Exhibit 10.37
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT made as of November
16, 2004 by and between vFinance, Inc., a Delaware corporation (the "Company"),
and Xxxxxxx X. Xxxxxxx ("Employee").
RECITALS:
A. Employee and the Company desire to amend and restate that certain
Employment Agreement dated November 8, 1999 between Employee and the Company, as
amended on January 5, 2001, July 2, 2001 and January 7, 2002 (the "Previous
Employment Agreement").
B. Employee wishes to be employed by the Company with the duties and
responsibilities as hereinafter described, and the Company desires to assure
itself of the availability of Employee's services in such capacity.
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the Company and Employee hereby agree as follows:
1. Employment. The Company hereby agrees to employ Employee, and Employee
hereby agrees to serve the Company, upon the terms and conditions hereinafter
set forth.
2. Term. The employment of Employee by the Company pursuant to this
Agreement shall be for a three (3) year period commencing on the date hereof and
shall automatically be extended for an additional one year period on the first
year anniversary date of this Agreement (November 16, 2005) and each anniversary
date thereafter (November 16th of each year beginning in 2006) unless the
Company's has provided notice of non-renewal thirty (30) days prior an
anniversary date as directed by a majority vote of the Board of Directors (the
"Term"). For example, in the event the Company has provided notice of
non-renewal 30 days prior to November 16, 2005, there will be only two (2) years
remaining in the Term; in the event the Company did not provide such notice
thirty (30) days prior to November 15, 2005, then the Term shall be extended to
November 16, 2008 so that on November 16, 2005, the total Term is three (3)
years; in no event following such notice by the Company will the remaining Term
be less than two (2) years.
3. Duties. Employee shall, subject to overall direction consistent with the
legal authority of the Board of Directors of the Company (the "Board"), serve
as, and have all power and authority inherent in the offices of Chairman and
Chief Operating Officer of the Company and shall be responsible for those areas
in the conduct of the business reasonably assigned to him by the Board of
Directors. Employee shall devote substantially all his business time and efforts
to the business of the Company; provided, however, that it is understood and
agreed that, while Employee may devote time to other business matters in which
he has an interest, in the event of a conflict, Employee's first and primary
responsibility shall be to the performance of his duties for the Company.
4. Conflicting Activities. For the term of this Agreement or until
Employee's employment hereunder terminates, whichever occurs first, Employee
hereby agrees to promote and develop all business opportunities that come to his
attention relating to current or anticipated future business of the Company, in
a manner consistent with the best interest of the Company and with his duties
under this Agreement. If Employee becomes aware of a business opportunity during
the performance of his Company duties, through the use of the Company's property
or information, or under circumstances that would reasonably lead Employee to
believe that the business opportunity was intended by the offeror to be offered
to the Company, he shall first offer such opportunity to the Company. Should the
Executive Committee of the Board of Directors of the Company, on behalf of the
Company, not exercise its right to pursue this business opportunity within a
reasonable period of time, not to exceed thirty (30) days, Employee may develop
the business opportunity for himself; provided, however, that such development
may in no way conflict or interfere with the duties owed by Employee to the
Company under this Agreement. Further, Employee may develop such business
opportunities only on his own time, and may not use any service, personnel,
equipment, supplies, facility, or trade secrets of the Company in their
development. As used herein, the term "business opportunity" shall not include
business opportunities involving investment in publicly traded stocks, bonds or
other securities, or other investments of a personal nature.
5. Compensation and Other Provisions. Employee shall be entitled to the
compensation and benefits hereinafter described in subparagraphs (a) through (e)
(such compensation and benefits being hereinafter referred to as "Compensation
Benefits").
(a) Base Salary. The Company shall pay to Employee an initial
base salary of $257,500 per annum which shall increase five percent (5%) per
annum beginning January 1, 2005 and each year thereafter ("Base Salary"). The
Base Salary and Employee's other compensation will be reviewed by the Board at
least annually and may be increased (but not decreased) from time to time as the
Board may determine.
(b) Participation in Benefit Plans. During the Term, Employee
shall be eligible to participate in all employee benefit plans and arrangements
now in effect or which may hereafter be established, including, without
limitation, all life, group insurance and medical care plans and all disability,
retirement and other employee benefit plans of the Company. The Company shall
pay all costs of the Employee for his participation in such plans. Should the
employee not want to participate in the Company's health plan, with Board
approval, the company will reimburse the employee for the expense incurred in
participating in another plan. Additionally, Employee shall be added as an
insured to any director and officer insurance policy that the Company hereafter
procures.
(c) Other Provisions. Employee shall be entitled to four (4)
weeks paid vacation per annum. Employee shall be reimbursed for all reasonable
expenses incurred by him in the performance of his duties, including, but not
limited to, continuing education costs related to professional licenses, if any,
maintained by Employee, cellular telephone, entertainment, travel and other
expenses deemed reasonably necessary by the Board of Directors.
(d) Discretionary Bonuses. Employee shall be entitled to
receive annual and/or interim cash bonuses and/or other bonuses when and in such
amounts as may be determined by the Board in its sole and reasonable discretion
based upon Employee's performance, the Company's performance and/or other
factors; provided, that, the Board shall meet at least annually to review
Employee's bonus entitlements.
(e) Incentive Compensation. Employee shall receive quarterly
incentive compensation payments as more fully described on Schedule A attached
hereto and incorporated herein. Notwithstanding the foregoing, subject to the
mutual written agreement of Employee and the Company, Employee may receive
lesser compensation payments than those described on Schedule A with respect to
one or more specified operating divisions, units or subsidiaries, as the case
may be, for specified periods of time, as mutually agreed to in writing between
Employee and the Company.
(f) Stock Options. The Company and Employee shall enter into
the Stock Option Agreement attached hereto as Exhibit B pursuant to which the
Company shall grant to Employee certain options to purchase common stock of the
Company upon such terms and conditions set forth therein.
6. Severance and Change of Control Provisions. Upon the occurrence of a
Triggering Event (as hereinafter defined), Employee shall be entitled to the
immediate receipt of Severance Payments and Benefits (as hereinafter defined)
from the Company in accordance with the terms hereinafter set forth:
(a) Triggering Event. The occurrence of any of the following
events shall be defined as a "Triggering Event" for purposes hereof:
(1) The Company's termination of Employee's
employment (other than for Cause (as hereinafter defined)) at any time prior to
the expiration of the Term or within two (2) years following a Change of Control
(as hereinafter defined);
(2) The voluntary resignation of Employee for any
reason whatsoever within ninety (90) days following a Change of Control; or
(3) The voluntary resignation of Employee for "good
reason," which for purposes hereof shall include, without limitation, (i) a
demotion or a change in Employee's duties to the Company under Section 3 hereof,
(ii) a reduction in salary, benefits, bonuses, incentives or perquisites, or
(iii) the relocation of the principal office of the Company or the relocation of
Employee outside of Broward or Palm Beach Counties in Florida.
(4) The death or Disability of the Employee (as
defined herein).
(b) Change of Control. For purposes of this Agreement, the
term "Change of Control" shall mean the occurrence of any of the following
events:
(1) Thirty percent (30%) or more of the Company's
voting stock shall be acquired by any person (other than Employee), entity or
affiliated group;
(2) An unapproved change to the majority control of
the Company's Board of Directors;
(3) Any merger, consolidation or business combination
pursuant to which the Company is not the surviving corporation or thirty percent
(30%) or more of the Company's voting stock shall be owned or controlled by any
person (other than Employee), entity or affiliated group;
(4) A liquidation or dissolution of the Company; or
(5) The sale of all or substantially all of the
Company's assets.
(c) Severance Payments and Benefits. For purposes of this
Agreement, the term "Severance Payments and Benefits" shall mean:
(1) Employee shall receive a lump sum payment equal
to:
(i) two (2) multiplied by the sum of Employee's
highest annual Base Salary; plus
(ii) two (2) multiplied by the higher of:
(a) the highest bonus, incentive and other
compensation payments actually received by Employee
in respect of any year within the three (3) fiscal
years preceding the Triggering Event (or the
annualized sum of bonuses, incentives and other
compensation which Employee received during the year
in which the Triggering Event occurred); or
(b) the highest bonus, incentive and other
compensation payments the Employee was entitled
(notwithstanding the fact that the Employee agreed to
a lesser amount pursuant to Section 5 (e) above) to
receive pursuant to Exhibit A in respect of any year
within the three (3) fiscal years preceding the
Triggering Event (or the annualized sum of bonuses,
incentives or other compensation which Employee was
entitled to receive pursuant to Exhibit A during the
year in which the Triggering Event occurred
notwithstanding the fact that the Employee agreed to
a lesser amount pursuant to Section 5 (e) above).
(2) All stock options, warrants, other stock
appreciation rights and other similar securities shall become immediately and
fully vested and all conditions applicable to all contingently issued options,
warrants, stock appreciation rights and other similar securities shall be deemed
waived by the Company;
(3) All benefits applicable to Employee and his
family members as described in Sections 5(a) and (b) of the Agreement shall
continue for a period of two (2) years following the Triggering Event or through
the expiration of the Term (as if the Triggering Event had not occurred),
whichever is later;
(4) In the event that Severance Payments and Benefits
are deemed to be "excess parachute payments" as defined under Section 280G of
the Internal Revenue Code, then the Company shall pay to Employee an additional
lump sum cash payment as shall be necessary to provide Employee with the same
"after-tax" compensation and benefits as if no such excise tax had been imposed.
(5) The Company shall pay as and when due any and all
attorneys' fees and costs that Employee may incur in connection with the
enforcement of his rights under this Agreement or any dispute or settlement in
connection herewith;
(6) Severance Payments and Benefits will not be
subject to mitigation in any respect; and
(7) The non-competition and non-solicitation periods
described in Section 14 of this Agreement shall be reduced from one (1) year to
three (3) months (other than by virtue of the expiration of the Term of this
Agreement).
(d) Stock Options, Warrants and Stock Appreciation Rights.
Notwithstanding the foregoing, all stock options, warrants, stock appreciation
rights and other similar securities shall immediately vest upon the occurrence
of a Change of Control and at such time all conditions applicable to
contingently issued options, warrants, stock appreciation rights and other
securities shall be deemed waived by the Company.
7. Termination. Employee's employment hereunder shall terminate as a result
of any of the following events:
(a) Employee's death;
(b) Employee shall be unable to perform his duties hereunder
by reason of illness, accident or other physical or mental disability for a
continuous period of at least nine months or an aggregate of twelve months
during any continuous eighteen month period ("Disability");
(c) Voluntary termination by Employee; or
(d) For Cause, where "Cause" shall mean: (i) final
non-appealable adjudication of Employee of a felony; or (ii) the unanimous
determination of the entire Board (other than Employee) that Employee has
engaged in material intentional misconduct or the gross neglect of his duties,
which has a continuing material adverse effect on the business of the Company.
Any termination pursuant to subparagraph (b), (c) or (d) of
this Section shall be communicated by a written notice ("Notice of
Termination"), such notice to set forth with specificity the grounds for
termination if the result of "Cause". Employee's employment under this Agreement
shall be deemed to have terminated as follows: (i) if Employee's employment is
terminated pursuant to subparagraph (a) above, on the date of his death; (ii) if
Employee's employment is terminated pursuant to subparagraph (b) or (d) above,
on the date on which Notice of Termination is given; and (iii) if Employee's
employment is terminated pursuant to subparagraph (c) above, thirty (30) days
after the date on which a Notice of Termination is given. The date on which
termination is deemed to have occurred pursuant to this paragraph is hereinafter
referred to as the "Date of Termination".
8. Payments on Termination. In the event that Employee's employment is
terminated pursuant to Section 6 above, the Company shall pay to Employee his
full Base Salary through the Date of Termination together with all incentive
compensation, benefits and other compensation, if any, due and owing as of that
date, plus any Severance and Benefit Payments to which Employee may be entitled
hereunder.
9. Board of Directors. The Company shall cause Employee to be nominated as
a member of the Board of Directors of the Company at all times during the Term.
Employee shall agree to faithfully serve the Company as a member of the Board of
Directors upon election.
10. Life Insurance. If requested by the Company, Employee shall submit to
such physical examinations and otherwise take such actions and execute and
deliver such documents as may be reasonably necessary to enable the Company to
obtain life insurance on the life of Employee for the benefit of the Company.
11. Representations and Warranties. Employee represents and warrants to the
Company that he is under no contractual or other restriction or obligation that
would prevent the performance of his duties hereunder or interfere with the
rights of the Company hereunder.
12. Disclosure and Protection of Confidential Information.
(a) For purposes of this Agreement, "Confidential Information"
means knowledge, information and material which is proprietary to the Company,
of which Employee may obtain knowledge or access through or as a result of his
employment by the Company (including information conceived, originated,
discovered or developed in whole or in part by Employee). Confidential
Information includes, but is not limited to, (i) technical knowledge,
information and material such as trade secrets, processes, formulas, data,
know-how, improvements, inventions, computer programs, drawings, patents, and
experimental and development work techniques, and (ii) marketing and other
information, such as supplier lists, customer lists, marketing and business
plans, business or technical needs of customers, consultants, licensees or
suppliers and their methods of doing business, arrangements with customers,
consultants, licensees or suppliers, manuals and personnel records or data.
Confidential Information also includes any information described above which the
Company obtains from another party and which the Company treats as proprietary
or designates as confidential, whether or not owned or developed by the Company.
Notwithstanding the foregoing, any information which is or becomes available to
the general public otherwise than by breach of this Section 11 shall not
constitute Confidential Information for purposes of this Agreement.
(b) During the term of this Agreement and thereafter, Employee
agrees, to hold in confidence all Confidential Information and not to use such
information for Employee's own benefit or to reveal, report, publish, disclose
or transfer, directly or indirectly, any Confidential Information to any person
or entity, or to utilize any Confidential Information for any purpose, except in
the course of Employee's work for the Company.
(c) Employee will abide by any and all security rules and
regulations, whether formal or informal, that may from time to time be imposed
by the Company for the protection of Confidential Information, and will inform
the Company of any defects in, or improvements that could be made to, such rules
and regulations.
(d) Employee will notify the Company in writing immediately
upon receipt of any subpoena, notice to produce, or other compulsory order or
process of any court of law or government agency if such document requires or
may require disclosure or other transfer of Confidential Information.
(e) Upon termination of employment, Employee will deliver to
the Company any and all records and tangible property that contain Confidential
Information that are in his possession or under his control.
13. Covenant Not To Compete.
(a) In consideration for the Company entering into this
Agreement, Employee covenants and agrees that during the Term and for a one (1)
year period thereafter, Employee will not, without the express prior written
consent of the Company, directly or indirectly, compete with the business of the
Company anywhere within the United States of America. Employee will undertake no
activities that may lead Employee to compete with or to acquire rival,
conflicting or antagonistic interests to those of the Company with respect to
the business of the Company, whether alone, as a partner, or as an officer,
director, employee, independent contractor, consultant or shareholder holding 5%
or more of the outstanding voting stock of any other corporation, or as a
trustee, fiduciary or other representative of any other person or entity.
(b) During the Term and for a period of one (1) year after
termination of employment, Employee will not, directly or indirectly, solicit or
induce any other employee of the Company or any parent or affiliate to leave his
or her employment, or solicit or induce any consultant or independent contractor
to sever that person's relationship with the Company.
(c) If any court shall determine that the duration or
geographical limit of any covenant contained in this Section 13 is
unenforceable, it is the intention of the parties that covenant shall not
thereby be terminated but shall be deemed amended to the extent required to
render it valid and enforceable, such amendment to apply only in the
jurisdiction of the court that has made such adjudication.
(d) Employee acknowledges and agrees that the covenants
contained in Sections 12 and 13 hereof are of the essence in this Agreement,
that each of such covenants is reasonable and necessary to protect and preserve
the interests, properties, and business of the Company, and that irreparable
loss and damage will be suffered by the Company should Employee breach any of
such covenants. Employee further represents and acknowledges that he shall not
be precluded from gainful engagement in a satisfactory fashion by the
enforcement of these provisions.
14. Availability of Injunctive Relief. Employee acknowledges and agrees
that any breach by him of the provisions of Sections 12 or 13 hereof will cause
the Company irreparable injury and damage for which it cannot be adequately
compensated in damages. Employee therefore expressly agrees that the Company
shall be entitled to seek injunctive and/or other equitable relief, on a
temporary or permanent basis to prevent any anticipatory or continuing breach of
this Agreement or any part hereof, and is secured as an enforcement. Nothing
herein shall be construed as a waiver by the Company of any right it may have or
hereafter acquired to monetary damages by reason of any injury to its property,
business or reputation or otherwise arising out of any wrongful act or omission
of it.
15. Survival. The covenants, agreements, representations and warranties
contained in or made pursuant to this Agreement shall survive Employee's
termination of employment, irrespective of any investigation made by or on
behalf of any party.
16. Modification. This Agreement sets forth the entire understanding of the
parties with respect to the subject matter hereof, supersedes all existing
agreements between them concerning such subject matter, and may be modified only
by a written instrument duly executed by each party.
17. Notices. Any notice required or permitted hereunder shall be deemed
validly given if delivered by hand, verified overnight delivery, or by first
class, certified mail to the following addresses (or to such other address as
the addressee shall notify in writing to the other party):
If to Employee: Xxxxxxx Xxxxxxx
00 Xxxxxx Xxxxx
Xxxx Xxxxx Xxxxxxx, XX 00000
If to the Company: 0000 X. Xxxxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
18. Waiver. Any waiver by either party of a breach of any provision of this
Agreement shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term of
this Agreement on one or more occasions shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. All waivers must be in writing.
19. Binding Effect. The Company's rights and obligations under this
Agreement shall not be transferable by assignment or otherwise, and any attempt
to do any of the foregoing shall be void. The provisions of this Agreement shall
be binding upon the Employee and his heirs and personal representatives, and
shall be binding upon and inure to the benefit of the Company, its successors
and assigns.
20. Headings. The headings in this Agreement are solely for convenience of
reference and shall be given no effect in the construction or interpretation of
this Agreement.
21. Governing Law; Venue. This Agreement is to be performed in the State of
Florida, and the validity, construction and enforcement of, and the remedies
under, this Agreement shall be governed in accordance with the laws of the State
of Florida, without giving effect to any choice of laws principles. In the event
of any litigation arising out of or relating to this Agreement, exclusive venue
shall be in Palm Beach County, Florida.
22. Entire Agreement. This writing constitutes the binding and entire
agreement of the parties superseding and extinguishing all prior agreements or
understandings regarding the subject matter hereof, including, but not limited
to, the Previous Employment Agreement, and may not be modified without the
written agreement by the parties.
23. Invalidity. The invalidity or unenforceability of any term of this
Agreement shall not invalidate, make unenforceable or otherwise affect any other
term of this Agreement, which shall remain in full force and effect.
24. Attorneys' Fees. In the event any dispute or litigation arises
hereunder between any of the parties hereto, the prevailing party shall be
entitled to all reasonable costs and expenses incurred by it in connection
therewith (including, without limitation, all reasonable attorneys' fees and
costs incurred before and at any trial or other proceeding and at all tribunal
levels), as well as all other relief granted in any suit or other proceeding. As
used herein, a party shall be deemed "prevailing" when it recovers (I) as to a
damage claim, an aggregate of more than fifty percent (50%) of the damages which
it seeks among its various asserted claims exclusive of interest, attorney's
fees, costs incurred and exemplary damages and (ii) as to an equity claim,
substantial injunctive or other equitable relief upon its asserted claim. Either
of the parties herein shall be entitled to request the trier of fact in any
dispute, litigation or arbitration between them, to determine which of the
parties is "prevailing."
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first hereinabove written.
EMPLOYER:
vFINANCE, INC., a Delaware corporation
By:
-----------------------------------
_______________its, _______________
EMPLOYEE:
---------------------------------------
Xxxxxxx X. Xxxxxxx
EXHIBIT A
Incentive Compensation
Employee's compensation, in addition to Base Salary, will include distributions
from the Company pursuant to this Exhibit A. Such distributions shall be a
function of pre-tax income from the Company (hereinafter "Company Available
Income"), plus a percentage interest in Company Non-Cash consideration which
shall be determined, and distributed, in accordance with the following business
rules and a percentage of the consolidated pre-tax net income of the Company as
follows:
1. Company Available Income: The calculation of Company Available Income will
be made by the Company on a quarterly basis no later than the 45th day
following the end of a quarter with respect to the preceding calendar
quarter beginning with the quarter ending December 31, 2004. The
calculation of the "Company Available Income" shall be made with respect to
the overall financial performance of the Company (including all
subsidiaries and affiliates) in accordance with the following formula:
+ Company Attributable Revenues
- Direct and Indirect Expenses
- Reasonable Reserves
= Company Available Income
Where,
"Company Attributable Revenues" means one hundred percent
(100%) of cash revenues received by the Company during the
quarter, or other income streams, attributable to the Company.
"Direct and Indirect Company Expenses" shall mean the direct
and indirect expenses for the operation of the Company
including, but not limited to, salaries, profit sharing
expenses to divisional executives or other divisional
employees (excluding Employee), taxes, allocable rent,
utilities, phone, accounting, bookkeeping, etc.
"Reasonable Reserves" shall mean, in the context of current
facts and circumstances, the appropriate reserve for future
contingencies and demands on cash resources attributable to
the operations of such division
Employee shall have the right, during reasonable business hours, to
meet with representatives of the Company concerning this calculation
and shall have reasonable access to books and records of the Company to
validate the calculations.
2. Employee's share as described herein (i.e. Incentive Compensation), is
equal to ten percent (10%) of the Company Available Income paid to the
Employee quarterly and in an amount each quarter not to exceed fifty
percent (50%) of the year-to-date base salary paid to the Employee. Should
at fiscal year end, ten percent (10%) of the Company Available Income
exceed fifty percent (50%) of the Base Salary, the difference will be paid
to the Employee within thirty (30) days of the Company filing its Form 10K
with the Securities and Exchange Commission.
3. Division Non-Cash Distributions: In the case of non-cash revenues received
by Company in the form of securities (e.g. stock, debt, stock options,
warrants, etc.), Employee shall be entitled to receive in-kind
distributions equal to ten percent (10%) of the non-cash compensation
received by the Company (including all subsidiaries and affiliates) which
securities shall be distributed quarterly within forty five (45) days
following the applicable quarter.
