AMENDMENT TO EMPLOYMENT AGREEMENT
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THIS AMENDMENT to an Employment Agreement is made as of the 17th day of
May, 2001 by and between LIGHTHOUSE FAST FERRY, INC., formerly known as
Lighthouse Landings, Inc., a New Jersey corporation, whose office is located at
000 Xxxxxxxxx Xxxxxx, Xxxxx X, Xxxx Xxxxxxxx, Xxx Xxxxxx, 00000 (the "Company")
and XXXXXXX X. XXXXXXXXX (the "Employee") residing at
_________________________________.
WITNESSETH
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WHEREAS, the Company and the Employee executed an Employment Agreement
dated as of January 1, 2000 (the "Employment Agreement"); and
WHEREAS, the Company and the Employee wish to amend the Employment
Agreement;
NOW, THEREFORE, in consideration of the premises set forth above and the
mutual agreements hereinafter set forth, the parties hereto, intending to be
legally bound thereby, hereby agree as follows:
1. Paragraph 1.2 is amended to read as follows:
The term of the Employee's employment under this Agreement
shall be the period commencing on the date hereof and
continuing through December 31, 2005, unless sooner
terminated in accordance with this Agreement.
2. Paragraph 3.1 shall be amended by increasing the Employee's base salary
from $120,000.00 per annum to $144,000.00 per annum, effective July 1, 2001
3. Paragraph 3.3 is amended to add the following: The issuance of the
second anniversary and third anniversary warrants shall be accelerated and both
warrants shall be issued effective as of the date hereof, which acceleration
shall be in recognition of the Employee's performance for the Company during the
year 2000. All warrants issued under this Agreement shall be deemed "cashless"
warrants.
4. Paragraph 6.4 is hereby amended to read as follows:
The Company may terminate the Employee's employment prior to
the expiration of the term of this Agreement for whatever
reason it deems appropriate; provided, however that in the
event that such termination is not
pursuant to Sections 6.1, 6.2 or 6.3, the Company shall
(1) pay to the Employee in a lump sum an amount equal to two (2)
times the Employee's annual salary as set forth in Section 3.1
(or if higher, the annual salary rate then in effect); and,
(2) issue to the Employee cashless stock warrants granting such
Employee the right to purchase 200,000 shares of the Company's
common stock at One and One/Tenth ($1.10) Dollars per share
exercisable at any time over a period of five (5) years from the
Date of Termination. In the event of a termination under this
Section 6.4, neither the Company nor the Employee shall
thereafter have any further rights or obligations under this
Agreement except as are provided in Sections 7, 8, 9, 10 and 18.
5. Paragraph 6.6 is amended to read as follows:
6.6. Change in Control-termination of Employment.
(a) Should a Change in Control occur (as hereinafter defined),
Employee may terminate his employment within one (1) year after he has
obtained actual knowledge of the occurrence of any of the following
events:
(i) Failure to elect or appoint, or re-elect or re-
appoint, Employee to, or removal of Employee from, his office and/or
position as President and Chief Executive Officer, except in
connection with the termination of Employee's employment pursuant to
subparagraphs 6.1, 6.2 or 6.3 hereof.
(ii) A reduction in Employee's overall compensation
(including any reduction in pension or other benefit programs or
perquisites) or a significant change in the nature or scope of the
authorities, powers, functions or duties normally attached to
employee's position with the Company.
(iii) A determination by Employee made in good faith that,
as a result of a Change in Control, he is unable effectively to carry
out the authorities, powers, functions or duties attached to his
position and the situation is not remedied within thirty
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(30) calendar days after receipt by the Company of written notice from
Employee of such determination.
(iv) A breach by the Company of any provision of this Agreement
not covered by clause (i), (ii) or (iii) of this subparagraph 6.6(a),
which is not remedied within thirty (30) calendar days after receipt
by the Company of written notice from Employee of such breach.
(v) A change in the location at which substantially all of
Employee's duties with the Company are to be performed to a location
which is not within a 20 mile radius of the address of the place where
Employee is performing services on the date of the Change in Control.
(vi) A failure by the Company to obtain the assumption of, and
the agreement to perform, this Agreement by any successor.
An election by Employee to terminate his employment under the
provisions of this subparagraph 6.6(a) shall be deemed a voluntary
termination of employment by Employee for the purpose of interpreting the
provisions of any of the Company's employee benefit plans, programs or
policies. Employee's right to terminate his employment hereunder shall
not be affected by his illness or incapacity, whether physical or mental,
unless the Company shall at the time be entitled to terminate his
employment under paragraph 6.2 of this Agreement. Employee's continued
employment with the Company for any period of time less then two (2) years
after a Change in Control shall not be considered a waiver of any right he
may have to terminate his employment pursuant to this paragraph 6.6(a).
(b) After a Change in Control has occurred, if Employee terminates his
employment with the Company pursuant to subparagraph 6.6(a) or if
Employee's employment is terminated by the Company for any reason other
than pursuant to paragraph 6.1, 6.2 or 6.3 hereof, Employee (i) shall be
entitled to his salary, bonuses, awards, perquisites and benefits,
including, without limitation, benefits and awards under the Company's
stock option plans if any, and the Company's pension and retirement plans
and programs, if any, through the Termination Date and, in addition
thereto, (ii) shall be entitled to be paid the benefits and money as set
forth in Paragraph 6.4. Such lump sum payment is hereinafter referred to
as the "Termination Compensation."
(c) For purposes hereof, a Change in Control shall be deemed to have
occurred if there has occurred, after the Commencement Date, (i) a change
in control of the Company as the term "control" is defined in Rule 12b-2
promulgated under the Securities and Exchange Act; (ii) when any "person"
(as such term is defined in the Act) who does not presently own five (5%)
percent or more of the Company's issued and outstanding securities becomes
a beneficial owner, directly or indirectly, of securities of the Company
representing thirty (30%) percent or more of the Company's then outstanding
securities having the right to vote on the election of directors; (iii)
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during any period of not more than two consecutive years (not including any
period prior to the execution of this Amended Agreement), individuals who
at the beginning of such period constitute the Board, cease for any reason
to constitute at least sixty (60%) percent of the entire Board of
Directors; (iv) when a majority of the directors elected at any annual or
special meeting or stockholders (or by written consent in lieu of a
meeting) are not individuals nominated by the Company's incumbent Board of
Directors; (v) if the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a
merger or consolidation which would result in the holders of voting
securities of the Company outstanding immediately prior thereto being the
holders of at least sixty (60%) percent of the voting securities of the
surviving entity outstanding immediately after such merger or
consolidation; (vi) if the shareholders of the Company approve a plan of
complete liquidation of the Company; or (vii) if the shareholders of the
Company approve an agreement for the sale or disposition of all or
substantially all of the Company's assets.
(d) Notwithstanding anything in this Paragraph 6.6 to the contrary;
Employee shall have the right, prior to the receipt by him of any amounts
due thereunder, to waive the receipt thereof or, subsequent to the receipt
by him of any amounts due hereunder, to treat some or all of such amounts
as a loan from the Company which Employee shall repay to the Company within
ninety (90) days from the date of receipt, with interest at the rate
provided in Section 7872 of the Internal Revenue Code of 1986. Notice of
any such waiver of treatment of amounts received as a loan shall be given
by Employee to the Company in writing and shall be binding upon the
Company.
(e) It is intended that the "present value" of the payments and
benefits to Employee, whether under this Amended Agreement or otherwise,
which are includible in the computation of "parachute payments" shall not,
in the aggregate, exceed 2.99 times the "base amount" (the terms "present
value," "parachute payments" and "base amount" being determined in
accordance with the Code). Accordingly, if Employee receives payments or
benefits from the Company prior to payment of the Termination Compensation
which, when added to the Termination Compensation, would, in the opinion of
the Company's regularly employed independent accounting firm (hereinafter
"accountants"), subject any of the payments or benefits to Employee to the
excise tax imposed by Section 4999 of the Code, the Termination
Compensation shall be reduced by the smallest amount necessary, in the
opinion of the Accountants, to avoid such tax. In addition, the Company
shall have no obligation to make any payment or provide any benefit to
Employee subsequent to payment of the Termination Compensation that, in the
opinion of the Accountants, would subject any of the payments or benefits
to Employee to the excise tax imposed by Section 4999 of the Code. No
reduction in Termination Compensation or release of the Company from any
payment or benefit obligation in reliance upon any aforesaid opinion of the
Accountants shall
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be permitted unless the Company shall have provided to Employee a copy of
any such opinion, specifically entitling Employee to rely thereon, no later
than the date otherwise required for payment of the Termination
Compensation or any such letter payment or benefit.
(f) Employee shall not be required to use his best efforts to mitigate
the payment of the Termination compensation by seeking other employment.
To the extent that Employee shall, during or after the Term, receive
compensation from any other employment, the payment of Termination
compensation shall not be adjusted.
6. Paragraph 18 is deleted in its entirety and the following is
substituted therefore.
18. Indemnification.
(a) The Company shall indemnify Employee to the fullest extent
permitted by the New Jersey Business Corporation Act. Without
limitation of the foregoing, in the event that Employee becomes
involved in any capacity in any action, proceeding or investigation in
connection with any activities involving the Company occurring during
the term hereof, the Company will, advance to Employee his reasonable
legal and other reasonable expenses (including the cost of any
investigation and preparation incurred in connection therewith). Such
advances and indemnification shall also be provided to Employee
subsequent to the term hereof provided such action, proceeding or
investigation invokes activities of the Company while the Employee was
employed by the Company.
(b) Employee shall give prompt written notice to the Company of
the commencement of any action, suit or proceeding for which
indemnification may be sought under this paragraph, and the Company,
through counsel reasonably satisfactory to Employee, may assume the
defense thereof; provided, however, that Employee shall be entitled to
participate in any such action, suit or proceeding with counsel of his
own choice but at his own expense; and provided further, the Employee
shall be entitled to participate in any such action, suit or
proceeding with counsel of his own choice at the expense of the
Company if, in the good faith judgment of Employee's counsel,
representation by the Company's counsel may present a conflict of
interest or there may be defenses available to Employee which are
different from or in addition to those available to the Company. In
any event, if the Company fails to assume the defense within a
reasonable time, Employee may assume such defense and the reasonable
fees and expenses of his attorneys shall be borne by the Company. No
action, suit or proceeding for which indemnification may be sought
shall be compromised or settled in any manner which might adversely
affect the interest of the Company without the prior written consent
of the Company. Notwithstanding anything in this Agreement to the
contrary, the Company shall not, without the written consent of the
Employee, (i) settle
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or compromise any action, suit or proceeding or consent to the entry
of any judgment which does not include as a unconditional term thereof
the delivery by the claimant or plaintiff to Employee of a written
release from all liability in respect of such action, suit or
proceeding or (ii) settle or compromise any action, suit or proceeding
in any manner that may materially and adversely affect Employee other
than as a result of money damages or other money payment for which the
Company fully pays.
(c) The Company shall cause to be maintained in effect, for not
less than two (2) years after the Termination Date, the then current
policies of the directors' and officers' liability insurance
maintained by the Company and the Company's subsidiaries provided that
the Company may substitute therefor policies of at least the same
coverage containing terms and conditions which are no less
advantageous so long as no lapse in coverage occurs as a result of
such substitution, and shall use its best efforts to provide such
insurance for an additional three (3) years after the expiration of
such two-year period, the availability of such insurance at
commercially reasonable rates (or, if not available at reasonable
rates, then the Company shall purchase similar insurance but with such
lowers limits of liability, without change in retention amounts, as
may be available for a premium comparable to that paid by the Company
for the last year of such two-year period), with respect to all
matters occurring prior to and including the Termination Date;
provided that, in the event that any claim shall be asserted or made
within such period during which insurance has been or is to be
provided, such insurance shall be continued in respect of any such
claim until final disposition of any and all such claims. The
Company shall pay all expenses, including reasonable attorneys' fees,
that may be incurred by Employee in enforcing the indemnity and other
obligations provided for in this paragraph. The covenant in this
paragraph shall survive the Termination Date and shall continue
without time limit (except as expressly provided in this paragraph).
7. Paragraph 6.8 shall provide as follows:
6.8 Notice of Termination and Termination Date.
(a) Any termination of Employee's employment by the Company
or by Employee shall be communicated by a Notice of Termination to the
other party hereto. For purposes hereof, a "Notice of Termination"
shall mean a notice which shall stated the "Termination Date" (as
hereinafter defined) and the specific reasons, and shall set forth in
reasonable detail the facts and circumstances, for such determination
and, in the case of Employee's termination of employment pursuant to
paragraph 6.6(a)(iii) hereof, shall state that Employee has made the
good faith termination required by that subparagraph.
(b) "Termination Date" shall mean the date specified in the
Notice of Termination as the last date of Employee's employment by the
Company, which date
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shall not be sooner than the date on which the Notice of Termination
is given.
(c) If, within thirty (30) calendar days after any Notice of
Termination is given, or, if later, prior to the Termination Date (as
determined without regard to this paragraph 6.8(c)), the party hereto
receiving such Notice of Termination notifies the other party hereto
that a dispute exists concerning the termination, the Termination Date
shall be the date on which the dispute is finally determined, either
by mutual written agreement of the parties hereto, by a binding
arbitration award or by a final judgment, order or decree of a court
of competent jurisdiction (which is not appealable or with respect to
which the time for appeal therefrom has expired and no appeal has been
perfected); provided, however, that the Termination Date shall be
extended by a notice of dispute only if such notice is given in good
faith and the party hereto giving such notice pursues the resolution
of such dispute with reasonable diligence. Notwithstanding the
pendency of such dispute, the Company will continue to pay to Employee
his full compensation (including perquisites and other benefits) in
effect when the notice of dispute was given and continue Employee as a
participant in all employee benefit plans and programs in which he was
participating when the notice of dispute was given, until the dispute
is finally resolved as hereinabove provided.
8. Paragraph 16 is deleted in its entirety and the following is
substituted therefore:
16. ARBITRATION. In the event any dispute arises between the
parties hereto, Employee and the Company shall each have the right to seek
arbitration in Newark, New Jersey under the rules of the American
Arbitration Association by giving written notice of intention to arbitrate
to the other party. Any award rendered in any such arbitration proceeding
shall be non-appealable and final and binding upon the parties hereto, and
judgment thereon may be entered in any court of competent jurisdiction.
If Employee prevails in any litigation or arbitration proceeding brought in
accordance herewith, or if any such litigation or arbitration proceeding is
settled, Employee shall be entitled, to the extent no prohibited by
applicable law, to reimbursement from the Company for his reasonable
attorneys' fees and expenses incurred in connection with such litigation or
arbitration proceeding.
9. The parties hereto ratify and confirm, other than as modified herein,
all of the terms and conditions of the Employment Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
behalf of themselves, their heir executors, legal representatives, successors
and assigns.
LIGHTHOUSE FAST FERRY, INC., Employer
/s/ Xxxxxxx Xxxxxxx
By: _________________________________
Name: Xxxxxxx Xxxxxxx
Title: President, CEO & Director
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/s/ Xxxxxxx X. Xxxxxxxxx
__________________________________
XXXXXXX X. XXXXXXXXX, Employee
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