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Exhibit 10.5
EMPLOYMENT AGREEMENT
PLEASE READ THIS AGREEMENT CAREFULLY. THIS AGREEMENT DESCRIBES THE BASIC LEGAL
AND ETHICAL RESPONSIBILITIES THAT YOU ARE REQUIRED TO OBSERVE AS AN EXECUTIVE
EXPOSED TO HIGHLY SENSITIVE TECHNOLOGY AND STRATEGIC INFORMATION. CONSULT WITH
YOUR LEGAL COUNSEL IF ALL THE TERMS AND PROVISIONS OF THIS AGREEMENT ARE NOT
FULLY UNDERSTOOD BY YOU.
THIS AGREEMENT is made as of the 6th day of March, 2000, by and between
XXXXX ENTERPRISES, INCORPORATED, a Florida corporation (the "Company"), and W.
XXXXXXX XXXXXXX (the "Executive").
W I T N E S S E T H :
WHEREAS, the Company desires to assure itself of the Executive's
continued employment in an executive capacity and the Company's Vice President
and Chief Financial Officer; and
WHEREAS, the Executive desires to be employed by the Company on the
terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
of the parties contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
covenant and agree as follows:
1. EMPLOYMENT AND DUTIES. Subject to the terms and conditions of this
Agreement, the Company shall employ the Executive during the Term (as
hereinafter defined) as its Vice President and Chief Financial Officer. The
executive shall report to the Office of the Chairman, which will comprise the
Chairman of the Board of Directors, the Chief Executive Officer, and the
President of the Company. The Executive accepts such employment and agrees to
devote his best efforts and entire business time, skill, labor, and attention to
the performance of such duties. During the term, the Executive agrees to
promptly provide a description of any other commercial duties or pursuits
engaged in by the Executive to the Company's Board of Directors. If the Board of
Directors determines in good faith that such activities conflict with the
Executive's performance of his duties hereunder, the Executive shall promptly
cease such activities to the extent as directed by the Board of Directors. It is
acknowledged and agreed that such description shall be made regarding any such
activities in which the Executive owns more than 5% of the ownership of the
organization or which may be in violation of Section 5 hereof, and that the
failure of the Executive to provide any such description shall enable the
Company to terminate the Executive for Cause (as provided in Section 6(c)
hereof). The Company agrees to hold any such information provided by the
Executive confidential and not disclose the same to any person other than a
person to whom disclosure is reasonably necessary or appropriate in light of the
circumstances. In addition, the Executive agrees to serve without additional
compensation if elected or appointed to any office or position, including as a
director, of the Company or any subsidiary or affiliate of the Company;
provided, however, that the Executive shall be entitled to receive such benefits
and additional compensation, if any, that is paid to executive officers of the
Company in connection with such service.
2. TERM. Subject to the terms and conditions of this Agreement,
including, but not limited to, the provisions for termination set forth in
Section 6 hereof, the employment of the Executive under this Agreement shall
commence on the effective date hereof and shall continue through and including
the close of business on the date hereof as set forth on Exhibit A attached
hereto and incorporated herein (such term shall herein be defined as the
"Term"). The Executive agrees that some portions of this Agreement, including
Sections 4, 5, and 6 hereof, will remain in force after the termination of this
Agreement.
3. COMPENSATION.
(a) Base Salary and Bonus. As compensation for the Executive's services
under this Agreement, the Executive shall receive and the Company shall pay a
weekly base salary set forth on Exhibit A. Such base salary may be increased but
not decreased during the Term in the Company's discretion based upon the
Executive's performance and any other factors the Company deems relevant. Such
base salary shall be payable in accordance with the policy then prevailing for
the Company's executives. In addition to such base salary, the Executive shall
be entitled during the Term to a performance bonus set forth on Exhibit A and to
participate in and receive payments from, at the Company's election, other bonus
and other incentive compensation plans, if any, as may be adopted by the
Company.
(b) Payments. All amounts paid pursuant to this Agreement shall be
subject to withholding or deduction by reason of the Federal Insurance
Contribution Act, federal income tax, state and local income tax, if any, and
comparable laws and regulations.
(c) Other Benefits. The Executive shall be reimbursed by the Company
for all reasonable and customary travel and other business expenses incurred by
the Executive in the performance of the Executive's duties hereunder in
accordance with the Company's standard policy regarding expense verification
practices. The Executive shall be entitled to that number of weeks paid vacation
per year that is available to other executive officers of the Company in
accordance with the Company's standard policy regarding vacations and such other
fringe benefits as may be set forth on Exhibit A and shall be eligible to
participate in such pension, life insurance, health insurance,
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disability insurance, and other executive benefits plans, if any, which the
Company may from time to time make available to its executive officers
generally.
4. CONFIDENTIAL INFORMATION.
(a) The Executive has acquired and will acquire information and
knowledge respecting the intimate and confidential affairs of the Company,
including, without limitation, confidential information with respect to the
Company's technical data, research and development projects, methods, products,
software, financial data, business plans, financial plans, customer lists,
business methodology, processes, production methods and techniques, promotional
materials and information, and other similar matters treated by the Company as
confidential (the "Confidential Information"). Accordingly, the Executive
covenants and agrees that during the Executive's employment by the Company
(whether during the Term hereof or otherwise) and thereafter, the Executive
shall not, without the prior written consent of the Company, disclose to any
person, other than a person to whom disclosure is reasonably necessary or
appropriate in connection with the performance by the Executive of the
Executive's duties hereunder, any Confidential Information obtained by the
Executive while in the employ of the Company.
(b) The Executive agrees that all memoranda; notes; records; papers or
other documents; computer disks; computer, video or audio tapes; CD-ROMs; all
other media and all copies thereof relating to the Company's operations or
business, some of which may be prepared by the Executive; and all objects
associated therewith in any way obtained by the Executive shall be the Company's
property. This shall include, but is not limited to, documents; computer disks;
computer, video and audio tapes; CD-ROMs; all other media and objects concerning
any technical data, methods, products, software, research and development
projects, financial data, financial plans, business plans, customer lists,
contracts, price lists, manuals, mailing lists, advertising materials; and all
other materials and records of any kind that may be in the Executive's
possession or under the Executive's control. The Executive shall not, except for
the Company's use, copy or duplicate any of the aforementioned documents or
objects, nor remove them from the Company's facilities, nor use any information
concerning them except for the Company's benefit, either during the Executive's
employment or thereafter. The Executive covenants and agrees that the Executive
will deliver all of the aforementioned documents and objects, if any, that may
be in the Executive's possession to the Company upon termination of the
Executive's employment, or at any other time at the Company's request.
(c) In any action to enforce or challenge these Confidential
Information provisions, the prevailing party is entitled to recover its
attorney's fees and costs.
5. COVENANT NOT-TO-COMPETE AND NO SOLICITATION. Executive recognizes
that the Company is in the business of employing individuals to provide
specialized and technical services to the Company's Clients. The purpose of
these Covenant Not-to-Compete and No Solicitation provisions are to protect the
relationship which exists between the Company and its Client while Executive is
employed and after Executive leaves the employ of the Company. The consideration
for these Covenant Not-to-Compete and No Solicitation provisions is the
Executive's employment with the Company.
(a) Executive acknowledges the following:
(1) The Company expended considerable resources in obtaining
contracts with its Clients;
(2) The Company expended considerable resources to recruit and
hire employees who could perform services for its Clients;
(3) Through his/her employ with the Company, Executive will
develop a substantial relationship with the Company's existing or
potential Clients, including, but not limited to, being the sole or
primary contact between the Client and the Company;
(4) Executive will be exposed to valuable confidential
business information about the Company, its Clients, and the Company's
relationship with its Client;
(5) By providing services on behalf of the Company, Executive
will develop and enhance the valuable business relationship between the
Company and its Client;
(6) The relationship between the Company and its Client
depends on the quality and quantity of the services Executive performs;
(7) Through employment with the Company, Executive will
increase his/her opportunity to work directly for the Client or for a
competitor of the Company; and
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(8) The Company will suffer irreparable harm if Executive
breaches these Covenant Not-to-Compete and No Solicitation provisions
of this Agreement.
(b) Executive agrees that:
(1) The relationship between the Company and its Client
(developed and enhanced when the Executive performs services on behalf
of the Company) is a legitimate business interest for the Company to
protect;
(2) The Company's legitimate business interest is protected by
the existence and enforcement of these Covenant Not-to-Compete and No
Solicitation provisions;
(3) The business relationship which is created or exists
between the Company and its Client, or the goodwill resulting from it,
is a business asset of the Company and not the Executive; and
(4) Executive will not seek to take advantage of opportunities
which result from his/her employment with the Company and that entering
into the Agreement containing Covenant Not-to-Compete and No
Solicitation provisions is reasonable to protect the Company's business
relationship with its Clients.
(c) Restrictions on Executive. During the term of this Agreement and
for a period of time set forth on Exhibit A after the termination of this
Agreement, for whatever reason, whether such termination was by the Company or
the Executive, voluntarily or involuntarily, and whether with or without cause,
Executive agrees that he/she shall not, as a principal, employer, stockholder,
partner, agent, consultant, independent contractor, employee, or in any other
individual or representative capacity:
(1) Directly or indirectly engage in, continue in, or carry on
the business of the Company or any business substantially similar
thereto, including owning or controlling any financial interest in any
corporation, partnership, firm, or other form of business organization
which competes with or is engaged in or carries on any aspect of such
business or any business substantially similar thereto;
(2) Consult with, advise, or assist in any way, whether or not
for consideration, any corporation, partnership, firm, or other
business organization which is now, becomes, or may become a competitor
of the Company in any aspect of the Company's business during the
Executive's employment with the Company, including, but not limited to,
advertising or otherwise endorsing the products of any such competitor
or loaning money or rendering any other form of financial assistance to
or engaging in any form of transaction whether or not on an arm's
length basis with any such competitor;
(3) Provide or attempt to provide or solicit the opportunity
to provide or advise others of the opportunity to provide any services
of the type Executive performed for the Company or the Company's
Clients (regardless of whether and how such services are to be
compensated, whether on a salaried, time and materials, contingent
compensation, or other basis) to or for the benefit of any Client (i)
to which Executive has provided services in any capacity on behalf of
the Company, or (ii) to which Executive has been introduced to or about
which the Executive has received information through the Company or
through any Client from which Executive has performed services in any
capacity on behalf of the Company;
(4) Retain or attempt to retain, directly or indirectly, for
itself or any other party, the services of any person, including any of
the Company's employees, who were providing services to or on behalf of
the Company while Executive was employed by the Company and to whom
Executive has been introduced or about whom Executive has received
information through Employer or through any Client for which Executive
has performed services in any capacity on behalf of the Company;
(5) Engage in any practice, the purpose of which is to evade
the provisions of this Agreement or to commit any act which is
detrimental to the successful continuation of or which adversely
affects the business or the Company; provided, however, that the
foregoing shall not preclude the Executive's ownership of not more than
2% of the equity securities registered under Section 12 of the
Securities Exchange Act of 1934, as amended; or
(6) For purpose of these Covenant Not-to-Compete and No
Solicitation provisions, Client includes any subsidiaries, affiliates,
customers, and clients of the Company's Clients. The Executive agrees
that the geographic scope of this Covenant Not-to-Compete shall extend
to the geographic area where the Company's Clients conduct business at
any time during the Term of this Agreement. For purposes of this
Agreement, "Clients" means any person or entity to which the Company
provides or has provided within a period of one (1) year prior to the
Executive's termination of employment labor, materials or services for
the furtherance of such entity's or person's business or any person or
entity
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that within such period of one (1) year the Company has pursued or
communicated with for the purpose of obtaining business for the
Company.
(d) Enforcement. These Covenant Not-to-Compete and No Solicitation
provisions shall be construed and enforced under the laws of the State of
Florida. In the event of any breach of this Covenant Not-to-Compete, the
Executive recognizes that the remedies at law will be inadequate, and that in
addition to any relief at law which may be available to the Company for such
violation or breach and regardless of any other provision contained in this
Agreement, the Company shall be entitled to equitable remedies (including an
injunction) and such other relief as a court may grant after considering the
intent of this Section 5. It is further acknowledged and agreed that the
existence of any claim or cause of action on the part of the Executive against
the Company, whether arising from this Agreement or otherwise, shall in no way
constitute a defense to the enforcement of this Covenant Not-to-Compete, and the
duration of this Covenant Not-to-Compete shall be extended in an amount which
equals the time period during which the Executive is or has been in violation of
this Covenant Not-to-Compete. In the event a court of competent jurisdiction
determines that the provisions of this Covenant Not-to-Compete are excessively
broad as to duration, geographic scope, prohibited activities or otherwise, the
parties agree that this covenant shall be reduced or curtailed to the extent
necessary to render it enforceable.
(e) In an action to enforce or challenge these Covenant
Not-to-Compete and No Solicitation provisions, the prevailing party is entitled
to recover its attorney's fees and costs.
(f) By signing this Agreement, the Executive acknowledges that
he/she understands the effects of these Covenant Not-to-Compete and No
Solicitation provisions and agrees to abide by them.
6. TERMINATION
(a) Death. The Executive's employment hereunder shall terminate upon
his death.
(b) Disability. If during the Term the Executive becomes physically
or mentally disabled in accordance with the terms and conditions of any
disability insurance policy covering the Executive, or, if due to such physical
or mental disability the Executive becomes unable for a period of more than six
(6) consecutive months to perform his duties hereunder on substantially a
full-time basis as determined by the Company in its sole reasonable discretion,
the Company may, at its option, terminate the Executive's employment hereunder
upon not less than thirty (30) days' written notice.
(c) Cause. The Company may terminate the Executive's employment
hereunder for Cause effective immediately upon notice. For purposes of this
Agreement, the Company shall have "Cause" to terminate the Executive's
employment hereunder: (i) if the Executive engages in conduct which has caused
or is reasonably likely to cause demonstrable and serious injury to Company;
(ii) if the Executive is convicted of a felony as evidenced by a binding and
final judgment, order, or decree of a court of competent jurisdiction; (iii) for
the Executive's neglect of his duties hereunder or the Executive's refusal to
perform his duties or responsibilities hereunder as determined by the Company's
Board of Directors in good faith; (iv) consistent failure to achieve goals
established by the Board of Directors or their designate; (v) gross
incompetence; (vi) for the Executive's violation of this Agreement, including,
without limitation, Section 5 hereof; (vii) chronic absenteeism; (viii) for use
of illegal drugs; (ix) insobriety by the Executive while performing his or her
duties hereunder; and (x) for any act of dishonesty or falsification of reports,
records, or information submitted by the Executive to the Company.
(d) Non-Compete Payment. In the event of a termination of the
Executive's employment pursuant to Section 6 or by the Executive, all payments
and Company benefits to the Executive hereunder, except the payments (if any)
specified in Section 6(a) above or provided for below, shall immediately cease
and terminate. In the event of a termination by the Company of the Executive's
employment with the Company for any reason other than pursuant to Section 6(c),
the Covenant Not-to-Compete set forth in Section 5 hereof shall remain in full
force and effect through the full stated Term of this Agreement; and
additionally, from the end of the Term of this Agreement through the non-compete
period stated on Exhibit "A", the Company shall pay the Executive Not-to-Compete
pay in equal biweekly installments ("Non-Compete Payment Installments") in the
amount set forth on Exhibit A ("Non-Compete Payment"). Such Non-Compete Payment,
however, shall not be required to be paid by the Company if the Company elects,
in its sole discretion, to release the Executive from the Covenant
Not-to-Compete set forth in Section 5 hereof. Additionally, if the Company
commences paying Executive Non-Compete Payment Installments and subsequently
elects in the future, in its sole discretion, to release Executive from the
Covenant Not-to-Compete and gives notice to Executive, then, at the effective
date of such notice, Executive shall no longer be subject to the Covenant
Not-to-Compete, and no further Non-Compete Payment Installments shall be due or
payable to Executive. If the Company terminates the Executive's employment
pursuant to Section 6(c) or the Executive terminates such employment, the
Executive shall not be entitled to the Non-Compete Payment, and the Covenant
Not-to-Compete set forth in Section 5 hereof shall remain in full force and
effect. Notwithstanding anything to the contrary herein contained, the Executive
shall receive all compensation and other benefits to which he was entitled under
this Agreement or otherwise as an executive of the Company through the
termination date.
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7. NOTICE. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given when hand-delivered, sent by telecopier, facsimile
transmission, or other electronic means of transmitting written documents (as
long as receipt is acknowledged) or mailed by United States certified or
registered mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive, to the address set forth on the signature page.
If to the Company: Xxxxx Enterprises, Incorporated
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attention: VP Human Resources
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that a notice of change of address shall
be effective only upon receipt.
8. ENFORCEMENT, GOVERNING LAW, AND ATTORNEY'S FEES. It is stipulated
that a breach by Executive of the restrictive covenants set forth in Sections 4
and 5 of this Agreement will cause irreparable damage to Company or its Clients,
and that in the event of any breach of those provisions, Company is entitled to
injunctive relief restraining Executive from violating or continuing a violation
of the restrictive covenants as well as other remedies it may have.
Additionally, such covenants shall be enforceable against the Executive's
successors or assigns or by successor assigns.
The validity, interpretation, construction, and performance of this
Agreement shall be governed by the internal laws of the State of Florida. Any
litigation to enforce this Agreement shall be brought in the state or federal
courts of Hillsborough County, Florida, which is the principal place of business
for Company and which is considered to be the place where this Agreement is
made. Both parties hereby consent to such courts' exercise of personal
jurisdiction over them.
In the event action is brought by either party to enforce any of the
terms and conditions set forth herein, the prevailing party is entitled to
recover its reasonable attorney's fees and costs.
9. MISCELLANEOUS. No provision of this Agreement may be modified or
waived unless such waiver or modification is agreed to in writing signed by the
parties hereto; provided, however, that the terms of the performance bonus and
fringe benefits set forth or Exhibit A may be amended by the Company in its
discretion without the Executive's consent to the extent provided therein. No
waiver by any party hereto of any breach by any other party hereto shall be
deemed a waiver of any similar or dissimilar term or condition at the same or at
any prior or subsequent time. This Agreement is the entire agreement between the
parties hereto with respect to the Executive's employment by the Company and
there are no agreements or representations, oral or otherwise, expressed or
implied, with respect to or related to the employment of the Executive which are
not set forth in this Agreement. Any prior agreement relating to the Executive's
employment with the Company is hereby superseded and void, and is no longer in
effect. This Agreement shall be binding upon and inure to the benefit of the
Company, its respective successors and assigns, and the Executive and his heirs,
executors, administrators and legal representatives. Except as expressly set
forth herein, no party shall assign any of his or its rights under this
Agreement without the prior written consent of the other party and any attempted
assignment without such prior written consent shall be null and void and without
legal effect. The parties agree that if any provision of this Agreement shall
under any circumstances be deemed invalid or inoperative, the Agreement shall be
construed with the invalid or inoperative provision deleted and the rights and
obligations of the parties shall be construed and enforced accordingly. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed to be an original but all of which together will constitute but one and
the same instrument. This Agreement has been negotiated and no party shall be
considered as being responsible for such drafting for the purpose of applying
any rule construing ambiguities against the drafter or otherwise.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
XXXXX ENTERPRISES, INCORPORATED EXECUTIVE
By: __________________________________ _____________________________________
W. Xxxxxxx Xxxxxxx
Address:
_____________________________________
_____________________________________
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W. Xxxxxxx Xxxxxxx
EXHIBIT A TO EMPLOYMENT AGREEMENT
TERM: Two (2) Years
BASE SALARY $3,846.15 per week
PERFORMANCE BONUS: Eligible for 0% to 100% of base compensation
based on Performance Bonus Plan for Vice
President & Chief Financial Officer to be
developed.
FRINGE BENEFITS: Eligible for standard fringe benefits for
Executives
STOCK OPTIONS: 50,000 1996 options, vesting 1/3 per year 3
years; 60,000 1997 performance options,
vesting based on goal achievement.
COVENANT NOT TO COMPETE: Twelve (12) months
NON-COMPETE PAYMENT: $3,846.15 per week for 52 weeks
THE COMPANY RESERVES THE RIGHT, AT ITS SOLE DISCRETION, AT SUCH TIME OR TIMES AS
IT ELECTS, TO CHANGE OR ELIMINATE BONUSES OR OTHER BENEFITS, EXCEPT FOR THOSE
BONUSES AND OTHER BENEFITS SET FORTH IN THE EMPLOYMENT AGREEMENT.
IN WITNESS WHEREOF, the parties have executed this Exhibit A to the
Employment Agreement as of the ___ day of _____________, 2000.
XXXXX ENTERPRISES, INCORPORATED EXECUTIVE
By: __________________________________ _____________________________________
