EMPLOYMENT AGREEMENT
Exhibit
10.20
THIS
AGREEMENT is dated as of September 24, 2009 (the “Effective Date”), by and
between Avantair, a Delaware corporation (the “Company”), and Xxxxxx X. Xxxxx
(the “Executive”).
In
consideration of the mutual covenants herein contained and of the mutual
benefits herein provided, the Company and the Executive agree as
follows:
1. Representations and
Warranties. The Executive represents and warrants to the
Company that Executive is not bound by any restrictive covenants and has no
prior or other obligations or commitments of any kind that would in any way
prevent, restrict, hinder or interfere with Executive’s acceptance of continued
employment or the performance of all duties and services hereunder to the
fullest extent of the Executive’s ability and knowledge.
2. Term of
Employment. The Company will employ the Executive and the
Executive accepts continued employment by the Company on the terms and
conditions herein contained for a period (the “Employment Period”) provided in
Section 5.
3. Duties
and Functions.
(a) The
Executive shall be employed as the Chief Executive Officer (“CEO”) of the
Company and shall oversee, direct and manage all of the day-to-day operations of
the Company. The Executive shall report directly to the Company’s
Board of Directors (the “Board”). The Executive agrees to undertake
the duties and responsibilities commensurate with the position of CEO, which may
encompass such different or additional
duties as may, from time to time, be reasonably assigned by the Board, and the
duties and responsibilities undertaken by the Executive may be reasonably
altered or modified from time to time by the Board, subject to the limitations
on reduction of duties provided in Section 5(c) of this Agreement. Executive shall comply with all of the
Company’s policies and procedures.
(b) During
the Employment Period, the Executive will devote substantially all of his full
time and efforts to the best of his ability,
experience and talent to the business of the Company. Except as provided in Section 7, nothing in
this Agreement shall preclude Executive from engaging, so long as, in the
reasonable determination of the Board, such activities do not interfere
with his duties and responsibilities hereunder, in
charitable and community affairs, from managing any passive investment made by
him in publicly traded equity securities or other property (provided that no
such investment may exceed 5% of the equity of any entity, without the prior
approval of the Board) or from serving, subject to the prior approval of the
Board, as a member of boards of directors or as a trustee of any other
corporation, association or entity.
4. Compensation.
(a) Base
Salary: As compensation for his services hereunder, during the
Executive’s employment as CEO, the Company agrees to pay the Executive a base
salary at the rate of Five Hundred Thousand Dollars ($500,000) per annum,
payable in accordance with the Company’s normal payroll schedule. In
no event shall Executive’s salary be reduced below his current salary (or,
subsequent to any increases, below his then current
salary). Executive’s salary shall be subject to annual review, based
on corporate policy and contributions made by Executive to the Company and such other factors as the Board or the Company’s
Compensation Committee (the “Committee”) shall determine and, the Board and/or
the Committee may, in its sole discretion, elect to increase Executive’s base
salary hereunder.
(b) Bonus: Executive
shall be eligible to receive annual cash and/or stock bonus awards as determined by the Board or the
Committee. All bonuses shall be at the discretion of the Board
and the Committee contingent upon the Executive achieving goals determined by
the Board or the Committee in their sole
discretion.
(c) Participation
in Stock Option Program: To the extent the Company establishes or
may, from time to time, establish at any period in the future, an incentive
program that permits, allows, or provides for awards of stock, restricted stock,
or options in the Company, or similar incentive equity interests, the Executive
shall, subject to Committee approval, be
eligible to participate in such program to the same extent as other, similarly
situated employees of the Company.
(d) Automobile
Expenses: Executive shall be entitled to a monthly stipend in the amount of One Thousand Five
Hundred Dollars ($1,500) to cover his car lease.
(e) Business
Expenses: In addition to the compensation provided for above, the
Company agrees to pay or to reimburse the Executive during his employment for
all reasonable, ordinary, and necessary, properly vouchered, client-related
business or entertainment expenses incurred in the performance of his services
hereunder in accordance with Company policy in effect from time to
time. The Executive shall submit vouchers and receipts for all
expenses for which reimbursement is sought.
(f) Vacation: During
each calendar year, the Executive shall be entitled to four weeks of vacation
per year. To the extent that Executive does not use his vacation in a
given calendar year, he shall be entitled to carry forward accrued unused vacation over from year to
year; provided, however, that in no event may he
at any time have more than 30 business days of vacation accrued and once he has
30 business days of accrued unused vacation, he shall no longer continue to
accrue further vacation time until he has used some of his accrued vacation
time.
(g) Fringe
Benefits: In addition to his compensation provided by the foregoing,
the Executive shall be entitled to the benefits made available generally to Company employees
pursuant to Company programs, including, by way of illustration, personal leave,
paid holidays, sick leave, profit-sharing, retirement, disability, dental,
vision, group sickness, accident or family health insurance programs of the
Company, subject, in each case, to the terms of
each such program (including any discrimination testing in such
program).
5. Employment
Period; Termination.
(a) The
Executive’s employment under this Agreement shall commence on the Effective Date
of this Agreement, and shall continue thereafter unabated until terminated upon
the earlier to occur of the following events: (i) the close of
business on the third anniversary of this Agreement (the three year term of this
Agreement shall be referred to herein as the “Term”) or (ii) as otherwise
provided below, provided,
however, that, on the third anniversary of the date of this Agreement,
and on every subsequent annual anniversary, and unless either party has given
the other party written notice at least thirty (30) days prior to the such
anniversary date, the term of this Agreement and the Employment Period shall be
renewed for a term ending upon the later of (i) one (1) year subsequent to such
date (each such one-year term shall be referred to herein as a “Renewal Term”)
or (ii) the close of business on the third anniversary of a Change of Control
(as defined herein) (the “Change of Control Period”), if a Change of Control
occurs, unless sooner terminated as provided herein. For the purposes
of this Agreement, the Term and each Renewal Term (and continued employment
through the Change of Control Period) shall collectively be referred to as the
“Employment Period.”
For
purposes of this Agreement, “Change of Control” shall mean “ (i) the
acquisition, in one or more transactions, by any Person of the beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Securities
Exchange Act of 1934, as amended) of more than 50% of (A) all shares of capital
stock of Company to be outstanding immediately following such acquisition, or
(B) the combined voting power of all shares of capital stock of
Company to be outstanding immediately following such acquisition that
are entitled to vote generally in the election of directors (the shares
described in clauses (A) and (B), collectively “Company Voting Stock”); (ii) the
closing of a sale or other conveyance of 40% or more of the assets of Company;
(iii), individuals who, as of the date hereof, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a member of the Board (a
“Director”) subsequent to the date hereof whose election, or nomination for
election by the Company’s stockholders, was approved by a vote of at least
two-thirds of the Directors then comprising the Incumbent Board (either by a
specific vote or by approval of the proxy statement of the Company in which such
person is named as a nominee for director, without objection to such nomination)
shall be deemed to have been a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest (within the meaning of Rule
14a-11 of the Exchange Act) with respect to the election or removal of Directors
or other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board; or (iv) the effective time of any
merger, share exchange, consolidation, or other business combination involving
Company if immediately after such transaction, persons who hold a majority of
the outstanding voting securities entitled to vote generally in the election of
directors of the surviving entity (or the entity owning 100% of such surviving
entity) are not persons who, immediately prior to such transaction, held Company
Voting Stock. For purposes of this section, a “Person” means any
individual, entity or group within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934, as amended, other than an entity
controlled by the Company.
(b) Termination By Executive Without Good
Reason. Notwithstanding the provisions of Sections 5(a), the
Executive may terminate the employment relationship at any time for any reason
by giving the Company written notice at least sixty (60) days prior to the
effective date of termination. Unless otherwise provided by this
Section, all compensation and benefits paid by the Company to the Executive
shall cease upon his last day of employment, but Executive shall be entitled to
receive any accrued but unpaid base salary,
and to be reimbursed for any reimbursable expenses that have not been reimbursed
prior to the effective date such termination.
(c) Termination By Executive with “Good
Reason.” Subject to the provisions detailed below, upon thirty
(30) days’ written notice to the Company of his intent to terminate the
Agreement, Executive shall have the right to terminate his employment under this
Agreement for “Good Reason.” For purposes of this Agreement, “Good
Reason” is defined as any one of the following: (i) Company’s willful material
breach of any provision of this Agreement; (ii) any material adverse change in
Executive’s position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities (other than a change due to
Executive’s Permanent Disability or as an accommodation under the Americans With
Disabilities Act) which results in: (A) a diminution in any material respect in
Executive’s position, authority, duties, responsibilities or
compensation, which diminution continues in time over at least thirty (30) days,
such that it constitutes an effective demotion; or (B) a material diversion from
Executive’s performance of the functions of Executive’s position, excluding for
this purpose material adverse changes made with Executive’s written consent or
due to Executive’s termination For Cause or termination by Executive without
Good Reason; or (iii) relocation of the Company’s headquarters and/or
Executive’s regular work address to a location which requires him to travel more
than forty (40) miles from Executive’s place of
employment on the date hereof; provided,
however, that it shall not constitute Good Reason unless Executive shall
have provided the Company with written notice of its alleged actions
constituting Good Reason (which notice shall specify in reasonable detail the
particulars of such Good Reason) within 30 days of
the events alleged actions constituting Good Reason and Company has not
cured any such alleged Good Reason or substantially commenced its effort to cure
such breach within thirty (30) days of the Company’s receipt of such written
notice.
If the Executive’s employment is terminated by the
Executive with Good Reason, the Executive shall continue to receive his base
salary for a period of twelve (12) months from the effective date of
termination, payable in accordance with the Company’s normal payroll schedule,
and in addition, if Executive elects to receive Consolidated Omnibus
Budget Reconciliation Act (“COBRA”) continuation coverage under the Company’s
medical plan, the Company shall reimburse the same portion of the premium costs
for the medical portion of such COBRA coverage for a period of eighteen (18)
months as the Company was paying on Executive’s behalf under the Company’s
medical plan immediately prior to the termination of Executive’s employment;
provided that Executive is and remains eligible for such COBRA continuation
coverage. For the avoidance of doubt, it is understood and agreed
that any period during which the Company reimburses for a portion of Executive’s
COBRA premium costs pursuant to the preceding sentence shall count toward the
18-month maximum COBRA eligibility period. Payments hereunder will be
subject to all applicable withholding taxes. The
base salary continuation and continued health insurance coverage is referred to
herein as “Severance Benefits”.
Notwithstanding the foregoing, Executive shall not be
entitled to any Severance Benefits unless (i) Executive complies with all of the
restrictive covenants by which he is bound (whether pursuant to this Agreement
or otherwise), including, but not limited to, any non-competition agreement,
non-solicitation agreement, confidentiality agreement or invention assignment
agreement signed by Executive, and (ii) the Executive executes, delivers and
does not revoke a general release in form and substance acceptable to the
Company no later than thirty (30) days after the date of termination and
any revocation period with respect to such release has expired; further provided, however,
that if the consideration and/or revocation period straddles two taxable years,
then the Company shall make the severance payments starting in the second of
such taxable years, regardless of which taxable year the executed release is
delivered. The parties hereto
acknowledge that the Severance Benefits to be provided under this Section 5(c)
are to be provided in consideration for the above-specified
release.
(d) Termination by the Company for
“Cause.” If the Executive’s employment is terminated for
“Cause,” the Executive will not be entitled to and shall not receive any
compensation or benefits of any type following the effective date of
termination. Except as provided below, in the event Executive’s
employment with the Company is terminated for “Cause,” such termination shall be
effective upon Executive’s receipt of the notice terminating his employment for
“Cause,” which notice shall describe the bases for the “Cause”
determination. As used in this Agreement, the term “Cause” shall
exist upon any of the following
events: (1) Executive’s fraud or
breach of fiduciary obligations in connection with performance of his
duties with the Company (including but not limited to any acts of embezzlement
or misappropriation of funds); (2) Executive’s
indictment for a felony or plea of
guilty or nolo contendere
to a felony charge or any criminal act involving moral turpitude; (3) Executive’s being under the influence of any
drugs (other than prescription medicine or other medically-related drugs
to the extent that they are taken in accordance with their directions) or repeatedly being under the influence of alcohol,
during the performance of his duties under this Agreement, or, while
under the influence of such drugs or alcohol, engaging in grossly inappropriate
conduct during the performance of his duties under this Agreement; (4) Executive’s refusal to substantially perform the
Executive’s duties hereunder, except in the event that the Executive becomes
permanently disabled as set forth in Section 5(f);
(5) Executive’s willful misconduct or gross negligence in connection with his
employment; (6) Executive’s material violation of any Company policies or
procedures relating to harassment, discrimination or xxxxxxx xxxxxxx; or (7)
Executive’s material breach of any provision of this Agreement. In
the case of items (4), (6) and (7) above, the Company shall provide the
Executive with written notice specifying in reasonable detail the particulars of
such Cause and the Executive shall have thirty (30) days from the giving
of such notice within which to cure, if such a
cure is possible and, if such a cure is possible and the Executive cures such
Cause to the reasonable satisfaction of the Company then Cause shall not exist
with respect to such Cause event.
(e) Termination by the Company Without
“Cause.” Upon ten (10) days written notice, the Company shall have the right to terminate Executive for any
reason or no reason at all. If the Executive’s employment is
terminated by the Company without Cause, the Executive shall receive the
Severance Benefits (subject to any limits of the Company’s applicable benefits
plans and insurance policies); provided, however, that if
the Executive’s employment is terminated by the Company without Cause during the
Change of Control Period, the Executive shall receive the Severance Benefits
plus his base salary for an additional period of
twenty-four (24) months and an additional eighteen (18) months of continued and
health insurance coverage, on comparable terms as made available to the
Company’s employees at such time. Furthermore,
Executive’s interest in any stock options or restricted stock which he was
granted subject to vesting or for which he otherwise has become eligible under
the terms of the applicable stock option or restricted stock plan or agreement
or for which he was scheduled to become eligible at any time during the then
applicable Employment Period (collectively, the “Options”) shall fully vest on
the effective date of his termination without Cause, and Executive shall be
granted a 12-month period in which to exercise all of these options, subject to
the terms and conditions of the applicable stock option plan and the discretion
of the Committee. The non-competition and non-solicitation
restrictions set forth in Section 7 of this Employment Agreement will terminate
on the date Executive ceases to collect Severance Benefits in the case of a
termination of employment by the Company without Cause pursuant to this Section
5(e). The
confidentiality and rights to inventions obligations established in Sections 8
and 9 of this Agreement will survive the termination of this Agreement pursuant
to this section.
Notwithstanding
the foregoing, Executive shall not be entitled to any Severance Benefits unless
(i) Executive complies with all of the restrictive covenants by which he is bound (whether
pursuant to this Agreement or otherwise), including, but not limited to,
any non-competition agreement, non-solicitation agreement, confidentiality
agreement or invention assignment agreement signed by Executive, and (ii) the
Executive executes, delivers and does not revoke a general release in form and
substance acceptable to the Company no later than thirty (30) days after the
date of termination and any revocation period with respect to such release has
expired; further provided,
however, that if the consideration and/or revocation period straddles two
taxable years, then the Company shall make the severance payments starting in
the second of such taxable years, regardless of which taxable year the executed
release is delivered. The parties hereto acknowledge that the Severance Benefits to be provided under this
Section 5(e) is to be provided in consideration for the above-specified
release.
(f) Termination Due to Executive’s
Permanent Disability. In the event the Executive becomes
permanently disabled during employment with the Company, the Company may
terminate this Agreement by giving fifteen (15) days notice to the Executive of
its intent to terminate, and unless the Executive resumes performance of the
duties set forth in Section 3 within five (5) days of the date of the notice and
continues performance for the remainder of the notice period, this Agreement
shall terminate at the end of the fifteen (15) day period. If the
Executive is terminated pursuant to this Section 5(f), he shall be entitled to
receive the Severance Benefits. Executive shall reasonably cooperate
with the Company in securing disability coverage, retaining disability coverage,
and collecting any benefits available from its disability insurance
carrier. This salary continuation element of the Severance Benefits
shall be payable in accordance with the Company’s normal payroll schedule, from
the effective date of his termination, as if Executive’s employment had
continued during the severance period. “Permanently disabled” for the
purposes of this Agreement means the inability, due to physical or mental ill
health, to perform the essential functions of Executive’s job, with or without a
reasonable accommodation, for one hundred twenty (120) business days during any
one employment year, irrespective of whether such days are
consecutive. In the event of any dispute under this Section, the
Executive shall submit to a physical examination by a licensed physician subject
to the dictates or requirements of the Company’s disability insurance carrier,
the cost of which will be paid by the Company, and the determination of such
physician shall be determinative.
(g) Termination Upon Executive’s
Death. This Agreement will terminate immediately
upon the Executive’s death. In that event, Executive’s estate shall
receive any accrued but unpaid salary or bonuses. In addition,
Executive’s estate shall be entitled to receive the Severance
Benefits. This salary continuation element of the Severance Benefits
shall be payable in accordance with the Company’s normal payroll schedule, from
the effective date of his termination, as if Executive’s employment had
continued during the twelve month severance period, and Executive’s interest in
any stock options or restricted stock for which he had become eligible under the
terms of the applicable stock option or restricted stock plan or agreement or
for which he was scheduled to become eligible at any time during the then
applicable Employment Period under the terms of any such stock option or
restricted stock plan or agreement shall fully vest on the effective date of his
termination under this Section 5(g), subject to the terms and conditions of the
applicable stock option plan and the discretion of the
Committee. Executive and his estate shall reasonably cooperate with
the Company in securing and maintaining “key man” life insurance at the
Company’s cost and collecting any benefits available from its life insurance
carrier.
(h) Section
409A. Notwithstanding anything to the contrary in this
Agreement, any cash severance payments otherwise due to Executive pursuant to
this Section 5 or otherwise on or within the six-month period following
Executive’s termination will accrue during such six-month period and will become
payable in a lump sum payment on the date that is six (6) months and one (1) day
following the Executive’s termination. In addition, this Agreement
will be deemed amended to the extent necessary to avoid imposition of any
additional tax or income recognition prior to actual payment to Executive under
Section 409A of the Internal Revenue Code of 1986,
as amended, and any temporary, proposed or final Treasury Regulations and
guidance promulgated thereunder (together, “Section 409A”) and the parties agree
to cooperate with each other and to take reasonably necessary steps in this
regard. For purposes of Section 409A, the right to a series of
installment payments under this Agreement shall be treated as a right to a
series of separate payments. “Termination of employment,” or words of
similar import, as used in this Agreement means, for purposes of any payments
under this Agreement that are payments of deferred compensation subject to
Section 409A, the Employee’s “separation from service” as defined in Section
409A.
6. Company
Property. All correspondence, records, documents, software,
promotional materials, and other Company property, including all copies, which
come into the Executive’s possession by, through or in the course of his
employment, regardless of the source and whether created by the Executive, are
the sole and exclusive property of the Company, and immediately upon the
termination of the Executive’s employment, or any time at the Company’s
reasonable request, the Executive shall return to the Company all such property
of the Company.
7. Non-Competition,
Non-Solicitation.
(a) Subject
to Section 5(e), the Executive agrees that, in consideration of his employment
with the Company pursuant to this Agreement, and other good and valuable
consideration, the receipt of which is hereby acknowledged, during Executive’s
employment with the Company and for twelve
(12) months after termination thereof, the Executive will not either on
his own behalf or on behalf of any third party, except on behalf of the Company,
directly or indirectly (other than through his ownership of equity interest in
the Company), as an individual proprietor, principal, manager, agent, consultant, guarantor,
advisor, member, owner, participant, partner, stockholder, officer,
employee, director, joint venturer, lender, or in any other capacity whatsoever
(other than as a passive holder of not more
than five percent (5%) of the total outstanding stock of a publicly-held
company):
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(i)
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carry on, engage in, accept employment with, or have any financial
interest in any North America-based: (1) fractional
aircraft ownership business; (2) fixed base
operations business; (3) air charter business; (4) business regulated as
an “air taxi” service under applicable Federal Aviation Administration
regulations; or (5) business based on know-how, trade secrets or
technology of the kind or type acquired, developed or being developed,
produced, marketed, distributed, planned, furnished or sold by the Company
while the Executive was employed by the
Company;
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(ii)
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(a) recruit,
offer employment to, solicit or induce, or attempt to induce, any
employee or employees of the Company or any
affiliate to terminate their employment with, or otherwise cease
their relationship with, the Company or any
affiliate or (b) recruit, offer employment to or solicit any person who
has been employed by the Company or any affiliate during the 12 months
preceding such solicitation or offer of
employment;
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(iii)
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solicit,
divert, take away, or attempt to divert or take away, the business or
patronage (with respect to products or services of the kind or type
developed, produced, marketed, furnished or sold by the Company) of any of
the Company’s clients, customers, vendors, business or strategic partners,
or accounts, or prospective clients, customers, vendors, business or
strategic partners, or accounts, or
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(iv)
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persuade
or induce any client, customer,
vendor, strategic or business partner, or account of the Company to restrict or cease to do business with, invest in, participate with, or
otherwise work with the Company, or to reduce the amount of business,
investment, participation or work that any such client, customer, vendor,
or strategic or business partner has customarily done or actively
contemplates doing with the
Company.
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(b) Executive and the Company agree that this covenant not
to compete is a reasonable covenant under the circumstances, and further agree
that if in the opinion of any court of competent jurisdiction such restraint is
not reasonable in any respect, such court shall have the right, power and
authority to excise or modify such provision or provisions of this covenant as
to the court shall appear not reasonable and to enforce the remainder of the
covenant as so amended. Executive agrees that any breach of the
covenants contained in this Section 7 would irreparably injure the
Company. Accordingly, Executive agrees that the Company may, in
addition to pursuing any other remedies it may have in law or in equity, cease
making any payments or providing any benefits otherwise required by this
Agreement and obtain an injunction against Executive from any court having
jurisdiction over the matter restraining any further violation of this Agreement
by Executive.
(c) The
provisions of Section 7 shall survive termination of this
Agreement.
8. Protection
of Confidential Information.
(a) For purposes of this Section 8, “Confidential
Information” shall mean non-public information concerning the financial data,
strategic business plans, product development (or other proprietary product
data), projects, customer lists, marketing plans, methodologies, business
or vendor relationships, relationships with strategic or business partners, its
high speed networks, or equipment, tools or other materials developed for use on
such networks, and all information and know-how (whether or not patentable,
copyrightable or otherwise able to be registered or protected under laws
governing intellectual property) owned, possessed, or used by the Company, any affiliate or any customer, including, without
limitation, any invention, existing or future product, formula, method,
manufacturing techniques and procedures, composition, compound, project,
development, plan, market research, vendor information, supplier information,
customer lists or information, contacts at or knowledge of customers,
prospective customers, business or strategic partners of the Company, apparatus,
equipment, trade secret, process, research, reports, clinical data, financial
data, technical data, test data, know-how, computer program, software, software
documentation, source code, hardware design, technology, marketing or business
plan, forecast, unpublished financial statement, budget, license, patent
applications, contracts, joint ventures, price, cost and personnel data, any
trade names, trademarks or slogans and other
non-public, proprietary and confidential information of the Company, its
affiliates or customers, that, in any case, is not otherwise available to the
public (other than by Executive’s breach of the terms hereof). The
Executive agrees (i) that all Confidential Information, whether or not in
writing, shall be treated as being confidential and/or proprietary information
and is the exclusive property of the Company and (ii) to hold in a fiduciary
capacity for the sole benefit of the Company all Confidential
Information.
(b) “Confidential
Information” shall not include information that
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(i)
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is
or becomes public knowledge through legal means without fault by the
Executive,
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(ii)
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is
already public knowledge prior to the signing of this
Agreement,
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(iii)
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must
be disclosed pursuant to applicable law or court
order.
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(c) The
Executive agrees that he will not at any time, either during the term of this
Agreement or after its termination, disclose to anyone any Confidential
Information, or utilize such Confidential Information for his own benefit, or
for the benefit of third parties without written approval by an officer of the
Company. Executive further agrees that all memoranda, notes, records,
data, schematics, sketches, computer programs, prototypes, or written,
photographic, magnetic or other documents or tangible objects compiled by him or
made available to him during the term of his employment concerning the business
of the Company and/or its clients, including any copies of such materials, shall
be the property of the Company and shall be delivered to the Company on the
termination of his employment, or at any other time upon request of the
Company.
(d) The Executive also agrees that any breach of the
covenants contained in this Section 8 would irreparably injure the
Company. Accordingly, Executive agrees that the Company may, in
addition to pursuing any other remedies it may have in law or in equity, cease
making any payments or providing any benefits otherwise required by this
Agreement and obtain an injunction against Executive from any court having
jurisdiction over the matter restraining any further violation of this Agreement
by Executive.
9. Intellectual
Property. During the term of this Agreement, the Executive
will disclose to the Company all ideas, concepts, inventions, product ideas, new
products, discoveries, methods, software, business plans and business
opportunities developed by him during the
Employment Period, which relate directly or
indirectly to the Company’s business or the business of any of its affiliates or
their respective clients, including without limitation, any process, product or
product improvement, product ideas, new products, discoveries, methods,
software, domain names or proposed domain names, uniform resource locators,
trade names, trademarks or slogans, which may or may not be patentable or
copyrightable, registerable or otherwise protectable. The Executive
agrees that such will be the property of the Company from the moment of its
inception (including, without limitation, all
copyrightable works, which shall be deemed “works made for hire” under the
United States Copyright Act) and that he will at the Company’s reasonable
request and cost do whatever is necessary to assign or otherwise secure for the
Company the rights thereto by patent, copyright or
otherwise. Executive acknowledges and agrees that his obligations
with respect to Company property discussed in this paragraph shall survive the
termination or expiration of this Agreement.
10. Publicity. Neither
party shall issue, without consent of the other party, any press release or make
any public announcement with respect to this Agreement or the employment
relationship between them except for necessary public filings with the
Securities and Exchange Commission and other regulatory
agencies. Following the date of this Agreement and regardless of any
dispute that may arise in the future, the Executive and the Company jointly and
mutually agree that they will not disparage, criticize or make statements which
are negative, detrimental or injurious to the other (or, in the case of the Executive, negative,
detrimental or injurious to any officer, director, stockholder or affiliate of
the Company or its affiliates) to any individual, company or client,
including within the Company.
11. Binding
Agreement. This Agreement shall be binding upon and inure to
the benefit of the parties hereto, their heirs, personal representatives,
successors and assigns. In the event the Company is acquired, is a
non surviving party in a merger, or transfers substantially all of its assets,
this Agreement shall not be terminated and the transferee or surviving company
shall be bound by the provisions of this Agreement. The parties
understand that the obligations of the Executive are personal and may not be
assigned by him.
12. Entire
Agreement. This Agreement contains the entire understanding of
the Executive and the Company with respect to employment of the Executive and
supersedes any and all prior understandings, written or oral. This
Agreement may not be amended, waived, discharged or terminated orally, but only
by an instrument in writing, specifically identified as an amendment to this
Agreement, and signed by all parties. By entering into this
Agreement, the Executive certifies and acknowledges that he has carefully read
all of the provisions of this Agreement and that he voluntarily and knowingly
enters into said Agreement.
13. Severability. Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be deemed severable from the
remainder of this Agreement, and the remaining provisions contained in this
Agreement shall be construed to preserve to the maximum permissible extent the
intent and purposes of this Agreement. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
14. Governing Law and Submission to
Jurisdiction. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Florida, without giving effect to the principles
of conflicts of law thereof.
15. Notices. Any notice
provided for in this Agreement shall be provided in writing. Notices
shall be effective from the date of service, if served personally on the party
to whom notice is to be given, or on the second day after mailing, if mailed by
first class mail, postage prepaid. Notices shall be properly
addressed to the parties at their respective addresses or to such other address
as either party may later specify by notice to the other.
16. ARBITRATION. EXCEPT AS PROVIDED BELOW, THE PARTIES AGREE THAT
ANY CONTROVERSY, CLAIM OR DISPUTE ARISING OUT OF OR RELATING TO THIS AGREEMENT,
OR THE BREACH THEREOF OR ARISING OUT OF OR RELATING TO THE EMPLOYMENT OF THE
EXECUTIVE, OR THE TERMINATION THEREOF, INCLUDING ANY STATUTORY OR COMMON LAW
CLAIMS UNDER FEDERAL, STATE, OR LOCAL LAW, INCLUDING ALL LAWS PROHIBITING
DISCRIMINATION IN THE WORKPLACE, SHALL BE RESOLVED BY ARBITRATION IN FLORIDA IN
ACCORDANCE WITH THE EMPLOYMENT DISPUTE RESOLUTION RULES OF
JAMS/ENDISPUTE. THE PARTIES AGREE THAT ANY AWARD RENDERED BY THE
ARBITRATOR SHALL BE FINAL AND BINDING, AND THAT JUDGMENT UPON THE AWARD MAY BE
ENTERED IN ANY COURT HAVING JURISDICTION THEREOF. THE PARTIES FURTHER
ACKNOWLEDGE AND AGREE THAT, DUE TO THE NATURE OF THE CONFIDENTIAL INFORMATION,
TRADE SECRETS, AND INTELLECTUAL PROPERTY BELONGING TO THE COMPANY TO WHICH THE
EXECUTIVE HAS OR WILL BE GIVEN ACCESS, AND THE LIKELIHOOD OF SIGNIFICANT HARM
THAT THE COMPANY WOULD SUFFER IN THE EVENT THAT SUCH INFORMATION WAS DISCLOSED
TO THIRD PARTIES, NOTHING IN THIS SECTION SHALL PRECLUDE THE COMPANY FROM GOING
TO COURT TO SEEK INJUNCTIVE RELIEF TO PREVENT EXECUTIVE FROM VIOLATING THE
OBLIGATIONS ESTABLISHED IN SECTIONS 7 THROUGH 10 OF THIS AGREEMENT.
17. Indemnification.
(a) Corporate
Acts. In his capacity as a director, manager, officer, or employee of
the Company or serving or having served any other entity as a director, manager,
officer, or executive at the Company’s
request, Executive shall be indemnified and held harmless by the Company to the
fullest extent allowed by law, the Company’s charter and by-laws, from and
against any and all losses, claims, damages, liabilities, expenses (including
legal fees and expenses), judgments, fines, settlements and other amounts
arising from any and all claims, demands, actions, suits or proceedings, civil,
criminal, administrative or investigative, in which Executive may be involved,
or threatened to be involved, as a party or otherwise by reason of Executive’s
status, which relate to or arise out of the Company, their assets, business or
affairs, if in each of the foregoing cases, (i) Executive acted in good faith
and in a manner Executive believed to be in the best interests of the Company,
and, with respect to any criminal proceeding, had no reasonable cause to believe
Executive’s conduct was unlawful, and (ii) Executive’s conduct did not
constitute gross negligence or willful or wanton misconduct. The Company shall
advance all reasonable expenses incurred by
Executive in connection with the investigation, defense, settlement or appeal of
any civil or criminal action or proceeding referenced in this Section, including
but not necessarily limited to, reasonable fees
of legal counsel, expert witnesses or other litigation-related
expenses.
(b) Directors
& Officers Insurance. During the
Employment Period and thereafter for six years after the Executive’s employment
terminates, Executive shall be entitled to coverage under the Company’s
directors and officers liability insurance policy and any other insurance policy providing coverage to
directors or officers of the Company, subject to the terms of such policies,
in effect at any time in the future to no lesser extent than any other
officers or directors of the Company. Notwithstanding anything herein
to the contrary, the provisions of this Section shall survive the termination of
this Agreement and the termination of the Employment Period for any
reason.
(c) Personal
Guarantees. The Company shall indemnify and hold harmless the
Executive for any liability incurred by him by reason of his execution of any
personal guarantee for the Company’s benefit (including but not limited to
personal guarantees in connection with office or equipment leases, commercial
loans or promissory notes). Notwithstanding anything
herein to the contrary, the provisions of this Section shall survive the
termination of this Agreement and the termination of the Employment Period for
any reason.
18. Miscellaneous.
(a) No
delay or omission by either party in exercising any right under this Agreement
shall operate as a waiver of that or any other right. A waiver or
consent given by one party on any one occasion shall be effective only in that
instance and shall not be construed as a bar or waiver of any right on any other
occasion.
(b) With
respect to any reimbursement of expenses of, or any provision of in-kind
benefits to, Executive, as specified under this Agreement, such reimbursement of
expenses or provision of in-kind benefits shall be subject to the following
conditions: (1) the expenses eligible for reimbursement or the amount of in-kind
benefits provided in one taxable year shall not affect the expenses eligible for
reimbursement or the amount of in-kind benefits provided in any other taxable
year, except for any medical reimbursement arrangement providing for the
reimbursement of expenses referred to in Section 105(b) of the Code; (2) the
reimbursement of an eligible expense shall be made no later than the end of the
year after the year in which such expense was incurred; and (3) the right to
reimbursement or in-kind benefits shall not be subject to liquidation or
exchange for another benefit.
(c) The
captions of the sections of this Agreement are for convenience of reference only
and in no way define, limit or affect the scope or substance of any section of
this Agreement.
(d) Any
rights of Executive hereunder shall be in addition to any rights Executive may
otherwise have under written benefit plans or agreements of the Company to which
he is a party or in which he is a participant, including, but not limited to,
any Company sponsored written employee benefit plans, stock option plans, grants
and agreements.
(e) The Company shall be entitled to withhold from any
payment any amount of withholding required by law.
IN
WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be duly
executed and delivered under seal, by its authorized officers or individually,
on the date first identified above.
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/s/ Xxxxxxx X. Xxxxx Xx.
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By:
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Xxxxxxx X. Xxxxx Xx.
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Title:
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Chief
Financial Officer
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EXECUTIVE:
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| /s/ Xxxxxx Xxxxx | ||
| Xxxxxx X. Xxxxx | ||
