Exhibit 10.2 - Executive Employment Agreement between Xxxxx X.
Xxxxxx and Registrant.
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (the "Employment
Agreement") is effective as of ____________________, 1996, by and
between SMART CHOICE HOLDINGS, INC., a Delaware corporation
("Company"), and XXXXX X. XXXXXX, an individual ("Executive").
W I T N E S S E T H:
WHEREAS, the Company believes that the attraction and
retention of key employees such as the Executive is essential to
the Company's growth and success; and
WHEREAS, Executive has extensive experience relating to the
automobile industry and to the pre-merger business operations of
Xxxxxx Industries, Inc., a corporation that intends to acquire
all of the Company's common stock; and
WHEREAS, the Company desires to employ Executive as its Vice
President for Corporate Integration, and Executive is willing and
able to render his services to the Company from and after the
date hereof, on the terms and conditions of this Employment
Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals,
and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby
covenant and agree as follows:
Section 1. Employment.
a. Subject to the terms and conditions of this
Employment Agreement, the Company shall retain the Executive as
its Vice President for Corporate Integration, and the Executive
shall render services to the Company in an executive capacity.
Executive shall report to the President of the Company and shall
be responsible for assisting the Company with the integration of
the Company's business with the business of Xxxxxx Industries,
Inc.
b. Throughout the period of his employment hereunder,
the Executive shall: (i) devote sufficient time to perform
his duties; and (ii) observe and carry out such reasonable rules,
regulations, policies, directions and restrictions as may be
established from time to time by the Board, including but not
limited to the standard policies and procedures of the Company as
in effect from time to time.
Section 2. Term of Employment. Subject to prior
termination in accordance with the terms and conditions of this
Employment Agreement, the term of employment of Executive by the
Company pursuant to this Employment Agreement shall be for an
initial period of one (1) year (the "Employment Period")
commencing on the date of the execution of a definitive merger
agreement between the Company and Xxxxxx Industries, Inc. (the
"Commencement Date"), and ending one (1) year thereafter.
Section 3. Company's Principal Place of Business. It is
anticipated that the Company's principal place of business will
be located in the central Florida area, or such other area as may
be designated by the Company's Board.
Section 4. Compensation. During the Employment Period,
subject to all the terms and conditions of this Employment
Agreement and as compensation for all services to be rendered by
Executive under this Employment Agreement, the Company shall pay
to the Executive $800,000 which shall be payable (i) $200,000 on
January 15, 1997; and (ii) the balance on the earlier of the date
of completion of a secondary offering of equity securities by the
Company or April 30, 1997. The Company at its option may pay
amounts payable by the Company under this Section 4 by issuing to
the Executive that number of shares of Common Stock of the
Company equal to the amount payable by the Company hereunder,
divided by the Market Price of the Company's Common Stock
(hereinafter defined) on the date of payment, less 10% of the
Market Price of the Company's Common Stock on such date. For
purposes of this Agreement, the Market Price of the Company's
Common Stock shall equal the last sale price of the Company's
Common Stock on NASDAQ as of the time of such determination.
Section 5. Fringe Benefits. Executive shall be entitled
to such benefits in accordance with the Company's practices
covering executive personnel, but only to the extent that
Executive is not provided with such benefits from an affiliate,
subsidiary, parent or related company of the Company.
Section 6. Termination.
a. Mutual Termination. This Employment Agreement may
be terminated upon mutual written agreement of the Company and
the Executive;
b. By Executive. This Employment Agreement may be
terminated at the option of the Executive, upon fourteen (14)
days' prior written notice to the Company, in the event that the
Company shall (i) fail to make any payment to the Executive
required to be made under the terms of this Employment Agreement
within thirty (30) days after payment is due, or (ii) fail to
perform any other material covenant or agreement to be performed
by it hereunder or take any action prohibited by this Employment
Agreement, and fail to cure or remedy same within thirty (30)
days after written notice thereof to the Company;
c. By the Company For Cause. This Employment
Agreement may be terminated at the option of the Company, upon
written notice to the Executive, "for cause" (as hereinafter
defined), or in the event of the "permanent disability" (as
defined and provided for in Section 8) or death of the Executive
as provided for in Section 8). The Company may terminate
(i) As used herein, the term "for cause"
shall mean and be limited to: (A) any material breach of this
Employment Agreement by the Executive which in any case is not
fully corrected within thirty (30) days after written notice of
same from the Company to the Executive; (B) neglect by the
Executive of his duties and responsibilities hereunder; (C) any
fraud, theft, conversion, insubordination, criminal misconduct,
breach of fiduciary duty, dishonesty, or gross and willful
misconduct by the Executive in connection with the performance of
his duties and responsibilities hereunder; (D) the Executive
being legally intoxicated (alcohol or drugs) during business
hours or while on call, or being habitually drunk or addicted to
drugs (provided that this shall not restrict the Executive from
taking physician-prescribed medication in accordance with the
applicable prescription); (E) the commission by the Executive of
any crime of moral turpitude, or any other action by the
Executive which may materially impair or damage the reputation of
the Company; or (F) habitual breach by the Executive of any of
the material provisions of this Employment Agreement (regardless
of any prior cure thereof).
d. Effect of Termination For Cause. In the event of
termination for any of the reasons set forth in this Section 7
(except as otherwise provided for hereinafter with respect to
"permanent disability", death or "without cause") Executive shall
be entitled to no further compensation, Base Salary or other
benefits under this Employment Agreement, except as to that
portion of any unpaid Base Salary or other benefits accrued and
earned by him hereunder up to and including the effective date of
termination.
Section 7. Termination by Reason of Death; Permanent
Disability; or Without Cause.
a. If the Company terminates Executive "without
cause" which shall mean for any reason other than as set forth in
Section 7(c)(i), or in the event of Executive's death or
"permanent disability" (as defined below), Executive shall be
entitled to receive an amount equal to the full compensation to
which he would otherwise be entitled under this Employment
Agreement (just as if Executive had not been so terminated and
was continuing to serve as an employee hereunder for the full
term of this Employment Agreement) (the "Severance Payment").
Such Severance Payment shall be payable in a single lump sum
distribution (without any present value adjustment) to Executive
or his estate, as the case may be, no later than ninety (90) days
from the effective date of such termination.
b. Payment in the Event of Permanent Disability. For
purposes of this Employment Agreement, Executive's "permanent
disability" shall be deemed to have occurred after one hundred
twenty (120) days in the aggregate during any consecutive twelve
(12) month period, or after ninety (90) consecutive days, during
which one hundred twenty (120) or ninety (90) days, as the case
may be, Executive, by reason of his physical or mental disability
or illness, shall have been unable to discharge fully his duties
under this Employment Agreement. The date of permanent
disability shall be the one hundred twentieth (120th) or
ninetieth (90th) day, as the case may be. In the event
Executive, after receipt of notice from Executive, shall dispute
that his permanent disability shall have occurred, he shall
promptly submit to a physical examination by a qualified
practicing physician selected and paid for by the Company (and
reasonably acceptable to the Executive). Unless such physician
shall issue a written statement to the effect that in his
opinion, based on his diagnosis, Executive is capable of resuming
his employment and devoting his full time and energy to
discharging his duties within ten (10) days after the date of
such statement, such permanent disability shall be deemed to have
occurred without further dispute by Executive or Company. For
the purposes of this Employment Agreement, the term hereof is not
renewable and no benefits or base salary shall be payable after
the expiration of this Employment Agreement.
Section 8. Confidential Information. Executive recog
nizes and acknowledges that the Company has, through the
expenditure of substantial time, effort and money, developed and
acquired certain confidential information and trade secrets which
have become of great value to the Company in its creation,
development and operations. Executive further acknowledges and
understands that in the course of performing his duties for the
Company, Executive has had and will have access to the trade
secrets and confidential information of the Company. Executive
agrees that during the course of his employment and at any time
after the termination or expiration thereof he will not make any
independent use of, publish or disclose, or authorize anyone to
publish or disclose, to any other person or organization, any of
the Company's trade secrets and confidential information, except
as required in the course of his employment with the Company or
by law. Upon request of the Company and, in any event upon the
cessation of Executive's employment with the Company, whether
with or without cause, Executive will promptly return all
tangible expressions of trade secrets and confidential
information in his possession and control and all copies thereof.
As used herein, the term "trade secrets and confidential
information" shall mean client lists, applicant lists, and other
related client and applicant data, computerized compilation of
such data, training materials and information, policy and
procedure manuals, video and audio recordings of training and
operation methods, sales, services, support and marketing
practices and operations, advertising themes, information
concerning possible acquisition candidates, formats of
advertising and other business methods, and techniques, processes
and financial information of the Company or any subsidiary or
affiliate of the Company, all of which are not generally known to
the trade or industry and which will be of competitive use by
them. "Trade secrets and confidential information" shall not
include intangible information which is generally known and used
by persons with training and experience comparable to Executive
as of the date of this Employment Agreement and all intangible
information which is common knowledge in the industry or
otherwise legally in the public domain.
Executive further agrees that the restrictions set
forth in this Section 9 are in addition to, and not in lieu of,
any other restrictions or obligations placed upon him, and/or any
rights or remedies available to the Company, by any statute or at
common law.
Section 9. Covenant not to Compete. Executive covenants
and agrees that, in order to protect the Company's legitimate
business interest in its trade secrets and confidential
information, special training, goodwill, and substantial
relationships with prospective or existing customers or suppliers
during the Employment Period and for a period of twelve (12)
months following the expiration or termination of this Employment
Agreement or any renewal of the Employment Agreement, however the
same shall occur, whether voluntary or involuntary, Executive
will not, without the prior written consent of the Company,
directly or indirectly,
a. engage, whether by virtue of stock ownership,
management responsibilities or otherwise, in companies,
businesses, organizations and/or ventures which manufacture,
market or distribute products which are competitive with any of
the "Company's Products" (as hereinafter defined) within a 50
mile radius of any location where the Company is currently
conducting business, or within a 50 mile radius of any location
where the Company has conducted or has definite plans to conduct
business twelve (12) months before or after the termination or
expiration of this Employment Agreement; or
b. become interested, directly or indirectly, whether
as principal, owner, stockholder, partner, agent, officer,
director, employee, salesman, joint venturer, consultant,
advisor, independent contractor or otherwise, in any person,
firm, partnership, association, venture, corporation or entity
engaging directly or indirectly in any of the activities
described in Subsection 10a. above; or
c. knowingly solicit the employment of any of the
Company's Personnel (as hereinafter defined).
d. For purposes of this Employment Agreement:
(i) the term "Company" shall include any
subsidiary, any affiliates, any successor in interest whether by
sale, merger, liquidation or the like, and any of the Company's
other subsidiaries and affiliates;
(ii) the term "Company Personnel" shall mean
any person employed by the Company or any subsidiary of the
Company or any of its affiliates at any time through the end of
the term of this Employment Agreement, but excluding any person
who has left such employment for a continuous period exceeding
one (1) year;
(iii) the term "Company's Products" shall
mean any present or future (future being limited to the term of
this Employment Agreement and any and all extensions thereof)
product or service (i) being sold by the Company or (ii) any
product designed, engineered, manufactured, assembled, or
enhanced (whether or not sold) by the Company.
e. None of the foregoing shall prevent Executive from
holding up to two percent (2%) in the aggregate of any class of
securities of any entity engaged in the prohibited activities
described above, provided that, such securities are listed on a
national securities exchange or registered under Section 12(g) of
the Securities and Exchange Act of 1934.
f. The parties acknowledge that the Company intends
to undergo a major restructuring by way of a merger, stock for
stock exchange, reorganization or otherwise, and may, thereafter,
seek to assign this Employment Agreement to such new or resulting
entity. Executive expressly consents and agrees to such an
assignment, without the need for any further writing, approval or
consent by Executive.
Section 10. Remedies in Event of Breach.
a. Injunctive Relief. The parties acknowledge that
each would be irreparably harmed by any breach of the covenants
contained in Sections 9 and 10 of this Employment Agreement, and
that either party's remedy at law for any breach by the other
party of their obligations under Sections 9 and 10 of this
Employment Agreement would be inadequate, and would be impossible
to ascertain and therefore, in the event of the breach or
threatened breach of any obligations under 9 and 10 of this
Employment Agreement, either party, in addition to any and all
other remedies at law or in equity, shall have the right to
enjoin the other party from any threatened or actual activities
in violation thereof; and the parties hereby consent and agree
that temporary and permanent injunctive relief may be granted in
any proceedings which might be brought to enforce any such
covenants without the necessity of proof of actual damages and
without the necessity of posting bond. In the event either party
does apply for such injunction, the other party shall not raise
as a defense thereto that such applying party has an adequate
remedy at law.
b. Damages; Accounting for Profits. In addition to
any injunctive relief that may be granted to the Company or
Executive for breach of this Employment Agreement, the Company
and Executive shall be entitled to recover all damages, including
reasonable attorneys' fees and costs (including paralegals'
fees), sustained or incurred by the Company or Executive by
reason of a violation or threatened violation of the terms of
this Employment Agreement, and to receive such other remedy or
remedies as the court determines is appropriate. Executive
covenants and agrees that, if he violates any of his covenants or
agreements under Sections 9 and 10 hereof, the Company shall be
entitled to an accounting and repayment of all profits,
compensations, commissions, remunerations or benefits which
Executive directly or indirectly has realized or may realize as a
result of, growing out of, or in connection with, any such
violation; such remedy shall be in addition to and not in
limitation of any injunctive relief or any other rights or
remedies to which the Company is or may be entitled at law or in
equity or under this Employment Agreement.
Section 11. Reasonableness. Executive has carefully read
and considered the provisions of Sections 9 and 10 hereof and,
having done so, agrees that the restrictions set forth in such
sections, including, but not limited to, the time period of
restriction, the geographical areas of restriction, and the
definition of Company Products set forth therein, are fair and
reasonable and are reasonably required for the protection of the
legitimate business interests of the Company, and further that
the geographical areas of restriction set forth therein
accurately reflect the area in which he will be actively engaged
in the performance of services.
Section 12. No Inconsistent Obligations. Executive
represents and warrants that no action required of him under this
Employment Agreement or any other agreements or understandings,
written or oral, entered into with the Company will conflict
with, breach or otherwise impair any previously existing
agreements or understandings, whether written or oral, into which
Executive has entered with other persons or entities, including
agreements with respect to proprietary information or non-
competition.
Section 13. Notices. Any notice to be given hereunder
shall be deemed to be given when delivered by hand or by
overnight courier to the party for whom the notice is intended,
or three (3) days after notice is placed in the U.S. mail
properly addressed to the party for whom notice is intended, at
the following address:
If to the Company: Smart Choice Holdings, Inc.
0000 Xxxxx Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
If to Executive: Xxxxx X. Xxxxxx
0000 Xxxxx Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Section 14. Binding Effect and Governing Law. This
Employment Agreement supersedes all prior understandings and
agreements between the parties with respect to the subject matter
hereof. This Employment Agreement shall be binding upon the
legal representatives, heirs, distributees, successors and
assigns of the parties. The Employment Agreement contains the
entire agreement of the parties, and may not be changed orally
but only in writing signed by the party against whom enforcement
of any such change is sought. It is agreed that a waiver by
either party of a breach of any provision of this Employment
Agreement shall not be operated or be construed as a waiver of
any subsequent breach by that same party. This Employment
Agreement shall be governed by the laws of the State of Florida.
Section 15. Severability. In the event that any terms or
provisions of this Employment Agreement shall be held to be
invalid or unenforceable by a court of competent jurisdiction,
such invalidity or unenforceability shall not affect the validity
or enforceability of the remaining terms and provisions hereof.
Section 16. Assignability. The rights or obligations
contained in this Employment Agreement shall not be assigned,
transferred, or divided in any manner by Executive or Company,
without the prior written consent of the other; provided however,
that nothing in this Section 16 shall preclude: (i) Executive
from designating a beneficiary to receive any benefits hereunder
upon his death, or the executors, administrator or other legal
representatives of Executive or his estate from assigning any
rights hereunder to the person(s) entitled thereto; or (ii) the
Company's right to assign this Employment Agreement to a related
entity subsequent to any merger, stock for stock exchange,
reorganization, or otherwise as set forth in Section 10f.
Notwithstanding the foregoing, this Employment Agreement shall be
binding on any entity which by purchase of assets, merger, or
otherwise, becomes a successor to the business of the Company.
Section 17. Director & Officer Liability Insurance. The
Company shall use its best reasonable efforts to obtain a policy
of Director & Officer Liability Insurance of a type that is usual
and customary for businesses similar to that of the Company;
provided, however, that the Company shall not be required to
obtain such a policy if in its judgment such a policy cannot be
obtained without the payment of an unreasonable policy premium.
Section 18. Headings. The headings of paragraphs herein
are included solely for convenience of reference and shall not
control the meaning, interpretation, or performance of any of the
provisions of this Employment Agreement.
Section 19. Entire Agreement. This Agreement expresses
the entire understanding of the Company and Executive with
respect to the subject matter of this Agreement. Nothing in this
Agreement shall alter, amend, modify, delete, rescind or
otherwise waive any terms or conditions to which Executive may be
subject.
IN WITNESS WHEREOF, the parties hereto have caused this
Employment Agreement to be executed the day and year first above
written.
COMPANY:
SMART CHOICE HOLDINGS, INC.
By:
Xxxxxx X. Xxxxxx
As its: Secretary/Treasurer
EXECUTIVE:
___________________________________
Xxxxx X. Xxxxxx
Social Security Number:
