Exhibit 10.3(h)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), by and between MarineMax, Inc., a
Delaware corporation (the "Company"), and Xxxxxxx X. XxXxxx, Xx. ("Executive")
is entered into and effective as of the 7th day of June, 2006.
RECITALS
A. The Company is engaged primarily in the business of selling, renting,
leasing, and servicing boating, nautical, and other related lifestyle
entertainment products and services, and related activities (collectively, the
"Watercraft Business"), and Executive has experience in such business.
B. Executive currently serves as Chairman, President, and Chief Executive
Officer of the Company. The Company desires to assure itself of the continued
availability of Executive.
C. The Company desires to employ Executive, and Executive desires to accept such
employment, pursuant to the terms and conditions set forth in this Agreement,
which shall replace the existing employment agreement between the Company and
Executive.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises, terms, covenants, and
conditions set forth herein and the performance of each, it is hereby agreed as
follows:
1. EMPLOYMENT AND DUTIES.
(a) EMPLOYMENT. The Company hereby employs Executive, and Executive hereby
agrees to act, as Chairman of the Board, President and Chief Executive Officer
of the Company. As such, Executive shall have responsibilities, duties, and
authority reasonably accorded to, expected of, and consistent with Executive's
position and Executive shall report directly to the Board of Directors of the
Company (the "Board"). Executive hereby accepts this employment upon the terms
and conditions herein contained and, subject to Section l(c) hereof, agrees to
devote his best efforts and substantially all of his business time and attention
to promote and further the business of the Company.
(b) POLICIES. Executive shall faithfully adhere to, execute, and fulfill all
lawful policies established by the Company.
(c) OTHER ACTIVITIES. Executive shall not, during the period of his employment
hereunder, be engaged in any other business activity pursued for gain, profit,
or other pecuniary advantage if such activity interferes in any material respect
with Executive's duties and responsibilities hereunder. The foregoing
limitations shall not be construed as prohibiting Executive from (i) making
personal investments in such form or manner as will neither require his services
in the operation or affairs of the companies or enterprises in which such
investments are made nor subject Executive to any conflict of interest with
respect to his duties to the Company, (ii) serving on any civic or charitable
boards or committees, (iii) delivering lectures or fulfilling speaking
engagements, or (iv) serving, with the written approval of the Board, as a
director of one or more corporations, in each case so long as any such
activities do not significantly interfere with the performance of Executive's
responsibilities under this Agreement. In addition, Executive shall comply with
the restrictions listed in Section 3 of this Agreement.
(d) PLACE OF PERFORMANCE. Executive shall not be required by the Company or in
the performance of his duties to relocate his primary residence.
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2. COMPENSATION. For all services rendered by Executive, the Company shall
compensate Executive as follows:
(a) BASE SALARY Effective the date hereof, the base salary payable to Executive
shall be Five Hundred Thousand Dollars ($500,000) per year, payable on a regular
basis in accordance with the Company's standard payroll procedures, but not less
than monthly. On at least an annual basis, the Board or a committee of the Board
shall review Executive's performance and may make increases to such base salary
if, in its sole discretion, any such increase is warranted.
(b) BONUS OR OTHER INCENTIVE COMPENSATION. Executive shall be eligible to
receive a bonus or other incentive compensation as may be determined by the
Board or a committee of the Board based upon such factors as the Board or such
committee, in its sole discretion, may deem relevant, including, without
limitation, the performance of Executive and the Company; provided, however,
that the Board or a committee of the Board shall establish for each fiscal year
of the Company a bonus program in which Executive shall be entitled to
participate, which bonus program provides Executive with a reasonable
opportunity, based on the performance of the Company, the past compensation
practices of the Company and Executive's then base salary, to maintain or
increase Executive's total compensation compared to the previous fiscal year.
(c) EXECUTIVE PERQUISITES, BENEFITS, AND OTHER COMPENSATION. Executive shall be
entitled to receive additional benefits and compensation from the Company in
such form and to such extent as specified below:
(i) INSURANCE COVERAGE. Payment of all premiums for coverage for Executive and
his dependent family members under all health, hospitalization, disability,
dental, life, and other insurance plans that the Company may have in effect from
time to time, with the benefits provided to Executive to be on terms no less
favorable than the benefits provided to other Company executive officers.
(ii) REIMBURSEMENT FOR EXPENSES. The Company shall provide reimbursement to
Executive for business travel and other out-of-pocket expenses reasonably
incurred by Executive in the performance of his services under this Agreement.
All reimbursable expenses shall be appropriately documented in reasonable detail
by Executive upon submission of any request for reimbursement and shall be in a
format and manner consistent with the Company's expense reporting policy.
(iii) VACATION. Paid vacation in accordance with the applicable policy of the
Company as in effect from time to time. Executive shall be entitled to no less
than four (4) weeks paid vacation per year; provided, however, Executive may
carryover up to, but not more than, two weeks of unused vacation time from one
calendar year to the next succeeding calendar year. The maximum amount of
vacation that may be accrued for any calendar year is six (6) weeks of paid
vacation. No additional paid vacation shall accrue above the six (6) week limit.
(iv) OTHER EXECUTIVE PERQUISITES. The Company shall provide Executive with other
executive perquisites as may be made available to or deemed appropriate for
Executive by the Board or a committee of the Board and participation in all
other Company-wide employee benefits (including group insurance, pension,
retirement, and other plans and programs) as are available to the Company's
executive officers from time to time.
3. NON-COMPETITION AGREEMENT.
(a) NON-COMPETITION. Executive shall not, during the period of his employment by
or with the Company, and during the Noncompete Period (as hereinafter defined)
for any reason whatsoever, directly or indirectly, for himself or on behalf of
or in conjunction with any other person:
(i) OTHER ACTIVITIES. Engage, as an officer, director, shareholder, owner,
principal, partner, lender, joint venturer, employee, independent contractor,
consultant, advisor, or sales representative, in any
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Competitive Business within the Restricted Territory;
(ii) SOLICITATION OF EMPLOYEES. Call upon any person who is, at that time,
within the Restricted Territory, an employee of the Company or any of its
subsidiaries, in a managerial capacity for the purpose or with the intent of
enticing such employee away from or out of the employ of the Company or any of
its subsidiaries;
(iii) SOLICITATION OF CUSTOMERS. Call upon any person or entity that is, at that
time, or that has been, within one (1) year prior to that time, a customer of
the Company or any of its subsidiaries, within the Restricted Territory for the
purpose of soliciting or selling products or services in direct competition with
the Company or any of its subsidiaries within the Restricted Territory;
(iv) SOLICITATION OF ACQUISITION CANDIDATES. Call upon any prospective
acquisition candidate (that is, a business that the Company may have an interest
in acquiring), on Executive's own behalf or on behalf of any person, which
candidate was, to Executive's knowledge after due inquiry, either called upon by
the Company, or for which the Company made an acquisition analysis, for the
purpose of acquiring such candidate.
(b) CERTAIN DEFINITIONS. As used in this Agreement, the following terms shall
have the meanings ascribed to them:
(i) COMPETITIVE BUSINESS shall mean any Person that sells, rents, brokers,
leases, stores, repairs, restores, or services recreational boats or other
boating products or provides services relating to recreational boats or other
boating products or any other business in which the Company is engaged;
(ii) NONCOMPETE PERIOD shall mean the longer of (i) the two (2) year period
immediately following the termination of Executive's employment with the Company
or (ii) the time during which severance payments are being made by the Company
to Executive in accordance with this Agreement; provided, however, that if the
Executive's employment is terminated by the Company without Good Cause,
Executive terminates his employment with Good Reason or, Executive terminates
his employment after a Change in Control pursuant to Section 4(b)(vii)(B), then
the Noncompete Period shall be for the one (1) year period immediately following
the termination of his employment with the Company.
(iii) PERSON shall mean any individual, corporation, limited liability company,
partnership, firm, or other business of whatever nature;
(iv) RESTRICTED TERRITORY shall mean any state or other political jurisdiction
in which, or any location within two hundred (200) miles of which, the Company
or any subsidiary of the Company maintains any facilities; sells, rents,
brokers, leases, stores, repairs, restores, or services recreational boats or
other boating products; or provides services relating to recreational boats or
other boating products; and
(v) SUBSIDIARY shall mean the Company's consolidated subsidiaries, including
corporations, partnerships, limited liability companies, and any other business
organization in which the Company holds at least a fifty percent (50%) equity
interest.
(c) ENFORCEMENT. Because of the difficulty of measuring economic losses to the
Company as a result of a breach of the foregoing covenants, and because of the
immediate and irreparable damage that could be caused to the Company for which
it would have no other adequate remedy, Executive agrees that the foregoing
covenants may be enforced by the Company in the event of breach by him, by
injunctions and restraining orders.
(d) REASONABLE RESTRAINT. It is agreed by the parties that the foregoing
covenants in this Section 3 impose a reasonable restraint on Executive in light
of the activities and business of the Company (including the Company's
subsidiaries) on the date of the execution of this Agreement and the current
plans of the Company (including the Company's subsidiaries); but it is also the
intent of the Company and Executive that such covenants be construed and
enforced in accordance with the changing activities, business, and
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locations of the Company (including the Company's subsidiaries) throughout the
term of this covenant, whether before or after the date of termination of the
employment of Executive. For example, if, during the term of this Agreement, the
Company (including the Company's subsidiaries) engages in new and different
activities, enters a new business, or establishes new locations for its current
activities or business in addition to or other than the activities or business
enumerated above or the locations currently established therefore, then
Executive will be precluded from soliciting the customers or employees of such
new activities or business or from such new location and from directly competing
with such new business within the Restricted Territory through the term of these
covenants.
(e) OTHER ACTIVITIES. It is further agreed by the parties that, in the event
that Executive shall cease to be employed hereunder and enters into a business
or pursues other activities not in competition with the Company (including the
Company's subsidiaries), or similar activities or business in locations, the
operation of which, under such circumstances, does not violate this Section 3,
and in any event such new business, activities, or location are not in violation
of this Section 3 or of Executive's obligations under this Section 3, if any,
Executive shall not be chargeable with a violation of this Section 3 if the
Company (including the Company's subsidiaries) shall thereafter enter the same,
similar, or a competitive (i) business, (ii) course of activities, or (iii)
location, as applicable.
(f) SEPARATE COVENANTS. The covenants in this Section 3 are severable and
separate, and the unenforceability of any specific covenant shall not affect the
provisions of any other covenant. Moreover, in the event any court of competent
jurisdiction shall determine that the scope, time, or territorial restrictions
set forth are unreasonable, then it is the intention of the parties that such
restrictions be enforced to the fullest extent that the court deems reasonable,
and the Agreement shall thereby be reformed.
(g) INDEPENDENT AGREEMENT. All of the covenants in this Section 3 shall be
construed as an agreement independent of any other provision in this Agreement,
and the existence of any claim or cause of action of Executive against the
Company, whether predicated on this Agreement or otherwise, shall not constitute
a defense to the enforcement by the Company of such covenants, except as
provided in Section 4(d) below. It is specifically agreed that the Noncompete
Period defined in this Section 3, during which the agreements and covenants of
Executive made in this Section 3 shall be effective, shall be computed by
excluding from such computation any time during which Executive is in violation
of any provision of this Section 3.
4. AT-WILL EMPLOYMENT; TERMINATION; RIGHTS ON TERMINATION.
(a) AT WILL EMPLOYMENT. Executive's employment with the Company shall be
at-will. The Executive may terminate his employment at any time for any reason
(subject to the notice requirements provided in this Agreement) and the Company
may terminate Executive's employment with the Company at any time and for any
reason (subject to the severance provisions of this Agreement). This at-will
employment relationship cannot be changed except by written authorization by the
Board of Directors of the Company.
(b) TERMINATION. Executive's employment under this Agreement may be terminated
in any one of the followings ways:
(i) DEATH OF EXECUTIVE. The employment of Executive shall terminate immediately
upon Executive's death provided that the Company shall pay to the estate of
Executive an amount equal to $1.5 million and continue to pay for a period of 6
months all premiums for coverage for Executive's dependent family members under
all health, hospitalization, disability, dental, life, and other insurance plans
that the Company maintained at the time of Executive's death. In the event of
such termination, all options to purchase Common Stock of the Company held by
Executive shall thereupon vest and shall be exercisable for the maximum period
of time, up to their full term, that will not cause Executive with respect to
such options to be subject to any excise tax under Section 409A of the Internal
Revenue Code of 1986, as amended ("Section 409A") notwithstanding the
termination of employment. All restricted stock and/or restricted stock units
(or comparable forms of equity compensation, if any) held by the Executive
which, as of the date of the death of Executive, are not then subject to any
performance conditions for vesting, shall
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be fully vested and shall not be subject to any risk of forfeiture or repurchase
as of the date of Executive's death.
(ii) DISABILITY OF EXECUTIVE. 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 Company may terminate Executive's employment
provided Executive is unable to resume his full-time duties at the conclusion of
such notice period. Also, Executive may terminate his employment 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 Company with a written
statement from a qualified doctor to such effect and provided, further, that, at
the Company'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
Company who is reasonably acceptable to Executive or Executive's doctor and such
doctor shall have concurred in the conclusion of Executive's doctor. In the
event Executive's employment under this Agreement is terminated as a result of
Executive's disability, Executive shall receive from the Company, in a lump-sum
payment due within ten (10) days of the effective date of termination, an amount
equal to the average of the base salary and bonus paid to Executive for the two
(2) prior full fiscal years, for one (1) year. In the event of such termination,
all options to purchase Common Stock of the Company held by Executive shall
thereupon vest and shall be exercisable for the maximum period of time, up to
their full term, that will not cause Executive with respect to such options to
be subject to any excise tax under Section 409A notwithstanding the termination
of employment. All restricted stock and/or restricted stock units (or comparable
forms of equity compensation, if any) held by the Executive which, as of the
date of the disability of Executive, are not then subject to any performance
conditions for vesting, shall be fully vested and shall not be subject to any
risk of forfeiture or repurchase as of the date of Executive's termination due
to disability (as defined in this paragraph).
(iii) TERMINATION BY THE COMPANY FOR GOOD CAUSE. The Company may terminate
Executive's employment upon ten (10) days prior written notice to Executive for
"Good Cause," which shall mean any one or more of the following: (A) Executive's
willful, material, and irreparable breach of this Agreement; (B) Executive's
gross negligence in the performance or intentional nonperformance (continuing
for thirty (30) days after receipt of written notice of need to cure) of any of
Executive's material duties and responsibilities hereunder; (C) Executive's
willful dishonesty, fraud, or misconduct with respect to the business or affairs
of the Company, which materially and adversely affects the operations or
reputation of the Company; (D) Executive's conviction of a felony crime
involving dishonesty or moral turpitude; or (E) a confirmed positive illegal
drug test result. In the event of a termination by the Company for Good Cause,
Executive shall have no right to any severance compensation.
(iv) TERMINATION BY THE COMPANY WITHOUT GOOD CAUSE OR BY EXECUTIVE WITH GOOD
REASON. The Company may terminate Executive's employment without Good Cause upon
the approval of a majority of the members of the Board, excluding Executive if
Executive is a member of the Board. Executive may terminate his employment under
this Agreement for Good Reason upon thirty (30) days prior notice to the
Company.
(A) RESULT OF TERMINATION BY THE COMPANY WITHOUT GOOD CAUSE OR BY EXECUTIVE WITH
GOOD REASON. Should the Company terminate Executive's employment without Good
Cause or should Executive terminate his employment with Good Reason, the Company
shall pay to Executive for three (3) years after such termination, on such dates
as would otherwise be paid by the Company, an amount equal to the average of the
base salary and bonus paid to Executive for the two (2) prior full fiscal years.
Further, if the Company terminates Executive's employment without Good Cause or
Executive terminates his employment with Good Reason, (1) the Company shall make
the family medical insurance premium payments contemplated by COBRA or provide
comparable coverage for a period of three (3) years after such termination (2)
all options to purchase Common Stock of the Company held by Executive shall vest
thereupon and shall be exercisable for the maximum period of time, up to their
full term, that will not cause Executive with respect to such options to be
subject to any excise tax under Section 409A notwithstanding the termination of
employment, (3) the Company shall maintain life
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insurance coverage, comparable to that provided immediately prior to
termination, for a period of three (3) years thereafter with the beneficiary
designated by Executive, (4) all restricted stock and/or restricted stock units
(or comparable forms of equity compensation, if any) held by Executive which, as
of the effective date of the termination of Executive, are not then subject to
any performance conditions for vesting, shall be fully vested and shall not be
subject to any risk of forfeiture or repurchase as of the date of termination,
and (5) Executive shall be entitled to receive all other unpaid benefits due and
owing through Executive's last day of employment. Further, any termination by
the Company without Good Cause or by Executive for Good Reason shall operate to
shorten the Noncompete Period set forth in Section 3 to one (1) year from the
date of termination of employment.
(B) DEFINITION OF GOOD REASON. Executive shall have "Good Reason" to terminate
his employment upon the occurrence of any of the following events, unless
Executive has specifically agreed in writing to such event:
(1) Executive is demoted by means of a reduction in authority, responsibilities,
or duties; (2) Executive's annual base salary, as determined pursuant to Section
2, is reduced either (i) to a level that is less than ninety percent (90%) of
the base salary paid to Executive during the prior year under this Agreement or
(ii) below $500,000; (3) Executive does not have a reasonable opportunity to
maintain or increase Executive's total compensation (i.e., base salary plus
bonus and any other annual cash incentive compensation) compared to the previous
fiscal year (provided total compensation may take into account performance of
the Company and the past compensation practices of the Company); (4) any
relocation of Executive's principal place of business by more than twenty-five
(25) miles from its then current location or (5) the Company breaches a material
provision of this Agreement and such breach remains uncured for a thirty (30)
day period of time following the Company's receipt from Executive of written
notice of such breach.
(v) RESIGNATION BY EXECUTIVE WITHOUT GOOD REASON. Executive may, without cause,
and without Good Reason terminate his own employment under this Agreement,
effective thirty (30) days after written notice is provided to the Company or
such earlier time as any such resignation may be accepted by the Company. If
Executive resigns or otherwise terminates his employment without Good Reason,
Executive shall receive no severance compensation.
(vi) RETIREMENT. The Company (so long as Executive does not have Good Reason to
terminate his employment under this Agreement) and Executive (so long as the
Company does not have Good Cause to terminate Executive's employment under this
Agreement) shall each have the right, upon not less than thirty (30) days prior
written notice to the other, to elect that Executive Retire from his services to
the Company upon reaching the age of sixty-eight (68) provided that, if
requested by the Company prior to the end of the thirty (30) day notice period,
Executive shall defer his Retirement for a period of up to six (6) months from
the date of the notice and continue his employment under this Agreement. In the
event of any such Retirement, Executive shall make himself available for a
period of thirty-six (36) months following the date of Retirement to render
consulting services to the Company requiring not more than four (4) days per
month and the Company shall in consideration for such retirement services (A)
pay Executive an amount equal to fifty percent (50%) of the average of the base
salary and bonus paid to him for the two (2) full fiscal years immediately
preceding such Retirement, (B) provide Executive with medicare supplemental
medical coverage for life, and (C) maintain life insurance coverage comparable
to that provided at the date of Retirement for a period of three (3) years with
the beneficiary designated by Executive, (D) vest all unvested options to the
extent not previously vested and have such options be exercisable for the
maximum period of time, up to their full term, that will not cause Executive
with respect to such options to be subject to any excise tax under Section 409A
notwithstanding the termination of employment and (E) ) all restricted stock
and/or restricted stock units (or comparable forms of equity compensation, if
any) held by Executive which, as of the effective date of the retirement of
Executive, are not then subject to any performance conditions for vesting, shall
be fully vested and shall not be subject to any risk of forfeiture or repurchase
as of the date of termination. The Noncompete Period provided for in Section 3
shall equal the thirty-six (36) month consulting period and an additional two
(2) year period thereafter.
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(vii) CHANGE IN CONTROL OF THE COMPANY.
(A) POSSIBILITY OF CHANGE IN CONTROL. Executive understands and acknowledges
that the Company may be merged or consolidated with or into another entity and
that such entity shall automatically succeed to the rights and obligations of
the Company hereunder or that the Company may undergo another type of Change in
Control. In the event such a merger or consolidation or other Change in Control
is initiated prior to the end of the Term, then the provisions of this Section
4(b)(vii) shall be applicable.
(B) TERMINATION BY EXECUTIVE. Subject to the exceptions set forth in Section
4(b)(vii)(E), if any Change of Control is initiated during Executive's
employment hereunder, Executive may, at his sole discretion, elect to terminate
his employment under this Agreement by providing written notice to the Company
at least thirty (30) business days at any time beginning on the effective date
of the Change in Control and ending one (1) year after the closing of the
transaction giving rise to the Change in Control. In such case, the applicable
provisions of Section 4(b)(iv) hereof will apply as though the Company had
terminated Executive's employment without Good Cause; however, under such
circumstances, the amount of the severance payments due to Executive shall be
paid in a lump sum, the Noncompete Period of Section 3 hereof shall be limited
to a period of one (1) year from the effective date of termination, and
Executive shall make himself available, for a period of twelve (12) months
following the date of his termination of employment, to render consulting
services relating to the business and operations of the Company requiring not
more than four (4) days a month. To the extent that Executive shall be
determined by a final and non-appealable determination of a court of competent
jurisdiction to have willfully violated either the non-competition or consulting
requirement, Executive shall reimburse the Company for Five Hundred Thousand
Dollars ($500,000) of the severance amount paid to him for either violation and
One Million Dollars ($1,000,000) of the severance amount paid to him for a
violation of both covenants.
(C) EFFECTIVE DATE OF CHANGE IN CONTROL. For purposes of applying Section 4
hereof under the circumstances described in 4(b)(vii)(B) above, the effective
date of the Change in Control will be the closing date of the transaction giving
rise to the Change in Control and all compensation, reimbursements, and lump-sum
payments due Executive must be paid in full by the Company promptly following
Executive's election to terminate his employment following such Change in
Control.
(D) DEFINITION OF CHANGE IN CONTROL. A "Change in Control" shall mean a change
in control of a nature that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange
Act of 1934, as amended, as in effect on the date of this Agreement, or if Item
6(e) is no longer in effect, any regulations issued by the Securities and
Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended,
which serve similar purposes; provided further that, without limitation, a
Change in Control shall be deemed to have occurred if and when:
(1) TURNOVER OF BOARD. The following individuals no longer constitute a majority
of the members of the Board: (A) the individuals who, as of the date of this
Agreement, constitute the Board (the "Current Directors"); (B) the individuals
who thereafter are elected to the Board and whose election, or nomination for
election, to the Board was approved by a vote of at least two-thirds (2/3) of
the Current Directors then still in office (such directors becoming "Additional
Directors" immediately following their election); and (C) the individuals who
are elected to the Board and whose election, or nomination for election, to the
Board was approved by a vote of at least two-thirds (2/3) of the Current
Directors and Additional Directors then still in office (such directors also
becoming "Additional Directors" immediately following their election);
(2) TENDER OFFER. A tender offer or exchange offer is made where the intent of
such offer is to take over control of the Company, and such offer is consummated
for the equity securities of the Company representing twenty percent (20%) or
more of the combined voting power of the Company's then outstanding voting
securities;
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(3) MERGER OR CONSOLIDATION. The stockholders of the Company shall approve a
merger, consolidation, recapitalization, or reorganization of the Company, a
reverse stock split of outstanding voting securities, or consummation of any
such transaction if stockholder approval is not obtained, other than any such
transaction that would result in at least seventy-five percent (75%) of the
total voting power represented by the voting securities of the surviving entity
outstanding immediately after such transaction being beneficially owned by the
holders of outstanding voting securities of the Company immediately prior to the
transaction, with the voting power of each such continuing holder relative to
other such continuing holders not substantially altered in the transaction; or
(4) LIQUIDATION OR SALE OF ASSETS. The stockholders of the Company shall approve
a plan of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or a substantial portion of the Company's
assets to another person or entity, which is not a wholly owned subsidiary of
the Company (i.e., fifty percent (50%) or more of the total assets of the
Company).
(E) EXCEPTIONS FROM CHANGE IN CONTROL. A Change in Control shall not be
considered to have taken place for purposes of this Section 4 in the event that
both (1) the Change in Control shall have been specifically approved by at least
two-thirds (2/3) of the Current and Additional Directors (as defined above) and
(2) the successor company assumes this Agreement and appoints Executive to the
same position at the successor corporation as Executive had with the Company
immediately prior to the Change in Control; provided that if the successor
corporation has a parent, the parent rather than the successor corporation must
appoint Executive to the position with the same title and responsibilities as
Executive had with the Company immediately prior to the Change in Control. Sales
of the Company's Common Stock issued, beneficially owned or controlled by the
Company shall not be considered in determining whether a Change in Control has
occurred.
(F) EXCESS PARACHUTE PAYMENTS. Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment,
distribution or other action by the Company to or for the benefit of the
Executive (whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise, (including any additional payments
required under this Section 4((b)(vii)(F)) (a "Payment") would be subject to an
excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended (the "Code"), or any interest or penalties are incurred by the Executive
with respect to any such excise tax (such excise tax, together with any such
interest and penalties, are hereinafter collectively referred to as the "Excise
Tax"), the Company shall make a payment to the Executive (a "Gross-Up Payment")
in an amount such that after payment by the Executive of all taxes (including
any Excise Tax) imposed upon the Gross-Up Payment, the Executive retains (or has
had paid to the Internal Revenue Service on his behalf) an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments. The Gross-Up
Payment will be due and payable by the Company or its successor within ten (10)
days after Executive delivers a written request for reimbursement accompanied by
a copy of his tax return(s) showing the Excise Tax actually incurred by
Executive.
(G) NOTIFICATION. Executive shall be notified in writing by the Company at any
time that the Company anticipates that a Change in Control may take place.
(c) PAYMENTS TO TERMINATION DATE. Upon termination of Executive's employment
under this Agreement for any reason provided above, Executive shall be entitled
to receive all compensation earned and all benefits and reimbursements due
through the effective date of termination. Additional compensation subsequent to
termination, if any, will be due and payable to Executive only to the extent and
in the manner expressly provided above. All other rights and obligations of the
Company and Executive under this Agreement shall cease as of the effective date
of termination, except that the Company's obligations under Section 8 (relating
to indemnification of Executive) and Executive's obligations under Section 3
(relating to non-competition), Section 5 (relating to return of Company
property), Section 6 (relating to inventions), Section 7 (relating to trade
secrets), and Section 9 (relating to prior agreements) shall survive such
termination in accordance with their terms.
(d) FAILURE TO PAY EXECUTIVE. If termination of Executive's employment arises
out of the Company's failure to pay Executive on a timely basis the amounts to
which he is entitled under this
8
Agreement or as a result of any other breach of this Agreement by the Company,
as determined by a court of competent jurisdiction or pursuant to the provisions
of Section 14, the Company shall pay all amounts and damages to which Executive
may be entitled as a result of such breach, including interest thereon and all
reasonable legal fees and expenses and other costs incurred by Executive to
enforce his rights hereunder. Further, none of the provisions of Section 3
(relating to non-competition) shall apply in the event Executive's employment
under this Agreement is terminated as a result of a breach by the Company.
(e) CONDITIONS PRECEDENT FOR PAYMENT OF SEVERANCE. In order for the Company to
be obligated to make any payments to Executive pursuant to this Section 4,
Executive must (i) sign and not revoke a release of claims in a form
satisfactory to the Company and (ii) unless otherwise requested to continue by
the Company's board of directors, resign from the board of directors of the
Company and of any subsidiaries of the Company on which he sits as of the date
of the termination of his employment.
(f) MITIGATION. The Company and Executive have mutually agreed that it would be
appropriate to mitigate the costs to the Company of any severance arrangements
if Executive accepts other employment, the Company secures insurance or other
coverage at its cost, or Executive can obtain coverage under any governmental
program without expense to Executive, subject in each case to providing
comparable benefits to Executive with no out-of-pocket cost to him. As a result,
all medical, disability, and other similar benefits payable to Executive
following the termination of his employment under this Agreement shall be
reduced on a dollar-for-dollar basis by (i) any medical, disability, and other
similar benefits received by or which may reasonably be receivable by Executive
from any subsequent employer, (ii) any governmental benefits available to
Executive upon premium payments made or reimbursed by the Company to or on
behalf of Executive, or (iii) any insurance, annuity, or comparable payments or
coverage furnished by the Company at no cost to Executive as an alternative to
the benefits provided by this Agreement.
(g) DELAY IN SEVERANCE PAYMENTS. To the extent required under Section 409A, any
severance payments due under this Section 4 shall be delayed until the first
date such payment may be made in compliance with Section 409A(a)(2)(B).
5. RETURN OF COMPANY PROPERTY. All records, designs, patents, business plans,
financial statements, manuals, memoranda, lists, and other property delivered to
or compiled by Executive by or on behalf of the Company (or its subsidiaries) or
its representatives, vendors, or customers that pertain to the business of the
Company (or its subsidiaries) shall be and remain the property of the Company
and be subject at all times to its discretion and control. Likewise, all
correspondence, reports, records, charts, advertising materials, and other
similar data pertaining to the business, activities, or future plans of the
Company (or its subsidiaries) that is collected by Executive shall be delivered
promptly to the Company without request by it upon termination of Executive's
employment.
6. INVENTIONS. Executive shall disclose promptly to the Company any and all
significant conceptions and ideas for inventions, improvements, and valuable
discoveries, whether patentable or not, which are conceived or made by
Executive, solely or jointly with another, during the period of employment or
within one (1) year thereafter, and which are directly related to the business
or activities of the Company (or its subsidiaries) and which Executive conceives
as a result of his employment by the Company. Executive hereby assigns and
agrees to assign all his interests therein to the Company or its nominee.
Whenever requested to do so by the Company, Executive shall execute any and all
applications, assignments, and other instruments that the Company shall deem
necessary to apply for and obtain Letters Patent of the United States or any
foreign country or to otherwise protect the Company's interest therein.
7. TRADE SECRETS. Executive agrees that he will not, during or after the period
of employment under this Agreement, disclose the specific terms of the Company's
relationships or agreements with its respective significant vendors or
customers, or any other significant and material trade secret of the Company,
whether in existence or proposed, to any person, firm, partnership, corporation,
or business for any reason or purpose whatsoever.
8. 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
9
the Company against Executive), by reason of the fact that he is or was
performing services under this Agreement, then the Company 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 Company are made a party to the same third-party action, complaint, suit, or
proceeding, the Company agrees to engage competent legal representation, and
Executive agrees to use the same representation, provided that if counsel
selected by the Company shall have a conflict of interest that prevents such
counsel from representing Executive, Executive may engage separate counsel and
the Company 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 Company for errors or omissions made in good faith if Executive has not
exhibited gross, willful, and wanton negligence and misconduct or performed
criminal and fraudulent acts that materially damage the business of the Company.
Notwithstanding this Section 8, the provision of any written indemnification
agreement applicable to the directors or officers of the Company to which
Executive shall be a party shall apply rather than this Section 8 to the extent
inconsistent with this Section 8.
9. NO PRIOR AGREEMENTS. Executive hereby represents and warrants to the Company
that the execution of this Agreement by Executive and his employment by the
Company and the performance of his duties hereunder will not violate or be a
breach of any agreement with a former employer, client, or any other person or
entity. Further, Executive agrees to indemnify the Company for any claim,
including, but not limited to, attorneys' fees and expenses of investigation, by
any such third party that such third party may now have or may hereafter come to
have against the Company based upon or arising out of any non-competition,
invention, or secrecy agreement between Executive and such third party that was
in existence as of the date of this Agreement.
10. ASSIGNMENT; BINDING EFFECT. Executive understands that he is being employed
by the Company on the basis of his personal qualifications, experience, and
skills. Executive agrees, therefore, he cannot assign all or any portion of his
performance under this Agreement. Subject to the preceding two (2) sentences and
the express provisions of Section 11 below, this Agreement shall be binding
upon, inure to the benefit of and be enforceable by the parties hereto and their
respective heirs, legal representatives, successors, and assigns.
11. COMPLETE AGREEMENT. This Agreement is not a promise of future employment.
Executive has no oral representations, understandings, or agreements with the
Company or any of its officers, directors, or representatives covering the same
subject matter as this Agreement. This written Agreement is the final, complete,
and exclusive statement and expression of the agreement between the Company and
Executive and of all the terms of this Agreement, and it cannot be varied,
contradicted, or supplemented by evidence of any prior or contemporaneous oral
or written agreements. This written Agreement may not be later modified except
by a further writing signed by a duly authorized officer of the Company and
Executive, and no term of this Agreement may be waived except by writing signed
by the party waiving the benefit of such term. This Agreement hereby supersedes
any other employment agreements or understandings, written or oral, between the
Company and Executive.
12. NOTICE. Whenever any notice is required hereunder, it shall be given in
writing addressed as follows:
To the Company: MarineMax, Inc.
00000 X.X. Xxxxxxx 00 Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Corporate Secretary
To Executive: Xxxxxxx X. XxXxxx, Xx.
00000 X.X. Xxxxxxx 00 Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
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In either case with a Xxxxxxxxx Traurig, LLP
copy to: 0000 Xxxx Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxx, Esq.
Notice shall be deemed given and effective on the earlier of three (3) days
after the deposit in the U.S. mail of a writing addressed as above and sent
first class mail, certified, return receipt requested, or when actually
received. Either party may change the address for notice by notifying the other
party of such change in accordance with this Section 12.
13. SEVERABILITY; HEADINGS. If any portion of this Agreement is held invalid or
inoperative, the other portions of this Agreement shall be deemed valid and
operative and, so far as is reasonable and possible, effect shall be given to
the intent manifested by the portion held invalid or inoperative. The Section
headings herein are for reference purposes only and are not intended in any way
to describe, interpret, define or limit the extent or intent of the Agreement or
of any part hereof.
14. MEDIATION ARBITRATION. All disputes arising out of this Agreement shall be
resolved as set forth in this Section 14. If any party hereto desires to make
any claim arising out of this Agreement ("Claimant"), then such party shall
first deliver to the other party ("Respondent") written notice ("Claim Notice")
of Claimant's intent to make such claim explaining Claimant's reasons for such
claim in sufficient detail for Respondent to respond. Respondent shall have ten
(10) business days from the date the Claim Notice was given to Respondent to
object in writing to the claim ("Notice of Objection"), or otherwise cure any
breach hereof alleged in the Claim Notice. Any Notice of Objection shall specify
with particularity the reasons for such objection. Following receipt of the
Notice of Objection, if any, Claimant and Respondent shall immediately seek to
resolve by good faith negotiations the dispute alleged in the Claim Notice, and
may at the request of either party, utilize the services of an independent
mediator. If Claimant and Respondent are unable to resolve the dispute in
writing within ten (10) business days from the date negotiations began, then
without the necessity of further agreement of Claimant or Respondent, the
dispute set forth in the Claim Notice shall be submitted to binding arbitration
(except for claims arising out of Sections 3 or 7 hereof), initiated by either
Claimant or Respondent pursuant to this Section. Such arbitration shall be
conducted before a panel of three (3) arbitrators in Tampa, Florida, in
accordance with the National Rules for the Resolution of Employment Disputes of
the American Arbitration Association ("AAA") then in effect provided that the
parties may agree to use arbitrators other than those provided by the AAA. The
arbitrators shall not have the authority to add to, detract from, or modify any
provision hereof nor to award punitive damages to any injured party. The
arbitrators shall have the authority to order back-pay, severance compensation,
vesting of options (or cash compensation in lieu of vesting of options), vesting
and the removal of restrictions on restricted stock and/or restricted stock
units (or comparable forms of equity compensation, if any) that, as of the
effective date of the termination of Executive, are not then subject to any
performance conditions for vesting, reimbursement of costs, including those
incurred to enforce this Agreement, and interest thereon in the event the
arbitrators determine that Executive was terminated without disability or
without Good Cause, as defined in Sections 4(b) and 4(c) hereof, respectively,
or that the Company has otherwise materially breached this Agreement. A decision
by a majority of the arbitration panel shall be final and binding. Judgment may
be entered on the arbitrators' award in any court having jurisdiction. The
direct expense of any mediation or arbitration proceeding and, to the extent
Executive prevails, all reasonable legal fees shall be borne by the Company.
15. NO PARTICIPATION IN SEVERANCE PLANS. Except as contemplated by this
Agreement, Executive acknowledges and agrees that the compensation and other
benefits set forth in this Agreement are and shall be in lieu of any
compensation or other benefits that may otherwise be payable to or on behalf of
Executive pursuant to the terms of any severance pay arrangement of the Company
or any affiliate thereof, or any other similar arrangement of the Company or any
affiliates thereof providing for benefits upon involuntary termination of
employment.
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16. GOVERNING LAW. This Agreement shall in all respects be construed according
to the laws of the state of Florida, notwithstanding the conflict of laws
provisions of such state.
17. 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 executed this Agreement as of the
day and year first above written.
MARINEMAX, INC.
By: /s/ Xxxxxxx X. XxXxxx
----------------------------------
Xxxxxxx X. XxXxxx
Title Vice President and Chief
Financial Officer
--------------------------------
Vice President and Chief
Financial Officer
EXECUTIVE:
/s/ Xxxx XxXxxx
--------------------------------------
Xxxxxxx X. XxXxxx, Xx.
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