THIS EMPLOYMENT AGREEMENT is entered into as of January 1st, 1999 by
and between Method Products Corporation, a Florida corporation (the "Company"),
and Xxxx X. Xxxxxxxxx (the "Executive").
WITNESSETH:
WHEREAS, the Company desires to continue to employ the Executive, and
the Executive desires to continue to be employed by the Company, pursuant to the
provisions contained in this Employment Agreement (the "Agreement");
NOW, THEREFORE, in consideration of the premise, and the respective
covenants and agreements of each of the Company and the Executive contained in
this Agreement, each of the Company and the Executive agrees as follows:
ARTICLE I
Employment
1.1 The Company. The Company employs the Executive and the Executive
accepts such employment. Subject to the direction of the Board of Directors of
the Company, the Executive shall serve as a Director of the Company and Chief
Executive Officer of the Company. The Executive shall have such
responsibilities, perform such duties and exercise such power and authority as
are inherent in, or incident to, the offices of a Director of the Board and
Chief Executive Officer. The Executive shall devote his full business time and
attention, and his best efforts, to the diligent performance of such duties.
1.2 Subsidiary Corporations. The Executive shall serve as (a) a
Director and Executive Vice President of all of the Company's subsidiaries
corporations, unless the Board of Directors deems it necessary or otherwise
desirable to elect other Directors and appoint other officers to the Company's
subsidiary corporations.
ARTICLE II
Term
Subject to the provisions of Article VI below, the term of this
Agreement shall be for a period of three years, commencing as of January 1st,
1999 and expiring on December 31st, 2001. Unless either party shall give to the
other written notice of termination on or before December 31st, 2001, the term
of this Agreement shall, on January 1st, 2002, be extended for a period of three
years, commencing as of January 1st, 2002 and expiring on December 31st, 2004.
ARTICLE III
Salary
3.1 Initial Salary. In full payment for the obligations to be
performed by the Executive during the term of this Agreement, the Company shall
pay to the Executive a salary at an annual rate equal to the sum of One Hundred
Twenty-Five Thousand Dollars ($125,000.00). Such salary may, in part from time
to time, depending upon cash flow and the reasonable discretion of the Company,
be subject to accrual.
3.2 Adjustment of Salary. As promptly as practicable after the
conclusion of each of the Company's fiscal years during the term of the
Executive's employment hereunder, the certified public accountants regularly
retained by the Company shall determine the increase, if any, in the cost of
living, using as the basis of such computation the current applicable Consumer
Price Index published by the Bureau of Labor Statistics of the United States
Department of Labor (the "Index"). Any such increase shall be computed as
follows:
(a) The Index number in the column for Broward County,
Florida, entitled "all items," for the month of June (or such other month
immediately following the Company's fiscal year end in the event of a change in
the Company's fiscal year end) shall be the "Current Index Number" and the
corresponding Index number for the immediately preceding June (or such other
month immediately following the Company's fiscal year end in the event of a
change in the Company's fiscal year end), commencing with June 1st, 1999, shall
be the "Base Index Number."
(b) The increase in the cost of living shall be determined
by dividing the Current Index Number by the Base Index Number and subtracting
the integer 1 from the quotient thereof, and then multiplying the remainder by
One Hundred Percent (100%) in accordance with the following formula:
Increase
in = Current Index Number - 1 x 100%
Cost of Living Base Index Number
(c) The percentage increase in the cost of living,
multiplied by the Executive's then current salary, shall be the increase
required to be determined pursuant to this Section 3.2.
(d) If the publication of the Consumer Price Index is
discontinued for any reason, then the parties shall utilize comparable
statistics of the cost of living for the City of Pompano Beach, Florida, the
City of Fort Lauderdale, Florida, or Palm Beach County, Florida, , as computed
and published by an agency or instrumentality of the United States of America or
by a responsible financial periodical or recognized authority then to be
selected by the parties.
(e) In the absence of fraud or manifest error, any
determination made by the Company's accountants pursuant to this Section 3.2
shall be conclusive and binding upon the Company and the Executive.
(f) The Executive's then current salary shall be adjusted
as of July 1st of each year, commencing as of July 1st, 1999, in accordance with
the provisions of this Section 3.2 and such adjustment shall remain in effect
during such year.
3.3 Payment of Salary. Payments of salary shall be made to
the Executive in installments from time to time on the same dates payments of
salary are generally made to all senior management employees of the Company.
ARTICLE IV
Bonus
The Executive may receive an annual bonus in an amount determined by
the Board of Directors of the Company, in its discretion, if and when so
determined by the Board of Directors.
Through June 30, 2001, unless earlier terminated (a) by the Company
with cause, as defined by Article VI hereof; (b) by the Executive without Good
Reason as defined in Article VI hereof; (c) upon the Executive's death
(collectively, the "Period"), the Executive shall be entitled to receive, for no
additional consideration, shares of the Company's common stock equal to ten
percent (10%) of the Company's outstanding common stock pursuant to this
provision. It is acknowledged that the Company has already issued 500,000 shares
of the Company's common stock to Xxxx X. Xxxxxxxxx, representing ten percent
(10%) of the Company's total issued and outstanding shares of the Company's
common stock as of the date hereof, and that the Company will issue additional
shares of the Company's common stock to the Executive at such time during the
period as when the Company may secure debt and/or equity financing of at least
$500,000, such that the aggregate number of shares of the Company's common stock
issued to the Executive pursuant to this provision shall be equal to ten percent
(10%) of the Company's then issued and outstanding common stock. Following such
financing, the Company shall then promptly, for no additional consideration,
issue additional shares of the Company's common stock to the Executive so as to
maintain the Executive at ten percent (10%) equity position (based on the number
of shares of the Company's common stock issued and outstanding) through the
Period.
ARTICLE V
Certain Fringe Benefits
5.1 Generally. The Executive shall be entitled to receive such
benefits and to participate in such benefit plans as are generally provided from
time to time by the Company to its senior management employees; provided,
however, that nothing contained in this Section 5.1 shall be construed to
obligate the Company to provide any specific benefits to its employees
generally.
5.2 Vacations. The Executive shall be entitled to vacation time on an
annual basis in accordance with such policies as are from time to time adopted
by the Company's Board of Directors with respect to its senior management
employees.
5.3 Automobile. The Company shall provide the Executive a luxury
automobile for use by the Executive in connection with the performance of his
duties under this Agreement. The Executive shall be entitled to receive
reimbursement for such automobile expenses as are incurred by the Executive in
connection with the performance of his duties under this Agreement. Such
reimbursement shall include the cost of operating the automobile, the cost of
maintenance of such automobile and the cost of insurance of such automobile.
5.4 Stock Options. The Executive shall be entitled to participate in
the Company's stock option plans as may from time to time be in effect and to
receive such incentive or other stock options as may from time to time be
granted to him thereunder; provided, however, that nothing contained in this
Section 5.4 shall be construed to obligate the Company, its Board of Directors
or any committee of its Board of Directors to grant any incentive or other stock
option whatsoever to the Executive.
5.5 Income Tax Returns and Estate Planning. The Company shall pay for
the cost of preparation of the Executive's annual federal income tax returns and
for reasonable estate planning advice that the Executive receives from time to
time.
5.6 Reimbursement of Medical Expenses. The Company shall reimburse
the Executive for the full amount of any medical, dental and optical expenses
not covered under any group medical plan from time to time in effect for the
benefit of Company employees generally. Such coverage shall include without
limitation mental health care and treatment and other medical, dental and
optical expenses not covered under the Company's health care plan now or
hereafter in effect. The Company may satisfy its obligation to the Executive
under this Section 5.7 by providing excess medical, dental, optical and other
health care insurance coverage for the Executive's benefit.
5.7 Annual Physical Examination. To the extent not covered by any
group medical plan from time to time in effect for the benefit of Company
employees generally or other insurance coverage provided by the Company for the
benefit of the Executive, the Company shall reimburse the Executive for the full
cost of a complete annual physical examination.
5.8 Business and Entertainment Expenses. The Company shall reimburse
the Executive for all reasonable business and entertainment expenses related to
the Executive's position with the Company.
ARTICLE VI
Termination of Employment
6.1 Certain Definitions. The following terms shall have the following
respective meanings when utilized in this Agreement:
(a) "Bonus" shall mean, as of a given date, the most recent
annual bonus awarded by the Company to the Executive.
(b) "Cause" shall mean any action by the Executive or any
inaction by the Executive which constitutes:
(i) fraud, embezzlement, misappropriation, dishonesty or
breach of trust;
(ii) a felony or moral turpitude;
(iii) a material breach or violation of any or all of the
covenants, agreements and obligations of the Executive
set forth in this Agreement, other than as the result
of the Executive's death or Disability (as hereinafter
defined);
(iv)a willful or knowing failure or refusal by the
Executive to perform any or all of his material duties
and responsibilities as an officer of the Company,
other than as the result of the Executive's death or
Disability; or
(v) gross negligence by the Executive in the performance of
any or all of his material duties and responsibilities
as an officer of the Company, other than as a result of
the Executive's death or Disability;
provided, however, that if the basis for any termination of the Executive's
employment by the Company as set forth in the Termination Notice (as hereinafter
defined) delivered by the Company to the Executive is any or all of the
definitions of Cause set forth in Sections 6.1(b)(iii), 6.1(b)(iv) or 6.1(b)(v)
of this Agreement, then, in such event, the Executive shall have fifteen (15)
days from and after the date of his receipt of such Termination Notice to
present a reasonable plan to cure such action or inaction specified in the
Termination Notice, which plan may require more than fifteen (15) days to cure
the specified action or inaction, but such plan must be reasonably satisfactory
to the Company and the Executive must proceed diligently to effectuate such
plan.
(c) "Compensation" shall mean the sum of the Executive's
Salary (as hereinafter defined) and Bonus.
(d) "Disability" shall mean any mental or physical illness,
condition, disability or incapacity which prevents the Executive from reasonably
discharging his duties and responsibilities as an officer of the Company. If any
disagreement or dispute shall arise between the Company and the Executive as to
whether the Executive suffers from any Disability, then, in such event, the
Executive shall submit to the physical or mental examination of a physician
licensed under the laws of the State of Florida, who is mutually agreeable to
the Company and the Executive, and such physician shall determine whether the
Executive suffers from any Disability. In the absence of fraud or bad faith, the
determination of such physician shall be final and binding upon the Company and
the Executive. The entire cost of such examination shall be paid for solely by
the Company.
(e) "Good Reason" shall mean:
(i) the assignment by the Board of Directors (or the
executive committee of the Board of Directors, if any)
to the Executive, without his express written consent,
of duties and responsibilities which results in the
Executive having less significant duties and
responsibilities or exercising less significant power
and authority than he had, or duties and
responsibilities or power and authority not comparable
to that of the level and nature which he had,
immediately prior to such assignment;
(ii) the removal of the Executive from, or a failure to
reappoint the Executive to, his then current position
or positions with the Company or its subsidiaries or
affiliates, except (A) with the Executive's express
written consent or (B) in connection with any
termination of the Executive's employment by the
Company as the result of the Executive's Protracted
Disability (as hereinafter defined) or for Cause;
(iii) the reduction of the Executive's Salary or the
reduction of any or all of the Executive's benefits
set forth in Article V above;
(iv) the Company's failure to perform on a timely basis its
obligations under this Agreement;
(v) the Company's requiring the Executive, without his
express written consent, to travel on Company business
to an extent substantially greater than the
Executive's business travel obligations immediately
prior to such time;
(vi) the Company's requiring the Executive, without his
express written consent, to change his place of
permanent residency to place outside of Broward
County, Florida;
(vii)the Company's moving its executive offices to a place
outside of Broward County, Florida, without the
Executive's express written consent; or
(viii) the failure of the Company to obtain the express
written assumption of, and agreement to perform on a
timely basis, the Company's obligations under this
Agreement by any successor to the Company as required
by Article IX of this Agreement.
(f) "Protracted Disability" shall mean any Disability which prevents
the Executive from reasonably discharging his duties and responsibilities as an
officer of the Company for a period of twelve (12) consecutive months.
(g) "Salary" shall mean, as of a given date, the Executive's then
current annual salary.
(h) "Termination Date" shall mean a specific date not less than
forty-five (45) nor more than ninety (90) days from and after the date of any
Termination Notice upon which the Executive's employment by the Company shall be
terminated in accordance with the provisions of this Agreement.
(i) "Termination Notice" shall mean a written notice which sets forth
(i) the specific provision of this Agreement relied upon to terminate the
Executive's employment, (ii) in reasonable detail the facts and circumstances
claimed to provide the basis for the termination of the Executive's employment,
and (iii) a Termination Date.
6.2 Termination of Employment.
(a) Notwithstanding the provisions of Article II hereof, this
Agreement (i) shall automatically terminate upon the death of the Executive
pursuant to the provisions of Section 6.3 hereof, (ii) may be terminated at any
time by the Company pursuant to the provisions of Sections 6.4 or 6.5 hereof,
and (iii) may be terminated at any time by the Executive pursuant to the
provisions of Section 6.6 hereof.
(b) If either the Company or the Executive shall desire to terminate
the Executive's employment by the Company pursuant to any of the provisions of
Sections 6.4, 6.5 or 6.6 of this Agreement, then, in such event, the party
causing such termination shall provide a Termination Notice to the other party.
(c) If this Agreement shall be terminated pursuant to any of the
provisions of this Article VI, the Company shall be discharged from all of its
obligations to the Executive under this Agreement upon the payment to the
Executive of the amount set forth in the Section of this Article VI pursuant to
which such termination shall occur. The Executive's sole and exclusive remedy
for the termination of this Agreement, regardless of whether such termination
shall be initiated by the Company or the Executive, and regardless of whether
such termination shall be with or without Cause, shall be the payment by the
Company to the Executive of the amount set forth in the Section of this Article
VI pursuant to which such termination shall occur.
6.3 Termination Upon Death of Executive. If during the term of this
Agreement the Executive shall die, then the employment of the Executive by the
Company shall automatically terminate on the date of the Executive's death. In
such event, not more than thirty (30) days after the date of the Executive's
death, the Company shall pay to the Executive's estate or as otherwise directed
by the Executive's personal representative, an amount in cash equal to the
Executive's Compensation (subject to applicable payroll and/or other taxes
required by law to be withheld) determined as of the date of the Executive's
death.
6.4 Disability of Executive.
(a) In the event that at any time during the term of this Agreement
the Executive shall suffer any Disability, then the Company shall be obligated
to continue to pay in the ordinary and normal course of its business to the
Executive or his legal representative, as the case may be, the Executive's
Compensation (subject to applicable payroll and/or other taxes required by law
to be withheld) from the date that the Executive shall first suffer any such
Disability to the date that the Executive's employment by the Company shall be
terminated pursuant to any of the provisions of this Agreement.
(b) In the event that the Executive shall suffer any Protracted
Disability during the term of this Agreement, then the Company may terminate the
Executive's employment under this Agreement. In such event, in addition to any
other benefits which may have been provided by the Company to the Executive or
his legal representative, as the case may be, pursuant to the provisions of
Section 6.4(a) above, not later than the Termination Date specified in the
Termination Notice delivered by the Company to the Executive or his legal
representative, as the case may be, the Company shall pay to the Executive or as
otherwise directed by the Executive's legal representative an amount in cash
equal to the Executive's Compensation (subject to applicable payroll and/or
taxes required by law to be withheld) determined as of the date of such
Termination Notice. Subsequent to such Termination Date, the Executive or his
legal representative, as the case may be, shall also be entitled to receive any
benefits which may be payable under any disability insurance policy or
disability plan provided to the Executive by the Company.
6.5 Termination of Employment by Company.
(a) The Company may terminate this Agreement at any time with Cause.
In such event, the Company shall be obligated to continue to pay in the ordinary
and normal course of its business to the Executive only his Salary (subject to
applicable payroll and/or other taxes required by law to be withheld) through
the Termination Date set forth in the Termination Notice.
(b) The Company may terminate this Agreement at any time without
Cause. If any such termination shall occur on or before December 31st, 2001,
then, in such event, not later than the Termination Date specified in the
Termination Notice, the Company shall pay to the Executive, in cash, an amount
equal to (i) the Executive's Compensation, determined as of the date of the
Termination Notice, multiplied by (ii) the greater of (A) the number of years
and any portion of a year remaining in the term of this Agreement or (B) two
(subject to applicable payroll and/or other taxes required by law to be
withheld). If any such termination shall occur after December 31st, 2001, then,
in such event, not later than the Termination Date specified in the Termination
Notice, the Company shall pay to the Executive, in cash, an amount equal to (i)
the Executive's Compensation, determined as of the date of the Termination
Notice, multiplied by two (subject to applicable payroll and/or other taxes
required by law to be withheld).
6.6 Termination of Employment by Executive.
(a) The Executive may terminate this Agreement at any time with Good
Reason. If any such termination shall occur on or before December 31st, 2001,
then, in such event, not later than the Termination Date specified in the
Termination Notice, the Company shall pay to the Executive, in cash, an amount
equal to (i) the Executive's Compensation, determined as of the date of the
Termination Notice, multiplied by (ii) the greater of (A) the number of years
and any portion of a year remaining in the term of this Agreement or (B) two
(subject to applicable payroll and/or other taxes required by law to be
withheld). If any such termination shall occur after December 31st, 2001, then,
in such event, not later than the Termination Date specified in the Termination
Notice, the Company shall pay to the Executive, in cash, an amount equal to (i)
the Executive's Compensation, determined as of the date of the Termination
Notice, multiplied by two (subject to applicable payroll and/or other taxes
required by law to be withheld).
(b) The Executive may terminate this Agreement at any time without
Good Reason. In such event, the Company shall be obligated to continue to pay in
the ordinary and normal course of its business to the Executive only his Salary
(subject to applicable payroll and/or other taxes required by law to be
withheld) through the Termination Date set forth in the Termination Notice.
ARTICLE VII
Termination of Employment
Subsequent to a Change in Control of the Company
7.1 Change in Control of the Company Defined. For purposes of this
Article VII, the term "Change in Control of the Company" shall mean any change
in control of the Company of a nature which would be required to be reported (a)
in response to Item 6 (e) of Schedule 14A of Regulation 14A, as in effect on the
date of this Agreement, promulgated under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), (b) in response to Item 1 of the Current Report
on Form 8-K, as in effect on the date of this Agreement, promulgated under the
Exchange Act, or (c) in any filing by the Company with the Securities and
Exchange Commission; provided, however, that, without limitation, a Change in
Control of the Company shall be deemed to have occurred if:
(i) any "person" (as such term is defined in
Sections 13(d)(3) and 14(d)(2) of the Exchange
Act), other than the Company, any majority-owned
subsidiary of the Company or any compensation
plan of the Company or any majority-owned
subsidiary of the Company, becomes the
"beneficial owner" (as such term is defined in
Rule 13d-3 of the Exchange Act), directly or
indirectly, of securities of the Company (whether
by merger, consolidation, reorganization or
otherwise) representing fifteen percent (15%) or
more of the combined voting power of the
Company's then outstanding securities;
(ii) during any period of two consecutive years
during the term of this Agreement, the
individuals who at the beginning of such period
constitute the Board of Directors of the Company
cease for any reason to constitute at least a
majority of such Board of Directors, unless the
election of each director who was not a director
at the beginning of such period has been approved
in advance by directors representing at least
two-thirds of the directors then in office who
were directors at the beginning of such period;
(iii) any "person" (as such term is defined in
Sections 13(d)(3) and 14(d)(2) of the Exchange
Act), other than the Company, any subsidiary of
the Company or any compensation, retirement,
pension or other employee benefit plan or trust
of the Company or any subsidiary of the Company,
becomes the "beneficial owner" (as such term is
defined in Rule 13d-3 promulgated under the
Exchange Act), directly or indirectly, of
securities of any wholly-owned or majority -owned
subsidiary/subsidiaries of the Company or any
successor to any wholly-owned or majority-owned
subsidiary/subsidiaries of the Company, (whether
by merger, consolidation, reorganization or
otherwise) representing a majority of the
combined voting power of the then outstanding
securities of any wholly-owned or majority-owned
subsidiary/subsidiaries of the Company, as the
case may be;
(iv) the Company shall merge or consolidate with
or into another corporation or other entity, or
enter into a binding agreement to merge or
consolidate with or into another corporation or
other entity, other than a merger or
consolidation which would result in the voting
securities of the Company outstanding immediately
prior thereto continuing to represent (either by
remaining outstanding or by being converted into
voting securities of the surviving corporation or
entity) not less than eighty-five percent (85%)
of the combined voting power of the voting
securities of the Company or such surviving
corporation or entity outstanding immediately
after such merger or consolidation;
(v) any now and later formed, wholly-owned and
majority-owned subsidiary / subsidiaries shall
merge or consolidate with or into another
corporation or other entity, or enter into a
binding agreement to merge or consolidate with or
into another corporation or other entity, other
than a merger or consolidation which would result
in the voting securities of such subsidiary /
subsidiaries outstanding immediately prior
thereto continuing to represent (either by
remaining outstanding or by being converted into
voting securities of the surviving corporation or
entity) not less than a majority of the combined
voting power of the voting securities of such
subsidiary / subsidiaries or such surviving
corporation or entity outstanding immediately
after such merger or consolidation;
(vi) the Company shall sell, lease, exchange,
transfer, convey or otherwise dispose of all or
substantially all of its assets, or enter into a
binding agreement for the sale, lease, exchange,
transfer, conveyance or other disposition of all
or substantially all of its assets, in one
transaction or in a series of related
transactions;
(vii) any now or later formed wholly-owned or
majority-owned subsidiary/subsidiaries of the
Company shall sell, lease, exchange, transfer,
convey or otherwise dispose of all or
substantially all of its respective assets, or
enter into a binding agreement for the sale,
lease, exchange, transfer, conveyance or other
disposition of all or substantially all of its
respective assets, in one transaction or in a
series of related transactions;
(viii) the Company shall liquidate or dissolve,
or any plan or proposal shall be adopted for the
liquidation or dissolution of the Company; or
(ix) any now or later formed wholly-owned or
majority-owned subsidiary/subsidiaries of the
Company shall liquidate or dissolve, or any plan
or proposal shall be adopted for the liquidation
or dissolution of any of such or any other
wholly-owned or majority-owned
subsidiary/subsidiaries.
7.2 Termination of Employment After Change in Control of Company.
(a) Notwithstanding the provisions of Articles II and VI of this
Agreement, in the event that there shall occur any Change in Control of the
Company and at any time subsequent to the date of any such Change in Control of
the Company, either the Company shall terminate the employment of the Executive
without Cause or the Executive shall terminate his employment for Good Reason,
then, in any such event, the following shall occur:
(i) Not later than the Termination Date specified
in the Termination Notice delivered by the
Company to the Executive, or by the Executive to
the Company, as the case may be, the Company
shall pay to the Executive an amount, in cash,
equal to his "base amount," as such term is
defined in Section 280G of the Internal Revenue
Code of 1986, as amended, and the rules and
regulations promulgated thereunder, determined as
of the date of the Termination Notice, multiplied
by Two and Ninety-Nine One Hundredths (2.99) (the
"Change in Control Termination Amount") (subject
to applicable payroll and/or other taxes required
by law to be withheld); and
(ii) Any and all stock options granted to the
Executive under any stock option plan of the
Company as may from time to time be in effect,
which shall not by their terms have vested on or
before such Termination Date, shall vest on such
Termination Date.
(b) The Change in Control Termination Amount shall be determined by
the Company's regularly retained certified public accountants in consultation
with the Company's regularly retained attorneys. In making such determination,
the Company's regularly retained certified public accountants and attorneys
shall liberally construe the provisions of the Internal Revenue Code of 1986, as
amended, and the applicable rules and regulations thereunder. In the absence of
fraud or manifest error, any determination made pursuant to this Section 7.2(b)
shall be conclusive and binding upon the Company and the Executive.
(c) Notwithstanding anything to the contrary set forth in Sections
7.2(a) and 7.2(b) above, the amount paid by the Company to the Executive shall
be limited to the maximum amount which will not constitute a "parachute
payment," as such term is defined in Section 280G(b)(2) of the Internal Revenue
Code of 1986, as amended. This limitation shall first be applied to amounts
provided pursuant to clause (ii) of Section 7.2(a) hereof (otherwise included in
the calculation of a parachute payment) to the extent thereof and then to
amounts provided pursuant to clause (i) of Section 7.2(a) hereof.
ARTICLE VIII
Certain Restrictions on the Executive
8.1 Certain Restrictions. The Executive covenants and agrees with the
Company as follows:
(a) He shall not at any time, directly or indirectly, for himself or
any other person, firm, corporation, partnership, association or other entity
(collectively, a "Person") which competes in any manner with the Company or any
of its subsidiaries or affiliates in the United States of America or its
territories and possessions or any other countries in which the Company as of
the date of termination of this Agreement conducts its business directly or
indirectly through any of its subsidiaries or affiliates (collectively, the
"Territory"), employ, attempt to employ or enter into any contractual
arrangement for employment with, any employee or former employee of the Company
or any of its subsidiaries or affiliates, unless such former employee shall not
have been employed by the Company or any of its subsidiaries or affiliates for a
period of at least one year.
(b) He shall not, during the term of this Agreement and for a period
of two years from and after the date of termination of this Agreement, directly
or indirectly, (i) acquire or own in any manner any interest in, or loan any
amount to, any Person which competes in any manner with the Company or any of
its subsidiaries or affiliates in the Territory, (ii) be employed by or serve as
an employee, agent, officer, or director of, or as a consultant to, any Person,
other than the Company and its subsidiaries and affiliates, which competes in
any manner with the Company or its subsidiaries or affiliates in the Territory,
or (iii) compete in any manner with the Company or its subsidiaries or
affiliates in the Territory. The foregoing provisions of this Section 8.1(b)
shall not prevent the Executive from acquiring and owning not more than three
percent (3%) of the equity securities of any Person whose securities are listed
for trading on a national securities exchange or are regularly traded in the
over-the-counter securities market.
(c) In the course of the Executive's employment by the Company, the
Executive will have access to confidential or proprietary information of the
Company and its subsidiaries and affiliates. The Executive shall not at any time
divulge or communicate to any Person, or use to the detriment of the Company or
its subsidiaries or affiliates, any such confidential or proprietary
information. The term "confidential or proprietary information" shall mean
information not generally available to the public, including without limitation
personnel information, financial information, customer lists, supplier lists,
ownership information, marketing plans and analyses, trade secrets, know-how,
computer software, management agreements and procedures and techniques of
operating and managing the business of the Company and its subsidiaries and
affiliates. The Executive acknowledges and agrees that all confidential or
proprietary information is and shall remain the property of the Company and its
subsidiaries and affiliates, and agrees to maintain all such confidential or
proprietary information in strictest confidence.
8.2 Remedies. It is recognized and acknowledged by each of the
Company and the Executive that a breach or violation by the Executive of any or
all of his covenants and agreements contained in Section 8.1 of this Agreement
will cause irreparable harm and damage to the Company and its subsidiaries and
affiliates in a monetary amount which would be virtually impossible to ascertain
and, therefore, will deprive the Company of an adequate remedy at law.
Accordingly, if the Executive shall breach or violate any or all of his
covenants and agreements set forth in Section 8.1 hereof, then the Company and
its subsidiaries and affiliates shall have resort to all equitable remedies,
including without limitation the remedies of specific performance and
injunction, both permanent and temporary, as well as all other remedies which
may be available at law. It is the intent of the parties that the restrictions
set forth in Section 8.1 hereof shall be enforced to the fullest extent
permissible under the laws and public policies of each jurisdiction in which
enforcement of such restrictions may be sought. If any provision contained in
Section 8.1 hereof shall be adjudicated by a court of competent jurisdiction to
be invalid or unenforceable because of its duration or geographic scope, then
such provision shall be reduced by such court in duration or geographic scope or
both to such extent as to make it valid and enforceable in the jurisdiction
where such court is located, and in all other respects shall remain in full
force and effect.
ARTICLE IX
Successor to the Company
The Company shall require any successor, whether direct or
indirect, and whether by purchase, merger, consolidation or otherwise, to all or
substantially all of the business or properties and assets of the Company, to
execute and deliver to the Executive, not later than the date of the
consummation of any such purchase, merger, consolidation or other transaction, a
written instrument in form and in substance reasonably satisfactory to the
Executive and his legal counsel pursuant to which any such successor shall agree
to assume and to perform on a timely basis or to cause to be performed on a
timely basis all of the Company's covenants, agreements and obligations set
forth in this Agreement (a "Successor Agreement"). The failure of the Company to
cause any such successor to execute and deliver a Successor Agreement to the
Executive shall (a) constitute a breach of the provisions of this Agreement by
the Company and (b) be deemed to constitute a termination by the Executive of
his employment hereunder (as of the date upon which any such successor shall
succeed to all or substantially all of the business or properties and assets of
the Company) for Good Reason.
ARTICLE X
Attorneys' Fees
In the event that any litigation shall arise between the
Company and the Executive based, in whole or in part, upon this Agreement or any
or all of the provisions contained herein, then, in any such event, the
prevailing party in any such litigation shall be entitled to recover from the
non-prevailing party, and shall be awarded by a court of competent jurisdiction,
any and all reasonable fees and disbursements of trial and appellate counsel
paid, incurred or suffered by such prevailing party as the result of, arising
from, or in connection with, any such litigation.
ARTICLE XI
Miscellaneous Provisions
11.1 Governing Law. This Agreement shall be governed by, and shall be
construed and interpreted in accordance, with the laws of the State of Florida,
without giving effect to the principles of conflicts of law thereof.
11.2 Notices. Any and all notices and other communications required
or permitted to be given pursuant to this Agreement shall be in writing and
shall be deemed to have been duly given when delivered by hand, or when
delivered by United States mail, by registered or by a nationally recognized
overnight delivery service or via telecopier or certified mail, postage prepaid,
return receipt requested, to the respective parties at the following respective
addresses:
If to the Company: Method Products Corporation
0000 Xxxx Xxxxxx Xxxx, Xxxxx X-0
Xxxxxxx Xxxxx, Xx 00000
Attention: Board of Directors
Telecopier No. (000) 000-0000
If to the Executive: Xxxx X. Xxxxxxxxx
0000 XX 00xx Xxxxxx
Xxxxxxx Xxxxx, Xxxxxxx 00000
Telecopier No. (000) 000-0000
or to such other address as either party may from time to time give written
notice of to the other in accordance with the provisions of this Section 11.2.
11.3 Entire Agreement. This Agreement constitutes the entire
agreement between the Company and the Executive with respect to the subject
matter hereof and supersedes all prior agreements, understandings, negotiations
and arrangements, both oral and written, between the Company and the Executive
with respect to such subject matter.
11.4 Amendments. This Agreement may not be amended or modified in any
manner, except by a written instrument executed by each of the Company and the
Executive.
11.5 Benefits; Binding Effect. This Agreement shall be for the
benefit of, and shall be binding upon, each of the Company and the Executive and
their respective heirs, personal representatives, executors, legal
representatives, successors and assigns.
11.6 Severability. The invalidity of any one or more of the words,
phrases, sentences, clauses or sections contained in this Agreement shall not
affect the enforceability of the remaining portions of this Agreement or any
part hereof, all of which are inserted conditionally on their being valid in
law. Except as otherwise provided in Section 8.3 above, if any one or more of
the words, phrases, sentences, clauses or sections contained in this Agreement
shall be declared invalid by any court of competent jurisdiction, then, in any
such event, this Agreement shall be construed as if such invalid word or words,
phrase or phrases, sentence or sentences, clause or clauses, or section or
sections had not been inserted.
11.7 No Waivers. The waiver by either party of a breach or violation
of any provision of this Agreement by the other party shall not operate nor be
construed as a waiver of any subsequent breach or violation. The waiver by
either party to exercise any right or remedy it or he may possess shall not
operate nor be construed as a bar to the exercise of such right or remedy by
such party upon the occurrence of any subsequent breach or violation.
11.8 Jurisdiction and Venue; Service of Process; Waiver of Trial by
Jury; Attorneys Fees.
(a) Any claim or dispute arising out of, connected with, or in any
way related to this Agreement which results in litigation shall be instituted by
the complaining party and adjudicated either in the federal or state courts for
Broward County, Florida, and each of the parties to this Agreement consent to
the personal jurisdiction of and venue in such courts. In no event shall either
party to this Agreement contest the jurisdiction or venue of such courts with
respect to any such litigation.
(b) Each of the Company and the Executive agrees that service of any
process, summons, notice or document, by United States registered or certified
mail, to its or his address set forth in or as provided in Section 11.2 above
shall be effective service of such process, summons, notice or document for any
action, suit or proceeding brought against it or him by the other party in the
federal or state courts for Broward County, Florida.
(c) In recognition of the fact that the issues which would arise
under this Agreement are of such a complex nature that they could not be
properly tried before a jury, each of the Company and the Executive waives trial
by jury.
(d) The prevailing party in any such action or proceeding shall be
entitled to recover its reasonable attorneys' fees and related costs from the
other party.
11.9 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of any or all of the provisions hereof.
11.10 Counterparts. This Agreement may be executed in any number of
counterparts and by the separate parties in separate counterparts, each of which
shall be deemed to constitute an original and all of which shall be deemed to
constitute the one and the same instrument.
IN WITNESS WHEREOF, each of the parties hereto has executed and
delivered this Agreement on the date first written above.
Method Products Corp.
By
Xxxx X. Xxxxxxxx, President
Chairman of the Board
Xxxx X. Xxxxxxxxx
