TRANSITION AGREEMENT
Exhibit
10.1
THIS
TRANSITION AGREEMENT
(the
"Agreement") is entered into as of May 6, 2008, by and between Xxxxxx X. Xxxxxx
("Xxxxxx") and 21st
Century
Holding Company, a Florida corporation (the "Company").
WITNESSETH:
WHEREAS,
Xxxxxx
was employed by the Company to serve as the Chief Executive Officer of the
Company pursuant to an employment agreement dated September 1, 1998, as amended
by the First Modification Agreement dated December 7, 2004 (collectively, the
"Employment Agreement");
WHEREAS,
Xxxxxx
has decided to retire and will resign from all officer positions that he holds
with the Company effective as of June 30, 2008 (the "Resignation Date")and
from
officer and/or director positions with any subsidiaries or affiliates of the
Company (collectively, the "Affiliated Companies") effective as of May 6, 2008;
WHEREAS,
following the Resignation Date, Xxxxxx agrees to work with the Company on the
terms and conditions set forth herein;
NOW,
THEREFORE,
Xxxxxx
and the Company, intending to be legally bound hereby and in consideration
of
the promises contained herein, do hereby agree as follows:
1. RESIGNATION
FROM OFFICER POSITIONS.
Xxxxxx
agrees to resign from his position as the Chief Executive Officer and Chairman
of the Board of the Company and from any other officer positions that he holds
with the Company or any Affiliated Companies, effective as of the Resignation
Date. Xxxxxx acknowledges and agrees that after the Resignation Date, he will
not have the authority to represent or bind the Company or any Affiliated
Companies as an executive officer of the Company or any Affiliated Company.
2. TERMINATION
OF EMPLOYMENT AGREEMENT.
2.1 Xxxxxx
acknowledges and agrees that this Agreement shall serve to terminate his
Employment Agreement and this Agreement sets forth all of the compensation
payable to him effective as of the date of this Agreement. Xxxxxx acknowledges
and agrees that the Company has paid him all wages and any other compensation
that is payable to him under his Employment Agreement, including but not limited
to all salary payments, bonuses, incentive compensation, reimbursement for
his
business expenses and vacation pay, to which he is entitled under the Employment
Agreement or otherwise in connection with his employment with the Company.
2.2 The
Company and Xxxxxx acknowledge the termination of the Employment Agreement,
except for the covenants and obligations set forth in Sections 7 and 8 of the
Employment Agreement, which by their terms survive the termination of the
Employment Agreement and are incorporated herein by reference. Xxxxxx
acknowledges and agrees that he will comply with the obligations and covenants
set forth in Sections 7 and 8 of the Employment Agreement for the applicable
time periods set forth in the Employment Agreement.
3. DIRECTOR
SERVICE.
Xxxxxx
and the Company agree that Xxxxxx will continue to serve as a member of the
Board of Directors of the Company (the "Board"), until such time that Xxxxxx
resigns from the Board or Xxxxxx is replaced and his successor is duly elected.
Xxxxxx agrees to attend all Board Meeting and acknowledges and agrees that
he
will not receive any fees for serving as a director during the
Term.
4. TRANSITION
SERVICES.
4.1 Xxxxxx
agrees to work with the Board of Directors of the Company from his Resignation
Date through December 31, 2010 (the "Expiration Date"). This period between
the
Resignation Date and the Expiration Date shall be referred to as the "Term."
These services will include without limitation, advice regarding the Company's
business and growth strategy. Such services shall be provided at such times,
locations and by such means as reasonably required by the Company. The Company
agrees to provide the Xxxxxx with at least seven (7) days notice when his
presence is required at the Company's executive office or any other location.
4.2 In
consideration of the covenants and other promises set forth herein, the Company
agrees to pay Xxxxxx an annual salary of One Hundred Seventy-Five Thousand
Dollars ($175,000) per year during the Term, beginning on the Resignation Date
and ending on the Expiration Date (unless terminated prior to the Expiration
Date). Xxxxxx'x salary will be paid in accordance with the Company's normal
payroll practices and shall be pro-rated for any partial year during the Term.
For the sake of clarity, if the Term ends prior to December 31, 2010, Xxxxxx
shall only be entitled to receive the amount earned prior to the Expiration
Date, in accordance with the Company's normal payroll practices. All
compensation paid under this Agreement shall be subject to all applicable
withholding taxes and any other amounts required by law to be withheld. During
the Term, Xxxxxx shall be entitled to receive medical and dental benefits which
are available to executive officers of the Company and the Company will pay
for
these benefits.
4.3 The
Company's obligation to make payments to Xxxxxx under this Agreement is
conditioned upon Xxxxxx'x compliance with all of his covenants and obligations
contained in (a) this Agreement and (b) Sections 7 and 8 of the Employment
Agreement.
5. WAIVER
AND RELEASE.
For good
and valuable consideration, the receipt and sufficiency of which is acknowledged
by Xxxxxx, including the payments to Xxxxxx as described herein, Xxxxxx hereby
agrees that his execution and delivery of this Agreement was not due in any
way
to age or any other type of discrimination or any wrongful act of the Company,
and Xxxxxx and his Releasors, as hereinafter defined, do hereby voluntarily
and
fully release and forever discharge the Company and any Affiliated Companies,
together with their respective past and current predecessors, successors,
shareholders, officers, directors, employees, attorneys, trustees, insurers,
representatives, contractors, representatives, related organizations, affiliates
and subsidiaries (collectively, the "Released Parties"), jointly and
individually, from any and all claims, demands, debts, causes of action, claims
for relief, and damages, of whatever kind or nature, known or unknown, developed
or undeveloped, which Xxxxxx had, now has or may hereinafter have from the
beginning of the world to the date hereof, including, without limitation, all
claims and all rights which Xxxxxx may have under Title VII of the Civil Rights
Act of 1964; the Equal Employment Opportunity Act of 1972; the Civil Rights
Act
of 1991; the Age Discrimination and Employment Act of 1967; Xxxxxx Retirement
Security Act 42 U.S.C. ss. 1981; the Older Workers' Benefit Protection Act;
the
Americans with Disabilities Act; the Family Medical Leave Act of 1993; the
Equal
Pay Act; the Fair Labor Standards Act; and any and all other federal and state
statutes which regulate employment; and the laws of contracts, tort and other
subjects.
6. RELEASED
PARTIES AND NO ADMISSION OF LIABILITY.
For
purposes of paragraph 5, "Releasors" shall mean, collectively, the spouse of
Xxxxxx and Xxxxxx'x dependents, heirs, executors administrators and assigns,
past and present and each of them and their trustees, directors, officers,
agents, attorneys, insurers, employees, representatives, successors, assigns
and
all persons acting by, through, under or in connection with them, past and
present. Execution of this Agreement and payment of the payments specified
in
this Agreement does not constitute an admission by any Released Party of any
violation of any civil rights or other employment discrimination statute, or
any
other legal statute, provision, regulation, ordinance, order or action under
common law. Rather, this Agreement expresses the intention of the parties to
resolve all possible issues and other claims related to or arising out of
Xxxxxx'x employment by the Company without the time and expense of
litigation.
7. COOPERATION
IN ONGOING LITIGATION.
Xxxxxx
agrees to make himself available for, and to provide whatever cooperation and
assistance may be requested by the Company relating to, any ongoing or future
litigation in which the Company or any officer, director, stockholder, manager,
agent or representative of the Company is a party or has a direct interest
relating to matters occurring before or during Xxxxxx'x employment with the
Company or service on the Board of Directors, including, without limitation,
the
class action lawsuit, the derivative lawsuit and related cases. Xxxxxx shall
execute all documents in connection with such matters as may be reasonably
requested of him.
8. TERMINATION.
8.1 The
Company may terminate this Agreement for Cause. "Cause" shall mean (i) any
action or omission of Xxxxxx which constitutes a willful and material breach
of
this Agreement which is not cured or as to which diligent attempts to cure
have
not commenced within 10 business days after receipt by Xxxxxx of notice of
same,
(ii) fraud, embezzlement or misappropriation as against the Company, (iii)
the
conviction of Xxxxxx for any criminal act which is a felony. The Company may
also terminate this Agreement if it discovers that Xxxxxx has committed any
acts
or omissions under his Prior Employment which would have permitted the Company
to terminate Xxxxxx for "Cause," as defined in the Prior Employment Agreement.
8.2 Upon
any termination event hereunder, the Company shall pay, within thirty (30)
days
after the date of termination, all amounts owning to Xxxxxx for service
completed as of the termination date and related expenses, if submitted in
accordance with the Company's policies and procedures. The parties hereto
acknowledge and agree that the Company shall have no obligation to Xxxxxx to
pay
any amounts that would otherwise be due following the date of termination of
this Agreement.
9. GOVERNING
LAW, ENTIRE AGREEMENT.
The law
of the State of Florida shall govern the validity of this Agreement, the
construction of its terms and the interpretation of the rights and duties of
the
parties. This Agreement and the Employment Agreement constitute the entire
agreement and understanding between Xxxxxx and the Company with respect to
the
matters set forth herein. Any agreement to amend or modify the terms and
conditions of this Agreement must be in writing and executed by the parties
hereto. This Agreement may be specifically enforced in judicial proceedings
and
may be used as evidence in a subsequent proceeding in which a breach is
alleged.
10. CONFIDENTIALITY.
Xxxxxx
agrees that he will keep confidential all information regarding the Company,
its
business operations and this Agreement, whether currently known or hereafter
acquired during the Term, including, but not limited to, information about
pricing, customers, current and former employees and will not disclose such
information to anyone unless (i) such information is published and becomes
public knowledge (other than through or by Xxxxxx on his behalf), (ii) required
by legal process in formal legal proceeding or (iii) to the extent necessary
to
report income to the appropriate taxing authorities. The provisions of this
paragraph are in addition to, and not in lieu of, any other obligations of
confidentiality entered into by Xxxxxx and the Company and/or any Affiliated
Companies.
11. NON-DISPARAGEMENT.
Xxxxxx
agrees that he will not directly or indirectly, individually or in concert
with
others for a period of five (5) years from the date of termination of this
Agreement, (i) disparage, interfere with or attempt to interfere with, the
reputation, goodwill, services or business of the Company or any of the
Affiliated Companies and/or the shareholders, directors, officers, employees,
agents or representatives of the Company or any Affiliated Companies or (ii)
engage in any conduct, take any actions or make any statements (oral or written)
to the public, future employers, customers, vendors, the investment community,
the media, current, former or future employees or the Company or any Affiliated
Company, or any other third party whatsoever that is calculated to have, or
reasonably likely or possibly having, the effect of undermining, disparaging
or
otherwise reflecting negatively or could reasonably be considered to undermine,
disparage or reflect negatively, on the Company or the Affiliated Companies
or
the reputation, goodwill, services and business of the Company or the Affiliated
Companies. This paragraph is not to be interpreted as negating any rights Xxxxxx
has as a shareholder or as a member of the board of directors.
12. KNOWING
AND VOLUNTARY ASSENT.
IN
EXECUTING THIS AGREEMENT, XXXXXX HEREBY REPRESENTS THAT HE HAS BEEN AFFORDED
A
REASONABLE OPPORTUNITY TO CONSIDER THIS AGREEMENT; THAT HE HAS COMPLETELY AND
CAREFULLY READ THIS AGREEMENT; THAT HE HAS BEEN ADVISED BY THE COMPANY TO
CONSULT WITH AN ATTORNEY OF HIS OWN CHOICE PRIOR TO EXECUTING THIS AGREEMENT,
AND RELIED ON THE LEGAL ADVICE OF HIS ATTORNEY; THAT HE HAD THE OPPORTUNITY
TO
HAVE AN ATTORNEY EXPLAIN TO HIM THE TERMS OF THIS AGREEMENT; THAT HE KNOWS
AND
UNDERSTANDS THE CONTENTS OF THIS AGREEMENT; THAT THE TERMS OF THIS AGREEMENT
ARE
SATISFACTORY TO AND FULLY UNDERSTOOD AND VOLUNTARILY ACCEPTED BY
HIM.
13. EFFECT
OF RESIGNATION AND INTERPRETATION.
The
Company and Xxxxxx intend this Agreement to be legally binding upon and inure
to
the benefit of each of them and their respective heirs, administrators,
executors, successors and assigns. The language of this Agreement shall be
construed as a whole, according to its fair meaning and intent and not strictly
for or against any party hereto, regardless of who drafted or was principally
responsible for drafting this Agreement. The recitals contained at the beginning
of this Agreement are expressly made a part of this Agreement. Headings are
for
convenience only and should not be used in interpreting this
Agreement.
14. ASSIGNMENT,
WAIVERS.
Nothing
in this Agreement shall be construed to permit the assignment by Xxxxxx of
any
of his rights or obligations hereunder, and such assignment is expressly
prohibited without the prior written consent of the Company, which may be
delayed or withheld in Company's sole and absolute discretion. The waiver by
either party hereto of a breach or violation of any term or provision of this
Agreement shall not operate nor be construed as a waiver of any subsequent
breach or violation.
15. SEVERABILITY
AND JURY WAIVER.
Should
any provision of this Agreement be declared illegal or unenforceable by any
court of competent jurisdiction and cannot be modified to be enforceable,
including the general release language, such provision shall immediately become
null and void, leaving the remainder of the Agreement in full force and effect.
The Company and Xxxxxx each knowingly, intentionally, and irrevocably waive
any
and all rights to a jury trial for any litigation or legal proceeding in any
way
relating to or arising out of this Agreement or the Employment
Agreement.
16. ARBITRATION
OF DISPUTES.
Any
dispute, controversy or claim arising between Xxxxxx and the Company arising
out
of or relating to this Agreement or the existence, validity, termination,
interpretation of any term hereof or either party's performance obligations
hereunder shall be finally settled by arbitration in accordance with the
International Arbitration Rules of the American Arbitration Association ("AAA")
in effect at the time of the arbitration (the "Arbitration Rules"). The AAA
shall be the appointing authority and responsible for administering any
arbitration hereunder in accordance with the Arbitration Rules. The place of
arbitration shall be in Broward County, Florida. The arbitration shall be
conducted by a single arbitrator who shall be a professional, legal or otherwise
but shall not be, or have previously been associated with any party to this
Agreement (the "Arbitrator"). The arbitral award shall be final,
binding
and non-appealable. Any award rendered by the Arbitrator may be confirmed,
judgment upon any award rendered may be entered and such award or the judgment
thereon may be enforced or executed upon, by any court having jurisdiction
over
any of the parties or their respective assets. The Arbitrator's award must
be
reasoned and issued in writing within thirty (30) days of the hearing, unless
otherwise agreed to by Xxxxxx and the Company.
17. COUNTERPARTS. This
Agreement may be executed in any number of counterparts with the same effect
as
if each party hereto had signed the same document. All counterparts shall be
construed together and shall constitute one agreement.
The
parties agree that the delivery of facsimile counterparts followed by the
conveyance of originally signed documents shall be sufficient to evidence the
parties’ intent for the ratification of this document.
[Signature
Page Follows]
IN
WITNESS WHEREOF,
the
aforesaid parties have hereunto set their hands and seals as of the day below
written.
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21st
CENTURY HOLDING COMPANY
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By:
/s/
Xxxxxxx X. Xxxxx
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Name:
Xxxxxxx
X. Xxxxx
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Title:
President
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XXXXXX
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/s/
Xxxxxx X. Xxxxxx
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Xxxxxx
X. Xxxxxx
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