EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of May 30, 2003, by and between SUNCOAST
NATURALS, INC., a corporation organized under the laws of the State of Delaware
(hereafter referred to as "Employer") and XXXXXXX X. XXXXXX, an individual
(hereafter referred to as "Employee").
In consideration of the mutual covenants herein contained, and other good
and valuable consideration, the parties hereto agree as follows:
1. Employment.
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(a) Employer hereby agrees to employ Employee, and Employee agrees to serve
as President of Employer or as an Officer of one or more of its subsidiaries,
during the Period of Employment, as defined in Section 2, in such executive
capacity as is set forth herein. During the Period of Employment, Employee also
agrees to serve as a Director of the Board of Directors of Employer, as well as
a member of any committee of the Board of Directors of the Employer to which
Employee may be elected or appointed. At its meeting held on the 28th day of
November, 2002, the Board of Directors of Employer elected Employee to the
additional posts of President and Chief Executive Officer of Employer effective
as of the date of said Meeting. It is the intention of the Board of Directors to
reelect Employee to such positions during the balance of the Period of
Employment.
(b) If after the annual meeting of the Board of Directors of Employer in
2003 or at any time thereafter during the Period of Employment, the Board of
Directors fails, without Employee's consent, to elect or reelect Employee as
President and Chief Executive of Employer and as a Director of Employer, or
removes Employee from such offices or directorship, or if at any time during the
Period of Employment, Employee shall fail to be vested by the Board of Directors
of Employer with the power and authority of President and Chief Executive
Officer of Employer or Employee shall lose any significant duties or
responsibilities attending such offices, Employee shall have the right by
written notice to Employer to terminate his services hereunder, effective as of
the last day of the month of receipt of such notice, in which event the Period
of Employment, as hereinafter defined, shall so terminate on such last day of
the month; such termination under such circumstances shall be deemed pursuant to
paragraph (a) of Section 7 hereof as a termination by Employer other than for
material breach or just cause with all of the consequences which flow from such
termination.
2. Period of Employment.
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The "Period of Employment" shall be the period commencing on the 30th day
of May, 2003 and ending on the 30th day of May, 2004, and the period of any
extensions thereof in accordance with the further provisions of this Section.
The Period of Employment shall be extended automatically without further action
by either party for a successive one-year period or periods, not to exceed five
(5) such periods, beginning on the 30th day of May, in the years 2004 through
2008, respectively, and ending on the 30th day of May in the years 2005 through
2009, respectively, unless either party shall have served written notice in
accordance with the provisions of Section 10 hereof upon the other party not
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less than sixty (60) days prior to the 30th day of May in the years 2004 through
2008, respectively, of its or his intention that the Period of Employment under
this Agreement shall terminate.
3. Duties During the Period of Employment.
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Employee shall devote his full business time, attention and best efforts to
the affairs of Employer and its subsidiaries during the Period of Employment,
provided, however, that Employee may engage in the practice of law, as well as
in other activities, such as activities involving charitable, educational,
religious and similar types of organizations, speaking engagements, membership
on the Board of Directors of other organizations (as Employer may from time to
time agree to), and similar type activities to the extent that such other
activities do not inhibit or prohibit the performance of his duties under this
Agreement, or conflict in any material way with the business of Employer and its
subsidiaries.
4. Current Cash Compensation.
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(a) Base Annual Salary. Employer will pay to Employee during the initial
Period of Employment commencing on the 30th day of May, 2003 and ending on the
30th day of May, 2004, a base annual salary of $48,000, payable in substantially
equal monthly installments during each calendar year, or portion thereof, of the
Period of Employment; provided, however, it is agreed between the parties that
the Employer shall review annually, and in light of such review may, in the
discretion of the Board of Directors, increase such base annual salary taking
into account Employee's then responsibilities, increase in the cost of living,
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increases in compensation of other executives of Employer and its subsidiaries,
increases in salaries of executives of other corporations, performance by
Employee, and other pertinent factors.
(b) Bonus. During the Period of Employment, Employer, in its sole
discretion, will xxxx Employee an annual bonus based on his performance and
other factors. The bonus in respect of any calendar year, if any, shall be paid
on or before the 28th day of February of the succeeding calendar year.
5. Incentives.
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(a) Restricted Stock. Six months following the date of this Agreement,
Employer shall award to Employee 100,000 shares of its "restricted stock." The
shares shall be shares of common stock of the Employer and may be authorized but
unissued shares or shares acquired by Employer and held in its treasury.
Except as hereinafter provided, the restricted stock will be forthwith
forfeited to Employer in the event of any sale, assignment, transfer,
hypothecation, pledge or other alienation, made or attempted, whether voluntary
or involuntary, and if involuntary whether by process of law in any civil or
criminal suit, action or proceeding, whether in the nature of an insolvency or
bankruptcy proceeding or otherwise.
Each certificate issued in respect of the restricted stock shall be
registered in Employee's name and deposited by him, together with a stock power
endorsed in blank, with Employer and shall bear the following (or a similar)
legend:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) contained in the Employment Agreement entered into between
the registered owner and Suncoast Naturals, Inc."
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If the Period of Employment shall be terminated other than pursuant to
paragraph (a) of Section 7 hereof, or by reason of death or permanent disability
of Employee, any shares which remain subject to the restrictions shall, upon
such termination, be forfeited and returned to Employer, provided, however, that
Employer may, but need not, determine that some or all of such shares shall be
free of restrictions and shall not be forfeited.
6. Other Employee Benefits.
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(a) Vacation and Sick Leave. Employee shall be entitled to reasonable paid
annual vacation periods and to reasonable sick leave.
(b) Regular Reimbursed Business Expenses. Employer shall reimburse Employee
for all expenses and disbursements reasonably incurred by Employee in the
performance of his duties during the Period of Employment, and such other
facilities or services as Employer and Employee may, from time to time, agree
are reimbursable.
(c) Life Insurance. During the Period of Employment, Employer shall procure
and pay all premiums on a term life insurance policy, effective the date of this
Agreement, with a face value of at least $250,000 (less the amount of group term
insurance, if any, provided under an insurance plan maintained by the Employer
for its employees generally) for the benefit of a beneficiary designated by
Employee.
(d) Employer's Benefit Plans or Arrangements. In addition to the cash
compensation provided for in Section 4 hereof, Employee, subject to meeting
eligibility provision and to the provisions of this Agreement, shall be entitled
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to participate in all employee benefit plans of Employer, as presently in effect
or as they may be modified or added to by the Employer from time to time.
(e) Reimbursement for Temporary and Incidental Expenses. In consideration
of his acceptance of employment pursuant to this Agreement, Employee and his
spouse expect to incur certain special and temporary expenses for which Employer
agrees to reimburse Employee, subject to the further provisions of this
paragraph (e), namely: (i) reasonable travel which are incurred by Employee, and
Employee shall furnish Employer with itemized vouchers covering such expenses.
(f) Counsel Fees. Employer shall pay, or reimburse to Employee, the
reasonable fees and expenses of Employee's personal counsel for professional
services rendered to Employee in connection with this Agreement and matters
related thereto.
7. Termination.
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(a) Termination by Employer other than for Material Breach of Just Cause;
Voluntary Terminations. If Employer should terminate the Period of Employment
for other than material breach or just cause, as herein defined, or if Employee
should voluntarily terminate the Period of Employment pursuant to paragraph (b)
of Section 1 or due to a breach of this Agreement by Employer, in addition to
all other benefits payable as provided for hereunder, Employer shall forthwith
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pay to Employee in one lump sum the amounts otherwise payable to Employee
pursuant to paragraphs (a) and (b) of Section 4, discounted to present value at
the rate of 15 percent per annum. In addition, the option described in paragraph
(b) of Section 5 hereof shall be exercisable by Employee immediately or at any
other time or times on or before the termination of the option pursuant to such
paragraph as to any share or shares subject to such option for which the option
has not yet been exercised. Finally, the restrictions on the shares of
restricted stock described in paragraph (a) of Section 5 hereof will lapse
immediately, and such shares will become non-forfeitable. "Material breach" and
"just cause" shall mean willful misconduct in following the legitimate
directions of the Board of Directors'; conviction of a felony; habitual
drunkenness; excessive absenteeism not related to illness, sick leave or
vacations, but only after notice from the Board of Directors followed by a
repetition of such excessive absenteeism; dishonesty; or continuous conflicts of
interest after notice in writing from the Board of Directors.
(b) Resignation by Employee. If during the Period of Employment, Employee
shall exercise his right of termination under paragraph (b) of Section 1, he
shall resign voluntarily as Director and as an employee of Employer upon the
notice set forth in such paragraph (b).
8. Nondisclosure.
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Employee shall not, at any time during or following the Period of
Employment, disclose, use, transfer or sell, except in the course of employment
with Employer, any confidential information or proprietary data of Employer and
its subsidiaries so long as such information or proprietary data remains
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confidential and has not been disclosed or is not otherwise in the public
domain.
9. Notices.
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All notices under this Agreement shall be in writing and shall be deemed
effective when delivered in person (in the Employer's case, to its Secretary) or
thirty-six (36) hours after deposit thereof in the United States mails, postage
prepaid, for delivery as registered or certified mail -- addressed, in the case
of Employee, to the Employee's residential address, and in the case of Employer,
to its corporate headquarters, attention of the Secretary, or to such other
address as Employee or Employer may designate in writing at any time or from
time to time to the other party. In lieu of personal notice or notice by deposit
in the United States mail, a party may give notice by telegram or telex.
10. Representations and Warranties of Employer.
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Employer represents and warrants that the execution of this Agreement has
been duly authorized by resolution of its Board of Directors, and that this
Agreement constitutes a valid and binding obligation of Employer in accordance
with its terms.
11. Miscellaneous.
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This Agreement constitutes the entire understanding between Employer and
Employee relating to employment of Employee by Employer and its subsidiaries and
supersedes and cancels all prior written and oral agreements and understandings
with respect to the subject matter of this Agreement. This Agreement may be
amended but only by a subsequent written agreement of the parties. This
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Agreement shall be binding upon and shall inure to the benefit of Employee, his
heirs, executors, administrators and beneficiaries and to the benefit of
Employer and its successors.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the year and day first above written.
SUNCOAST NATURALS, INC.
By:___________________________
XXXXXX XXXXX, Secretary
_______________________________
XXXXXXX X. XXXXXX
