EMPLOYMENT AGREEMENT
AGREEMENT made and entered into as of this 31st day of August, 1998
between American Marine Recreation, Inc., a Florida corporation (the
"Corporation") having an address at 0000 00xx Xxxxxx, Xxxxxxx, Xxxxxxx 00000 and
Xxxxxx X. Xxxxxxxx (the "Executive"), residing at 00000 Xxxxxxxxx Xxxx, Xxxxxxx,
Xxxxx 00000.
W I T N E S S E T H:
WHEREAS, Executive is presently employed by the Corporation; and
WHEREAS, the Company and the Executive desire to set forth the terms of
Executive's employment with the Company, pursuant to the terms and conditions
hereof.
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto agree with each other as follows: 1. Term of
Employment. The Corporation agrees to and does hereby employ Executive, and
Executive agrees to and does hereby accept employment by the Corporation, as the
Treasurer and Chief Financial Officer of the Corporation, subject to the
supervision and direction of its Board of Directors, for the three (3) year
period commencing on the consummation of the initial public offering of the
Corporation's securities (the "Term"). The Term shall be automatically renewed
on an annual basis (each such period, a "Renewal Period") for an additional year
(the "Renewal Term"), unless this Agreement is terminated in writing by the
Executive or the Corporation (the "Notice of Nonrenewal") not less than ninety
(90) days prior to the expiration
of the Term or any Renewal Period, unless otherwise terminated pursuant to the
provisions of this Agreement.
2. Duties of Executive. Executive shall devote such time, attention and
energy to the affairs of Corporation as shall be reasonably required to perform
his duties hereunder, and, in pursuance of the policies and directions of the
Board of Directors, Executive shall use his best efforts to promote the business
and affairs of the Corporation.
3. Base Compensation. In consideration of the Executive's services
pursuant to this Agreement, Corporation shall pay to Executive, during the
period of Executive's employment under this Agreement (the "Base Compensation"),
(i) a salary at the rate of One Hundred Thousand Twenty Dollars ($120,000) per
year during the first year of this Agreement; and (ii) for each year thereafter,
annual compensation shall be determined by the Board of Directors, but not less
than $120,000 per year. The Base Compensation shall be payable in equal
installments, in accordance with the Corporation's customary procedures for
executive employees, subject to applicable tax and payroll deductions.
4. Incentive Compensation. (a) Provided Executive has duly performed
his obligations pursuant to this Agreement, Executive shall be eligible to
receive, as additional compensation for the services to be rendered by Executive
under this Agreement, incentive compensation. The amount of such incentive
compensation, if any, shall be determined by the Board of Directors in its sole
discretion based on the Executive's performance and contributions to the
Corporation's success.
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(b) Provided Executive has duly performed his obligations pursuant to
this Agreement, Executive shall be eligible to receive, as additional
compensation for the services to be rendered by Executive under this Agreement,
a minimum of 150,000 options to purchase shares of the Company's common stock,
at the discretion of the Board of Directors of the Company. Subject to the
discretion of the Board of Directors, the number of options to be awarded to the
Executive shall be based on performance criteria to be determined by the Board
of Directors. Subject to the discretion of the Board of Directors the options
shall be awarded to the Executive in three equal annual installments and each
installment shall vest over a three-year period.
5. Other Benefits. (a) During the term of this Agreement the Executive
shall be entitled to participate in any benefit plans adopted by the Corporation
for the general and overall benefit of all employees and/or for key executives
of the Corporation such as health care, life insurance, disability, stock option
plans, tax, legal and financial planning services, pension, profit sharing and
savings.
(b) During the term of this Agreement, Executive shall be
entitled to a monthly car allowance in the amount of $400.
6. Vacation. Executive shall be entitled to a fully paid vacation of
four (4) weeks per calendar year, which vacation shall be scheduled at such time
or times as the Corporation in consultation with Executive may reasonably
determine.
7. Expenses. (a) The Corporation shall pay or reimburse Executive for
all reasonable and necessary expenses incurred by him in connection with his
duties hereunder, upon submission
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by Executive to the Corporation of such reasonable evidence of such expenses as
the Corporation may require.
(b) Relocation Expenses. The Company shall reimburse Executive
for such reasonable relocation expenses incurred by him and his family in their
relocation from Houston, Texas to the Orlando, Florida area and travel expenses
from Houston, Texas to Orlando, Florida. In addition, the Corporation shall
reimburse the Executive for travel expenses for up to three trips to Orlando,
Florida from Houston, Texas.
8. Insurance. The Corporation may from time to time apply for policies
of life, health and accident insurance or disability insurance upon the
Executive in such amounts as the Corporation deems appropriate. The Executive
agrees to aid the Corporation in procuring such insurance, including submitting
to a physical examination, if required, and completing any and all forms
required for application for any insurance policy.
9. Disclosure of Information. The Executive shall, during his
employment under this Agreement and thereafter, keep confidential and refrain
from disclosing to any unauthorized persons all data and information relating to
the respective businesses of the Corporation or any of its subsidiaries.
10. Intellectual Property Rights. (a) The Executive shall promptly
disclose to the Corporation in writing, any and all charts, layouts, maps,
inventions, improvements, techniques, markets, sales and advertising plans,
processes, concepts and plans, whether or not copyrightable or patentable,
secret processes and "know-how," conceived by the Executive during the term of
his employment by the Corporation (the "Executive's Work Product"), whether
alone or with
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others and whether during regular working hours and through the use of
facilities and property of the Corporation or otherwise, which directly relates
to the present business of the Corporation. Upon the Corporation's request at
any time or from time to time during the Term of the Executive's employment, the
Executive shall (i) deliver to the Corporation copies of the Executive's Work
Product that may be in his possession or otherwise available to him, and (ii)
execute and deliver to the Corporation such applications, assignments and other
documents as it may reasonably require in order to apply for and obtain
copyrights or patents in the United States of America and other countries with
respect to any Executive's Work Product that it deems to be copyrightable or
patentable, and/or otherwise to vest in itself full title thereto.
(b) All documents that pertain to the Corporation, including
but not limited to the Executive's Work Product, shall be the sole and exclusive
property of the Corporation. Upon the termination of the Executive's employment,
all such documents that may be in his possession or otherwise available to him
or shall thereafter come into his possession or control shall be promptly
returned to the Corporation without the necessity of a request therefor.
11. Non-Competition Covenant. (a) The Executive shall not, during his
employment by the Corporation, engage, directly or indirectly, in any business
competitive with the business of the Corporation without the consent of the
Board of Directors.
(b) For a period of two years after the termination of the
Executive's employment hereunder (the "Non-Competition Period"), for any reason
whatsoever, other than a termination by the Corporation without good cause, or
by Executive for good reason (as hereinafter defined) the Executive shall not
(i) engage, directly or indirectly, as an officer,
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director, shareholder, owner, partner, joint venturer or in a managerial
capacity, whether as an employee, independent contractor, consultant or advisor,
or as a sales representative in any business of selling, renting and leasing,
boating, nautical and other lifestyle entertainment products and services, and
related activities throughout the United States (the "Territory"), without the
permission of the Board of Directors, which permission shall not be unreasonably
withheld or delayed or (ii) induce or actively attempt to influence any other
employee or consultant of the Corporation to terminate his or her employment or
consultancy with the Corporation. Nothing herein contained shall be deemed to
prevent ownership by Executive and his associates (as said term is defined in
regulation 14(A) promulgated under the Securities Exchange Act of 1934 as in
effect on the date hereof), collectively, of not more than 5% of the outstanding
capital stock of a corporation listed on a national securities exchange.
(c) (i) The parties to this Agreement consider the
restrictions contained herein reasonable as to the duration of the
Non-Competition Period and the extent of the Territory. However, if the duration
of the Non-Competition Period or the extent of the Territory herein specified
should be judged unreasonable by any Court or arbitration proceeding, the
validity and effect of the remaining provisions of this Agreement shall not be
affected thereby and, the duration of the Non-Competition Period shall be
reduced by such number of months and/or the area of the Territory shall be
reduced such that, the Territory and the Non-Competition Period shall be deemed
reasonable so that the foregoing covenant not to compete may be enforced .
(ii) Executive agrees and recognizes that in the
event of a breach or threatened breach by Executive of the provisions of the
aforegoing covenants, the Corporation may
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suffer irreparable harm, and that money damages may not be an adequate remedy.
Therefore, the Corporation shall be entitled as a matter of right to specific
performance of the covenants of Executive contained herein by way of temporary
or permanent injunctive relief in a Court of competent jurisdiction.
12. Termination. This Agreement and Executive's employment may be
terminated in any one of the followings ways:
(a) Death. The death of Executive shall immediately terminate
this Agreement with no severance compensation due to Executive's estate.
(b) Disability. If, as a result of incapacity due to physical
or mental illness or injury, Executive shall have been absent from his full-time
duties hereunder for six (6) consecutive months, then thirty (30) days after
receiving written notice (which notice may occur before or after the end of such
six (6) month period, but which shall not be effective earlier than the last day
of such six (6) month period), the Corporation may terminate Executive's
employment hereunder provided Executive is unable to resume his full-time duties
at the conclusion of such notice period. Also, Executive may terminate this
employment hereunder if his health should become impaired to an extent that
makes the continued performance of his duties hereunder hazardous to his
physical or mental health or his life, provided that Executive shall have
furnished the Corporation with a written statement from a qualified doctor to
such effect and provided, further, that, at the Corporation's request made
within thirty (30) days of the date of such written statement, Executive shall
submit to an examination by a doctor selected by the Corporation who is
reasonably acceptable to Executive or Executive's doctor and such doctor shall
have concurred in the
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conclusion of Executive's doctor. In the event this Agreement is terminated as a
result of Executive's disability, Executive shall (i) receive from the Company,
in a lump-sum payment due within ten (10) days of the effective date of
termination, the base salary at the rate then in effect for the greater of the
time period then remaining under the term of this Agreement or for one (1) year
and (ii) the Corporation shall make the insurance premium payments contemplated
by COBRA for a period of eighteen (18) months after such termination.
(c) Good Cause. The Corporation may terminate this Agreement
ten (10) days after written notice to Executive for "Good Cause," which shall
mean any one or more of the following: (1) Executive's willful, material and
irreparable breach of this Agreement; (2) Executive's gross negligence in the
performance or intentional nonperformance (continuing for ten (10) days after
receipt of written notice of need to cure) of any of Executive's material duties
and responsibilities hereunder; (3) Executive's willful dishonesty, fraud or
misconduct with respect to the business or affairs of the Corporation which
materially and adversely affects the operations or reputation of the
Corporation; (4) Executive's conviction of a felony crime; or (5) confirmed
positive illegal drug test result. In the event of a termination for Good Cause,
as enumerated above, Executive shall have no right to any severance
compensation.
(d) Without Good Cause; Good Reason. At any time after the
commencement of employment, Executive may, without cause, and without Good
Reason terminate this Agreement and Executive's employment, effective thirty
(30) days after written notice is provided to the Corporation. Executive may
only be terminated without Good Cause by the Corporation during the Term hereof
if such termination is approved by a majority of the members of the Board
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of Directors of the Corporation and provided that the Executive receives at
least six (6) months written notice. Should Executive terminate with Good Reason
or in the event that Executive is terminated without Good Cause during the Term,
Executive shall receive from the Corporation, on such dates as would otherwise
be paid by the Corporation, the base salary at the rate then in effect for a
period of one (1) year. Further, if Executive is terminated without Good Cause
or terminates his employment hereunder with Good Reason, (a) the Corporation
shall make the insurance premium payments contemplated by COBRA for a period of
eighteen (18) months after such termination, (b) the Executive shall be entitled
to receive a prorated portion of any annual bonus and other incentive
compensation to which the Executive would have been entitled for the year during
which the termination occurred had the Executive not been terminated, (c) all
options to purchase the Corporation's Common Stock shall vest thereupon, and (d)
the Executive shall be entitled to receive all other unpaid benefits due and
owing through Executive's last day of employment. Further, any termination
without Good Cause by the Corporation or termination by the Executive with Good
Reason shall operate to shorten the period set forth in paragraph 11 hereof to
one (1) year from the date of termination of employment. If Executive resigns or
otherwise terminates his employment without Good Reason, rather than the
Corporation terminating his employment pursuant to this paragraph 12, Executive
shall receive no severance compensation.
Executive shall have "Good Reason" to terminate this Agreement and his
employment if the Executive is demoted by means of a reduction in authority,
responsibilities or duties to a
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position of less stature or importance within the Corporation than the position
described in paragraph 1 hereof, unless Executive has agreed in writing to that
demotion.
13. Indemnification. In the event Executive is made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by the
Corporation against Executive), by reason of the fact that he is or was
performing services under this Agreement, then the Corporation shall indemnify
Executive against all expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement, as actually and reasonably incurred by Executive in
connection therewith to the maximum extent permitted by applicable law. The
advancement of expenses shall be mandatory. In the event that both Executive and
the Corporation are made a party to the same third-party action, complaint, suit
or proceeding, the Corporation agrees to engage competent legal representation,
and Executive agrees to use the same representation, provided that if counsel
selected by the Corporation shall have a conflict of interest that prevents such
counsel from representing Executive, Executive may engage separate counsel and
the Corporation shall pay all attorneys' fees of such separate counsel. Further,
while Executive is expected at all times to use his best efforts to faithfully
discharge his duties under this Agreement, Executive cannot be held liable to
the Corporation for errors or omissions made in good faith where Executive has
not exhibited gross, willful and wanton negligence and misconduct or performed
criminal and fraudulent acts which materially damage the business of the
Corporation.
14. Effect of Waiver. The waiver by either party of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach thereof.
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15. Notices. Any notice permitted, required, or given hereunder shall
be in writing and shall be personally delivered; or delivered by any prepaid
overnight courier delivery service then in general use; or mailed, registered or
certified mail, return receipt requested, to the addresses designated herein or
at such other address as may be designated by notice given hereunder:
If to : Xxxxxx X. Xxxxxxxx
00000 Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxx 00000
If to : American Marine Recreation, Inc.
0000 00xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
With a copy to: XxXxxxxxxx & Xxxxx X.X.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxx, Esq.
Delivery shall be deemed made when actually delivered, or if mailed,
three days after delivery to a United States Post Office.
16. Assignment. Executive shall not be entitled to assign his rights,
duties or obligations under this Agreement.
17. Amendments. The terms and provisions of this Agreement may be
amended or modified only by a written instrument executed by the party to be
charged by such amendment or modification.
18. Governing Law. The terms and provisions herein contained and all
the disputes or claims relating to this Agreement shall be governed by,
interpreted and construed in accordance with the internal laws of the State of
Florida, without reference to its conflict of laws principles.
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19. Arbitration. (a) In the event of a dispute between the parties
arising out of or relating to this Agreement, or the breach thereof, the parties
shall make every effort to amicably resolve, reconcile, and settle such dispute
between them. Should an amicable resolution not be possible, either party may
invoke arbitration.
(b) Subject to the provisions of Section 11(c)(ii) hereof, all
claims, disputes and other matters in controversy arising out of or related to
this Agreement or the performance or breach hereof, shall be decided by binding
arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association (the "AAA Rules"), by a panel of three (3) arbitrators,
in New York, New York. One (1) such arbitrator shall be appointed by each of the
parties within three (3) weeks after being requested by the other party to make
such appointment and the third arbitrator shall be appointed by the two (2)
arbitrators appointed by the parties. In the event that a party does not appoint
its arbitrator within such three (3) week period, or the two (2) arbitrators
appointed by the parties shall fail to agree on the third arbitrator, such
appointed arbitrator or arbitrators shall be appointed by the American
Arbitration Association in accordance with the AAA Rules. The award shall state
the facts and findings and shall be rendered with reasons in writing. The
arbitrators shall have no authority or power to alter or modify any express
condition or provision of this Agreement, or to render any award which by its
terms shall have the effect of altering or modifying any express conditions or
provisions of this Agreement. The award rendered by the arbitrators shall be
final and judgement may be entered upon it in any court having jurisdiction
thereof. The successful party to the arbitration shall be entitled to an award
for reasonable attorney's fees, as determined by the arbitrators.
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20. Captions. The captions of the sections of this Agreement are for
convenience of reference only and in no way define, limit or affect the scope or
substance of any section of this Agreement.
21. Merger and Severability. This Agreement shall constitute the entire
Agreement between the Corporation and Executive with respect to the subject
matter hereof. The invalidity or unenforceability of any provision hereof shall
in no way affect the validity or enforceability of any other provision.
22. Counterparts; Facsimile. This Agreement may be executed by
facsimile and in two (2) or more counterparts, each of which shall be deemed an
original and all of which together shall constitute but one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have affixed their signatures
the day and year first above written.
AMERICAN MARINE RECREATION, INC.
By: /s/ Xxxxxx X. Xxxx, Xx.
------------------------------
Name: Xxxxxx X. Xxxx, Xx.
Title: President
/s/ XXXXXX X. XXXXXXXX
-------------------------------------
XXXXXX X. XXXXXXXX
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