EMPLOYMENT CONTRACT
EXHIBIT 10.8
THIS EMPLOYMENT CONTRACT
("Agreement") is dated as of the 15th day of November, 2007, by and between
SEREFEX CORPORATION, a
Delaware corporation (the "Company"), with an address at 0000 Xxxxxxxxx Xxxxxx
Xxxx., Xxxxx X, Xxxxxx, XX 00000, and XXXXX X. XXXXXXXX, an
individual ("Executive"), residing at 000 Xxxx Xxx, Xxxxxx, Xxxxxxx
00000.
W
I T N E S S E T H:
WHEREAS, the Board of
Directors of the Company (the "Board") and Executive desire that Executive
furnish services to the Company on the terms and conditions hereinafter set
forth; and
WHEREAS, the parties desire to
enter into this Agreement setting forth the terms and conditions of the
employment of the Executive with the Company;
NOW, THEREFORE, in
consideration of the foregoing and of the mutual promises and undertakings
contained in the Employment Contract and this Agreement, and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, and intending to be legally bound hereby, the parties hereto agree
as follows:
1. Employment
The
Company hereby agrees to employ the Executive, and the Executive hereby accepts
such employment, on the terms and conditions hereinafter set forth.
2. Terms
and Parties.
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(a)
Term. The term of the Executive's employment under this Agreement
shall be for a period of 61 full calendar months, commencing November 15,
2007, and ending December 31, 2012, unless further extended or sooner
terminated as hereinafter provided ("Term"). On December 31, 2012, the
Term shall be automatically extended for 12 calendar months in the absence
of any timely written notice provided by either party to this Agreement
advising the other party of a decision not to extend the obligations of
this Agreement beyond December 31, 2012, and the extended term of the
Executive's employment thereafter shall be regarded as the "Term," as used
in this Agreement, and the Term shall be automatically extended from time
to time thereafter in the same manner. The last day of the Term, as from
time to time extended, is hereinafter referred to as the "Expiration
Date." The Company may elect to terminate the automatic extension of the
Term set forth in this Section 2(a) by giving written notice of such
election to the Executive on or before December 31 of the calendar year
immediately preceding the then-current Expiration Date. The Executive may
elect to terminate the automatic extension of the Term set forth in this
Section 2(a) by giving written notice of such election to the President of
the Company on or before June 30 of the calendar year during which the
then-current Expiration Date falls. Upon the giving of any such written
notice, the Executive's employment under this Agreement shall terminate on
the Expiration Date (as last extended). Notwithstanding any other
provision(s) of this Agreement, any written notice given by either party
to this Agreement that communicates a decision not to extend the Term
shall not be construed to constitute a termination of this Agreement
either Without Cause or by way of a Constructive Termination (each as
defined in Section 6 hereof).
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(b)
Parties. The obligations of the Company hereunder shall include the
obligation to cause the Company
to act in accordance with the terms
hereof.
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3. Position
and Duties.
During
the Term of this Agreement, the Executive shall be employed as Chief Operations
Officer of the Company or other position to be mutually determined by the Board
of Directors and the Executive, and the Board shall consider him to be elected
as a member of the Board of the Company. In addition, Executive shall serve as
Director of Operational Efficiencies of X.X. Xxxxxxx Systems, Inc., and all
present and future subsidiaries or affiliates of the Company during times of
transition. In these capacities, duties, powers and responsibilities, as
determined from time to time by the Board of Directors, the Executive shall have
overall responsibility for the operations of the business of the Company and the
subsidiaries and affiliates of the Company for which he shall serve as Chief
Operations Officer. As Chief Operations Officer, the Executive shall report
directly to the Chief Executive Officer and the Board of the Company and
Executive's title(s), reporting relationship(s) to others associated with the
Company and its present and future subsidiaries and affiliates, or duties as
expressed in this Section 3 shall not be altered or diminished in any way
without Executive's prior written consent. The Executive hereby accepts such
employment and agrees to perform the duties and responsibilities set forth
herein.
4. Place
of Performance
The
principal place of employment and office of the Executive shall be at the
Company's headquarters in Solon, Ohio, or such other location of the companies
operations as may be required by the Board of Directors.
5. Compensation
and Related Matters.
The
Executive shall receive the following compensation and benefits for his services
rendered under this Agreement, each of which shall constitute a material
obligation of the Company hereunder:
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(a)
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Base
Salary. As compensation for the performance by the Executive of his duties
hereunder, the Company shall pay the Executive a base salary of One
Hundred Forty Thousand and No/100 Dollars ($140,000.00) (U.S.) per annum
for the period commencing November 15, 2007, through and including
December 31, 2008. Thereafter, the Executive's base salary for each
subsequent 12-month period commencing January 1, 2009, shall be fixed at a
minimum amount of one hundred and ten percent (110%) of the Executive's
base salary during the immediately preceding calendar year or as
additionally increased by the company's compensation
committee.
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(b)
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Incentive
Compensation. In addition to the compensation described in Section 5(a) of
this Agreement, the Executive shall receive such additional
compensation in the form of monthly commissions, as
follows:
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(1) The
Executive shall receive payment equal to two percent (2%) of the total
purchase price of all international imports of products by or for the
Company and/or any of its subsidiaries, whether wholly or partially owned
or controlled by the Company, The parties acknowledge and agree that this
component of the Executive's incentive compensation shall be paid by Xxxxx
X. Xxxx, Chief Executive Officer of the Company, as and when the Company
remits commissions to Xx. Xxxx in respect of the purchase of such imported
products realized by the Company and/or any of its subsidiaries. The
Executive's incentive compensation under this Section 5(b)(1) shall be
remitted by Xx. Xxxx xxxxx of all taxes not later than the 10th business
day of the month immediately following the date for which the Company pays
Xx. Xxxx for commissions in respect of the purchase of such imported
products. In the event Xx. Xxxx'x tenure with the Company is terminated,
disrupted, or interrupted for any reason (including, without limitation,
his death or disability), or if Xx. Xxxx fails, refuses, or is unable or
unwilling to pay the Executive the incentive compensation earned under
this Section 5(b)(1) as and when his obligation to do so shall become due
from time to time, the Company agrees to remit additional compensation to
the Executive in the full amount of the incentive compensation payable
under this Section 5(b)(1) not later than the last day of the calendar
month in which such incentive compensation became due and
payable.
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(2)
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The
Executive shall receive payment equal to one half of one percent (1/2%) of
the aggregate value of all future mergers or acquisitions, stock
exchanges, asset purchases or aggregations, and any other form of
acquisition of the capital stock, equity, business interests, and/or
assets of any other company, corporation, general or limited partnership,
limited liability company, proprietorship, joint venture, or other form of
business enterprise, either partially or completely, concluded by or for
the Company or any of its subsidiaries, whether wholly or partially owned
or controlled by the Company. In determining the amount of compensation to
be remitted to the Executive by operation of this Section 5(b)(2), the
"aggregate value" of any qualifying merger or acquisition shall equal the
total amount of obligation of the Company and/or any of its subsidiaries,
whether wholly or partially owned or controlled by the Company, under
the terms of such merger or acquisition in consideration of the sale,
exchange, or transfer of the capital stock, equity interests, business
interests, and or assets sold, transferred, or exchanged under the terms
of such merger or acquisition. All compensation to be remitted to the
Executive under this Section 5(b)(2) shall be due and payable not later
than the last day of the calendar month immediately following the date(s)
of closing for each merger or acquisition described herein and shall be
tendered to the Executive, either by way of a check made payable to the
Executive and/or by way of the issuance of the Company's restricted stock
in such manner and according to such terms and conditions as will be
negotiated in an agreement whereby the Company and the Executive agree
that part or all of the Company's obligations under this Section 5(b)(2)
might be satisfied.
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(3)
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The
obligation to remit incentive compensation under Sections 5(b)(1) and
5(b)(2) of this Agreement shall survive expiration or termination of this
Agreement and the Executive shall be entitled, even after expiration or
termination of this Agreement, to receive all incentive compensation
otherwise payable to him but for his no longer remaining an active
employee of the Company in respect of each shipment of imported products
received, each merger or acquisition closed within 6 months from his
termination, to the extent the Executive contributed in any material
fashion to booking any such business, finding any source of supply,
negotiating any contract or instrument, identifying and/or qualifying any
merger or acquisition target or opportunity, or otherwise participating in
the administration, processing, accounting, negotiation, execution,
delivery, performance, and/or modification of any transaction(s) by which
any such purchases of imported products and/or mergers and/or acquisitions
may have been concluded.
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(c)
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Annual
Bonus. In addition to the compensation described in Sections 5(a) and 5(b)
of this Agreement, beginning with the calendar year of 2008, the Executive
shall receive such additional compensation in the form of an annual bonus,
as and when calculated, approved and recommended by the Executive
Committee or the Board of the Company, and shall be determined according
to a formula that shall have been approved by the Board of the Company in
writing and shall have been provided to the Executive as soon as
practical. In the event the Board fails or refuses to provide the
Executive with timely written notice of the formula to be used in
determining the amount(s) of any annual bonus payable under this Section
5(c) for any given calendar year, the Executive shall be entitled to
receive an annual bonus for such calendar year according to the formula
used in determining the Executive's annual bonus for the immediately
preceding calendar year. Any annual bonus awarded to Executive shall be
payable when other executives of the company are paid their bonuses but to
be no later than go days after the end of the calendar year for which said
bonus was earned except as otherwise provided by other provisions of this
agreement, the obligation to remit the annual bonus payable under this
Section 6(c) shall survive expiration or termination of this Agreement and
the Executive shall be entitled, even after expiration or termination of
this agreement, to receive such annual bonus otherwise payable to him but
for his no longer remaining an active employee of the company, provided,
however, that the amount of the annual bonus payable to the Executive for
each calendar year during the Term shall be a target amount minimum of One
Hundred Thousand and No/100 Dollars
($100,000.00)(U.S.).
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(d) Additional
Benefits and Perquisites of Employment. The Executive shall be entitled to each
ofthe following additional benefits and perquisites of employment:
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(1)
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Health
Care Benefits. The Company shall pay on the Executives behalf 100 percent
(100%) of the expenses associated with providing the Executive, his spouse
and children with the Companies group or individual health care insurance
and benefits, including (without limitation) such major medical, cancer
coverage, dental, optical, prescription drug, and other health insurance
coverage as may be provided from time to time by the Company for its
senior-most officers, directors, and/or employees during the Term of this
Agreement and any renewal thereof.
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(2)
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Disability
Benefits, Other Insurance Coverages, and Benefit Plans. The Company shall
pay on the Executives behalf 100 percent (100%) of the expense associated
with providing the Executive disability insurance as provided for other
senior executives of the company and such other insurance coverages as may
be provided from time to time for the Company's senior-most officers,
directors, and/ or employees during the Term of this Agreement and any
renewal thereof, including (without limitation) life insurance and long
term care policies. The Company shall pay 100 percent (100%) of the costs
of providing a 20-year term life insurance policy with a death benefit of
not less than One Million and No/100 Dollars ($1,000,000.00) (U.S.) for
the Executive. The Executive also shall be included as a member in any
profit-sharing, pension, retirement, or other employee benefit plan which
may be adopted by the Company during the Term of this Agreement or any
renewal thereof as long as such plan(s) shall be offered or available to
any of the Company's other senior-most officers, directors, or employees
and the Executive meets the eligibility requirements
thereof.
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(3)
Vacation. During the Term of this Agreement and any renewal thereof, the
Executive shall be entitled to paid vacation leave equal to four (4) weeks
each calendar year, beginning January 1, 2008, and such additional
vacation leave as shall be approved by the President of the Company from
time to time. Vacation leave shall be taken by the Executive at such times
as are mutually convenient to Executive and the President of the Company.
The Executive agrees to provide reasonable advance notice to the President
of the Company of the Executive's plan to take vacation leave. If the
President of the Company concurs in the Executive's plan to take vacation
leave or if the President fails to notify the Executive within 21 calendar
days of the Executive's notice that any given plan to take vacation leave
would not be convenient to the Company, such plan shall be deemed to have
been approved by the President of the Company. Once approved by the
President in a manner consistent with this Section 5(d)(3), the President
of the Company may not change, condition, or rescind the Executive's
vacation plans without the written consent of the Executive. Executive
shall not be entitled to carry over any unused vacation accrued during any
calendar year to any succeeding year, provided, however, that
notwithstanding this provision respecting vacation leave carryovers, the
Executive shall be compensated at his base salary determined according to
Section 5(a) of this Agreement for any accrued vacation leave not taken in
any given calendar year because the President did not approve or vacation
leave requested by the Executive at least 21 calendar days in advance or
the Executive consented in writing to the President's request that the
Executive not take an approved vacation leave or not taken because
the employment of the Executive was terminated for any reason before the
Executive was able to take such vacation leave. Vacation leave may be
taken in increments of not less than one (x) full calendar day each and
the Executive's plan to take more than two consecutive weeks of vacation
leave within any i2-month period during any Term of this Agreement shall
require the express written consent of the President of the
Company. Notwithstanding the foregoing provisions of this Section 5(d)(3),
The Executive shall be released from the notice requirements and
restrictions on taking vacation leave, as expressed herein, to the extent
the Executive takes vacation leave for the purpose of attending to any
family emergency, any unplanned surgery or medical care involving himself
or his spouse or children, or any bereavement leave occasioned by the
death of any of the immediate family members of the Executive or the
Executive's spouse.
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(4)
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Expense
Reimbursement. Upon submission of receipts and reasonable documentation,
the Company hereby agrees to reimburse the Executive for expenses incurred
by the Executive in connection with business travel, including (without
limitation) parking, tolls, mileage, lodging, and meals. Business
entertainment, dues, subscription fees, and membership fees to any
professional association or organization related to the Company's business
of which the Executive is a member or shall become a member during the
term hereof or any renewal thereof, shall be first approved by the
company.
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(5)
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Automobile.
During the Term of this Agreement, the Company shall afford the Executive
access to similar automobile benefits being granted to other Executives of
the company.
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(6)
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No
Disqualification of the Executive, His Spouse, or His Children. The
Company acknowledges and agrees that the Executive and his spouse and
children qualify for all benefits for which they, or any of them, may be
or shall become eligible under this Section 5 immediately upon the
Executive's execution of this Agreement. All insurance policies referenced
in this Section 5 are to be in place as soon as Xxxxx X. Xxxx'x policies,
Chief Executive Officer, are in
place.
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(7)
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Alternate
Forms of Satisfying Certain Obligations Under Section 5(d). With the
mutual consent of the Executive and the company, the Executive may
instruct the Company to remit directly to such insurance company or
companies as the Executive may designate from time to time, in full or
partial satisfaction of the Executive's own obligations under his own
contract(s) of insurance with such company or companies, a sum equal to
the total amount otherwise payable by the company for its in place
insurance coverage's being offered to other executives for premiums
covered under any contract(s) for any insurance policy or policies
contemplated by the terms of Section 5(d) of this Agreement. Upon honoring
the Executive's instruction respecting any individual insurance policy,
the Company's obligation to provide the same coverage and/or benefits
under the terms of Section 5(d) of this Agreement shall xxxxx and
thereafter shall be limited to continuing to remit sums under the Section
5(d)(7) to the Executive's own insurer(s) as and when such obligations
become due and payable during any Term of this Agreement. The obligation
to remit any sum(s) payable under this Section 5(d)(7) shall continue
until the first anniversary of the termination of this Agreement for any
reason.
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(e)
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Relocation
Expenses. The Executive will be required to relocate from Naples, Florida,
to Solon, Ohio, or a community within Northeast Ohio that is within 45
minutes driving distance of Solon, Ohio, to perform his corporate duties
as described in this contract. The Company agrees to reimburse the
Executive for any and all pre approved fees and expenses associated with
said relocation including but not limited
to:
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(1)Temporary
Housing. The Company shall reimburse the Executive for reasonable
temporary living expenses (including reasonable travel expenses between
the Executives primary residence as of the effective date and
Cleveland/Solon, Ohio metropolitan area) for the executive and
his family in the Cleveland/Solon, Ohio metropolitan area for a
period not to exceed one year from the effective
date.
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(2)
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Moving
Expenses. The Company shall reimburse the Executive for all moving
expenses, including packing, shipping, insurance, unpacking and temporary
storage costs. .
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(3)
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Housing
Value Adjustment. The Company will make available to the Executive the
opportunity to recapture any loss in the sales proceeds from his family's
home using a base of $550,000, located in Xxxxxx, XX 00000, where the
Executive currently resides by either making a cash or Serefex common
stock payment in the amount due including all broker's fees and closing
costs. Said payment form of either Serefex common stock or cash is to be
mutually agreed upon by the Executive and the
Company.
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(4)
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Relocation
Bonus. In addition, the Executive shall receive a relocation bonus of
$19,000, payable on the Effective Date, to cover the other costs
associated with the relocation of Executive's primary
residence.
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(5)
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All
relocation payments and benefits are to be fully grossed-up for any
applicable taxes.
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(f)
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Retirement.
The executive shall be entitled to any retirement plan and benefits put in
place by the company that is offered to other senior
executives
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(g)
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Payment.
All amounts in compensation and benefits payable under Sections 5(a)
through 5(f) of this Agreement shall be remitted and honored in accordance
with the terms set forth or referenced therein in a timely fashion and in
such manner as shall be mutually agreeable between Executive and the
Company to the extent not otherwise specified in this Agreement. In the
event that the Company cannot legally compensate Executive for any or all
items listed in Sections 5(a) through 5(f) of this agreement due to local,
state, or federal laws and/or regulations, the Company shall remit amounts
equivalent to the compensation and/or benefits otherwise foreclosed by
such laws and/or regulations in the form of increased annual base salary
in addition to the then-current base salary determined for the
then-current calendar year by operation of Section 5(a) of this
Agreement.
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6. Termination.
The
Executive's employment hereunder shall terminate upon expiration of any Term of
this Agreement by operation of Section 2(a) of this Agreement, but otherwise may
be terminated only as follows:
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(a)
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Death
of the Executive. Subject to any post-mortem rights or obligations
specified herein, the Executive's
employment shall terminate immediately upon his
death.
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(b)
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Disability
of the Executive. If the Executive shall fail or become unable to perform
any of his duties
hereunder due to illness or other incapacity (as determined by a medical
doctor mutually agreed to by the Executive or his attorney-in-fact and the
Company) and such illness or incapacity shall continue for a period of
more than 9o consecutive days ("Disability"), the Company may terminate
the Executive's employment hereunder 3o days after written notice of
termination is given to the Executive or his attorney-at-law or
attorney-in-fact if the Executive shall not have returned to the
performance of his duties on a full-time basis by the end of such 3o-day
notice period.
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(c)
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With
Cause or Without Cause. Except as otherwise provided by Sections 6(a) and
6(b) of this Agreement, the Company may terminate the Executive's
employment only in the event one or more of the following events should
occur and the Executive shall not have cured any defect in his performance
or conduct (if curable) within 3o days after written notice thereof has
been given by the Company to the Executive coupled with a disclosure that
the Company intends to terminate the Executive's employment under this
Section 6(c), effective as of the date such notice is given or such later
date as may be indicated in such notice, and specifying the factual basis
for the Company's decision to invoke the remedy of
termination:
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(1)
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A
failure by the Executive to perform material duties assigned to him as an
employee of the Company (other than due to physical or mental disability
or impairment or after the delivery of a Notice of Termination for
Constructive Termination by the Executive pursuant to Section 6(d) of this
Agreement);
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(2)
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Engaging
in misconduct that injures the Company or any subsidiary or any
affiliate of the Company in a material
fashion;
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(3)
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The
Executive's conviction for a felony offense;
(4)
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(4)
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A
material breach by the Executive of any written covenant or agreement not
to compete with
the Company or any subsidiary or any affiliate;
or
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(5)
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A
breach of the Executive's fiduciary duty to the
Company.
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Any
termination of the Executive's employment for any of the reasons listed in this
Section 6(c) shall constitute a termination "With Cause" for purposes of this
Agreement and any termination of the Executive's employment for any reason other
than those listed in this Section 6(c) or as provided by Sections 6(a) or 6(b)
hereof, whether for the convenience of the Company or otherwise, shall
constitute a termination "Without Cause" for purposes of this
Agreement.
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(d)
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Constructive
Termination. The Executive may terminate his employment in the event one
or more of the following events should occur, without the prior
written consent of the Executive, and the Company shall not have cured any
defect in its performance or conduct (if curable) within 3o days after
written notice thereof has been given by the Executive to the Company
coupled with a disclosure that the Executive intends to terminate this
Agreement under this Section 6(d), effective as of the date such notice is
given or such later date as may be indicated in such notice, and
specifying the factual basis for the Executive's decision to invoke the
remedy of termination:
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(1)
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Any
change in the Executive's reporting relationship as specified in Section 3
of this Agreement, any assignment or delegation, without Executive's prior
express written consent, of any of the duties previously assigned to the
Executive or any reduction of the Executive's duties, either of which
results in a significant diminution in Executive's position, authority, or
responsibilities with the Company otherwise in effect immediately prior to
such assignment, or the removal of the Executive from such position and
responsibilities, or the elimination of any such authority from the
Executive;
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(2)
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Any
substantial reduction of the facilities and perquisites (including office
space, location, and available administrative support) available to the
Executive immediately prior to such reduction except to the extent the
Executive may have consented in writing to such
reduction;
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(3)
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Any
relocation of the Executive for a period of more than twenty one (21)
consecutive calendar days to a facility or a location more than 45 miles
from the Executive's principle office prior to such relocation except to
the extent the Executive may have consented the same in
writing;
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(4)
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Any
purported or attempted termination of Executive's employment by the
Company Without Cause, or any purported or attempted termination of the
Executive's employment for any reason under Section 6(b) and/or 6(c) of
this Agreement whereby the grounds on which the Company relies in
connection with any such termination or a tempted termination are not
valid or depend upon determinations of fact or conclusion respecting the
Executive's performance of his obligations under this Agreement or the
Executive's conduct that either are not true or are not supported by the
evidence on which the Company relies in taking its action against the
Executive;
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(5)
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The
filing of any voluntary or involuntary petition seeking protection under
the bankruptcy laws, the appointment of any receiver or other fiduciary
designated by any court or by operation of any agreement or undertaking to
which the Company or any of its subsidiaries or affiliates is a party or
beneficiary for the purpose of gathering, collecting, seizing, managing,
or administering the business, assets, or affairs of the Company or any
its subsidiaries or affiliates, or any change in the ownership or
controlling interest of the Company or any of its subsidiaries or
affiliates except to the extent the Executive, in respect of any of the
events listed in this Section 6(d)(5), shall have consented in writing 1
the same;
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(6)
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Termination
of the services of Xxxxx X. Xxxx and Chief Executive Officer of the
Company for any reason or removal or demotion of Xx. Xxxx from his
position as Chief Executive Officer of the
Company;
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(7)
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The
Company's failure to honor any material duty or obligation set forth or
referenced in this Agreement; or
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(8)
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Failure
of the Company to maintain current and in effect Directors and Officers
Insurance including Employment Practices Liability, Fiduciary Liability
and Errors and Omissions Insurance. As of date of this agreement,
coverages have been applied for. The company agrees to indemnify the
Executive of any and all areas that would be covered by said coverages
during times of transition.
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Any
termination of this Agreement by the Executive any of the reasons listed in this
Section 6(d1,2,3,5,6,7 and 8) shall constitute a "Constructive Termination" for
purposes of this Agreement. And for all purposes under this Agreement, a
Constructive Termination shall afford the Executive and h: heirs, executors,
administrators, successors, assigns, and dependents that same rights, privilege
and benefits as if the Company had terminated his services Without
Cause.
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(e)
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By
the Executive Without Good Reason. The Executive may terminate his
employment hereunder without Good Reason at any time upon twenty (20) days
prior written notice to the Company. If however the Executive terminates
this agreement without good cause within the first 3 years from the
effective date, then the executive agrees to return to the company all
payments made to him under section 5 e(3) of this
agreement.
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(f)
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Procedure
in the Event of Disputes Concerning Termination. Any party receiving a
written notice invoking the remedy of termination under Sections 6(b),
6(c), or 6(d) of this Agreement may give written notice to the other party
not later than the first Tuesday immediately following the 3oth day after
which such notice shall have been delivered to the effect that a dispute
exists concerning the termination or the impact or effect such termination
shall have on the post-termination rights, benefits, expectations,
obligations, and/or duties of the parties under this Agreement. Upon
completing service of such written notice respecting termination, the
parties agree to refer their dispute to mediation subject to the
provisions of Section 19(b) of this Agreement unless the notice of
termination of the Executive's employment specifies that such action is
taken for one of the reasons set forth or referenced in Sections 6(c)(3),
6(c)(4), 6(d)(5), 6 (d)(6), 6(d)(7)and/or 6(d)(8) of this Agreement, and
no party to this Agreement shall pursue any post-termination remedies in
any civil action for enforcement of the terms and conditions hereof except
upon the conclusion of such mediation efforts. The Executive shall be
reimbursed for any and all associated legal and non-legal fees associated
with said dispute in the event the Executive is the prevailing
party.
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7.
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Termination
Benefits
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Upon the
termination of this Agreement by the Company Without Cause, or upon the
Executive's termination of this Agreement for Constructive Termination, and in
addition to any other post termination obligations imposed by operation of
this Agreement, the Company shall remit to the Executive, or upon the death or
disability of the Executive, as and for a termination benefit, all of the
following:
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(a)
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Salary
Benefit. The Company shall pay to Executive (or to the Executive's spouse
or the Executive's estate in the event the Executive should die without a
spouse) in a lump sum not later than 3o days after the effective date of
the notice of termination for any reason other than the death, termination
with cause or disability of the Executive an amount equal to 500 percent
(500%) of the annual base salary of the Executive, determined according to
Section 5(a) of this Agreement, that was in effect as of the effective
date of the termination of the Executive's employment hereunder, plus the
value of all of the Executive's accrued and unused vacation
leave.
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(b)
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Incentive
Compensation Benefits. The Company shall remit to the Executive (or to the
Executive's spouse or the Executive's estate in the event the Executive
should die without a spouse) all accrued and unpaid incentive compensation
earned by the Executive under Section 5(b) of this Agreement as and when
such compensation becomes due and payable after the date of termination of
the Executive's employment.
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(c)
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Annual
Bonus Benefit. The Company shall remit to the Executive (or to the
Executive's spouse or the Executive's estate in the event the Executive
should die without a spouse) all accrued and unpaid annual bonus
obligations of the Company arising under Section 5(b) of this Agreement as
and when such annual bonus compensation becomes due and payable after the
date of termination of the Executive's
employment.
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(d)
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Death
Benefit. The aforementioned life insurance
policy.
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(e)
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Disability
Benefit. The Company shall remit to the Executive (or to the Executive's
spouse or the
Executive's estate in the event the Executive should die without a spouse)
the cost incurred by the Executive to acquire like insurance as offered in
section 5 d (2) of this contract until the expiration date of the last
extension.
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(f)
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Health
Care Benefits. The Company shall remit to the Executive (or to the
Executive's spouse or
the Executive's estate in the event the Executive should die without a
spouse) the cost incurred by the Executive to acquire like insurance as
offered in section 5 d (i) of this contract until the expiration date of
the last extension.
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8.
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Noncompetition
and Confidentiality.
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(a)
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Noncompetition. In
recognition of the foregoing agreements, in the event that Executives
employment pursuant to this Agreement is terminated for any reason by
either party:
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(1)
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If
the termination of the Executive’s employment is With Cause, as defined in
Section 6(c) of this Agreement, or is occasioned by the expiration of the
then-current Term of this Agreement, the Executive agrees that for a
period of 365 days following the date of such termination, he shall not
within a geographic limit of 100 miles of the primary location of the
Company be employed by, participate in the formation, ownership,
management, operation, or control of, or be connected in any manner with
(other than as a holder of not in excess of 10% of the outstanding voting
shares of any publicly traded company) any existing retail distributor or
roofing products company that competes with the business of the Company
except as listed below in Section 8(c) of this Agreement;
and
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(2)
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If
the termination of the Executive's employment is terminated without cause,
whether or not such reason is specified or contemplated by the terms and
conditions of this Agreement, the Company acknowledges and agrees that the
Executive shall not be bound by any noncompetition
provisions.
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(b)
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Confidentiality.
The Executive acknowledges that he will be subject to certain restrictive
covenants concerning his employment. The Executive further acknowledges
that he will acquire confidential information of a special and unique
nature and value relating to the Company's intentions, plans, procedures,
confidential reports, financial resources, shareholders, investors,, and
prospective business that is not generally shared by the Company in the
public domain. In this regard, the Executive hereby agrees that he will
not (1) persuade or attempt to persuade any customer of the Company to
cease doing business with the Company or persuade or attempt to persuade
any potential customer to refrain from becoming a customer of the Company,
(2) persuade or attempt to persuade any employee of the Company to leave
the Company's employ or to become employed by any person, firm, or
corporation other than the Company, or (3) divulge any knowledge or
information of any type whatsoever of a confidential nature relating to
the businesses of the Company to anyone other than the Company or any
person employed or designated in writing by the Company, or make any
unauthorized use of such confidential knowledge or information, or publish
or use such confidential knowledge or in formation for the benefit of
any third parties or to the Company's
detriment.
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(c)
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Exclusions
to Noncompetition Obligations of the Executive. The Company acknowledges
and agrees that the Executive has involvement and ownership rights in
family businesses based in Naples, Florida, and Sarasota, Florida, and
that some or all of those family businesses may compete from time to time
with the business of the Company. The family-owned or affiliated
businesses in which the Executive shall have continuing involvement and/or
ownership rights after the effective date of this Agreement include (but
may not be limited to) to Hi-Lite Services, Inc., and Wholesale
Construction Materials, LLC. Notwithstanding the provisions of Sections
8(a) and 8(b) of this Agreement, the Company acknowledges and agrees that
the Executive shall not be subjected to the restrictions or limitations
imposed by operation of this Section 8 to the extent the same might
otherwise apply to the family-owned or affiliated businesses identified or
referenced in this Section 8(c).
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9.
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Joint
and Several Obligations
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The
obligations set forth herein shall be deemed to be joint and several obligations
of each of the Company and each of its subsidiaries.
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10.
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Assignment.
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This
Agreement shall not be assignable by either party except upon the prior written
consent of the other party. Notwithstanding this restriction, and subject to the
other rights and remedies afforded the parties to this Agreement, (1) the
Company's obligations to the Executive and the members of the Executive's
immediately family and their respective heirs, successors, executors,
administrators, and assigns may be assigned by the Company to any person or
entity acquiring all or substantially all of the assets of the
Company.
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11.
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Severability
of Provisions.
|
If any of
the provisions of this Agreement or the application of any such provision(s)
shall for any reason be held invalid by a court of competent jurisdiction, such
invalidity shall not affect or impair any other provision, it being the
intention of the parties that such other provisions shall be and remain in full
force and effect.
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12.
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Compliance
with Applicable Laws.
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The
Executive agrees to comply with all laws and regulations in the conduct of his
duties and obligations under this Agreement and to comply with all regulations,
resolutions, and policies of the Company.
13. Notices.
When any
notice is to be given by a certain date specified in this Agreement, to the
extent the deadline for such notice falls on a Saturday, Sunday, or legal
holiday, such deadline shall extend to the next succeeding calendar day that is
not a Saturday, Sunday, or legal holiday. All notices, requests, demands, and
other communications provided for by this Agreement shall be in writing and
shall be deemed to have been given at the time when dispatched by certified mail
at any office of the United States Postal Service to the recipient thereof at
the address(es) set forth below or to such changed address as such party may
have fixed by notice to the other party, provided, however, that any notice or
change of address shall be affected only upon receipt and further provided that
any notice may be personally delivered to the respective party by the party
giving notice in lieu of being mailed.
If to the
Company:
Serefex Corporation
0000 Xxxxxxxxx Xxxxxx Xxxx. Xxxxx
X
Xxxxxx,
XX 00000
Attention:
Xxxxx X. Xxxx, President
If to the
Executive: Mr.
Xxxxx Xxxxxxxx
000 Xxxx
Xxx
Xxxxxx,
Xxxxxxx 00000
14. Binding
Effect.
This
Agreement shall inure to the benefit of and shall be binding upon the Company,
its subsidiaries, its successors and assigns, and any corporation, person(s), or
entity that may acquire all or substantially all of the Company's assets or into
which the Company may be consolidated or merged, and shall inure to the benefit
of Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees, and legatees. Upon the Executive's
death, all amounts to which he is entitled hereunder, and unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
the Executive's devisee, legatee, or other designee, or, if there be no such
designee, to the Executive's estate.
15. Governing
Law and Consent to Jurisdiction.
This
Agreement shall be governed by and construed in accordance with the laws of the
State of Ohio without regard for principles of choice of law. The parties hereto
agree to consent to the jurisdiction and venue of the courts of the State
of Ohio located in Cuyahoga County, Ohio, and agree that all disputes between
the parties shall be litigated only therein.
16. Entire
Agreement.
This
Agreement represents the entire agreement of the parties, and supersedes all
prior understandings and agreements between the parties relating to the subject
matter of the employment of Executive, including a certain Employment Contract
dated January 1 2006, as amended. This Agreement may not be modified or amended
except by an instrument in writing signed by all of the parties hereto. The
parties acknowledge and agree that while the Executive and his counsel were
responsible principally for formatting this Agreement with the use of their
respective word processing equipment, the Company engaged in a material and
direct fashion in drafting various provisions appearing herein, and therefore
for purposes of resolving any disputes respecting the interpretation,
application, or enforcement of this Agreement, neither party shall be deemed to
have been the author of the terms and conditions expressed herein.
17. Execution
in Counterparts.
This
Agreement may be executed by the parties hereto signing the same instrument, or
by each party hereto signing a separate counterpart or counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument. The parties agree that documents
executed by facsimile shall be acceptable in this transaction, and the
signatures thereof shall have the same force and effect as original
signatures.
18. Waiver
The
failure of any party to insist in any one or more instances upon performance of
any terms or conditions of this Agreement shall not be construed as a waiver of
future performance of any such term, covenant or conditions, but the obligations
of either party with respect thereto shall continue in full force and
effect.
19. Miscellaneous
Provisions.
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(a)
|
Survival.
All warranties, representations, and covenants, unless expressly provided
otherwise by the terms and conditions hereof, shall survive the closing of
the transaction(s) contemplated by this
Agreement.
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(b)
Mediation. Except as otherwise provided by the terms of this Agreement,
the parties agree to submit any disputes arising under this Agreement
or respecting the interpretation, application, and/or enforcement of its
various terms and conditions to a trained mediator or retired judge with
experience in mediating employment-related or commercial disputes. The
Company shall bear responsibility for selecting and compensating the
mediator, but the Executive agrees to bear one-half of the fee charged by
the mediator for his or her services if a settlement of the dispute(s)
submitted for mediation is concluded within 45 days of the conclusion of
the mediation session(s) devoted to such dispute(s). If a request is made
by either party for mediation of any such dispute(s), the other party
shall use his or its best efforts to accommodate the schedules of the
other party and the mediator so as to allow for the first mediation
session to take place within 21 calendar days of the date the mediator is
selected and not more than 3o days from the date the request for mediation
is received. No party to this Agreement shall commence litigation for the
enforcement of his or its rights or expectations hereunder without first
declaring in a written notice to the other party that the parties are at
impasse and waiting ten (10) calendar days to afford the other party an
opportunity to reconsider his or its position and/or make an at tempt to
renew settlement discussions or mediation talks. Once either party
declares the parties to be at impasse and waits the required ten (10) days
following his or its notice to that effect, such party may initiate
litigation in a court of competent jurisdiction in respect of the
dispute(s) addressed in mediation. Except as otherwise provided in this
Agreement, the mediation process outlined in this Section 19(b) shall be
followed by the parties for each dispute arising under this Agreement and
no part of any dispute not first subjected to such mediation process shall
be included in any pending litigation by amendment or otherwise or as the
subject matter of any new civil action commenced in respect of such
dispute(s) until such mediation process is exhausted in respect of each
such dispute.
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(c)
|
Costs
of Litigation. In any civil action for the interpretation or enforcement
of any of the provisions of this Agreement, the prevailing party shall be
entitled, in addition to all other rights and remedies provided or allowed
by law, to an order or judgment awarding the prevailing party
reimbursement of all attorney fees and litigation expenses ordinarily,
reasonably, and necessarily incurred in the successful prosecution or
defense of such civil action, all preparation, research, and investigation
conducted in respect of such litigation or any claims asserted or
threatened in respect of the subject matter of such litigation in advance
of the commencement of such civil action, and all services rendered in
participating in any mediation session(s) conducted pursuant to Section
i9(b) of this Agreement.
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(d)
|
All
Other Remedies Reserved. Nothing in this Agreement shall be construed as a
limitation, replacement, or elimination of any right or remedy otherwise
enjoyed by any party or any of such party's heirs, successors, assigns, or
transferees, or as a condition on the exercise of any such right or the
availability of any such remedy, except as may be expressly provided to
the contrary by any provision(s) of this
Agreement.
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(e)
|
Headings.
Headings used in this Agreement are for the convenience of the reader and
are not meant to alter the substantive meaning of any other provision(s)
set forth or referenced herein.
|
20. Authority
to Execute Agreement
In
signing this Agreement, each signatory represents and warrants that he or she
has the authority to do so, is not subject to any condition, restriction, or
encumbrance that would condition, restrict, limit, or otherwise affect or
control his or her decision to enter into this Agreement or his or her ability
to honor or discharge the various duties, responsibilities, obligations,
commitments, conditions, covenants, representations, and warranties set forth or
referenced herein, has read each of the terms and conditions hereof and
understands the same, has had adequate opportunity to seek advice or counsel
from an attorney of his or her own choosing prior to executing this Agreement,
intends fully to be bound contractually by the provisions of this Agreement in
accordance with its terms, and has entered into this agreement freely,
voluntarily, and without reservation.
ONCE
EXECUTED BY ALL PARTIES, THIS AGREEMENT WILL CONSTITUTE A BINDING CONTRACT FULLY
ENFORCEABLE ACCORDING TO ITS TERMS. THE PARTIES ARE ADVISED TO CONSULT
INDEPENDENT PROFESSIONALS IF TAX OR LEGAL ADVICE IS DESIRED.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement under seal the
day and year above first written.
SEREFEX
CORPORATION
Attest: Date:
/s/ Xxxxx X.
Xxxx
___________________
Xxxxx X.
Xxxx, President & CEO
Serefex
Corporation
Witness:
Date:
_______________________________ ___________________
Attest: Date:
/s/ Xxxxx
Xxxxxxxx
___________________
Xxxxx
Xxxxxxxx,
Executive
Serefex
Corporation
Witness: Date:
_______________________________ ___________________
ADDENDUM
TO
EMPLOYMENT
CONTRACT
This
addendum is to an Employment Contract dated November 15, 2007 by and between
Serefex Corporation, a Delaware corporation, and Xx. Xxxxx X. Xxxxxxxx, formerly
of Naples, Florida.
WHEREAS, for mutual consideration, the
receipt of which is hereby acknowledged, the parties hereby amend the Employment
Contract as follows:
1. Section
5 (b) is hereby deleted in its entirety.
IN
WITNESS WHEREOF, Serefex Corporation and Xxxxx X. Xxxxxxxx have caused this
Addendum to the Employment Contract to be duly executed on the day of ______ day
of May, 2008.
SEREFEX
CORPORATION EXECUTIVE
/s/ Xxxxx X.
Xxxx
/s/ Xxxxx X.
Xxxxxxxx,
Xxxxx X.
Xxxx, President &
CEO Xxxxx
X. Xxxxxxxx, Executive
Serefex
Corporation
WITNESS:
_____________________________
Name:
_______________________
ADDENDUM
TO
EMPLOYMENT
CONTRACT
This
addendum is to an Employment Contract dated November 15, 2007 by and between
Serefex Corporation, a Delaware corporation, and Xx. Xxxxx X. Xxxxxxxx, formerly
of Naples, Florida.
WHEREAS, for mutual consideration, the
receipt of which is hereby acknowledged, the parties hereby amend the Employment
Contract as follows:
|
1.
|
Section
5 (a) is to read:
|
Base
Salary. As compensation for the performance by the Executive of his duties
hereunder, the Company shall pay the Executive a base salary of One Hundred
Forty Thousand and No/100 Dollars ($140,000.00) (U.S.) per annum for the period
commencing November 15, 2007, through November 15, 2008. Thereafter, the
Executive's base salary for each subsequent 12-month period shall be fixed at a
minimum amount of one hundred and ten percent (11o%) of the Executive's base
salary during the immediately preceding calendar year or as additionally
increased by the company's compensation committee.
|
2.
|
Section
5 (b) is hereby deleted in its
entirety.
|
|
3.
|
Section
5 (c) is to read:
|
Annual
Bonus. In addition to the compensation described in Sections 5(a) and 5(b) of
this Agreement, beginning with the fiscal year of 2007, the Executive shall
receive such additional compensation in the form of an annual bonus, as and when
calculated, approved and recommended by the Executive Committee or the Board of
the Company, and shall be determined according to a formula that shall have been
approved by the Board of the Company in writing and shall have been provided to
the Executive as soon as practical. In the event the Board fails or refuses to
provide the Executive with timely written notice of the formula to be used in
determining the amount(s) of any annual bonus payable under this Section 5(c)
for any given fiscal year, the Executive shall be entitled to receive an annual
bonus for such fiscal year according to the formula used in determining the
Executive's annual bonus for the immediately preceding fiscal year. Any annual
bonus awarded to Executive shall be payable when other executives of the company
are paid their bonuses but to be no later than go days after the end of the
fiscal year for which said bonus was earned except as otherwise provided by
other provisions of this Agreement, the obligation to remit the annual bonus
payable under this Section 6(c) shall survive expiration or termination of this
Agreement and the Executive shall be entitled, even after expiration or
termination of this Agreement, to receive such annual bonus otherwise payable to
him but for his no longer remaining an active employee of the Company, provided,
however, that the amount of the annual bonus payable to the Executive for each
calendar year during the Term shall be a target amount minimum of One Hundred
Thousand and No/100 Dollars ($100,000.00) (U.S.).
IN WITNESS WHEREOF, Serefex Corporation
and Xxxxx X. Xxxxxxxx have caused this Addendum to the Employment Contract to be
duly executed on the 3rd day
of June, 2008.
SEREFEX
CORPORATION EXECUTIVE
/s/ Xxxxx X.
Xxxx
/s/ Xxxxx X.
Xxxxxxxx
Xxxxx X.
Xxxx, President &
CEO Xxxxx
X. Xxxxxxxx, Executive
Serefex
Corporation
X.X. XXXXXXX SYSTEMS,
INC. WITNESS:
/s/ Xxxxx X.
Xxxx
_____________________________
Xxxxx X.
Xxxx, President &
CEO Name:
_______________________
X.X.
Xxxxxxx Systems, Inc.
