EXHIBIT 10.38
AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT is made as of
the 1st day of October, 2001, by and between XXXXX ENTERPRISES, INCORPORATED, a
Florida corporation (the "Company"), and XXXX X. XXXXX (the "Executive").
WITNESSETH:
WHEREAS, the Company desires to assure itself of the Executive's
continued employment in an executive capacity;
WHEREAS, the Company recognizes that circumstances may arise in which a
change in control of the Company occurs, through acquisition or otherwise,
thereby causing uncertainty about the Executive's future employment with the
Company without regard to the Executive's competence or past contributions,
which uncertainty may result in the loss of valuable services of the Executive
to the detriment of the Company and its shareholders, and the Company and the
Executive wish to provide reasonable security to the Executive against changes
in the Executive's relationship with the Company in the event of any such change
in control;
WHEREAS, the Company and the Executive are desirous that any proposal
for a change in control or acquisition of the Company will be considered by the
Executive objectively and with reference only to the best interests of the
Company and its shareholders;
WHEREAS, the Executive will be in a better position to consider the
Company's best interests if the Executive is afforded reasonable security, as
provided in this Agreement, against altered conditions of employment which could
result from any such change in control or acquisition;
WHEREAS, the Executive desires to be employed by the Company on the
terms and conditions hereinafter set forth; and
WHEREAS, this Agreement amends and restates that certain Executive
Employment Agreement entered into by Executive and the Company effective as of
March 6, 2000.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
of the parties contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
covenant and agree as follows:
1. EMPLOYMENT AND DUTIES. Subject to the terms and conditions of
this Agreement, the Company agrees to employ the Executive, and the Executive
hereby agrees to
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serve the Company in two separate capacities: 1) as Chairman of the Board
("Chairman") and 2) as President and Chief Executive Officer ("CEO"). As
Chairman, the Executive shall render to the Company such management and
policy-making services of the type customarily performed by persons serving in
similar capacities with other employers that are similar to the Company,
together with such other duties with which he is charged by the Company's
By-laws. As President and CEO, the Executive shall report directly to the
Company's Board of Directors and shall render to the Company such management and
policy-making services of the type customarily performed by persons serving in
similar capacities with other employers that are similar to the Company,
together with such other duties with which he is charged by the Company's
By-laws and subject to the overall direction and control of the Company's Board
of Directors. The Executive accepts such employment and agrees to devote his
best efforts and substantially all of his business time, skill, labor and
attention to the performance of such duties. In addition, the Executive agrees
to serve without additional compensation if elected or appointed to any office
or position, including as a director, of the Company or any subsidiary or
affiliate of the Company; provided, however, that the Executive shall be
entitled to receive such benefits and additional compensation, if any, that is
paid to executive officers of the Company in connection with such service.
2. TERM. Subject to the terms and conditions of this Agreement,
including but not limited to the provisions for termination set forth in Section
5 hereof, the employment of the Executive under this Agreement shall commence on
the date hereof and shall continue through and including the close of business
on the fifth anniversary of the date hereof (the "Initial Term"); provided,
however, that upon the expiration of the Initial Term, this Agreement shall
automatically renew on a year-to-year basis (each year being referred to as a
"Successor Term") unless either party delivers written notice of termination to
the other party at least 180 days prior to the expiration of the Initial Term or
the then-current Successor Term (the Initial Term and all Successor Terms shall
be referred to as the "Term").
3. COMPENSATION.
(a) Annual Base Salary and Bonus. As compensation for his
services under this Agreement, the Executive shall receive, and the Company
shall pay, an annual base salary of such amount as shall be determined by the
Company's Board of Directors not less than Five Hundred Fifty Thousand Dollars
($550,000) until December 31, 2002, and thereafter during the Term at such
annual base salary as shall be determined by the Company's Board of Directors;
provided, however, the annual base salary shall be increased by (i) at least
thirty percent (30%) on the second (2nd) anniversary of the date hereof (i.e.,
October 1, 2003) and (ii) at least fifteen percent (15%) on the fourth
anniversary of the date hereof and at least fifteen percent (15%) on each
bi-annual (i.e., two year) anniversary thereafter. Such annual base salary shall
be payable in equal installments in accordance with the policy then prevailing
for the Company's executives. In addition to such annual base salary, the
Executive shall be entitled, during the Term, to a performance bonus as
determined by the Compensation Committee of the Board of Directors (or other
committee performing similar functions), and to participate in and receive
payments from all other bonus and other incentive compensation plans as may be
adopted by the Company as are made available to other executive officers of the
Company. At the end of each fiscal year, the
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Board of Directors in its discretion may award to the Executive a bonus based on
the Executive's performance during such fiscal year. Stock options may be
granted to the Executive from time to time at the sole discretion of the Board
of Directors.
(b) Payments. All amounts paid pursuant to this Agreement
shall be subject to withholding or deduction by reason of the Federal Insurance
Contribution Act, Federal income tax, state and local income tax, if any, and
comparable laws and regulations.
(c) Other Benefits. The Executive shall be reimbursed by
the Company for all reasonable and customary travel and other business expenses
incurred by him in the performance of his duties hereunder in accordance with
the Company's standard policy regarding expense verification practices. The
Executive shall be entitled to the fringe benefits which the Company may from
time to time make available to its executive officers generally, that number of
weeks paid vacation per year that is available to other executive officers of
the Company, and shall be eligible to participate in such pension, life
insurance, health insurance, disability insurance and other employee benefits
plans, if any, which the Company may from time to time make available to its
executive officers generally.
4. COVENANT NOT TO COMPETE.
(a) The Executive covenants and agrees that, during his
employment by the Company under this Agreement, he will not:
(i) directly or indirectly engage in, continue
in or carry on the business of the Company, or any business
substantially similar thereto, including owning or controlling any
financial interest in, any corporation, partnership, firm or other form
of business organization which competes with or is engaged in or
carries on any aspect of such business or any business substantially
similar thereto;
(ii) consult with, advise or assist in any way,
whether or not for consideration, any corporation, partnership, firm or
other business organization which is now, becomes or may become a
competitor of the Company in any aspect of the Company's business
during the Executive's employment with the Company, including, but not
limited to: advertising or otherwise endorsing the products of any such
competitor; soliciting customers or otherwise serving as an
intermediary for any such competitor; or loaning money or rendering any
other form of financial assistance to or engaging in any form of
business transaction whether or not on an arms' length basis with any
such competitor; or
(iii) engage in any practice the purpose of which
is to evade the provisions of this Agreement or to commit any act which
is detrimental to the successful continuation of, or which adversely
affects, the business or the Company;
provided, however, that the foregoing shall not preclude the Executive's
ownership of not more than 5% of the equity securities of a corporation which
has such securities registered under Section 12 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act").
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(b) The Executive agrees that the geographic scope of
this covenant not to compete shall extend to such geographic area where the
Company conducts business at any time during the Term of this Agreement.
(c) In the event of any breach of this covenant not to
compete, the Executive recognizes that the remedies at law will be inadequate
and that in addition to any relief at law which may be available to the Company
for such violation or breach and regardless of any other provision contained in
this Agreement, the Company shall be entitled to equitable remedies (including
an injunction) and such other relief as a court may grant after considering the
intent of this Section 4.
(d) In the event a court of competent jurisdiction
determines that the provisions of this covenant not to compete are excessively
broad as to duration, geographic scope, prohibited activities or otherwise, the
parties agree that this covenant shall be reduced or curtailed to the extent
necessary to render it enforceable.
(e) The restrictions set forth in this Section 4 shall
terminate upon the date that Executive ceases to be employed by the Company
under this Agreement.
5. TERMINATION.
(a) Death. The Executive's employment hereunder shall
terminate upon his death.
(b) Disability. If, during the Term, the Executive
becomes physically or mentally disabled in accordance with the terms and
conditions of any disability insurance policy covering the Executive or, if due
to such physical or mental disability, the Executive becomes unable for a period
of more than twelve (12) consecutive months to perform his duties hereunder on
substantially a full-time basis as determined by the Company in its sole
reasonable discretion, the Company may, at its option, terminate the Executive's
employment hereunder upon not less than thirty (30) days' written notice of
termination.
(c) Cause. The Company may terminate the Executive's
employment hereunder only for Cause, and such a termination shall be effective
immediately upon written notice of termination. For purposes of this Agreement,
the Company shall have "Cause" to terminate the Executive's employment
hereunder: (i) if the Executive engages in conduct which has caused, or is
reasonably likely to cause, demonstrable and serious injury to the Company; (ii)
if the Executive is convicted of a felony, as evidenced by a binding and final
judgment, order or decree of a court of competent jurisdiction, which
substantially impairs the Executive's ability to perform his duties hereunder;
or (iii) for the Executive's material violation of this Agreement, including
without limitation, Section 4 hereof.
(d) Voluntary Termination by Executive. The Executive may
terminate his employment hereunder at any time and for any reason by delivering
written notice of termination to the Company. However, if Executive terminates
his employment for Good Reason
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(as defined below), such termination shall be deemed to be a termination by the
Company without Cause and therefore a breach of this Agreement by the Company.
For purposes of this Agreement, the term "Good Reason" shall mean (i) a Change
of Control of the Company (as defined in Appendix A hereto), (ii) a good faith
determination by the Executive that there has been a breach of this Agreement by
the Company, (iii) a material adverse change in the Executive's working
conditions or status, (iv) the deletion of, or change in, any of the following
three titles of Executive: Chairman of the Board, CEO, or President, (v) a
significant relocation of the Executive's principal office, (vi) a significant
increase in travel requirements, or (vii) an impairment of the Executive's
health to an extent that makes the continued performance of his duties hereunder
hazardous to his physical or mental health or his life. If Executive desires to
terminate his employment for Good Reason, he shall deliver written notice of
termination to the Company indicating in reasonable detail the facts and
circumstances alleged to provide a basis for such termination and shall cease
performing the Executive's duties hereunder on the date which is ten (10) days
after delivery of the notice, which date shall also be the date of termination
of the Executive's employment.
(e) Benefits. The following shall apply upon termination
of the Executive's employment for any reason:
(i) Notwithstanding anything to the contrary
herein contained, the Executive shall receive all compensation and
other benefits to which he was entitled under this Agreement or
otherwise as an employee of the Company through the termination date,
including payments of base salary accrued hereunder through the
calendar month in which such termination occurs. Such amounts shall be
in addition to any damages, if any, to which Executive may be entitled
as a result of such termination.
(ii) Upon the termination of Employee's
employment under this Agreement, Executive and his spouse shall, during
the Executive's lifetime and if Executive is married at his time of
death, for his then spouse during her lifetime, have the right to
continue to participate in all employee benefit plans and programs
(including health and life insurance plans) in which the Executive was
entitled to participate immediately prior to the date of termination of
the Executive's employment, provided that the Executive's (or his
spouse) continued participation is possible under the general terms and
provisions of such plans and programs. However, such participation
shall be at the sole expense of Executive and/or his spouse.
(iii) For the rest of Executive's lifetime, the
Company shall, if the Company determines that such resources are
reasonably available under the circumstances existing at the time of
the termination of the Executive's employment, provide an office and a
secretary to the Executive in the Company's principal executive
offices.
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6. SUCCESSORS.
(a) If the Company sells, assigns or transfers all or
substantially all of its business and assets to any Person (as defined in
Appendix A hereto) or if the Company merges into or consolidates or otherwise
combines (where the Company does not survive such combination) with any Person
(any such event, a "Sale of Business"), then the Company shall assign all of its
right, title and interest in this Agreement as of the date of such event to such
Person, and the Company shall cause such Person, by written agreement in form
and substance reasonably satisfactory to the Executive, to expressly assume and
agree to perform from and after the date of such assignment all of the terms,
conditions and provisions imposed by this Agreement upon the Company. Failure of
the Company to obtain such agreement prior to the effective date of such Sale of
Business shall be a breach of this Agreement. In case of such assignment by the
Company and of assumption and agreement by such Person, as used in this
Agreement, "Company" shall thereafter mean such Person which executes and
delivers the agreement provided for in this Section 6 or which otherwise becomes
bound by all the terms and provisions of this Agreement by operation of law, and
this Agreement shall inure to the benefit of, and be enforceable by, such
Person. The Executive shall, in the Executive's discretion, be entitled to
proceed against any or all of such Persons, any Person which theretofore was
such a successor to the Company (as defined in the first paragraph of this
Agreement) and the Company (as so defined) in any action to enforce any rights
of the Executive hereunder. Except as provided in this Subsection, this
Agreement shall not be assignable by the Company. This Agreement shall not be
terminated by the voluntary or involuntary dissolution of the Company.
(b) This Agreement and all rights of the Executive shall
inure to the benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, heirs and beneficiaries. All amounts
payable to the Executive under this Agreement if the Executive had lived shall
be paid, in the event of the Executive's death, to the Executive's estate, heirs
and representatives; provided, however, that the foregoing shall not be
construed to modify any terms of any benefit plan of the Company, as such terms
are in effect on the date of the Executive's death, that expressly govern
benefits under such plan in the event of the Executive's death.
7. SEVERABILITY. The provisions of this Agreement shall
be regarded as divisible, and if any of said provisions or any part hereof are
declared invalid or unenforceable by a court of competent jurisdiction, then the
validity and enforceability of the remainder of such provisions or parts hereof
and the applicability thereof shall not be affected thereby.
8. AMENDMENT. This Agreement may not be amended or
modified at any time except by written instrument executed by the Company and
the Executive.
9. WITHHOLDING. The Company shall be entitled to
withhold from amounts to be paid to the Executive hereunder any federal, state
or local withholding or other taxes or charges which it is from time to time
required to withhold; provided, that the amount so withheld shall not exceed the
minimum amount required to be withheld by law (unless the Executive has
otherwise indicated in writing). The Company shall be entitled to rely on an
opinion of
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nationally recognized tax counsel if any question as to the amount or
requirement of any such withholding shall arise.
10. NOTICE. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given when actually received, whether hand-delivered (as long as
receipt is acknowledged), sent by telecopier, facsimile transmission or other
electronic means of transmitting written documents (as long as receipt is
acknowledged) or mailed by United States certified or registered mail, return
receipt requested, postage prepaid, addressed as follows:
If to the Executive:
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If to the Company:
Xxxxx Enterprises, Incorporated
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attn: Chairperson - Compensation Committee of the Board of Directors
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that a notice of change of address shall
be effective only upon receipt.
11. NO WAIVER; ENTIRE AGREEMENT. No waiver by any party hereto of
any breach of this Agreement by any other party hereto shall be deemed a waiver
of any similar or dissimilar term or condition at the same or at any prior or
subsequent time. This Agreement is the entire agreement between the parties
hereto with respect to the Executive's employment by the Company and there are
no agreements or representations, oral or otherwise, expressed or implied, with
respect to or related to the employment of the Executive which are not set forth
in this Agreement.
12. NO ASSIGNMENT. Except as expressly set forth herein, no party
shall assign any of his or its rights under this Agreement without the prior
written consent of the other party and any attempted assignment without such
prior written consent shall be null and void and without legal effect.
13. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute but one and the same instrument.
14. GOVERNING LAW.
(a) The validity, interpretation, construction and
performance of this Agreement shall be governed by the internal laws of the
State of Florida, except that Section 14(b) shall be construed in accordance
with the Federal Arbitration Act if arbitration is chosen by the Executive as
the method of dispute resolution.
(b) Any dispute arising out of this Agreement shall, at
the Executive's election, be determined by either (i) arbitration under the
rules of the American Arbitration Association then in effect (but subject to any
evidentiary standards set forth in this Agreement), in which both parties shall
be bound by the arbitration award, or (ii) by litigation. Whether the dispute is
to be settled by arbitration or litigation, the venue for the arbitration or
litigation shall be Tampa, Florida or, at the Executive's election, if the
Executive is no longer residing or working in the Tampa, Florida metropolitan
area, in the judicial district encompassing the city in which the Executive
resides; provided, that, if the Executive is not then residing in the United
States, the election of the Executive with respect to such venue shall be either
Tampa, Florida or in the judicial district encompassing that city in the United
States among the thirty cities having
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the largest population (as determined by the most recent United States Census
data available at that time) that is closest to the Executive's residence. The
parties consent to personal jurisdiction in each trial court in the selected
venue having subject matter jurisdiction notwithstanding their residence or
situs, and each party irrevocably consents to service of process in the manner
provided hereunder for the giving of notices.
15. CERTAIN RULES OF CONSTRUCTION. No party shall be considered as
being responsible for the drafting of this Agreement for the purpose of applying
any rule construing ambiguities against the drafter or otherwise. No draft of
this Agreement shall be taken into account in construing this Agreement. Any
provision of this Agreement which requires an agreement in writing shall be
deemed to require that the writing in question be signed by the Executive and an
authorized representative of the Company.
16. HEADINGS. The headings herein contained are for reference only
and shall not affect the meaning or interpretation of any provision of this
Agreement.
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APPENDIX A
For purposes of Section 5(d) of this Agreement, a Change of Control
shall be deemed to have occurred if the event set forth in any one of the
following paragraphs shall have occurred:
(i) any person or entity, or group thereof
acting in concert (a "Person") (other than (A) the Company or any of
its subsidiaries, (B) a trustee or other fiduciary holding securities
under any employee benefit plan of the Company or any of its
subsidiaries, (C) an underwriter temporarily holding securities
pursuant to an offering of such securities or (D) a corporation owned,
directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock in the
Company), being or becoming the "beneficial owner" (as such term is
defined in Securities and Exchange Commission ("SEC") Rule 13d-3 under
the Exchange Act) of securities of the Company which, together with
securities previously owned, confer upon such person, entity or group
the combined voting power, on any matters brought to a vote of
shareholders, of twenty percent (20%) or more of the then outstanding
shares of voting securities of the Company; or
(ii) the sale, assignment or transfer of assets
of the Company or any subsidiary or subsidiaries, in a transaction or
series of transactions, if the aggregate consideration received or to
be received by the Company or any such subsidiary in connection with
such sale, assignment or transfer is greater than fifty percent (50%)
of the book value, determined by the Company in accordance with
generally accepted accounting principles, of the Company's assets
determined on a consolidated basis immediately before such transaction
or the first of such transactions; or
(iii) the merger, consolidation, share exchange or
reorganization of the Company (or one or more direct or indirect
subsidiaries of the Company) as a result of which the holders of all of
the shares of capital stock of the Company as a group would receive
less than fifty percent (50%) of the combined voting power of the
voting securities of the Company or such surviving or resulting entity
or any parent thereof immediately after such merger, consolidation,
share exchange or reorganization; or
(iv) the adoption of a plan of complete
liquidation or the approval of the dissolution of the Company; or
(v) the commencement (within the meaning of SEC
Rule 13e-4 under the Exchange Act) of a tender or exchange offer which,
if successful, would result in a Change of Control of the Company; or
(vi) a determination by the Board of Directors of
the Company, in view of the then current circumstances or impending
events, that a Change of Control of the Company has occurred or is
imminent, which determination shall be made for the specific purpose of
triggering the operative provisions of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
XXXXX ENTERPRISES, INCORPORATED
Dated: By: /S/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx,
Chairman - Compensation Committee
EXECUTIVE
Dated: /S/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx, individually
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