxx are not sufficient to pay Executive’s salary,
same shall be accrued until such time as there are sufficient funds available to
the Company from said revenues with which to pay said salaries (both accrued and
then current). Provided that with respect to the Company paying
salaries that have been accrued, the Company shall be permitted to retain 10% of
the gross revenues generated by Executive and/or Xxx Xxxxxxx for purposes of
offsetting Company expenses, including travel and entertainment expenses
advanced by the Company on behalf of Executive and/or Xxx Xxxxxxx, or expenses
reimbursed to Executive and/or Xxx Xxxxxxx incurred in the performance of their
duties hereof.
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3. Disability
(a) Upon
the disability, as defined in subparagraph 3(b) hereof, of Executive during the
Employment Period, Company may, in its sole discretion, terminate Executive's
employment; provided that if the Company elects to so terminate Executive's
employment, Executive shall be entitled to receive, accrued but unpaid salary,
expense reimbursement and bonuses, the proceeds of any disability insurance
policy plus an amount from the Company monthly which, when added to the amount
received by the Executive from any disability policy in effect for the Executive
at the time of his disability will equal the Executive's salary for a
twelve-month period following the date of termination, as if the termination had
not occurred. Such termination shall have no effect on the Company's obligation
to pay the special bonus referred to hereinbefore. Provided, however, in the
event Executive partially perform and discharge the duties previously performed
by him for Company, nothing herein shall prevent the Executive from continuing
his duties in a part-time capacity, at a level of Compensation to be determined
at that time.
(b) For
purposes of this Agreement the term "disability" shall mean Executive's
inability to continue to materially and substantially perform and discharge the
duties previously required of him on behalf of the Company for an aggregate
period exceeding three (3) consecutive months within any twelve (12) month
consecutive period.
(c) In
the event of a dispute between the parties as to what constitutes a disability,
such dispute shall be finally determined by a person mutually agreed upon by
Executive and Company. If a mutually acceptable person cannot be selected, such
designations shall be made by Executive and Company each choosing a person,
which person shall then mutually select a third person (collectively called the
"panel"). The panel's determination shall be made by majority vote and such
determination shall be deemed binding and conclusive. The parties agree to fully
cooperate with whatever procedures and examinations may be required in order to
allow the panel to make its determination.
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4. Termination
of Employment
(a) (i)
In the event Fifty (50) Percent or more of the equity securities or all or
substantially all of the assets of the Company are acquired by any single person
or identifiable group, as defined by the applicable rules and regulations under
the Security and Exchange Act of 1934, as amended and in the further event that
Executive's employment is terminated, by either the Company or the Executive,
within twelve (12) months following such event, except if such termination is by
reason of "cause" (as that term is defined at paragraph 4(c) hereafter, or (ii)
in the event Executive terminates his employment by reason of the uncured breach
of this Agreement by Company ("cause"), then, on the termination date, Company
shall pay (or issue, as the case may be) to Executive a lump sum amount equal to
the aggregate of (i) accrued but unpaid salary, if any; (ii) accrued but unpaid
expenses, if any; (iii) accrued but unpaid bonuses, if any; (iv) unissued
warrants, if any; and (v) the total compensation which would have been paid to
Executive through three full years of compensation from the date of termination.
If the Executive intends to terminate his employment with the company for
"cause", the "cause" shall be specified in a written notice sent by Executive to
the Company, and the Company shall be afforded thirty (30) days or longer, if
reasonably required, to cure such breach, if such breach is capable of being
cured.
(b) In
the event Fifty (50) Percent or more of the equity securities or all or
substantially all of the assets of the Company are acquired by any single person
or identifiable group, as defined by the applicable rules and regulations under
the Security and Exchange Act of 1934, as amended, all unvested securities and
benefits attributable to the Executive will immediately vest. In
addition, with respect to any securities of the Company or rights to securities
in the Company vesting in Executive as a result of this Article 4, the Company
shall advise Executive by written notice at least four weeks prior to the
Company’s filing of one or more registration statements under the Securities Act
of 1933, as amended (or any successor form covering securities) to be offered
and sold to the public generally, and shall, upon request of Executive, include
in any such registration statement such securities of Executive as he may
request. The foregoing shall include common stock of the Company to
which Executive may be entitled by way of his exercise of any stock options
and/or the exercise of warrants.
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(c) In
the event of gross misconduct in office by Executive in the performance of his
duties hereunder (which shall hereinafter be referred to as "Termination for
Cause"), Company may terminate this Agreement by giving two (2) weeks prior
written notice to Executive identifying the cause of termination and specifying
the effective date of such termination. If Executive is subjected to Termination
for Cause, then such "cause" shall be specified in such notice and Executive
shall be afforded thirty (30) days or longer, if reasonably required, to cure
such breach, if such breach is capable of being cured. Except if termination is
pursuant to the provisions of paragraph “4.(c)” and provided the Company has
sufficient cash reserves, on the termination date, Company shall pay to
Executive the aggregate of (i) accrued but unpaid expenses, if any; and (ii) the
net salary compensation which would have been paid to Executive through the date
of termination. Furthermore, in that event any warrants to be issued pursuant to
this Agreement, and any options granted pursuant to plans then applicable to
Executive which have not then vested shall be forfeited as of the termination
date. In the event termination results from Executive and/or Xxx
Xxxxxxx not generating gross revenues for the Company in the aggregate amount of
not less than $50,000 during the first three months of the term of this
Agreement, Executive and/or Xxx Xxxxxxx, collectively, shall be entitled to
receive accrued but unpaid salaries but only to the extent of 90% of the gross
revenues generated during the period prior to the effective date of
termination. Any monies remaining to be paid to Executive and/or Xxx
Xxxxxxx thereafter shall be paid out of future revenues which may be received by
the Company subsequent to the termination date but, nonetheless, generated by
Executive and/or Xxx Xxxxxxx during their term of employment with the
Company.
(d)
Failure of the Executive to produce the revenues and/or independent rep
agreements as contained in Executive’s representations in paragraph “5.” hereof,
or the intentional failure of said representations to be accurate as of three
(3) months from the date of the execution hereof (collectively, the “causal
event”) shall give the Company the right to terminate and/or extend the initial
90-day period on the basis of cause (the “extended period”). During
the extended period, the Executive shall be afforded the opportunity of meeting
the gross revenue and/or independent rep agreement representations during which
extended term, the Company’s obligation to issue its common stock to Executive
shall similarly be suspended. In the event the Company
elects to extend this Agreement for the Extended Period by reason of Executive’s
failure to produce the total amount of revenues as contained in paragraph 5
hereof, but the
Executive has nonetheless produced a portion of same, the Company shall issue to
Executive such amount of the shares prorated in proportion to the amount of
revenues produced as compared to the total revenues required to be produced
pursuant to paragraph 5.
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(e) In
the event Executive resigns or is terminated as an employee of Company and any
of its subsidiaries, Executive hereby agrees that his position(s) as officer and
director of the Company shall automatically end as of the date of his
resignation or termination of employment.
5.
EXECUTIVE
REPRESENTATIONS
Executive represents and warrants to
the Company that:
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(a)
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He
was formally employed immediately prior to the execution of this Agreement
by Protective Marketing Enterprises, Inc. (PME) as its President at a
gross annual salary of
$30,000;
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(b)
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He,
either alone and/or in conjunction with Xxx Xxxxxxx, is in a position and
will generate gross revenues for the Company in an amount not less than
$10,000,000, annually, the source of which revenues being either current
accounts of PME or potential accounts that he had worked on for PME which
he is now in a position to “close” for the benefit of the
Company. Further, that he will generate, either alone or in
conjunction with Xxx Xxxxxxx, for the Company gross revenues of not less
than $50,000 during the first 90 days of the term of this
Agreement;
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(c)
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He,
either alone or in conjunction with Xxx Xxxxxxx, shall arrange for the
signing by the Company of independent sales representative agreements with
a significant number of the former approximately 2,000 independent sales
representatives of PME, a significant number being not less than 200,
which agreements will provide, in part, for the selling by such sales
representative of the Company’s products. Further, no less than
200 independent sales representatives will be committed via contract to
the Company within the first 90 days of the term of this
Agreement.
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(d)
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He
has full right, power and authority to enter into this Agreement and
perform the services and fulfill the representations contained herein free
of any further obligations to PME and/or Protective Life Corporation
(collectively,
Protective).
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6. CONFIDENTIALITY
(a) Executive agrees to execute
Company's standard form of Confidentiality Agreement as prepared by Counsel to
Company.
(b) Executive's covenants contained
herein shall survive the termination or expiration of this
Agreement.
7. TERMINATION
OF AGREEMENT
This Agreement shall, in addition to
other provisions affecting termination, terminate on the occurrence of any of
the following events:
(a) Cessation of the Company's
business;
(b) Dissolution of the Company;
or
(c) The voluntary agreement of the
partieshereto.
8. NOTICES
All notices, requests, demands,
deliveries and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed, postage prepaid, registered or
certified mail, return receipt requested to the parties at the addresses (or at
such other address for a party as shall be specified by like notice) specified
on the first page of this Agreement.
9. WAIVER
The failure of either party at any
time or times to require performances of any provision hereof shall in no manner
effect the right at a later time to enforce the same. To be effective, any
waiver must be contained in a written instrument signed by the party waiving
compliance by the other party of the term or covenant as specified. The waiver
by either party of the breach of any term or covenant contained herein, whether
by conduct or otherwise, in any one or more instances, shall not be deemed to
be, or construed as, a further or continuing waiver of any such breach, or a
waiver of the breach of any other term or covenant contained in this
Agreement.
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10. GOVERNING
LAW
This Agreement shall be governed by
the laws of the Sate of Florida, which shall have exclusive jurisdiction over
any claims or disputes arising from the subject matter contained herein without
regard to any conflict of laws provision.
11. COMPLETE
AGREEMENT
This Agreement constitutes the
complete and exclusive agreement between the parties hereto which supersedes all
proposals, oral and written, and all other communications between the parties
relating to the subject matter contained herein.
12. SEVERABILITY
If any of the provisions of this
Agreement are held to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
13. EXECUTORS,
ADMINISTRATORS, SUCCESSORS AND ASSIGNS
This Agreement may not be assigned,
transferred or otherwise inure to the benefit of any third person, firm or
corporation by operation of law or otherwise, without the written consent by the
other party hereto, except as herein specifically provided to the
contrary.
14. MODIFICATION
This Agreement may only be amended,
varied or modified by a written document executed by the parties
hereto.
15. FURTHER
INSTRUMENTS
The parties hereto agree to execute
and deliver, or cause to be executed and delivered, such further instruments or
documents and take such other action as may be required to effectively carry out
the transactions contemplated herein.
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16. INDEMNIFICATION
Except for a claim, demand, suit,
action or judgment asserted by Protective against Executive and/or the Company,
in addition to any liability insurance to be provided the Executive, the Company
will indemnify Executive from any and all claims, demands, suits, actions or
judgments which hereafter may by asserted, instituted or recorded by any person,
firm or corporation for the duration of this Agreement and for a six (6) year
period following the termination of said Agreement as defined in paragraph 4.
The foregoing indemnity shall be enforceable only with respect to claims made
against Executive with respect to all expenses, losses, charges and attorney's
fees sustained or incurred by the Executive in defending any suit, action or
other proceeding brought against the Executive, directly or indirectly, arising
out of Executive's employment by Company.
17. BOARD
APPROVAL
This Agreement is subject to and
conditioned upon the approval of the Company’s Board of Directors.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement this 15th day
of January, 2007.
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By: /s/ Xxxxx X.
Xxxxxx
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By: /s/ Xxx
Xxxxxx
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Xxxxx
X. Xxxxxx, CEO
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Xxx
Xxxxxx
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