EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of the 10th day of April, 2000,
regardless of the date signed, by and between Global Technovations, Inc.
("GTI"), a Delaware corporation (the "Company"), and Xxxxxxx Xxxxxx, Jr. (the
"Executive").
W I T N E S S E T H T H A T
WHEREAS, the Company wishes to provide for the employment by
the Company of the Executive, and the Executive wishes to serve the Company, in
the capacities and on the terms and conditions set forth in this Agreement;
NOW, THEREFORE, it is hereby agreed as follows:
1. EMPLOYMENT PERIOD. The Company shall employ the Executive, and the Executive
shall serve the Company, on the terms and conditions set forth in this
Agreement. The term of this Agreement shall commence on the date of this
Agreement and, unless earlier terminated in accordance with Section 5 hereof,
shall continue through the third anniversary of such date (such three-year term
shall be referred to herein as the "Employment Period").
2. POSITION AND DUTIES. (A) During the Employment Period, the Executive shall
serve as Chairman, President and Chief Executive Officer of the Company with
such duties and responsibilities as are customarily assigned to such positions,
and such other duties and responsibilities not inconsistent therewith as may
from time to time be assigned to him by the Board of Directors of the Company
(the "Board"). The Board shall propose the Executive for re-election and shall
use all reasonable efforts to have the Executive re-elected to the Board and for
positions specified above throughout the Employment Period.
(B) During the Employment Period, the Executive shall report directly
to the Board. All other executive officers of the company shall report to the
Executive.
(C) During the Employment Period, the Executive shall devote
substantially all of his time and attention to the business and affairs of the
Company and shall perform, faithfully and diligently his duties and
responsibilities hereunder. It shall not be considered a violation of the
foregoing for the Executive to serve on corporate, industry, civic, social or
charitable boards or committees, so long as such activities do not interfere
with the performance of the Executive's responsibilities as an employee of the
Company in accordance with this Agreement.
3. COMPENSATION.
(A) BASE SALARY. The Executive's compensation during the Employment
Period shall be determined by the Board upon the recommendation of the committee
of the Board having responsibility for approving the compensation of senior
executives (the "Compensation Committee"), subject to the next sentence and the
other provisions of this Section 3. During the Employment Period, the Executive
shall receive an annual base salary ("Annual Base Salary") of $344,000. The
Annual Base Salary shall be payable on the first and fifteenth day of each
calendar month (or, if any such date is not a business day, on the next business
day following such date) during the Employment Period.
(B) PERFORMANCE BONUS. Executive also shall be eligible to receive a
cash bonus ("Performance Bonus") for each successive fiscal year (prorated for
any partial period) during the Employment Period in an amount of between zero
and 100% of the Annual Base Salary, to be determined on an annual basis in
accordance with the provisions of this Section 3(B). The Performance Bonus, if
any, for each successive fiscal year shall be paid within 60 days after the end
of such period.
The Performance Bonus shall consist of the following two
components:
(I) The first component of the Performance Bonus shall be an
amount of between zero and 50% of the Annual Base Salary based on the Company
achieving certain earnings per share targets tied to the forecasted projections
associated with the funding of the Onkyo acquisition. If the acquisition is not
consummated, the Compensation Committee will meet to establish new financial
goals for FY01 (Oct '00 -Sept.'01).
(II) The second component of the Performance Bonus shall be an
amount of between zero and 50% of the Annual Base Salary based on the Company
achieving approximately five targets for each period of the fiscal year during
the Employment Period. The targets for FY01 (Oct '00-Sept '01) shall be
established within 60 days after the date of the close of each fiscal year,
based on the mutual written agreement of the Executive and the Compensation
Committee (and with respect to which Executive and the Company agree to
negotiate in good faith and as expeditiously as possible) and the targets for
each succeeding fiscal year during the Employment Period shall be reset and
established annually by the Compensation Committee in its sole and absolute
discretion. Each target shall be given equal weight (so that, by way of
illustration, if the Executive and the Compensation Committee agree upon five
targets, the Executive shall be eligible to receive an amount of up to 10% of
the Annual Base Salary upon meeting each such target), and the Executive's
success in achieving each target shall be graded on a scale of 1-10 (so that, by
way of illustration, if the Executive achieves a score of 5 for a target
representing a maximum award of 10% of the Annual Base Salary, the Executive
would receive an amount equal to 5% of the Annual Base Salary with respect to
such target). The Compensation Committee, acting in its sole discretion, shall
evaluate and determine the degree and/or quality of the Executive's achievement
of the targets, and shall report its determinations to the Executive promptly in
writing.
(C) STOCK OPTIONS. The Compensation Committee shall consider making
further grants of options to the Executive on an annual basis during the
Employment Period, although the Committee shall be under no obligation to make
any such additional grants.
(D) AUTOMOBILE ALLOWANCE. During the Employment Period, the Company
shall either (x) make available to the Executive a Company-owned car, or (y) pay
the Executive $600 per month as an automobile allowance, and also shall
reimburse the Executive for up to $400 per month for expenses such as insurance
premiums, parking, fuel and similar expenses relating to the maintenance of an
automobile.
(E) REIMBURSEMENT OF EXPENSES AND ADMINISTRATIVE SUPPORT. The Company
shall pay or reimburse the Executive, upon the presentation of appropriate
documentation of such expenses, for all reasonable travel and other expenses
incurred by the Executive in accordance with the Company's expense policies in
performing his obligations under this Agreement. The Company further agrees to
furnish the Executive with office space and administrative support in existing
Company facilities whenever possible, and any other assistance and
accommodations as shall be reasonably required by the Executive in the
performance of his duties under this Agreement. The Executive shall review the
foregoing expenses and other matters with the Compensation Committee on a
quarterly basis.
(F) VACATION. Executive shall be entitled to four (4) weeks paid
vacation in each calendar year.
(G) DEDUCTIONS. All payments made under this Agreement shall be subject
to such deductions at the source as from time to time may be required to be made
pursuant to any law, rule, regulation or order.
(H) CHANGE IN CONTROL. For purposes of this Agreement, a "Change in
Control" of the Company shall be deemed to have occurred upon any of the
following events:
(I) A person or entity or group of persons or entities, acting in concert,
shall become the direct or indirect beneficial owner (within the meaning of Rule
13d-3 of the Securities Exchange Act of 1934, as amended), of securities of the
Company representing more than fifty percent (50%) of the combined voting power
of the issued and outstanding common stock of the Company; or
(II) The majority of the Board is no longer comprised of the incumbent
directors who constitute such board on the date of this Agreement (Messrs.
Mennen, Vickar, Xxxx, Xxxxx and Xxxxxx); or
(III) The Board shall approve a sale of all or substantially all of the
assets of the Company; or
(IV) The Board shall approve any merger, acquisition, consolidation, or
like business combination or reorganization of the Company, the consummation of
which would result in the occurrence of any event described in clause (I) or
(II) above, and such transaction shall have been consummated.
4. PARTICIPATION IN BENEFIT PLANS. The Executive shall be entitled to
participate, during the term of this Agreement, in the Company's benefit
programs, including but not limited to the Company's 401K plan (with respect to
which the Company, shall make the maximum matching contribution (presently
$2,500 annually) permitted under the term of such plan and applicable law) and
any other qualified or non-qualified pension plans, supplemental pension plans,
group hospitalization, health, dental care, death benefit, post-retirement
welfare plans, or other present or future group employee benefit plans or
programs of the Company for which key executives are or shall become eligible
(collectively, the "Benefit Plans"), on the same terms as other key executives
of the Company. In addition to and without limiting the generality of the
foregoing, during the Employment Period, (x) the Company shall reimburse the
Executive for all medical expenses incurred by him and the members of his
immediately family in connection with reasonable medical care (not including
cosmetic surgery or procedures) to the extent not covered by the foregoing
insurance up to a maximum of $10,000 per year, and (y) the Company shall obtain
and maintain a term life insurance policy in the amount of $1,000,000, which
policy shall be owned by the Executive, from a nationally-recognized insurance
carrier reasonably acceptable to the Executive.
5. TERMINATION OF EMPLOYMENT.
(A) DEATH OR DISABILITY. The Executive's employment shall terminate
automatically upon the Executive's death during the Employment Period. The
Company shall be entitled to terminate the Executive's employment because of the
Executive's Disability during the Employment Period. "Disability" means that the
Executive has been unable, for a period of not less than (x) 90 consecutive
business days, or (y) 180 days within any 12 month period, to perform the
Executive's duties under this Agreement, as a result of physical or mental
illness or injury. A termination of the Executive's employment by the Company
for Disability shall be communicated to the Executive by written notice, and
shall be effective on the 30th day after receipt of such notice by the Executive
(the "Disability Effective Date"), unless the Executive returns to full-time
performance of the Executive's duties before the Disability Effective Date.
(B) BY THE COMPANY. (I) The Company may terminate the Executive's
employment during the Employment Period for Cause or without Cause. "Cause"
means (x) the conviction of the Executive for the commission of a felony related
to the Executive's performance of his duties with the Company, (y) gross
negligence or willful misconduct by the Executive that results in material and
demonstrable monetary damage to the Company, or (z) continued failure or refusal
by the Executive to substantially perform his duties hereunder (other than by
reason of death or disability) after written notification and a 30-day cure
period.
(II) A termination of the Executive's employment for Cause
shall be effected in accordance with the following procedures. The Company shall
give the Executive written notice ("Notice of Termination for Cause") of its
intention to terminate the Executive's employment for Cause, setting forth in
reasonable detail the specific conduct of the Executive that it considers to
constitute Cause and the specific provision(s) of this Agreement on which it
relies, and stating the date, time and place of the Special Board Meeting for
Cause. The "Special Board Meeting for Cause" means a meeting of the Board called
and held specifically for the purpose of considering the Executive's termination
for Cause, that takes place not less than ten and not more than twenty business
days after the Executive receives the Notice of Termination for Cause. The
Executive shall be given an opportunity, together with counsel, to be heard at
the Special Board Meeting for Cause. The Executive's termination for Cause shall
be effective when and if a resolution is duly adopted at the Special Board
Meeting for Cause.
(III) A termination of the Executive's employment without
Cause shall be effected by giving the Executive written notice of the
termination.
(C) GOOD REASON. (I) The Executive may terminate employment for Good Reason
or without Good Reason. "Good Reason" means:
a. Failure by the Company to re-elect the Executive as Chairman
of the Board of Directors and Chief Executive Officer, or the assignment to the
Executive of any duties or responsibilities materially inconsistent with those
customarily associated with the positions to be held by the Executive pursuant
to this Agreement, or any other action by the Company that results in a material
diminution in the Executive's position, authority, duties or responsibilities,
other than an isolated, insubstantial and inadvertent action that is not taken
in bad faith and is remedied by the Company promptly after receipt of notice
thereof from the Executive;
b. Any failure by the Company to comply with any provision of
Section 3 of this Agreement, other than an isolated, insubstantial and
inadvertent failure that is not taken in bad faith and is remedied by the
Company promptly after receipt of notice thereof from the Executive;
c. Any requirement by the Company not agreed to by the
Executive that the Executive's services be rendered primarily at a location or
locations more than 50 miles distant from the Company's present executive
offices in Palm Beach Gardens, Florida; or
d. Any other material breach of this Agreement by the Company that
either is not taken in good faith or is not remedied by the Company promptly
after receipt of notice thereof from the Executive.
(II) A termination of employment by the Executive for Good
Reason shall be effectuated by giving the Company written notice ("Notice of
Termination for Good Reason") of the termination, setting forth in reasonable
detail the specific conduct of the Company that constitutes Good Reason and the
specific provision(s) of this Agreement on which the Executive relies. A
termination of employment by the Executive for Good Reason shall be effective on
the fifth business day following the date when the Notice of Termination for
Good Reason is given, unless the notice sets forth a later date (which date
shall in no event be later than 30 days after the notice is given).
(III) A termination of the Executive's employment by the
Executive without Good Reason shall be effected by giving the Company written
notice of the termination.
(D) NO WAIVER. The failure to set forth any fact or circumstance in a
Notice of Termination for Cause or a Notice of Termination for Good Reason shall
not constitute a waiver of the right to assert, and shall not preclude the party
giving notice from asserting, such fact or circumstance in an attempt to enforce
any right under or provision of this Agreement.
(E) DATE OF TERMINATION. The "Date of Termination" means the date of
the Executive's death, the Disability Effective Date, the date on which the
termination of the Executive's employment by the Company for Cause or without
Cause or by the Executive for Good Reason is effective, or the date on which the
Executive gives the Company notice of a termination of employment without Good
Reason, as the case may be.
6. OBLIGATIONS OF THE COMPANY UPON TERMINATION.
(A) DEATH. If the Executive's employment is terminated by reason of the
Executive's death during the Employment Period, the Company shall continue to
pay to the Executive's designated beneficiaries (or, if there is no such
beneficiary, to the Executive's estate or legal representative), the Annual Base
Salary provided for in Section 3(A) as in effect on the Date of Termination
through the end of the month in which the Executive's death occurs. The Company
also shall pay to the Executive's designated beneficiaries (or, if there is no
such beneficiary, to the Executive's estate or legal representative), in a lump
sum in cash within 30 days of the Date of Termination (or, in the case of the
amount referred to in clause (I) below, as soon as practicable after the
calculation period in which the Date of Termination occurs), the sum of the
following amounts (the "Accrued Obligations"): (I) any accrued but unpaid
Performance Bonus, vacation pay or other monetary payments to which Executive
was entitled on the Date of Termination, and (II) a pro rata portion of the
Performance Bonus for the year in which the Date of Termination occurs, based on
the number of days of such year prior to the Date of Termination. With respect
to medical insurance coverage, the Company shall continue to provide the spouse
and dependents of the Executive, at the expense of the Company, with the medical
insurance then provided generally to dependents of employees of the Company, for
a period of one year following the termination of the employment of the
Executive, which medical insurance coverage shall be included as part of any
required continuation of coverage under Part 6, Subtitle B of Title I of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or any
similar state or local law ("COBRA Coverage"); provided, however, that the COBRA
Coverage shall terminate with respect to such spouse and/or dependents as of the
date that the spouse and/or dependents receive equivalent coverage and benefits
under any plans, programs and/or arrangements of a subsequent employer. The
rights and benefits of the estate or other legal representative of the Executive
under the benefit plans and programs of the Company shall be determined in
accordance with the provisions of such plans and programs. The rights and
benefits of the estate or other legal representative of the Executive with
respect to the options referred to in Section 3(C) shall be determined in
accordance with the provisions of the plans and grant agreements governing such
options. Except as otherwise specified in this Agreement, neither the estate or
other legal representative of the Executive nor the Company shall have any
further rights or obligations under this Agreement.
(B) DISABILITY. If the Executive's employment is terminated by reason
of the Executive's Disability during the Employment Period, the Company shall
pay to the Executive, in a lump sum in cash within 30 days of the Date of
Termination (or, in the case of any Performance Bonus, as soon as practicable
after the end of the calculation period in which the Date of Termination
occurs), the Accrued Obligations. The Company shall continue to provide the
Executive and the spouse and dependents of the Executive, at the expense of the
Company, with the medical insurance then provided generally to dependents of
employees of the Company, for a period of one year following the termination of
the employment of the Executive, which medical insurance coverage shall be
included as part of any required COBRA Coverage; provided, however, that the
COBRA Coverage shall terminate with respect to the Executive, the spouse and/or
dependents of the Executive as of the date that any such individual receives
equivalent coverage and benefits under any plans, programs and/or arrangements
of a subsequent employer. The rights and benefits of the Executive under the
benefit plans and programs of the Company shall be determined in accordance with
the provisions of such plans and programs. The rights and benefits of the
Executive with respect to the options referred to in Section 3(C) shall be
determined in accordance with the provisions of the plans and grant agreements
governing such options. Except as otherwise specified in this Agreement, neither
the Executive nor the Company shall have any further rights or obligations under
this Agreement.
(C) BY THE COMPANY OTHER THAN FOR CAUSE, DEATH OR DISABILITY, OR BY THE
EXECUTIVE FOR GOOD REASON. If, during the Employment Period, the Company
terminates the Executive's employment, other than for Cause, death or
Disability, or the Executive terminates employment for Good Reason, the Company
shall, continue to pay to the Executive, until the expiration of 12 months after
the Date of Termination, the Annual Base Salary provided for in Section 3(A).
The Company also shall pay to the Executive, in a lump sum in cash within 30
days of the Date of Termination (or, in the case of any Performance Bonus, as
soon as practicable after the end of the calculation period in which the Date of
Termination occurs), the Accrued Obligations. However, not withstanding the
foregoing, if the Company terminates the Executive or the Executive resigns for
Good Reason as a result of Change of Control, events outlined in 3(H), the
Company shall continue to pay to the Executive, until the expiration of 36
months after the Date of Termination, the Annual Base Salary provided for in
Section 3(A). The Company also shall pay to the Executive, in a lump sum in cash
within 30 days of the Date of Termination (or, in the case of any Performance
Bonus, as soon as practicable after the end of the calculation period in which
the Date of Termination occurs), the Accrued Obligations. The Company shall
continue to provide the Executive and the spouse and dependents of the
Executive, at the expense of the Company with the medical insurance then
provided generally to dependents of employees of the Company, for the period
during the termination pay (12 months or 36 months, respectively) following the
termination of the employment of the Executive, which medical insurance coverage
shall be included as part of any required COBRA Coverage; provided, however,
that the COBRA Coverage shall terminate with respect to the Executive, the
spouse and/or dependents of the Executive as of the date that any such
individual receives equivalent coverage and benefits under any plans, programs
and/or arrangements of a subsequent employer. The rights and benefits of the
Executive under the benefit plans and programs of the Company shall be
determined in accordance with the provisions of such plans and programs. The
rights and benefits of the Executive with respect to the options referred to in
Section 3(C) shall be determined in accordance with the provisions of the plans
and grant agreements governing such options. Except as otherwise specified in
this Agreement, neither the Executive nor the Company shall have any further
rights or obligations under this Agreement. The payments and benefits provided
pursuant to this paragraph (C) of Section 6 are intended as liquidated damages
for a termination of the Executive's employment by the Company other than for
Cause or Disability or for the actions of the Company leading to a termination
of the Executive's employment by the Executive for Good Reason.
(D) BY THE COMPANY FOR CAUSE; BY THE EXECUTIVE OTHER THAN FOR GOOD
REASON. If the Executive's employment is terminated by the Company for Cause
during the Employment Period, or if the Executive voluntarily terminates
employment during the Employment Period, other than for Good Reason, the Company
shall pay to the Executive in a lump sum in cash within 30 days of the Date of
Termination any portion of the Executive's Annual Base Salary through the Date
of Termination that has not yet been paid plus any accrued but unpaid vacation
pay to which Executive was entitled on the Date of Termination, and the Company
shall have no further obligations under this Agreement, except as otherwise
specified in this Agreement. The rights and benefits of the Executive under the
benefit plans and programs of the Company shall be determined in accordance with
the provisions of such plans and programs. The rights and benefits of the
Executive with respect to the options referred to in Section 3(C) shall be
determined in accordance with the provisions of the plans and grant agreements
governing such options.
(E) The Company's obligation to deliver the liquidated damages payments
described in paragraph (C) of this Section 6 shall be contingent on the
Executive delivering to the Company, on or about the Date or Termination, a
legal release in a form acceptable to counsel to the Company, releasing the
Company, its affiliates, and the current and former directors, officers and
employees of the Company from any obligations relating to his employment
hereunder, subject to the Company's continuing obligations under this Agreement
and subject to the Executive's continuing rights under the terms and conditions
of the compensation and benefit plans in which the Executive is a participant,
as such plans may be amended from time to time.
(F) The respective obligations of the Company and the Executive under
Sections 9, 10, 11, 12 and 13 shall survive any termination of Executive's
employment.
(G) Notwithstanding any other provision of this Agreement, to the
extent the Company reasonably determines that the Executive would be subject to
the excise tax under Section 4999 of the Internal Revenue Code of 1986, as
amended (the "Code"), on any payments under Section 6 of this Agreement and such
other amounts or benefits the Executive receives from the Company, any person
whose actions result in a change of ownership covered by Section 280G(b)(2) of
the Code or any person affiliated with the Company or such person, required to
be included in the calculation of parachute payments for purposes of Sections
280G and 4999 of the Code, the amounts provided under this Agreement shall be
automatically reduced to an amount one dollar less than that which, when
combined with such other amounts, would subject the Executive to such excise
tax.
7. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent or limit
the Executive's continuing or future participation in any plan, program, policy
or practice provided by the Company or any of its affiliated companies for which
the Executive may qualify, nor, subject to paragraph (F) of Section 14, shall
anything in this Agreement limit or otherwise affect such rights as the
Executive may have under any contract or agreement with the Company or any of
its affiliated companies. Vested benefits and other amounts that the Executive
is otherwise entitled to receive under the Stock Option Plan, or any other plan,
policy, practice or program of, or any contract of agreement with, the Company
or any of its affiliated companies on or after the Date of Termination shall be
payable in accordance with the terms of each such plan, policy, practice,
program, contract or agreement, as the case may be.
8. NO OFFSET, ETC. The Company's obligation to make the payments provided for
in, and otherwise to perform its obligations under, this Agreement shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim, right
or action that the Company may have against the Executive or others. In no event
shall the Executive be obligated to seek other employment or take any other
action by way of mitigation of the amounts payable to the Executive under any of
the provisions of this Agreement, and such amounts shall not be reduced,
regardless of whether the Executive obtains other employment.
9. INVENTIONS. Any and all inventions, innovations or improvements
("inventions") made, developed or created by the Executive (whether at the
request or suggestion of the Company (which, as used in this Section 9, shall be
deemed to include the Company and each of its subsidiaries) or otherwise,
whether alone or in conjunction with others, and whether during regular hours of
work or otherwise) during the period of his employment with the Company which
may be directly or indirectly useful in, or relate to, the business of the
Company, shall be promptly and fully disclosed by the Executive to the Board and
shall be the Company's exclusive property as against the Executive, and the
Executive shall promptly deliver to an appropriate representative of the Company
as designated by the Board all papers, drawings, models, data and other material
relating to any inventions made, developed or created by him as aforesaid. The
Executive shall, at the request of the Company and without any payment therefor,
execute any documents necessary or advisable in the opinion of the Company's
counsel to direct issuance of patents or copyrights to the Company with respect
to such inventions as are to be the Company's exclusive property as against the
Executive or to vest in the Company title to such inventions as against the
Executive. The expense of securing any such patent or copyright shall be borne
by the Company.
10. CONFIDENTIAL INFORMATION. The Executive shall hold all secret or
confidential information, knowledge or data relating to the Company or any of
its affiliated companies and their respective businesses that the Executive
obtains during the Executive's employment by the Company or any of its
affiliated companies and that is not public knowledge (other than as a result of
the Executive's violation of this Section 10) ("Confidential Information") in
strict confidence. The Executive shall not communicate, divulge or disseminate
Confidential Information at any time during or after the Executive's employment
with the Company, except with the prior written consent of the Company or as
otherwise required by law or regulation or by legal process. If the Executive is
requested pursuant to, or required by, applicable law or regulation or by legal
process to disclose any Confidential Information, the Executive will provide the
Company, as promptly as the circumstances reasonably permit, with notice of such
request or requirement and, unless a protective order or other appropriate
relief is previously obtained, the Confidential Information, subject to such
request, may be disclosed pursuant to and in accordance with the terms of such
request or requirement, provided that the Executive shall use his best efforts
to limit any such disclosure to the precise terms of such request or
requirement.
11. NON-COMPETITION. The Executive acknowledges that the services to be rendered
by him to the Company (which, as used in this Section 11 shall be deemed to
include the Company and each of its subsidiaries) are of a special and unique
character. In consideration of his employment hereunder, the Executive agrees,
for the benefit of the Company, that he will not, during the term of this
Agreement and thereafter until the earlier to occur of (x) the expiration of a
period of twelve (12) months commencing on the date of termination of his
employment with the Company or (y) a Change in Control, (a) engage, directly or
indirectly, whether as principal, agent, distributor, representative,
consultant, employee, partner, stockholder, limited partner or other investor
(other than an investment of not more than (I) two percent (2%) of the stock or
equity of any corporation the capital stock of which is publicly traded or (II)
two percent (2%) of the ownership interest of any limited partnership or other
entity) or otherwise, within the United States of America, in any business which
is competitive with the business now, or at any time during the term of this
Agreement, conducted by the Company, (B) solicit or entice to endeavor to
solicit or entice away from the Company any person who was an officer, employee
or sales representative of the Company, either for his own account or for any
individual, firm or corporation, whether or not such person would commit any
breach of his contract of employment by reason of leaving the service of the
Company, and the Executive agrees not to employ, directly or indirectly, any
person who was an officer, employee or sales representative of the Company or
who by reason of such position at any time is or may be likely to be in
possession of any confidential information or trade secrets relating to the
businesses or products of the Company, or (C) solicit or entice or endeavor to
solicit or entice away from the Company any customer or prospective customer of
the Company, either for his own account or for any individual, firm or
corporation. In addition, the Executive shall not, at any time during the term
of this Agreement or at any time thereafter, engage in the business which uses
as its name, in whole or in part, "Global Technovations," "Top Source," or any
other tradename or trademark or corporate name used by the Company or any of its
subsidiaries.
12. INDEMNIFICATION. (A) The Company shall indemnify the Executive to the
fullest extent permitted by Delaware law in effect as of the date hereof against
all costs, expenses, liabilities and losses (including, without limitation,
attorneys' fees, judgments, fines, penalties, ERISA excise taxes, penalties and
amounts paid in settlement) reasonably incurred by the Executive in connection
with a Proceeding. For the purposes of this Section 12, a "Proceeding" shall
mean any action, suit or proceeding, whether civil, criminal, administrative or
investigative, in which the Executive is made, or is threatened to be made, a
party to, or a witness in, such action, suit or proceeding by reason of the fact
that he is or was an officer, director or employee of the Company or is or was
serving as an officer, director, member, employee, trustee or agent of any other
entity at the request of the Company, whether or not the basis of such
Proceeding arises out of or in connection with the Executive's alleged action or
omission in an official capacity.
(B) The Company shall advance to the Executive all reasonable costs and
expenses incurred by him in connection with a Proceeding within 20 days after
receipt by the Company of a written request for such advance. Such request shall
include an itemized list of the costs and expenses and an undertaking by the
Executive to repay the amount of such advance if it shall ultimately be
determined that he is not entitled to be indemnified against such costs and
expenses.
(C) The Executive shall not be entitled to indemnification under this
Section 12 unless he meets the standard of conduct specified in the Delaware
General Corporation Law. Any indemnification under subsection (A) (unless
ordered by a court) shall be made by the Company only as authorized in the
specific case upon a determination that indemnification of the Executive is
proper in the circumstances because he has met the applicable standard of
conduct set forth in the Delaware Corporation Law. Such determination shall be
made (1) by the Board by a majority vote of a quorum consisting of directors who
were not parties to such Proceeding, or (2) if such a quorum is not obtainable,
or, even if obtainable a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion, or (3) by the stockholders.
(D) The Company shall not settle any Proceeding or claim in any manner
which would impose on the Executive any penalty or limitation without his prior
written consent. Neither the Company nor the Executive will unreasonably
withhold its or his consent to any proposed settlement.
(E) The indemnification in this Section 12 shall inure to the benefit
of the Executive's heirs, executors and administrators.
(F) The Company agrees to use its best efforts to obtain, continue and
maintain an adequate directors and officers' liability insurance policy and
shall cause such policy to cover the Executive to the extent the Company
provides such coverage for its other executive officers.
13. SUCCESSORS; BENEFICIARIES. (A) This Agreement is personal to the Executive
and, without the prior written consent of the Company, shall not be assignable
by the Executive otherwise than by will or the laws of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives.
(B) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
(C) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would have been required to perform it if no such
succession had taken place. As used in this Agreement, "Company" shall mean both
the Company as defined above and any such successor that assumes and agrees to
perform this Agreement, by operation of law or otherwise.
(D) The Executive shall be entitled, to the extent permitted under any
applicable law, to select and change the beneficiary or beneficiaries to receive
any compensation or benefit payable hereunder following the Executive's death by
giving the Company written notice thereof. In the event of the Executive's death
or a judicial determination of his incompetence, reference in this Agreement to
the Executive shall be deemed, where appropriate, to refer to his beneficiary,
estate or other legal representative.
14. MISCELLANEOUS. (A) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Florida, without reference to
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. This Agreement may not
be amended or modified except by a written agreement executed by the parties
hereto or their respective successors and legal representatives.
(B) All notices and other communications under this Agreement shall be
in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive:
Mr. Xxxxxxx Xxxxxx, Jr.
000 Xxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxx 00000-0000
If to the Company:
Global Technovations, Inc.
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxxx Xxxxxx, Xxxxxxx 00000
Attention: General Counsel
or to such other address as either party furnishes to the other in writing in
accordance with this paragraph (B) of Section 14. Notices and communications
shall be effective when actually received by the addressee.
(C) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement. If any provision of this Agreement shall be held invalid or
unenforceable in part, the remaining portion of such provision, together with
all other provisions of this Agreement, shall remain valid and enforceable and
continue in full force and effect to the fullest extent consistent with law.
(D) Notwithstanding any other provision of this Agreement, the Company
may withhold from amounts payable under this Agreement all federal, state, local
and foreign taxes that are required to be withheld by applicable laws or
regulations.
(E) The Executive's or the Company's failure to insist upon strict
compliance with any provisions of, or to assert, any right under, this Agreement
(including, without limitation, the right of the Executive to terminate
employment for Good Reason pursuant to paragraph (C) of Section 5 of this
Agreement) shall not be deemed to be a waiver of such provision or right or of
any other provision of or right under this Agreement.
(F) The Executive and the Company acknowledge that this Agreement
supersedes any other agreement between them concerning the subject matter
hereof.
(G) The rights and benefits of the Executive under this Agreement may
not be anticipated, assigned, alienated or subject to attachment, garnishment,
levy, execution or other legal or equitable process except as required by law.
Any attempt by the Executive to anticipate, alienate, assign, sell, transfer,
pledge, encumber or charge the same shall be void. Payments hereunder shall not
be considered assets of the Executive in the event of insolvency or bankruptcy.
(H) This Agreement may be executed in several counterparts, each of
which shall be deemed an original, and said counterparts shall constitute but
one and the same instrument.
IN WITNESS WHEREOF, the Executive has hereunto set the
Executive's hand and, pursuant to the authorization of the Board of Directors,
the Company has caused this Agreement to be executed in its name on its behalf,
all as of the day and year first above written.
Xxxxxxx Xxxxxx, Jr.
GLOBAL TECHNOVATIONS, INC.
By: Xxxxx Xxxxx Vice President
and CFO
COMPENSATION COMMITTEE:
G. Xxxx Xxxxxx
L. Xxxxx Xxxxxx
