EXHIBIT 10.9
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT ("the AGREEMENT") is made and entered
into on September 15, 1998, by and between REGIONAL CAPITAL MANAGEMENT
CORPORATION, a Florida corporation (the "COMPANY"), and F. XXXXXXX XXXXXXX, an
individual residing in Marietta, Georgia (the "EXECUTIVE"), who hereby agree as
hereinafter provided.
Section 1. DEFINITIONS. As used herein, the following terms shall have the
meanings set forth below.
"ACT" means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
"BASE COMPENSATION" shall have the meaning set forth in Section 5(a).
"BOARD OF DIRECTORS" means the incumbent directors of the Company as of
the point in time reference thereto is made in this Agreement.
"CAUSE" shall have the meaning set forth in Section 10(b).
"COLA ADJUSTMENT" means the cost of living adjustment, which shall be
equal to (i) two percent, plus (ii) the percent rise in prices for the preceding
year as measured by the Consumer Price Index for all Urban Consumers (CPI-UC),
All City Average, all Items (base year 1982-1984 = 100) published by the United
States Department of Labor, Bureau of Labor Statistics (the "INDEX"). The COLA
Adjustment shall be determined by multiplying the amount or figure to be
adjusted by the sum of (i) two percent, plus (ii) a fraction, the numerator of
which is the Index published for the month in which occurs the date of
adjustment and the denominator of which is the Index published for the same
month of the preceding year.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" means the common stock, par value $.001 per share, of the
Company.
"COMPANY" shall have the meaning set forth in the introductory paragraph
of this Agreement, and shall include Subsidiaries if appropriate.
"COMPETITIVE BUSINESS" shall have the meaning set forth in Section 9(a).
"CONFIDENTIAL INFORMATION" shall have the meaning set forth in Section
9(c).
"DISABILITY" of the Executive means that, as a result of the Executive's
incapacity due to physical or mental illness, the Executive shall have been
absent from his duties on a full time basis for six consecutive months, or for
an aggregate of nine months in any consecutive 12-month period, and a physician
selected by the Executive is of the opinion that (a) he is suffering from "total
disability" as defined in the Company's disability insurance program or policy
and (b) he will qualify for Social Security Disability Payments and (c) within
thirty (30) days after written notice thereof is given by the Company to the
Executive (which notice may be given at any time after the end of such six (6)
or twelve (12) month periods) the Executive shall not have returned to the
performance of his duties on a full-time basis. (If the Executive is prevented
from performing his duties because of Disability, upon request by the Company,
the Executive shall submit to an examination by a physician selected by the
Company, at the Company's expense, and the Executive shall also authorize his
personal physician to disclose to the selected physician all of the Executive's
medical records).
"EMPLOYMENT COMMENCEMENT DATE" means the date set forth in the
introductory paragraph of this Agreement.
"EMPLOYMENT PERIOD" means that period commencing on the Employment
Commencement Date and ending on the Employment Termination Date.
"EMPLOYMENT TERMINATION DATE" means the date the Employment Period
terminates as provided in Section 10.
FISCAL YEAR" means the fiscal year of the Company ending December 31 or as
such fiscal year as may be amended by the Board of Directors.
"FMV" means, as of any applicable date: (i) if the Common Stock is listed
on a national securities exchange or is authorized for quotation on The Nasdaq
National Market ("NMS"), the closing price of the Common Stock on such exchange
or NMS, as the case may be, on such date or if no sale of the Common Stock shall
have occurred on such date, on the next preceding date on which there was such a
reported sale; or (ii) if the Common Stock is not listed for trading on a
national securities exchange or authorized for quotation on NMS, the closing bid
price as reported by The Nasdaq SmallCap Market on such date, of if no such
price shall have been reported for such date, on the next preceding date for
which such price was so reported; or (iii) if the Common Stock is not listed for
trading on a national securities exchange or authorized for quotation on NMS or
The Nasdaq SmallCap Market (if applicable), the last reported bid price
published in the "pink sheets" or displayed on the National Association of
Securities Dealers, Inc. ("NASD") Electronic Bulletin Board, as the case may be;
or (iv) if the Common Stock is not listed for trading on a national securities
exchange, is not authorized for quotation on NMS or The Nasdaq SmallCap Market
and is not published in the "pink sheets" or displayed on the NASD Electronic
Bulletin Board, the fair market value of the Common Stock as determined in good
faith by the Committee.
"INCENTIVE BONUS COMPENSATION" shall have the meaning set forth in Section
5(b).
"IPO CLOSING DATE" means the closing date of the Company's initial public
offering ("IPO") of securities pursuant to a registration statement declared
effective by the Commission.
"IPO PRICE" means the price of the Company's Common Stock in an IPO.
"NOTICE OF TERMINATION" shall have the meaning set forth in Section
10(a)(1).
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"OFFERING" means any public offering of shares of Common Stock by the
Company or any holder thereof in accordance with the registration requirements
of the Act.
"REGISTRABLE SECURITIES" means any shares of Common Stock now or hereafter
held by the Executive other than Unrestricted Securities.
"REGISTRATION," "REGISTER" and like words mean compliance with all of the
laws, rules and regulations (federal, state and local), and provisions of
agreements and corporate documents pertaining to the public offering of
securities, including registration of any public offering of securities on any
form under the Act.
"RESTRICTED PERIOD" shall have the meaning set forth in Section 9(a).
"SCHEDULED EMPLOYMENT TERMINATION DATE" means the later of (a) the day
immediately preceding the third anniversary of the Employment Commencement Date
or (b) such date as is specified by either the Company or the Executive in a
Notice of Termination delivered for the purpose of fixing the Scheduled
Employment Termination Date, provided the date so specified shall be at least
three (3) years after the date such Notice of Termination is so delivered.
"SUBSIDIARIES" means wholly owned subsidiaries of the Company.
"UNRESTRICTED SECURITIES" means Common Stock beneficially owned by the
Executive, if any, that can be transferred by the Executive without registration
under the Act.
Section 2. EMPLOYMENT AND TERM. The Company hereby employs the Executive,
and the Executive hereby accepts such employment by the Company, for the
purposes and upon the terms and conditions contained in this Agreement. The term
of such employment shall be for the Employment Period.
Section 3. EMPLOYMENT CAPACITY AND DUTIES. The Executive shall be employed
throughout the Employment Period as the Chief Operating Officer of the Company.
The Executive shall have the duties and responsibilities incumbent with this
position. Accordingly, and not by way of limitation, as Chief Operating Officer,
the Executive shall superintend and manage the business operations of the
Company and coordinate and supervise the work of its other officers and employ,
direct, discipline and discharge its personnel, employ agents, professional
advisors and consultants and perform all functions of a general operating
manager of the Company's business. The Company agrees that it will not, without
the Executive's written consent, require the Executive to be based anywhere
other than Xxxx County, Georgia except for required travel on the Company's
business.
Section 4. EXECUTIVE PERFORMANCE COVENANTS. The Executive accepts the
employment described in Section 3 and agrees to devote substantially all of his
working time and efforts (except for absences due to illness and appropriate
vacations) to the business and affairs of the Company and the performance of the
aforesaid duties and responsibilities.
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Section 5. COMPENSATION. The Company shall pay to the Executive for his
services hereunder, the compensation hereinafter provided in this Section 5.
Such compensation shall be paid to the Executive at the time and in the manner
as provided below.
(a) BASE COMPENSATION. The Executive shall be paid "BASE
COMPENSATION" for each Fiscal Year at an annual rate of $84,000 in 26 bi-weekly
equal installments or such other basis as may be mutually agreed upon. The Base
Compensation (i) may be increased (but may not be decreased) at any time or from
time to time by action of the Board of Directors or any committee thereof, (ii)
shall be increased to an annual rate of $96,000 upon the IPO Closing Date, and
(iii) shall be increased by the COLA Adjustment on each anniversary of the
Employment Commencement Date. The Base Compensation shall be pro-rated for any
Fiscal Year hereunder which is less than a full Fiscal Year.
(b) INCENTIVE BONUS COMPENSATION. The Executive shall be eligible
for incentive bonus compensation for each Fiscal Year in an amount to be
determined by the Board of Directors or any committee thereof ("INCENTIVE BONUS
COMPENSATION").
(c) OPTIONS. The Executive shall be granted non-qualified
options to purchase shares of Common Stock from the Company as follows: (i)
options to purchase up to 5,000 shares of Common Stock on the IPO Closing Date
at the IPO Price and (ii) options to purchase up to 5,000 shares of Common Stock
from the Company on each anniversary of the Employment Commencement Date at a
price equal to the FMV of such shares of Common Stock on the date on which such
options are to be granted to the Executive.
Section 6. PAYMENT OF EXPENSES. The Company shall pay the Executive's
reasonable expenses incurred in providing services to the Company, including
expenses for travel, entertainment and similar items, in accordance with the
Company's expense policies as determined from time to time by the Board of
Directors. If there is a dispute as to the eligibility of an expense for payment
in accordance with the Company's expense policies, then such expense shall be
determined to be payable by the Company if approved by a majority of the Board
of Directors.
Section 7. EMPLOYEE BENEFITS, VACATIONS. During the Employment Period, the
Executive shall receive the benefits and enjoy the perquisites described below:
(a) BENEFIT PLANS. The Executive shall be entitled to
participate in any perquisite, benefit or compensation plan (in addition to the
compensation provided for in Section 5) including any profit sharing plan and
401(k) plan, medical insurance plan (which medical insurance shall be provided
for all of the Executive's dependents, at the Company's expense), life insurance
plan, health and accident plan and disability plan which are generally
applicable to all salaried employees of the Company (collectively referred to as
the "BENEFIT PLANS"). All such Benefit Plans shall be maintained by the Company,
or the Company shall maintain plans providing substantially similar benefits;
provided, however, that the Company may make modifications in the Benefit Plans
so long as such modifications (i) are generally applicable to all salaried
employees of the Company and (ii) do not discriminate against the Executive or
other highly-compensated employees of the Company.
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(b) VACATIONS. The Executive shall be entitled in each Fiscal Year
to a vacation of four weeks (20 working days), during which time his
compensation shall be paid in full, and such holidays and other nonworking days
as are consistent with the policies of the Company for executives generally.
(c) AUTOMOBILE ALLOWANCE. The Executive shall be entitled
to a monthly automobile allowance of $600 per month which shall be paid to the
Executive on the first day of each month during the Employment Period,
commencing on the first day of the first month after the Employment Commencement
Date.
(d) CELLULAR PHONE. The Executive shall be entitled to the use
of a cellular telephone provided by the Company, at the Company's expense. All
costs incurred for the use of such cellular telephone shall be paid by the
Company.
Section 8. COMPANY LIFE INSURANCE; MEDICAL EXAMINATIONS. At any time
during the Employment Period, the Company may, in its discretion, apply for and
procure as owner and for its own benefit, insurance on the life of the
Executive, in such amounts and in such form or forms as the Company may
determine. The Executive shall have no right to any interest in any such policy
or policies, but he shall, at the request of the Company, submit to such medical
examinations, supply such information and execute such applications, instruments
and other documents as reasonably may be required by the insurance company or
companies to whom the Company has applied for such insurance.
If requested by the Company, the Executive shall submit to at least one
medical examination during each Fiscal Year at such reasonable time and place
and by a physician or physicians determined and selected by the Company. All the
costs and expenses of said medical examination, including transportation of the
Executive to the place of examination and return, shall be paid by the Company.
The Executive shall be entitled to a copy of all reports and other
information provided to the Company in connection with any examination referred
to in this Section 8. Any failure to pass any such medical examination or to
meet any health criteria or medical standard shall not of itself be cause for
termination of the Employment Period by the Company.
Section 9. CERTAIN COMPANY PROTECTION PROVISIONS. The below provisions
apply for the protection of the Company.
(a) NONCOMPETITION. During the Restricted Period, the Executive shall not
directly or indirectly compete with the Company by owning, managing, controlling
or participating in the ownership, management or control of, or be employed or
engaged by or otherwise affiliated or associated with, any Competitive Business
which is within a five-mile radius of any assisted living facility owned or
managed by the Company as of the Employment Termination Date. As used herein,
the term "RESTRICTED PERIOD" means the Employment Period and a period of one
year thereafter and means the Employment Period if the Company terminates the
Executive without "cause" (as defined in Section 10(b)) or the Executive
terminates his employment for "good reason" (as defined in Section 10(e)). As
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used herein, a "COMPETITIVE BUSINESS" is any other corporation, partnership,
proprietorship, firm, association or other business entity which owns, manages,
controls or participates in the ownership, management or control of an assisted
living facility; provided, however, that ownership of not more than five percent
(5%) of the stock of any publicly traded company shall not be deemed a violation
of this provision.
(b) NON-INTERFERENCE. During the Restricted Period, the Executive
shall not induce or solicit any employee of the Company or any person doing
business with the Company to terminate his or her employment or business
relationship with the Company or otherwise interfere with any such relationship.
(c) CONFIDENTIALITY. The Executive agrees and acknowledges that,
by reason of the nature of his duties as an officer and employee, he will have
or may have access to and become informed of confidential and secret information
which is a competitive asset of the Company ("CONFIDENTIAL INFORMATION"),
including without limitation any lists of customers or suppliers, financial
statistics, research data or any other statistics and plans contained in profit
plans, capital plans, critical issue plans, strategic plans or marketing or
operation plans or other trade secrets of the Company and any of the foregoing
which belong to any person or company but to which the Executive has had access
by reason of his employment relationship with the Company. The Executive agrees
faithfully to keep in strict confidence, and not, either directly or indirectly,
to make known, divulge, reveal, furnish, make available or use (except for use
in the regular course of his employment duties) any such Confidential
Information. The Executive acknowledges that all manuals, instruction books,
price lists, information and records and other information and aids relating to
the Company's business, and any and all other documents containing Confidential
Information furnished to the Executive by the Company or otherwise acquired or
developed by the Executive, shall at all times be the property of the Company.
Upon termination of the Employment Period, the Executive shall return to the
Company any such property or documents which are in his possession, custody or
control, but his obligation of confidentiality shall survive such termination of
the Employment Period until and unless any such Confidential Information shall
have become, through no fault of the Executive, generally known to the trade.
The obligations of the Executive under this subsection are in addition to, and
not in limitation or preemption of, all other obligations of confidentiality
which the Executive may have to the Company under general legal or equitable
principles.
(d) REMEDIES. It is expressly agreed by the Executive and the
Company that these provisions are reasonable for purposes of preserving for the
Company its business, goodwill and proprietary information. It is also agreed
that if any provision is found by a court having jurisdiction to be unreasonable
because of scope, area or time, then that provision shall be amended to
correspond in scope, area and time to that considered reasonable by a court and
as amended shall be enforced and the remaining provisions shall remain
effective. In the event of any breach of these provisions by the Executive, the
parties recognize and acknowledge that a remedy at law will be inadequate and
the Company may suffer irreparable injury. The Executive acknowledges that the
services to be rendered by him are of a character giving them peculiar value,
the loss of which cannot be adequately compensated for in damages; accordingly
the Executive consents to injunctive and other appropriate equitable relief upon
the institution of proceedings therefor by the Company in order to protect the
Company's rights. Such relief shall be in addition to any other relief to which
the Company may be entitled at law or in equity.
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Section 10. TERMINATION OF EMPLOYMENT.
(a) NOTICE OF TERMINATION; EMPLOYMENT TERMINATION DATE.
(1) Any termination of the Executive's employment by
the Company or the Executive shall be communicated by written Notice of
Termination to the other party thereto. For purposes of this Agreement, a
"NOTICE OF TERMINATION" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination under the provision so indicated. Furthermore, either the Executive
or the Company may give a Notice of Termination to the other party for the
purpose of terminating this Agreement on the Scheduled Employment Termination
Date. Such Notice of Termination shall have the effect of terminating this
Agreement on the Scheduled Employment Termination Date.
(2) "EMPLOYMENT TERMINATION DATE" shall mean the date on
which the Employment Period and the Executive's right and obligation to perform
employment services for the Company shall terminate effective upon the first to
occur of the following, it being understood that in no event may the Employment
Period be terminated other than as the result of one of the following events:
(A) If the Executive's employment is terminated for
Disability, the date which is thirty (30) days after
Notice of Termination is given (provided that the
Executive shall not have returned to the performance of
his duties on a full-time basis during such thirty (30)
days period);
(B) If the Executive's employment is terminated by the
Executive for Good Reason or otherwise by voluntary
action of the Executive (see Section 10(e)), the date
specified in the Notice of Termination, which date
(except with the written consent of the Company to the
contrary) shall not be more than sixty (60) days after
the date that the Notice of Termination is given;
(C) The death of the Executive;
(D) The Scheduled Employment Termination Date;
(E) If the Executive's employment is terminated by the
Company for Cause (see Section 10(b)(1)), the date on
which a Notice of Termination is given; provided that if
within thirty (30) days after any Notice of Termination
is given the party receiving such Notice of Termination
notifies the other party that a dispute exists
concerning the termination, the Employment Termination
Date shall be the date on which the dispute is finally
determined, either by mutual written agreement of the
parties, by a binding and final arbitration award or by
a final judgment, order or decree of a court of
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competent jurisdiction (the time for appeal therefrom
having expired and no appeal having been perfected); and
(F) If the Executive's employment is terminated by the
Company other than for Cause, Disability or death of the
Executive (see Section 10(f)), the date specified in the
Notice of Termination which date (except with the
written consent of the Executive to the contrary) shall
not be more than sixty (60) days after the date that the
Notice of Termination is given.
(b) TERMINATION FOR CAUSE:
(1) The Company may terminate the Executive's employment
and the Employment Period for Cause. For the purposes of this Agreement, the
Company shall have "CAUSE" to terminate employment hereunder only (A) if
termination shall have been the result of an act or acts of willful misconduct
materially injurious to the Company, monetarily or otherwise, or (B) upon the
willful and continued failure by the Executive substantially to perform his
duties with the Company (other than any such failure resulting from incapacity
due to mental or physical illness) after a demand in writing for substantial
performance is delivered by the Board of Directors, which demand specifically
identifies the manner in which the Board believes that the Executive has not
substantially performed his duties, and such failure results in demonstrably
material injury to the Company. The Executive's employment shall in no event be
considered to have been terminated by the Company for Cause if such termination
took place as the result of (i) bad judgment or negligence, or (ii) any act or
omission without intent of gaining therefrom directly or indirectly a profit to
which the Executive was not legally entitled, or (iii) any act or omission
believed in good faith to have been in or not opposed to the interest of the
Company, or (iv) any act or omission in respect of which a determination is made
that the Executive met the applicable standard of conduct prescribed for
indemnification or reimbursement or payment of expenses under the Articles of
Incorporation of the Company or the laws of the State of Florida, in each case
as in effect at the time of such act or omission. The Executive shall not be
deemed to have been terminated for Cause unless and until there shall have been
delivered to him a copy of a resolution duly adopted by the affirmative vote of
not less than three-quarters of the entire membership of the Board of Directors
at a meeting of the Board of Directors called and held for the purpose (after
not less than thirty (30) days' written notice to the Executive and an
opportunity for him together with his counsel, to be heard before the Board of
Directors, such notice of meeting to indicate the specific termination provision
of this Agreement relied upon and specify in reasonable detail the facts and
circumstances claimed to provide a basis for termination under the provision so
indicated), finding that in the good faith opinion of the Board of Directors the
Executive was guilty of conduct set forth above in clauses (A) or (B) of the
second sentence of this paragraph and specifying the particulars thereof in
detail.
(2) If the Executive's employment shall be terminated for
Cause, the Company shall pay the Executive within ten (10) days of such
termination, his unpaid Base Compensation through the Employment Termination
Date at the rate in effect at the time Notice of Termination is given, plus any
expenses incurred in accordance with Section 6 hereof.
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(c) TERMINATION FOR DISABILITY. The Company may terminate the
Executive's employment because of the Disability of the Executive and thereafter
shall pay to the Executive (or his successors) (1) his unpaid Base Compensation
through the sixth full month following the Employment Termination Date at his
then effective Base Compensation rate; plus (2) any accrued but unpaid Incentive
Compensation plus (3) any expenses incurred in accordance with Section 6 hereof.
(d) TERMINATION UPON EXECUTIVE'S DEATH. In the event of the
Executive's death, the Company shall pay to the Executive's estate (1) any
unpaid amount of Base Compensation through the date of death at the then
effective Base Compensation rate, plus (2) any accrued but unpaid Incentive
Compensation, plus (3) any expenses incurred in accordance with Section 6
hereof. All previously granted stock options, rights, warrants and awards shall
fully vest on the death of the Executive.
(e) TERMINATION OF EMPLOYMENT BY THE EXECUTIVE.
(1) The Executive may terminate his employment for Good
Reason and receive the payments and benefits specified in Section 10(f) in the
same manner as if the Company had terminated his employment. For purposes of
this Agreement, "GOOD REASON" will exist if any one or more of the following
occur:
(A) Failure by the Company to honor any of its obligations
under this Agreement, including, without limitation, its
obligations under Section 3 (EMPLOYMENT CAPACITY AND
DUTIES). Section 4 (EXECUTIVE PERFORMANCE COVENANTS).
Section 5 (COMPENSATION). Section 6 (PAYMENT OF
EXPENSES). Section 7 (EMPLOYEE BENEFITS, VACATIONS).
Section 13 (INDEMNIFICATION) and Section 15 (SUCCESSORS
AND ASSIGNS); or
(B) Any purported termination by the Company of the
Executive's employment that is not effected pursuant to
a Notice of Termination satisfying the requirements of
Section 10(a) above and, for purposes of this Agreement,
no such purported termination shall be effective.
(C) If there is a Change in Control of the Company (as
defined below) and the employment of the Executive is
concurrently or subsequently terminated (i) by the
Company without Cause, (ii) by service of a Notice of
Termination or (iii) by the resignation of the Employee
because he has reasonably determined in good faith that
his titles, authorities, responsibilities, salary, bonus
opportunities or benefits have been materially
diminished, or that a material adverse change in his
working conditions has occurred or the Company has
breached this Agreement. For the purpose of this
Agreement, a "CHANGE IN CONTROL" of the Company has
occurred when: ------------------ (x) any person
(defined for the purposes of this Section 10 to mean any
person within the meaning of Section 13(d) of the
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Securities Exchange Act of 1934 (the "EXCHANGE ACT")),
other than the Company, ------------ or an employee
benefit plan established by the Board of Directors of
the Company, acquires, directly or indirectly, the
beneficial ownership (determined under Rule 13d-3 of the
regulations promulgated by the Securities and Exchange
Commission under Section 13(d) of the Exchange Act) of
securities issued by the Company having twenty percent
(20%) or more of the voting power of all of the voting
securities issued by the Company in the election of
directors at the meeting of the holders of voting
securities to be held for such purpose; or (y) a
majority of the directors elected at any meeting of the
holders of voting securities of the Company are persons
who were not nominated for such election by the Board of
Directors of the Company or a duly constituted committee
of the Board of Directors of the Company having
authority in such matters; or (z) the Company merges or
consolidates with or transfers substantially all of its
assets to another person.
(2) The Executive shall have the right voluntarily to
terminate his employment other than for Good Reason prior to the Scheduled
Employment Termination Date, and if the Executive shall so terminate his
employment, he shall be entitled only to payment of the amounts which would be
payable under Section 10(b)(2) had he been terminated for Cause.
(f) COMPENSATION UPON TERMINATION OTHER THAN FOR CAUSE.
(1) If the Company shall terminate the Executive's
employment other than for Cause pursuant to Section 10(c) or (d), or if the
Executive shall terminate his employment for Good Reason pursuant to Section
10(e)(1) (but not a termination voluntarily by the Executive other than for Good
Reason under Section 10(e)(2)), then the Company shall pay to the Executive the
following amounts:
(A) (1) His unpaid Base Compensation through the Employment
Termination Date at his then effective Base Compensation
Rate, plus (2) any accrued but unpaid Incentive Bonus
Compensation, plus (3) any expenses incurred in
accordance with Section 6 hereof.
(B) In addition to the amounts specified in Section 10(f)(1)
(A), the Company shall pay to the Executive promptly in
a single lump sum in cash an amount equal to the product
of three (3), multiplied by one hundred percent (100%)
of the aggregate total amount which would have been
payable to Executive under Section 5 for the entire
Fiscal Year in which occurs the Employment Termination
Date as if his employment had not been terminated (and
without deduction or offset for any amounts actually
paid for such Fiscal Year on account of Base
Compensation or Incentive Bonus Compensation, under
Section 5, this Section 10 or otherwise), and assuming
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for purposes of calculating (x) the Base Compensation,
one hundred percent (100%) of the amount thereof at the
annual rate payable for such Fiscal Year pursuant to
Section 5(a) and (y) the Incentive Bonus Compensation,
the largest amount thereof accrued for any of the two
most recently completed Fiscal Years.
(C) The Company shall also pay all legal fees and expenses
incurred as a result of such termination (including all
such fees and expenses, if any, incurred in contesting
or disputing any such termination, in seeking to obtain
or enforce any right or benefit provided by this
Agreement, or in interpreting this Agreement). The
Company agrees, in the event the Executive desires to
relocate within one year after the Employment
Termination Date, to pay for (or reimburse) all
reasonable moving expenses incurred relating to a change
of principal residence in connection with such
relocation and to indemnify the Executive in connection
with any loss he may sustain in the sale of his primary
residence.
(D) The Executive shall be under no obligation to seek other
employment and there shall be no offset against any
amounts due the Executive under this Agreement on
account of any remuneration attributable to any
subsequent employment that the Executive may obtain (any
amounts due under Section 10(f) are in the nature of
severance payments, or liquidated damages, or both, and
are not in the nature of a penalty).
(2) Unless Executive is terminated for Cause, the Company
shall maintain in full force and effect, for the Executive's continued benefit
through the Scheduled Employment Terminate Date, all active and retired Benefit
Plans and other benefit programs or arrangements in which he was entitled to
participate immediately prior to the Scheduled Employment Terminate Date (except
as specified in Section 7(a) of this Agreement), provided that continued
participation is possible under the general terms and provisions of such plans
and programs. In the event that participation in any such plan or program is
barred, the Company shall arrange to provide him with benefits substantially
similar to those which he is entitled to receive under such plans and programs.
(g) COMPENSATION UPON DISABILITY. During any period that the
Executive fails to perform his duties hereunder as a result of incapacity due to
physical or mental illness, he shall continue to receive his full Base
Compensation at the rate then in effect and his full Incentive Bonus
Compensation until this Agreement is terminated pursuant to Section 10(c)
hereof. Thereafter, his benefits shall be determined in accordance with the
Company's Benefit Plans.
Section 11. CERTAIN TAX MATTERS
(a) OPTIONAL RIGHT OF PARTIAL DISCLAIMER.
It is recognized that under certain circumstances:
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(1) Payments or benefits provided to the Executive under
this Agreement or otherwise pursuant to or by reason of any other agreement,
policy, plan, program or arrangement (including without limitation any stock
option plan) might give rise to an "excess parachute payment" within the meaning
of Section 280G of the Internal Revenue Code of 1986, or any successor provision
thereof.
(2) It might be beneficial to the Executive to disclaim
some portion of the payment or benefit in order to avoid such "excess parachute
payment" and thereby avoid the imposition of an excise tax resulting therefrom.
(3) Under such circumstances it would not be to the
disadvantage of the Company to permit the Executive to disclaim any such payment
or benefit in order to avoid the "excess parachute payment" and the excise tax
resulting therefrom.
Accordingly, the Executive may, at the Executive's option, exercisable at
any time or from time to time, disclaim any entitlement to any portion of the
payment or benefits arising under this Agreement or otherwise pursuant to or by
reason of any other agreement, policy, plan, program or arrangement (including
without limitation any stock option plan) which would constitute "excess
parachute payments" and it shall be the Executive's choice as to which payments
or benefits shall be so surrendered, if and to the extent that the Executive
exercises such option, so as to avoid "excess parachute payments."
(b) ADDITIONAL PAYMENTS.
(1) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined (as hereafter provided)
that any payment or distribution to or for the Executive's benefit, whether paid
or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise pursuant to or by reason of any other agreement, policy,
plan, program or arrangement (including without limitation any stock option
plan), or similar right (a "PAYMENT"), would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986 (or any successor
provision thereto), or any interest or penalties with respect to such excise tax
(such excise tax, together with any such interest and penalties, are hereafter
collectively referred to as the "EXCISE TAX"), then the Executive shall be
entitled to receive an additional payment or payments (a "GROSS-UP PAYMENT") in
an amount such that, after payment by the Executive of all taxes (including any
interest or penalties imposed with respect to such taxes), including any Excise
Tax, imposed upon the Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the lesser of (A) the Excise Tax imposed upon the
Payments or (B) the Excise Tax that would be imposed upon all payments or
benefits provided under this Agreement (including any stock option agreement) if
such payments or benefits (but only such payments or benefits) constituted in
their entirety "excess parachute payments" as such term is defined in section
280G and 4999 of the Internal Revenue Code of 1986 (or any successor provisions
thereto).
(2) Subject to the provisions of Section 11(b)(5), all
determinations required to be made under this Section 11(b), including whether
an Excise Tax is payable by the Executive, the amount of such Excise Tax,
whether a Gross-Up Payment is required, and the amount of such Gross-Up Payment,
shall be made by a nationally-recognized legal or accounting firm (the "FIRM")
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selected by the Executive in the Executive's sole discretion. The Executive
agrees to direct the Firm to submit its determination and detailed supporting
calculations to both the Executive and the Company as promptly as practicable.
If the Firm determines that any Excise Tax is payable by the Executive and that
a Gross-Up Payment is required, the Company shall pay the Executive the required
Gross-Up Payment within ten business days after receipt of such determination
and calculations. If the Firm determines that no Excise Tax is payable by the
Executive, it shall, at the same time as it makes such determination, furnish
the Executive with an opinion that the Executive has substantial authority not
to report any Excise Tax on the Executive's federal income tax return. Any
determination by the Firm as to the amount of the Gross-Up Payment shall be
binding upon the Executive and the Company. As a result of the uncertainty in
the application of Section 4999 of the Internal Revenue Code of 1986 (or any
successor provision thereto) at the time of the initial determination by the
Firm hereunder, it is possible that Gross-Up Payments which will not have been
made by the Company should have been made (an "UNDERPAYMENT"). In the event that
the Company exhausts its remedies pursuant to Section 11(b)(5) hereof and the
Executive thereafter is required to make a payment of any Excise Tax, the
Executive may direct the Firm to determine the amount of the Underpayment (if
any) that has occurred and to submit its determination and detailed supporting
calculations to both the Executive and the Company as promptly as possible. Any
such Underpayment shall be promptly paid by the Company to the Executive, or for
the Executive's benefit, within ten business days after receipt of such
determination and calculations.
(3) The Executive and the Company shall each provide the
Firm access to and copies of any books, records and documents in the possession
of the Company or the Executive, as the case may be, reasonably requested by the
Firm, and otherwise cooperate with the Firm in connection with the preparation
and issuance of the determination contemplated by Section 11(b)(2) hereof.
(4) The fees and expenses of the Firm for its services in
connection with the determinations and calculations contemplated by Section
11(b)(2) hereof shall be borne by the Company. If such fees and expenses are
initially paid by the Executive, the Company shall reimburse the Executive the
full amount of such fees and expenses within ten business days after receipt
from the Executive of a statement therefor and reasonable evidence of the
Executive's payment thereof.
(5) The Executive agrees to notify the Company in writing
of any claim by the Internal Revenue Service that, if successful, would require
the payment by the Company of a Gross-Up Payment. Such notification shall be
given as promptly as practicable but no later than 10 business days after the
Executive actually receives notice of such claim. The Executive agrees to
further apprise the Company of the nature of such claim and the date on which
such claim is requested to be paid (in each case, to the extent known by the
Executive). The Executive agrees not to pay such claim prior to the earlier of
(a) the expiration of the 30-calendar-day period following the date on which the
Executive gives such notice to the Company and (b) the date that any payment
with respect to such claim is due. If the Company notifies the Executive in
writing at least five business days prior to the expiration of such period that
it desires to contest such claim, the Executive agrees to:
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a) provide the Company with any written records or
documents in the Executive's possession relating to such
claim reasonably requested by the Company;
b) Company shall reasonably request in writing from time to
time, including without limitation accepting legal
representation with respect to such claim by an attorney
competent in respect of the subject matter and
reasonably selected by the Company;
c) cooperate with the Company in good faith in order to
effectively contest such claim; and
d) permit the Company to participate in any proceedings
relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including interest and penalties) incurred in connection with such
contest and shall indemnify and hold the Executive harmless, on an after-tax
basis, from and against any Excise Tax or income tax, including interest and
penalties with respect thereto, imposed as a result of such representation and
payment of costs and expenses. Without limiting the foregoing provisions of this
Section 11(b)(5), the Company shall control all proceedings taken in connection
with the contest of any claim contemplated by this Section 11(b)(5) and, at its
sole option, may pursue or forego any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect of
such claim (provided, however, that the Executive may participate therein at the
Executive's own cost and expense) and may, at its option, either direct the
Executive to pay the tax claimed and xxx for a refund or contest the claim in
any permissible manner, and the Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
the tax claimed and xxx for a refund, the Company shall advance the amount of
such payment to the Executive on an interest-free basis and shall indemnify and
hold the Executive harmless, on an after-tax basis, from any Excise Tax or
income tax, including interest or penalties with respect thereto, imposed with
respect to such advance; and provided further, however, that any extension of
the statute of limitations relating to payment of taxes for the Executive's
taxable year with respect to which the contested amount is claimed to be due is
limited solely to such contested amount. Furthermore, the Company's control of
any such contested claim shall be limited to issues with respect to which a
Gross-Up Payment would be payable hereunder and the Executive shall be entitled
to settle or contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.
(6) If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Section 11(b)(5) hereof, the Executive
receives any refund with respect to such claim, the Executive agrees (subject to
the Company's complying with the requirements of Section 11(b)(5) hereof) to
promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after any taxes applicable thereto). If, after
the Executive's receipt of an amount advanced by the Company pursuant to Section
11(b)(5) hereof, a determination is made that the Executive is not entitled to
any refund with respect to such claim and the Company does not notify the
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Executive in writing of its intent to contest such denial of refund prior to the
expiration of thirty (30) calendar days after such determination, then such
advance shall be forgiven and shall not be required to be repaid and the amount
of such advance shall offset, to the extent thereof, the amount of Gross-Up
Payment required to be paid pursuant to this Section 11(b).
SECTION 12. REGISTRATION RIGHTS.
(a) DEMAND REGISTRATION.
(1) At any time after the Employment Commencement Date, and
subject to the other provisions of this Section 12, the Executive shall have the
right, exercisable by making a written request to the Company, to demand that
the Company effect the Registration of any Registrable Securities in accordance
with the provisions of the Act. The Company shall then comply with Section
12(a)(2) hereof. Any provision herein to the contrary notwithstanding, the right
to demand Registration pursuant to this Section 12 shall be limited to one
Registration demand per calendar year. A right to demand Registration hereunder
shall be deemed to have been exercised and all of the Company's demand
Registration obligations hereunder for such calendar year shall be deemed to be
fully satisfied when the registration statement filed on account of such
exercise has been declared effective by the Commission. If any other executive
of the Company exercises his or her right, if any, to demand that the Company
effect the Registration of any Registrable Securities, then the Executive shall
have the right to Register an equivalent number of Registrable Securities
without reducing the number demand Registrations the Executive shall have in any
calendar year.
(2) Following receipt of a request pursuant to Section
12(a)(1) hereof, the Company shall (i) file within ninety (90) days thereafter a
registration statement on the appropriate form under the Act for the shares of
Common Stock that the Company has been requested to Register; (ii) if the
applicable Offering is pursuant to an underwriting agreement, enter into an
underwriting agreement in such form as said managing or sole underwriter shall
require (which must only contain terms and conditions customary for offerings of
equity securities of entities with market capitalizations that are approximately
equal to the Company's then current market capitalization and may contain
customary provisions requiring the Company and the Executive to indemnify and
provide contribution to the underwriter or underwriters of such Offering); and
(iii) use its reasonable best efforts to have such registration statement
declared effective as promptly as practicable and to remain effective for at
least one hundred eighty (180) days. Notwithstanding any other provision hereof,
the Executive acknowledges and agrees that there can be no guarantee or warranty
from or by the Company that any such registration statement will ever be
declared effective by the Commission, and that the Company makes no such
guarantee or warranty in this Agreement.
(b) PIGGY-BACK REGISTRATION. If the Company at any time
proposes to register any of its securities under the Act or pursuant to the
Securities Exchange Act of 1934, as amended (the "1934 ACT"), collectively
referred to as the "SECURITIES ACTS," whether or not for sale for its own
account, it will each such time give prompt written notice to the Executive of
its intention to do so (the "REGISTRATION NOTICE"). Upon the written request of
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the Executive, made within fifteen (15) business days after the receipt of the
Registration Notice, the Company shall use its best efforts to effect the
registration under the Securities Acts of such amount of the Executive's Common
Stock as the Executive requests, by inclusion of the Executive's Common Stock in
the registration statement that relates to the securities which the Company
proposes to register, PROVIDED that if, at any time after giving the
Registration Notice and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall
determine for any reason either not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to the Executive (the "REFUSAL NOTICE") and, thereupon, (i) in the
case of a determination not to register, shall be relieved of its obligation to
register the Executive's Common Stock in connection with such terminated
registration (but not from its obligation to pay the Registration Expenses in
connection therewith), and (ii) in the case of a determination to delay
registering, shall be permitted to delay registering the Executive's Common
Stock, for the same period as the delay in registering such other securities.
(c) REGISTRATION EXPENSES. The Company shall pay all
Registration Expenses (as defined herein) in connection with each registration
of the Executive's Common Stock pursuant to this Section 12. For the purposes
hereof, the phrase "REGISTRATION EXPENSES" shall include all expenses incident
to the Company's performance of, or compliance with, this Section 12, including,
without limitation, (i) all registration, filing and NASD fees, (ii) all fees
and expenses of complying with securities or blue sky laws, (iii) all printing
expenses, (iv) the fees and disbursements of counsel for the Company and of its
independent public accountants, including the expenses of any special audits or
"cold comfort" letters required by or incident to such performance and
compliance, (v) the fees and disbursements of any one counsel and any one
accountant retained by the Executive, (vi) premiums and other costs of policies
of insurance against liabilities arising out of the public offering of the
Executive's Common Stock being registered if the Company desires such insurance,
and (vii) any fees and disbursements of underwriters customarily paid by issuers
or sellers of securities, but excluding underwriting discounts and commissions
and transfer taxes, if any.
(d) SURVIVAL. Notwithstanding anything to the contrary
contained herein, the provisions of this Section 12 shall survive the Employment
Termination Date for a period of two (2) years.
Section 13. INDEMNIFICATION. As an employee, officer and director of the
Company, the Executive shall be indemnified against all liabilities, damages,
fines, costs and expenses by the Company in accordance with the indemnification
provisions of the Company's Articles of Incorporation as in effect on the date
hereof, and otherwise to the fullest extent to which employees, officers and
directors of a corporation organized under the laws of Florida may be
indemnified pursuant to Florida Business Corporation Act, as the same may be
amended from time to time (or any subsequent statute of similar tenor and
effect), subject to the terms and conditions of such statute.
Section 14. ARBITRATION. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration in
Pinellas County Florida in accordance with the rules of the American Arbitration
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Association then in effect; provided that all arbitration expenses shall be
borne by the Company. Notwithstanding the pendency of any dispute or controversy
concerning termination or the effects thereof, the Company will continue to pay
the Executive his full compensation in effect immediately before any Notice of
Termination giving rise to the dispute was given (including, but not limited to,
Base Salary and Incentive Compensation) and continue him as a participant in all
compensation, benefit and insurance plans in which he was then participating,
until the dispute is finally resolved. Judgment may be entered on the
arbitrators' award in any court having jurisdiction; provided, however, that the
Executive shall be entitled to seek specific performance of his right to be paid
until the Employment Termination Date during the pendency of any dispute or
controversy arising under or in connection with this Agreement.
Section 15. SUCCESSORS AND ASSIGNS. Except as hereinafter expressly
provided, the agreements, covenants, terms and provisions of this Agreement
shall bind the respective heirs, executors, administrators, successors and
assigns of the parties. Specifically, and not by way of limitation of the
foregoing, the Executive shall be bound by the terms and conditions of this
Agreement to any successor assignee of the Company's rights and obligations
hereunder as a result of any merger, consolidation or sale or lease of all or
substantially all of the Company's business and assets. If 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 fails,
concurrently with the effectiveness of any such succession, to agree in writing
in form and substance reasonably satisfactory to the Executive expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform if no such succession had
taken place, then the Executive shall have the right, effected by notice to such
successor not later than ninety (90) days after the effectiveness of such
succession, to terminate the Employment Period under Section 10(e) as though
such failure was an uncured breach by the Company of a material covenant or
agreement of the Company contained in this Agreement.
If the Executive should die while any amounts are payable to him
hereunder, or if by reason of his death payments are to be made to him
hereunder, then this Agreement shall inure to the benefit of and be enforceable
by the Executive's executors, administrators, heirs, distributees, devisees and
legatees and all amounts payable hereunder shall then be paid in accordance with
the terms of this Agreement to the Executive's devisee, legatee or other
designee or, if there is no such designee, to this estate.
This Agreement is personal in nature and neither of the parties hereto
shall, without the consent of the other, assign or transfer this Agreement or
any rights or obligations hereunder, except as hereinbefore provided in this
Section 15. Without limiting the foregoing, the Executive's right to receive
payments hereunder shall not be assignable or transferable, whether by pledge,
creation of a security interest or otherwise, other than a transfer by his will
or by the laws of descent or distribution, and in the event of any attempted
assignment or transfer contrary to this paragraph the Company shall have no
liability to pay to the purported assignee or transferee any amount so attempted
to be assigned or transferred.
As used in this Agreement, the "COMPANY" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
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aforesaid which executes and delivers the agreement provided for in the first
paragraph of this Section 15 or which otherwise becomes bound by all the terms
and provisions of this Agreement by operation of law.
Section 16. NOTICES. Any notice or other communication required or desired
to be given hereunder shall be in writing and shall be deemed sufficiently given
when personally delivered or delivered by recognized overnight delivery service,
addressed to the parties at their respective addressed set forth under their
respective signatures below or such other person or addresses as shall be given
by notice of any party. Such notice shall be deemed to be given on the date of
delivery.
Section 17. WAIVER; REMEDIES CUMULATIVE. No waiver of any right or option
hereunder by any party shall operate as a waiver of any other right or option,
or the same right or option as respects any subsequent occasion for its
exercise, or of any legal remedy. No waiver by any party of any breach of this
Agreement or of any agreement or covenant contained herein shall be held to
constitute a waiver of any other breach or a continuation of the same breach.
All remedies provided by this Agreement are in addition to all other remedies by
it or the law provided.
Section 18. GOVERNING LAW; SEVERABILITY. This Agreement is made and is
expected to be performed in Florida, and the various terms, provisions,
covenants and agreements, and the performance thereof, shall be construed,
interpreted and enforced under and with reference to the laws of the State of
Florida, unless otherwise indicated herein. It is the intention of the Company
and the Executive to comply fully with all laws and matters of public policy
relating to employment agreements and restrictive covenants, and this Agreement
shall be construed consistently with such laws and public policy to the extent
possible. If and to the extent any one or more covenants, agreements, terms and
provisions of this Agreement or any portion or portions thereof shall be held
invalid or unenforceable by a court of competent jurisdiction, then such
covenants, agreements, terms and provisions (or portions thereof) shall be
deemed separable from the remaining covenants, agreements, terms and provisions
of this Agreement and such holding shall in no way affect the validity or
enforceability of any of the other covenants, agreements, terms and provisions
hereof.
Section 19. MISCELLANEOUS. This Agreement constitutes the entire
understanding of the parties hereto with respect to the subject matter hereof.
This Agreement may not be modified, changed or amended except in a writing
signed by each of the parties hereto. This Agreement may be signed in multiple
counterparts, each of which shall be deemed an original hereof. The captions of
the several sections and subsections of this Agreement are not a part of the
context hereof, are inserted only for convenience in locating such sections and
subsections and shall be ignored in construing this Agreement.
IN WITNESS WHEREOF, the Company and the Executive have executed this
Agreement as of the date first above written.
Company: Executive:
REGIONAL CAPITAL MANAGEMENT CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
---------------------
Name: Xxxxxx X. Xxxxxxx /s/ F. Xxxxxxx Xxxxxxx
Title: President ----------------------
Address: 0000 X Xxxxx Xxxx Xxxxx Xxxxx Name: F. Xxxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxx 00000 Address: 0000 Xxxxxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxx 00000
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