EXHIBIT 10.9
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of the 1st day of March 2004, by and between XRG,
INC., a Delaware corporation having its principal office located at 0000 Xxxxxxx
Xxxxxx Xxxxx, XX 00000 (hereinafter "XRG"), and Xxxxx X. Xxxxxxx, an individual
residing in Pinellas County, Florida (hereinafter "Executive").
Witnesseth:
XRG desires to employ the Executive, and the Executive wishes to accept
such employment with XRG, upon the terms and conditions set forth in this
Agreement.
Accordingly, in consideration of the foregoing and the respective covenants
of the parties set forth herein, the parties, intending to be legally bound,
agree as follows:
1. Employment. XRG hereby employs the Executive and the Executive hereby
accepts employment by XRG upon the terms and conditions hereinafter set forth.
All previous employment agreements or other terms and conditions of employment
between XRG or XRG and the Executive are hereby terminated and are superseded by
this Agreement.
2. Term. Subject to the provisions of Paragraph 11 hereof, the term of the
Executive's employment by XRG under this Agreement shall commence on the date
hereof and shall continue for a term of five (5) years ("Original Term").
Expiration of the Original Term shall not prevent XRG from continuing the
Executive's employment beyond such expiration on such terms as may be mutually
satisfactory to XRG and the Executive. The term of the Executive's employment
hereunder, including any extension beyond the Original Term, is hereinafter
referred to as the "Employment Period. "
3. Duties. The Executive shall be employed as the President and Chief
Executive Officer of XRG and shall have such duties as are assigned or delegated
to him from time to time by the Board of Directors of XRG. The Executive shall
devote such time and attention during normal business hours to the business of
XRG as determined by the Board of Directors of XRG. Nothing herein, however,
shall prevent the Executive from engaging in additional activities in connection
with personal investments and community affairs that do not interfere or
conflict with his duties hereunder.
4. Base Compensation. The Executive shall be paid a salary at an annual
rate described in Exhibit A for the Original Term, which shall be payable in
installments in accordance with XRG's customary payroll practices, but no less
frequently than bi-monthly. The salary to be paid during any extension of the
Employment Period beyond the Original Term will be as agreed to by XRG and the
Executive.
5. Bonus. The Executive shall be paid a bonus of 1/2% of the gross revenue
billed in the most recent fiscal year by each newly acquired company, during the
original term of this agreement and any extensions. This commission shall be
paid at the closing of each acquisition in 50% cash and 50% XRG, Inc. common
stock at Market value, during the first six months of the agreement and 25% cash
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and 75% XRG, Inc. common stock at Market value. "Market value" shall be the
average of the closing prices for XRG Common Stock on the 20 trading days
immediately preceding the Closing Date, as reported by the principal stock
exchange or other automated quotation system on which XRG Common Stock is then
traded, or if it is not then traded, as reported by the OTC Bulletin Board or
other reporting agency.
6. Stock. The Executive will be entitled to acquire shares of XRG stock
pursuant to a stock option plan that will be implemented by XRG described in
Exhibit B.
7. Automobile Expense Allowance. During the Employment Period, XRG shall
pay to the Executive an automobile expense allowance of $1,500 per month, which
shall be paid to Executive on the first business day of each month. This amount
covers automobile purchase or lease payments and automobile insurance payments.
8. Expenses. Subject to compliance by the Executive with such policies
regarding expenses and expense reimbursement as may be adopted from time to time
by XRG, the Executive is authorized to incur reasonable expenses in the
performance of his duties hereunder in furtherance of the business and affairs
of XRG and XRG will reimburse the Executive for all such reasonable expenses, in
all cases upon the presentation by the Executive of an itemized account
satisfactory to XRG in substantiation of such expenses.
9. Vacations. The Executive shall be entitled to paid vacations in
accordance with the policies of XRG in effect, from time to time, as determined
by the Board of Directors of XRG; but in any event, Executive shall be entitled
to not less than two (2) weeks per year of paid vacation.
10. Other Employee Benefits. The Executive shall, during the Employment
Period, be eligible to participate in such pension, profit sharing, bonus, life
insurance, hospitalization and medical and other employee benefit plans of XRG
which may be in effect from time to time to the extent he is eligible under the
terms of those plans; provided, however, that the allocation of benefits under
any bonus or other plan which provides that allocations thereunder shall be in
the discretion of the Board of Directors of XRG and shall be as determined from
time to time solely by the Board of Directors. The Executive will be eligible to
participate in a stock bonus plan similar to the plan being created for the EFS
transaction.
11. Termination.
(a) The Employment Period, the Executive's compensation and any and all
other rights of the Executive under this Agreement or otherwise as an employee
of XRG shall terminate (except as to compensation and rights accrued prior to
the effective date of such termination): (i) upon the death of the Executive;
(ii) upon fourteen (14) days prior written notice by XRG to Executive in the
event of the physical or mental disability of the Executive (as defined in
Paragraph 11(b) below); (iii) for Cause (as defined in Paragraph 11(c) below),
immediately upon the giving of written notice thereof by XRG to the Executive,
or at such later time as such notice may specify; or (iv) without Cause at any
time after the initial two-year term hereof, upon not less than sixty (60) days'
prior written notice by either the Executive or XRG to the other party and
subject to Paragraph 11(d) below.
(b) For purposes of this Agreement, the Executive shall be deemed to
have a "physical or mental disability" if for medical reasons he has been unable
to perform his duties for thirty (30) consecutive days or ninety (90) days in
any 12-month period, all as determined in good faith by a physician mutually
acceptable to Executive and the Board of Directors of XRG.
(c) For purposes of this Agreement, the term "Cause" shall be deemed to
mean the Executive's conviction of any crime (felony or class 8 misdemeanor),
the Executive's commission of any act of willful misconduct or dishonesty, or
the material breach of any provision of this Agreement by the Executive.
(d) In the event the Employment Period is terminated by XRG for any
reason other than for Cause or for the death or the physical or mental
disability of the Executive, XRG shall pay to the Executive, as XRG's sole and
exclusive obligation related to such termination, the compensation and annual
bonuses provided for in this Agreement as described in paragraphs 4,5,7,8, and
10, for a five-year term, payable in a lump sum within 30 days of termination.
(e) Executive may terminate his employment for good reason. For
purposes of this Agreement, "good reason" shall mean a failure by XRG to comply
with any material provision of this Agreement, which failure is not cured within
fourteen (14) days after a written notice of noncompliance has been given by
Executive to XRG.
12. Non-Disclosure Covenant. The Executive acknowledges that (i) during
the Employment Period and as a part of his employment, the Executive will be
afforded access to Confidential Information (as hereinafter defined); (ii)
public disclosure of Confidential Information could have a material adverse
impact on XRG, on XRG or on the other subsidiaries of XRG (hereinafter "XRG
Companies") and their respective businesses; (iii) the Executive possesses
substantial technical expertise and skill with respect to the business of the
XRG Companies; and (iv) XRG has required the Executive to make the covenants set
forth in this Section 12 as a condition to its purchase of Express Freight
Systems, Incorporated and Freeway Systems, Incorporated and the Executive is
willing to do so. The Executive acknowledges that the provisions of this Section
12 are reasonable and necessary with respect to the use of Confidential
Information.
As used in this Agreement, the term "Confidential Information" shall
mean agency owner operator or driver lists or information, inventions and
improvements, ideas, plans, processes, techniques, technology, customer lists,
business methods, trade secrets as defined under applicable law, and other
information developed or acquired by or on behalf of the XRG Companies which
relate to or affect any aspect of the business of the XRG Companies.
Confidential Information shall not include information that becomes generally
known to the public through no act of Executive in breach of this Agreement
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In consideration of the foregoing and of continued employment of the
Executive by XRG and the compensation and benefits paid or provided, and to be
paid or provided, to the Executive by XRG, the Executive hereby covenants and
agrees as follows:
Both during and after the Employment Period, the Executive shall not,
without XRG's prior written consent, disclose to any third party, or use for any
purpose other than for the exclusive benefit of the XRG Companies, any
Confidential Information.
The Executive agrees that disclosures made by the XRG Companies to
governmental authorities, to their customers or potential customers, to their
suppliers or potential suppliers, to their employees or potential employees, to
their consultants or potential consultants or disclosures made by the XRG
Companies in any litigation or administrative or governmental proceedings shall
not mean that the matters so disclosed are available to the general public.
The Executive shall not remove from the premises of the XRG Companies,
except when appropriate to the pursuit of their business, any document, record,
notebook, plan, model, component, or device. The Executive recognizes that, as
between the XRG Companies and the Executive, all such documents, records,
notebooks, plans, models, components or devices, whether or not developed by the
Executive, are the exclusive property of the XRG Companies. In the event of
termination of the Executive's employment with XRG, or upon the earlier request
of any of the XRG Companies during the Employment Period, the Executive shall
return to the XRG Companies all documents, records, notebooks, plans, models,
components, and devices in the Executive's possession or subject to the
Executive's control. The Executive shall not retain any copies, abstracts,
sketches or other physical embodiment of any such document, record, notebook,
plan, model, component or device. The Executive agrees that all agency or
brokerage business introduced to any XRG Companies by either the Executive or
any associate or employee introduced by the Executive and which the Employee's
compensation is derived, shall remain the property of any XRG Companies as long
as the Employee is being compensated by any XRG Companies, including any
severance compensation.
13. Covenant Not to Compete; Non-Interference.
(a) The Executive acknowledges that the services to be performed under
this Agreement are of a special and unique character, that the businesses of the
XRG Companies are national in scope, that their services are marketed throughout
the United States, and that the XRG Companies compete with other organizations
that are or could be located in any part of the United States. The Executive
further acknowledges that XRG requires the Executive to agree to the provisions
of this Section 13 as a condition to its purchase of Express Freight Systems,
Incorporated and Freeway Systems, Incorporated. In consideration of the
foregoing, and in consideration of his continued employment by XRG, the
Executive hereby covenants and agrees that he shall not:
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(i) during the Employment Period, and for a period of one (1) year
thereafter, directly or indirectly engage or invest in, own, manage, operate,
control or participate in the ownership, management, operation or control of, be
employed, associated or in any manner connected with, or render services or
advice to, any business whose services or activities compete, in whole or in
part, with the services or activities of the XRG Companies within the
geographical territories within the United States in which the XRG Companies at
any time during the Employment Period conduct their respective businesses;
(ii) whether for the Executive's own account or for the account of any
other person, at any time during the Employment Period, and for a period of one
(1) year thereafter, solicit the business of any person or entity known by the
Executive to be a customer of the XRG Companies, whether or not the Executive
had personal contact with such person or entity during his employment with XRG;
and
(iii) whether for the Executive's own account or the account of any
other person at any time during the Employment Period and for a period of one
(1) year thereafter, solicit, employ or otherwise engage as an employee,
independent contractor or otherwise, any person who is or was an employee of any
of the XRG Companies during the Executive's Employment Period, or in any manner
induce or attempt to induce any employee of any of the XRG Companies to
terminate his/her employment with such company.
It is understood by and between the parties hereto that the foregoing
covenants by the Executive set forth in this Section 13 are essential elements
of this Agreement and that but for the agreement of the Executive to comply with
such covenants, XRG would not have entered into this Agreement. XRG and the
Executive have independently consulted their respective counsel and have been
advised in all respects concerning the reasonableness and propriety of such
covenants, with specific regard to the nature of the businesses conducted by the
XRG Companies.
(b) Notwithstanding any provision of this Agreement to the contrary,
the restrictions set forth in Section 13(a) hereof shall not apply in the event
that XRG terminates the Employment Period during the Original Term for any
reason other than for Cause or the physical or mental disability of the
Executive.
(c) Notwithstanding that the Executive's employment hereunder may
expire or be terminated as provided in Section 11 hereof, this Agreement shall
continue in full force and effect insofar as is necessary to enforce the
covenants and agreements of the Executive contained in Section 13.
14. Injunctive Relief. The Executive acknowledges that the damages that
would be suffered by the XRG Companies as a result of a breach of the provisions
of Section 12 or 13 of this Agreement may not be calculable, and that an award
of a monetary judgment to any of the XRG Companies for such a breach would be an
inadequate remedy. Consequently, any of the XRG Companies shall have the right,
in addition to any other rights it may have, to obtain, in any court of
competent jurisdiction, injunctive relief to restrain any breach or threatened
breach hereof or otherwise to specifically enforce any of the provisions of this
Agreement and such company shall not be obligated to post bond or other security
in seeking such relief.
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15. Definition of "person." The term "person" shall mean any
individual, corporation, firm, association, partnership, limited liability
company or other legal entity or other form of business organization.
16. Compliance with Other Agreements. The Executive represents and
warrants that the execution and delivery by the Executive of this Agreement and
the performance by the Executive of his obligations hereunder will not, with or
without the giving of notice or the passage of time, or both, (i) violate any
judgment, writ, injunction or order of any court, arbitrator or governmental
agency applicable to the Executive; or (ii) conflict with, result in the breach
of any provisions of or the termination of, or constitute a default under, any
agreement to which the Executive is a party or by which he is or may be bound.
17. Waiver of Breach. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach.
18. Binding Effect; Benefits. This Agreement shall inure to the benefit
of, and shall be binding upon, the parties hereto and their respective
successors, assigns, heirs and legal representatives, including, without
limitation, any entity with which XRG may merge or consolidate or to which it
may transfer all or substantially all of its assets. Insofar as the Executive is
concerned, this Agreement, being personal, may not be assigned.
19. Notices. All notices and other communications which are required or
may be given under this Agreement shall be in writing and shall be deemed to
have been duly given when delivered in person or three (3) days after being
mailed by registered or certified first class mail, postage prepaid.
20. Entire Agreement; Amendments. This Agreement contains the entire
agreement of the parties with respect to the subject matter hereof and
supersedes all prior agreements and understandings, oral or written, between the
parties hereto with respect to the subject matter hereof. This Agreement may not
be changed orally, but only by an agreement in writing signed by the party
against whom any waiver, change, amendment, modification or discharge is sought.
21. Severability. If any provision or provisions of this Agreement
shall be declared invalid or unenforceable, any such provision or provisions
shall be deemed severed from the remainder of the provisions contained herein
which shall otherwise remain in full force and effect.
22. Governing Law; Consent to Jurisdiction. This Agreement shall be
governed by and construed in accordance with the laws of the State of Florida
without giving effect to the principles of conflicts of law thereof. The
Executive hereby submits to the jurisdiction and venue of the Circuit Court of
the State of Florida for the County of Hillsborough or the United States
District Court for the Middle District of Florida, Tampa Division, for purposes
of any legal action related hereto. The Executive agrees that service upon him
in any such action may be made by first class mail, certified or registered.
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23. Dispute Resolution. Any dispute, controversy or claim arising out
of or relating to this Agreement (except for matters covered by Section 14
hereof) shall be settled by arbitration by the American Arbitration Association
("AAA") in accordance with the then current rules in effect governing
arbitration of such matters. The arbitration shall be conducted in Tampa,
Florida by three (3) independent and impartial arbitrators. The award rendered
by the arbitrators shall be final and a judgment may be entered upon it
according to applicable law in any court having jurisdiction. The arbitrators
shall, in the award, allocate the costs and expenses of the arbitration,
including AAA fees and expenses, arbitrator compensation and expenses, the cost
of any court reporter or stenographer employed by the parties and the reasonable
attorneys' fees and expenses of the parties.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date above first written.
XRG, INC. EXECUTIVE:
a Delaware corporation
By:
--------------------------------- ---------------------------------
Title:
------------------------------
Attachment:
Exhibit A - Compensation schedule
Exhibit B - XRG stock option plan
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Exhibit A
Compensation Schedule
Expected
Projected
Period Revenue Gross Salary
First six months $50,000,000 $185,000
Second six months $100,000,000 $225,000
Year 2 $150,000,000 $250,000
Year 3 $350,000,000 $350,000
Year 4 $650,000,000 $650,000
Year 5 $850,000,000 $850,000
