EMPLOYMENT AGREEMENT
WESTMARK GROUP HOLDING, INC., a Delaware corporation, located at 000 X.X.
Xxxxx Xxxxxx, Xxxxx 0, Xxxxxx Xxxxx, Xxxxxxx 00000, (hereinafter referred to as
"Employer") and XXXXX X. XXXXXXXX (hereinafter referred to as "Executive") in
consideration of the mutual promises made herein agree as follows:
ARTICLE I
TERM OF EMPLOYMENT
Section 1.01 Specified Term: The Employer hereby employs Executive and
Executive hereby accepts employment with employer for a term commencing July 1,
1997 and terminating April 24, 2000.
Section 1.02 Earlier Termination: This agreement may be terminated earlier
as hereinafter provided.
ARTICLE II
DUTIES AND OBLIGATIONS OF EXECUTIVE
Section 2.01 Title and Description of Duties: Executive shall serve as the
Executive Vice President to Employer and specifically will serve as Executive
Vice President, Mergers and Acquisitions/Capital Markets of Westmark Group
Holdings, Inc. Executive shall do and perform all services, acts or things
necessary or advisable to fulfill the duties hereinabove set forth and shall be
subject to the direction of the policies established by the Board of Directors
of Employer. Executive shall report directly to Xxxx Xxxxxxxxxx. Executive
currently serves as Chairman of the Board of Directors of Employer and shall be
nominated by the Board for re-election by the shareholders of Employer at the
next annual Shareholders Meeting. In the event of the subsequent formation of
Westmark Acquisition Corporation, Executive shall serve as the initial Chief
Executive Officer and President of said corporation.
Section 2.02 Loyal and Conscientious Performance of Duties: Executive
agrees that to the best of his ability and experience. he will at all times
loyally and conscientiously perform all of the duties and obligations required
of him, either express or implied, by the terms of this agreement.
Section 2.03 Satisfaction of Performance of Duties: Executive's
performance of his duties hereunder shall at all times be rendered to
Employer's satisfaction.
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Executive expressly agrees that Employer shall determine whether the services of
Executive are satisfactory pursuant to the performance guideline established by
the Board of Directors.
Section 2.04 Adherence to employer's Rules: At all times during the
performance of this contract, Executive shall strictly adhere to and obey all of
Employer's rules and regulations governing the conduct of its Executives now in
effect or as subsequently modified consistent with Executive's rights as set
forth herein.
Section 2.05 Devotion of Entire Time to Employer's Business: Executive
shall devote his full productive time, ability and attention to the business of
Employer during the term of this agreement. Furthermore, during the term of this
agreement, Executive shall not, whether directly or indirectly, render any
services of commercial or professional nature to any other person or
organization, whether for compensation or otherwise, without the prior consent
of Employer's President or Chief Executive Officer. This agreement shall not be
interpreted to prohibit Executive from making passive personal investments or
conducting private business affairs if those activities do not in any way
interfere with the services required under this agreement. However, Executive
shall not directly or indirectly acquire, hold or retain any interest in any
business competing with or similar in nature to the business of Employer.
Provided, however, that Executive may, from time to time, serve as a member of
the Board of Directors or as a consultant to other corporations both now and in
the future, provided that said other corporation shall not be in the same or
similar business as Employer. Employer further acknowledges that Executive may
be required to present to such other corporations business opportunities,
provided such opportunities are not in the same or similar business of Employer.
Executive currently serves on the Board of Directors of, or provides consulting
services to, the companies itemized in Exhibit "A" which is attached hereto and
incorporated herein. Executive and Employer believe that the reputation and
exposure to additional capital market sources resulting from Executive's service
as an outside board member or consultant for other companies will inure to the
benefit of Employer.
Section 2.06 Non-Competition during Term of employment contract: During the
term of this contract Executive shall not, directly or indirectly, either as an
employee, employer, consultant, agent, principal, partner, stockholder,
corporate officer, director or in any other individual or representative
capacity, engage or participate in any business that is in competition in any
matter whatsoever with the business of Employer, unless approved, in advance, by
Employer's Board of Directors.
Section 2.07 Confidentiality: In the course of the performance of
Executive's duties hereunder, Executive recognizes and acknowledges that
Executive may have access to certain confidential and proprietary information of
Employer or any of its affiliates. Without the prior written consent of
Employer, Executive shall not disclose any such confidential or proprietary
information to any person or firm, corporation,
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association, or other entity for any reason or purpose whatsoever, and
shall not use such information, directly or indirectly, for Executive's own
behalf or on behalf of any other party. Executive agrees and affirms that all
such information is the sole property of Employer and that at the termination
and/or expiration of this agreement, at Employer's written request, Executive
shall promptly return to Employer any and all such information so requested by
Employer. Executive shall not be precluded from utilizing and maintaining any
contacts Executive may have with the capital, equity and financial market
industry.
The provisions of this section shall not, however, prohibit Executive
from disclosing to others or using in any manner information that:
A. Has been published or has become part of the public domain;
B. Has been furnished or made known to Executive by third parties (other
than those acting directly or indirectly for or on behalf of Executive)
as a matter of legal right without restriction on its use or disclosure;
C. Was in the possession of Executive prior to obtaining such
information from Employer in connection with the performance of this
agreement; or
D. Is required to be disclosed by law.
ARTICLE III
OBLIGATIONS OF EMPLOYER
Section 3.01 General Description: Employer shall provide Executive with the
compensation, incentives and benefits specified elsewhere in this agreement or
as established by Employer from time to time.
Section 3.02 Office and Staff: Employer shall provide Executive with an
administrative assistant, office equipment and supplies and other facilities
and services suitable to Executive's position and adequate for the performance
of his duties including but not limited to the employment of Xxxx X. Xxxxxxxx
at an annual base salary of $35,000. Employer shall lease, as its Louisiana
corporate offices, approximately 2,100 square feet of Class A office space in
Baton Rouge, Louisiana, located at Suite 000 000xx Xxxxxx, Xxxxx Xxxxx,
Xxxxxxxxx, at a rental rate of approximately $2,100 per month or compatible
office space in the event said location is unavailable.
Section 3.03 Cellular Service: Employer shall furnish Executive with two
cellular phones, including a portable hand phone and mounted mobile phone.
Employer shall be responsible for all expenses pertaining to the repair and
maintenance of said
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phones and all expenses of service, long distance and other related charges with
respect to said cellular phones.
ARTICLE IV
COMPENSATION OF EXECUTIVE
Section 4.01 Monthly Salary: As compensation for the services to be
rendered by Executive hereunder, Employer shall pay Executive an annual salary
in the sum of $120,000 in weekly, semimonthly or monthly installments in
accordance with the standard payment policies of Employer. Executive agrees to
accrue $9,000 per month of said salary for the months of July, August and
September of 1997 and thereafter to accrue $5,000 of said salary for the months
of October, November and December of 1997. The accrued salary, in the sum of
$42,000, shall be paid to Executive in six equal monthly installments commencing
in January, 1998 in the sum of $7,000 per month in addition to the payment of
Executive's regular base salary. Executive shall be paid a base salary of
$132,000 during the second year of employment and $144,000 in the third year of
employment, payable in accordance with the then current payroll policies of
Employer. At any time, from time to time, said salary may be increased for the
remaining portion of the term if so determined by the Board of Directors of
Employer after review of Executive's performance of duties hereunder.
Section 4.02 Deductions: Employer shall have the right to deduct or
withhold from the compensation due to Executive hereunder any and all sums
required for federal income and social security taxes and all state or local
taxes now applicable or that may be enacted and become applicable in the future.
ARTICLE V
EXECUTIVE BENEFITS
Section 5.01 Health Care Benefits: Employer shall provide Executive and
Executive shall be entitled to participate in the hospital, surgical, medical
and dental plan in existence through Westmark Group Holdings, Inc. as of the
date of this agreement or such other hospital, surgical, medical and dental plan
as may be provided by Employer from and after the date of this agreement. In
lieu of the hospital, surgical, medical and dental benefits provided by
Employer, Executive shall have the right to maintain his existing hospital,
surgical, medical and dental policies at Employer's expense provided, however,
that said expense shall not exceed the expense that Employer would otherwise
incur to maintain Executive on Employer's health care benefit policies.
Section 5.02 Life Insurance: Employer agrees to include Executive
and Executive shall participate in the group term life insurance policy in
effect as of the
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date of this agreement through Westmark Group Holdings, Inc., if any, or such
other group life insurance policy provided by Employer from and after the date
of this agreement.
Section 5.03 Automobile Allowance: Executive, shall be entitled to an
automobile allowance of $400 per month during the term of this agreement or any
extension thereof. Employer shall also pay all expenses and insurance relevant
to the use of said automobile. Employer shall have the option to provide
Executive with an automobile during the term of this employment with the
expenses thereof to be paid by Employer.
Section 5.04 Stock Option: Immediately upon the execution of this
Agreement, Employer and Executive shall enter into a Stock Option Agreement,
pursuant to which Employer shall issue options to Executive to acquire 150,000
shares of the common stock of Westmark Group Holdings, Inc. Said options shall
vest immediately at an exercise price of $1.00. Said vested options may be
exercised on or after the following dates:
50,000 shares on March 31, 1998
20,000 shares on October 31, 1998
30,000 shares on March 31, 1999
20,000 shares on October 31, 1999
30,000 shares on March 31, 2000
In the event of a sale, divestiture, spin-off or transfer of all or
substantially all of the assets or stock of Westmark Mortgage Corporation, all
options granted hereunder to Executive shall immediately become exercisable.
Provided, however, that no option shall be exercisable after the expiration of
ten years from the date said option was granted.
The foregoing options are in addition to the options previously issued to
Executive, to wit: 50,000 shares with an exercise price of $.75 per share and
200,000 shares at an exercise price of Sl.00. All of the options issued or to be
issued to Executive shall be subject to Employer's 1994 Stock Option Plan.
Section 5.05 Vacation: Executive will be entitled to four weeks paid
vacation per year subject to the policies and procedures of Employer. Unused
accrued vacation time may be carried forward to subsequent years and/or will be
paid in full upon termination of this agreement.
Section 5.06 Other Benefits: During the term of this agreement or any
extension thereof, Executive shall be entitled to receive, in addition to and
not in lieu of base salary, bonus or other compensation, such other benefits and
normal perquisites
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as Employer currently provides or such other additional benefits as the company
may Provide for its executive officers in the future. Executive shall be
entitled to participate in a bonus plan which shall be promulgated by the Board
of Directors of Employer.
Section 5.07: Upon submission of a detailed statement and
reasonable documentation, Employer will reimburse Executive in the same manner
as other executive officers for all reasonable, necessary or appropriate
out-of-pocket travel and other expenses incurred by Executive in rendering
services pursuant to this agreement.
ARTICLE VI
TRADE SECRETS
Section 6.01 Restrictions on Use of Trade Secrets and Records: During the
term of employment under this agreement, Executive will have access to and
become acquainted with various trade secrets consisting of formulas, patterns.
devices, secret inventions, processes, and compilations of information, records
and specifications all of which are owned by Employer and regularly used in the
operation of Employer's business. All files, records, documents, drawings,
specifications, equipment and similar items relating to the business of
Employer, whether they are prepared by Executive or come into Executive's
possession in any other way and whether or not they contain or constitute trade
secrets owned by Employer, are and shall remain the exclusive property of
Employer and shall not be removed from the premises of Employer under any
circumstances whatsoever without the prior written consent of Employer.
Executive promises and agrees that he shall not misuse, misappropriate or
disclose any of the trade secrets described herein, directly or indirectly, or
use them in any way either during the term of this agreement or at any time
thereafter, except as required in the course of his employment. Trade secrets
shall not include any contacts developed, acquired or maintained by Executive in
equity, financial and capital markets.
ARTICLE VII
TERMINATION OF EMPLOYMENT
Section 7.01 Termination for Cause: Employer reserves the right to
terminate this agreement if Executive willfully breaches or willfully neglects
the duties which he is required to perform under the terms of this agreement.
Employer shall not terminate this agreement pursuant to the foregoing unless
Employer shall first deliver to Executive a notice which specifically identifies
such breach or neglect and Executive shall have ceased to continue such breach
or neglect within 30 days after receipt of the written notice. Employer shall
further have the right to terminate Executive if Executive commits acts of
dishonesty, fraud or misrepresentation that would prevent the effective
performance of Executive's duties. This agreement shall further terminate
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immediately on the occurrence of any of the following events:
A. The death of Executive;
B. Executive becomes permanently disabled because, of sickness, physical
or mental disability or any other reason so that Executive shall be
unable to complete duties under this agreement. "Permanently disabled"
shall mean any disability that continues for 180 days in any twelve
month period, certified by a licensed physician mutually agreed upon by
Employer and Executive.
Employer may at its option terminate this agreement for the reasons stated
in this section by giving written notice of termination to Executive without
prejudice to any other remedy to which Employer may be entitled either at law,
in equity, or under this agreement. The notice of termination required by this
section shall specify the ground for the termination and shall be supported by
statement of all relevant facts. In the event of termination for cause by
Employer, Executive shall be entitled to compensation or benefits earned up to
and including the date of termination. In the event a court of competent
jurisdiction determines that Executive was wrongfully terminated, said
termination shall be deemed to have been without cause and Employer shall pay to
executive all compensation and benefits provided for termination without cause
as set forth hereinafter, together with Executive's reasonable attorney's fees,
expert fees and court costs.
Section 7.02 Termination without Cause: This agreement is a guaranteed
contract and is not subject to termination by Employer other than for cause as
set forth herein above. In the event of termination by Employer, without cause,
prior to the end of the term of employment, Executive shall be entitled to a
lump sum payment equal to the monthly compensation provided for in this
agreement multiplied by the number of months remaining in the term of this
agreement or any extension thereof, together with all benefits, reimbursements
or other rights to which Executive has become entitled.
Section 7.03 Change of Control: In the event of a change of control as set
forth below, subject to the provisions of paragraph 7.03,(E), Executive may
elect at anytime within one year, subsequent to the change of control, to
terminate his services hereunder. In such event, Employer shall pay to Executive
a lump sum payment equal to the monthly compensation provided for in this
agreement multiplied by the number of months remaining in the term of this
agreement or any extension thereof, together with all benefits, reimbursements
or other rights to which Executive has become entitled. Change of control shall
be defined as follows:
A. Any "person," including a "group" as determined in accordance with
Section 13(d)(3) of the Securities Exchange Act of 1934 (the
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"Exchange Act"), becomes, in a single transaction or series of
transactions, the beneficial owner, directly or indirectly, of
securities representing a Control Percentage (as hereinafter defined)
of the combined voting power of the then outstanding securities of the
corporation not including a transaction caused by or resulting from the
affirmative vote of a majority of the current members of the Board of
Directors of Westmark Group Holdings, Inc. (subject to Section 7.03,
B.);
B. The membership of the board of directors as it exists at the time of
this Agreement changes such that the current members of the board no
longer constitute a majority of the board of directors not including a
change caused by or resulting from any current board member's death or
resignation pursuant to Section 7.05 hereinafter, or the affirmative
vote of a majority of the current members of the Board of Directors of
Westmark Group Holdings, Inc.;
C. The corporation is merged or consolidated with other corporations or
entities in a single transaction or series of transactions and as a
result of such merger or consolidation a Control Percentage of the
outstanding voting securities of the surviving or resulting corporation
shall no longer be owned in the aggregate by the stockholders who owned
stock in the corporation as of the date prior to the merger or
consolidation not including a merger or consolidation caused by or
resulting from the affirmative vote of a majority of the current
members of the Board of Directors of Westmark Group Holdings, Inc.
(subject to Section 7.03, B.). The term "Control Percentage" shall mean
at least 35% in the event the applicable securities are registered
under the Securities Exchange Act of 1934, as amended ("Exchange Act"),
or at least 35% in the event the applicable securities are not
registered under the Exchange Act;
D. The corporation transfers all or substantially all of its assets and/or
stock to another corporation, person or entity, including but not
limited to the transfer of the mortgage operations through a sale of
assets or stock, spin-off, divestiture or initial public offering not
including a transfer of assets or stock caused by or resulting from the
affirmative vote of a majority of the current members of the Board of
Directors of Westmark Group Holdings, Inc., (subject to Section 7.03,
B.). In the event of a transfer of the mortgage operations, Executive
shall have the right to exercise one of the following options:
(i) Assume the position of Executive Vice President, Mergers and
Acquisitions/Capital Markets, for the mortgage operations
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pursuant to the same terms and conditions of this contract; or
(ii) Continue to serve as Chairman of the Board of Directors of
Westmark Group Holdings, Inc. and, shall be duly elected, to serve
as President and Chief Executive Officer of Westmark Group
Holdings, Inc. in the event said positions are vacated.
E. in the event of a change of control as set forth above, and Executive
is requested to remain with the surviving or successor corporation or
business, with the same compensation and commensurate duties as
previously retained by Executive subject to the same terms and
conditions of this agreement, and Executive rejects such request for
continuing employment, said Executive shall be entitled to a lump sum
severance payment equal to the compensation provided in Paragraph 7.02
regarding termination without cause. Provided, however, that Executive
shall not reject such request for continuing employment without a
Reasonable basis.
Section 7.04 Termination by Executive for "Good Reason":
A. The Executive may terminate his employment for "good reason" if:
(i) He is assigned, without his express written consent, any duties
inconsistent with his positions, duties, responsibilities, or
status with Employer as of the date hereof, or a change in his
reporting responsibilities or titles in effect as of the date
hereof, with the exception of a transfer of the mortgage
operations as set forth hereinabove in Section 7.03, D;
(ii) His compensation is reduced:
(iii) Employer shall file a petition in bankruptcy or re-organization
under the federal bankruptcy statutes or an involuntary petition
is filed against Employer and not removed or withdrawn within
sixty (60) days, or Employer does not pay any salary or expense
due hereunder and then fails either to pay such amount within
thirty days after written notice from Executive, or to contest in
good faith such notice, Further, if such contest is not resolved
within sixty (60) days, the dispute shall be submitted to
arbitration pursuant to the then existing rules of the American
Arbitration Association, or
(iv) Employer commits any material breach of this agreement, which
breach is not cured by Employer within thirty (30) days of
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written notice of said breach from Executive.
(v) Executive is required to relocate his business address from Baton
Rouge, Louisiana.
B. In the event Executive terminates his employment for "good reason" as
hereinabove set forth, Executive shall be entitled to a lump sum
payment equal to the monthly compensation provided for in this
agreement multiplied by the number of months remaining in the term of
this agreement or any extension thereof, together with all benefits,
reimbursements or other rights to which Executive has become entitled.
Section 7.05 Voluntary Termination by Executive: Executive shall have the
right to terminate this agreement for any reason other than change of control or
good reason as set forth hereinabove, upon sixty (60) days written notice to
Employer. In the event of voluntary termination by Executive other than for good
reason or change of control, Executive shall be entitled to any compensation or
benefits due and owing to Executive up to the date of termination.
Section 7.06 Effect on Compensation: In the event that this agreement is
terminated prior to the completion of the term of employment specified herein,
Executive shall be entitled to the compensation earned by and vested in him
prior to the date of termination as provided for in this agreement, computed
pro-rata up to and including that date. Executive shall be entitled to no
further compensation or benefits as of the date of termination, except as
hereinabove set forth.
ARTICLE VIII
INSURANCE AND INDEMNIFICATION
Section 8.01 Insurance: Employer agrees to make a best effort to obtain and
maintain a Directors and Officers liability policy with limits established by
the Board of Directors of Employer for all liability arising out of Executive's
capacity as an officer and/or director of Employer. Employer further agrees to
make a best effort to obtain and maintain a comprehensive general liability
policy with broad form endorsements providing coverage for contractual
liability and personal injury with limits established by the Board of Directors
of Employer.
Section 8.02 Indemnification: Employer shall, to the full extent permitted
by law, indemnify, defend and hold harmless Executive from and against any and
all claims, demands, liabilities, losses and expenses (including reasonable
attorneys fees, court costs and disbursements) arising out of the performance by
Executive of Executive's duties hereunder, including ordinary negligence,
except in the case of Executive's gross negligence.
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ARTICLE IX
GENERAL PROVISIONS
Section 9.01 Notices: Any notices to be given by either party to the other
shall be in writing and may be transmitted either by personal delivery or by
mail, registered or certified, postage prepaid, with return receipt requested.
Mailed notices shall be addressed to the parties at the addresses appearing on
the signature page of this agreement. Each party may change their address by
written notice in accordance with this section. Notices delivered personally
shall be deemed communicated as of the date of actual receipt.
Section 9.02 Attorney's Fees and Costs:
A. In the event of any action at law or in equity with respect to any of
the terms or conditions of this agreement, the prevailing party shall
be entitled to reasonable attorney's fees, costs and necessary
disbursements in addition to any other relief to which that party may
be entitled. This provision shall be construed as applicable to the
entire contract.
B. Employer shall pay up to but not exceeding two thousand dollars
($92,000) for the attorney's fees incurred by Executive in connection
with the negotiation and preparation of this agreement. It is expressly
understood that any attorney's fees charged to Executive in excess of
two thousand dollars ($2,000) remain the responsibility of Executive
and notwithstanding Employer's payment of attorney's fees as aforesaid,
no attorney/client relationship shall exist between Employer and
Executive's attorney.
Section 9.03 Entire Agreement: With the exception of the Board Service
Agreement previously entered into between Employer and Executive, this agreement
supersedes any and all other agreements either oral or in writing between the
parties hereto with respect to the employment of Executive by Employer and
contains all of the covenants and agreements between the parties with respect
to that employment in any manner whatsoever. Each party to this agreement
acknowledges that no representations, inducements, promises or agreements orally
or otherwise have been made by any party or anyone acting on behalf of any party
which are not embodied herein and that no other agreement, statement or promise
not contained in this agreement shall be valid or binding.
Section 9.04 Modification: Any modifications to this agreement will be
effective only if it is in writing signed by the party to be charged.
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Section 9.05 Effect of Waiver: The failure of either party to insist on
strict compliance with any of the terms, covenants or conditions of this
agreement by the other party shall not be deemed a waiver of that term, covenant
or condition, nor shall any waiver or relinquishment of any right or power at
any one time or times be deemed a waiver or relinquishment of that right or
power for all or any other times.
Section 9.06: If any provision in this agreement is held by a Court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions shall nevertheless continue in full force without being impaired or
invalidated in any way.
Section 9.07 Law Governing Agreement: This agreement shall be governed by
and construed in accordance with the laws of the State of Florida, and venue for
any action between the parties shall be in the County of Palm Beach.
Section 9.08 Sums due Deceased Executive: If Executive dies prior to the
expiration of the term of his employment, any sums that may be due him from
Employer under this agreement as of the date of death shall be paid to
Executive's executors, administrators, heirs, personal representatives,
successors and assigns.
Executed on the 1st day of July, 1997 at Delray Beach, Florida.
EMPLOYER: EXECUTIVE:
WESTMARK GROUP HOLDINGS, INC.
By: /s/ Xxxx Xxxxxxxxxx /s/ Xxxxx X. Xxxxxxxx
------------------------- ----------------------------
Its: C.E.O. Xxxxx X. Xxxxxxxx
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