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EXHIBIT 10.3
EMPLOYMENT AGREEMENT
THIS AGREEMENT (this "Agreement") is made as of June 1, 1999, between
Xxxxxx Xxxxxxx, Inc., a Delaware corporation (the "Company"), and Xxxx X.
Xxxxxxxx ("Executive").
In consideration of the mutual covenants contained herein and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. Employment. The Company shall employ Executive, and Executive
hereby accepts employment with the Company, upon the terms and conditions set
forth in this Agreement for the period beginning on the date hereof and ending
on the Termination Date, as defined in paragraph 4 hereof (the "Employment
Period").
2. Position and Duties.
(a) During the Employment Period, Executive shall serve
as Chief Administrative Officer and General Counsel of the Company.
(b) Executive shall report to the Chief Executive Officer
and Executive shall devote his reasonable best efforts and his full business
time and attention (except for permitted vacation periods, periods of illness
or other incapacity) to the business and affairs of the Company.
(c) For purposes of this Agreement, all references to
"Company" shall include any corporation of which the securities having a
majority of the voting power in electing directors are, at the time of
determination, owned by the Company, directly or through one of more
subsidiaries.
3. Base Salary and Benefits.
(a) During the Employment Period, Executive's base salary
shall be $150,000 per annum, including previous salary advances (along with any
increases as provided for in Section 3(c) hereto, the "Base Salary"), which
shall be subject to required withholding. In addition, during the Employment
Period, Executive shall be entitled to participate in all of the Company's
employee benefit programs for which senior executive employees of the Company
are generally eligible.
(b) The Company shall reimburse Executive for all
reasonable expenses incurred by him in the course of performing his duties
under this Agreement which are consistent with the Company's policies in effect
from time to time for senior executives with respect to travel, entertainment
and other business expenses, subject to the Company's requirements for its
executives with respect to reporting and documentation of such expenses.
(c) In addition to the Base Salary, Executive shall be
eligible to receive a bonus (the "Bonus") at the end of each calendar year
during the Employment Period of up to 20% of
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Executive's Base Salary (the "Target Bonus") based upon Executive's performance
and the Company's financial results versus targets established by the Board or
the Compensation Committee of the Board for such year. The Bonus, if any, will
be payable no later than March 1 of the year immediately following the year in
which the Bonus was earned. The Bonus will be prorated for any partial year
during the Employment Period. The Executive shall be eligible for a review and
increase of the Base Salary in January 2000.
4. Term and Termination.
(a) This Agreement shall terminate on December 31, 2000
(the "Expiration Date") unless terminated earlier (i) by Executive's
resignation with or without Good Reason or Executive's death or Disability or
(ii) by the Company with or without Cause. The date on which Executive's
employment with the Company is terminated is referred to herein as the
"Termination Date."
(b) (i) If Executive's employment with the Company
is terminated by the Company without Cause or by Executive with Good
Reason, (x) Executive shall be entitled to receive his Base Salary and
his Target Bonus through the Expiration Date, payable in accordance
with paragraph 3 above, (y) all stock options granted to Executive
under the Stock Option Plan which are not vested at such time shall
automatically, and without further action, become vested as of the
Termination Date and all such options (together with all of
Executive's then vested stock options), shall remain exercisable until
the later to occur of (I) the Expiration Date and (II) the expiration
of such stock options pursuant to the terms of the Stock Option Plan
and (z) Executive's obligations under paragraph 6(a) below shall
terminate and be of no further force or effect.
(ii) If Executive's employment with the Company
is terminated for any reason other than as described in item (i)
above, Executive shall be entitled to receive his Base Salary through
the Termination Date.
(iii) If a "change of control" of the Company
occurs, then all stock options granted to Executive under the Stock
Option Plan which are not vested at such time shall automatically, and
without further action, become vested and all such options (together
with all of Executive's then vested stock options), shall remain
exercisable until the later to occur of the Expiration Date and the
expiration of such stock options pursuant to the terms of the Stock
Option Plan. For purposes hereof, a "change of control" shall be
deemed to have occurred if any person or group of persons acting as a
group, other than existing directors or their affiliates shall have
acquired control over the voting power represented by at least 50% of
the then outstanding shares of common stock of the Company. The rights
under this clause (iii) are in addition to any other rights under this
Agreement or otherwise in the event of such termination.
(c) All of Executive's rights to fringe benefits shall
cease upon the Termination Date.
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(d) For purposes of this Agreement, the following terms
shall have the meanings set forth below:
"Cause" shall mean (i) the conviction of Executive for a
felony or a crime involving moral turpitude or the plea of guilty or no lo
contendre by Executive to a charge of any such crime, (ii) Executive's theft or
embezzlement, of money or property of the Company, (iii) Executive's
perpetration of fraud, or Executive's participation in a fraud, on the Company
or Executive's unauthorized appropriation of any tangible or intangible
material assets or property of the Company, (iv) Executive's substantial and
repeated failure to perform his duties hereunder in accordance with the
reasonable directions of the Board after notice of such failure and a
reasonable opportunity to cure such failure.
"Disability" shall mean the inability, due to illness,
accident, injury, physical or mental incapacity or other disability, of
Executive to carry out effectively his duties and obligations to the Company or
to participate effectively and actively in the management of the Company for a
period of at least 90 consecutive days or for shorter periods aggregating at
least 120 days (whether or not consecutive) during any twelve-month period, as
determined in the reasonable and good faith judgment of the Board.
"Good Reason" shall mean (x) the Company's willful and
material breach of this Agreement or (y) the assignment to Executive of duties
that are materially inconsistent with Executive's position.
(e) A termination of this Agreement pursuant to its terms
on the Expiration Date shall not, in and of itself, constitute a termination of
Executive's employment with the Company. At such time, unless the Company or
the Executive terminate Executive's employment with the Company, Executive
shall become an employee at-will of the Company.
5. Confidential Information. Executive acknowledges that the
information, observations and data obtained by him while employed by the
Company concerning the business or affairs of the Company reasonably considered
of a confidential nature ("Confidential Information") are the property of the
Company. Therefore, Executive agrees that he shall not disclose to any
unauthorized person or use for his own purposes any Confidential Information
without the prior written consent of the Board, unless and to the extent that
the aforementioned matters become generally known to and available for use by
the public other than as a result of Executive's acts or omissions, or is
otherwise known to Executive from independent sources prior to or outside of
Executive's employment with the Company. Executive shall deliver to the Company
at the termination of the Employment Period, or at any other time the Company
may reasonably request, all memoranda, notes, plans, records, reports, computer
tapes, printouts and software and other documents and data (and copies thereof)
relating to the Confidential Information or the business of the Company which
he may then possess or have under his control. Nothing herein shall prohibit
Executive's disclosure of Confidential Information as directed by judicial,
administrative or other governmental law, rule, regulation or order provided
that Executive shall, to the extent possible, give immediate notice to the
Company of any disclosure of Confidential Information so required so that the
Company may seek a protective order.
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6. Non-Compete, Non-Solicitation.
(a) In further consideration of the compensation to be
paid to Executive hereunder, Executive acknowledges that in the course of his
employment with the Company he shall become familiar with the Company's trade
secrets and with other Confidential Information concerning the Company and that
his services shall be of special, unique and extraordinary value to the
Company. Therefore, Executive agrees that, during the Employment Period and for
two years thereafter (the "Noncompete Period"), he shall not directly or
indirectly own any interest in, manage, control, participate in, consult with,
render services for, or in any manner engage in any business competing with the
businesses of the Company, as such businesses exist or are in process on the
date of the termination of Executive's employment, within any geographical area
in which the Company engages or plans to engage in such businesses. Nothing
herein shall prohibit Executive from being a passive owner of not more than 2%
of the outstanding stock of any class of a corporation which is publicly
traded, so long as Executive has no active participation in the business of
such corporation.
(b) During the Noncompete Period, Executive shall not
directly or indirectly through another entity (i) induce or attempt to induce
any employee of the Company to leave the employ of the Company, or in any way
interfere with the relationship between the Company and any employee thereof,
(ii) hire any person who was an employee of the Company at any time during the
Employment Period (unless such employee was terminated by the Company), or
(iii) induce or attempt to induce any customer, supplier, licensee, licensor,
franchisee or other business relation of the Company to cease doing business
with the Company, or in any way interfere with the relationship between any
such customer, supplier, licensee or business relation and the Company.
(c) If, at the time of enforcement of this paragraph 6, a
court shall hold that the duration, scope or area restrictions stated herein
are unreasonable under circumstances then existing, the parties agree that the
maximum duration, scope or area reasonable under such circumstances shall be
substituted for the stated duration, scope or area and that the court shall be
allowed to revise the restrictions contained herein to cover the maximum
period, scope and area permitted by law. Executive agrees that the restrictions
contained in this paragraph 6 are reasonable.
(d) In the event of the breach or a threatened breach by
Executive of any of the provisions of this paragraph 6, the Company, in
addition and supplementary to other rights and remedies existing in its favor,
may apply to any court of law or equity of competent jurisdiction for specific
performance and/or injunctive or other relief in order to enforce or prevent
any violations of the provisions hereof (without posting a bond or other
security). In addition, in the event of an alleged breach or violation by
Executive of this paragraph 6, the Noncompete Period shall be tolled until such
breach or violation has been duly cured.
7. Mutual Representations. Executive and the Company each
represents and warrants to the other that (i) the execution, delivery and
performance of this Agreement by such party do not and shall not conflict with,
breach, violate or cause a default under any contract, agreement, instrument,
order, judgment or decree to which such party is a party or by which or it is
bound, (ii)
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such party is not a party to or bound by any employment agreement, noncompete
agreement or confidentiality agreement with any other person or entity that
would be breached or violated by such party execution and delivery or
performance of this Agreement and (iii) upon the execution and delivery of this
Agreement by such party, this Agreement shall be the valid and binding
obligation of such party, enforceable in accordance against such party with its
terms.
8. Survival. Paragraphs 5 and 6 and paragraphs 9 through 16 shall
survive and continue in full force in accordance with their terms
notwithstanding any termination of the Employment Period.
9. Notices. Any notice provided for in this Agreement shall be in
writing and shall be either personally delivered, or mailed by first class
mail, return receipt requested, to the recipient at the address below
indicated:
Notices to Executive:
Xxxx X. Xxxxxxxx
0000 XX 00xx Xxx.
Xx. Xxxxxxxxxx, XX 00000
Notices to the Company:
Xxxxxx Xxxxxxx, Inc.
000 Xxxx Xxx Xxxx Xxxx., Xxxxx 000
Xx. Xxxxxxxxxx, XX 00000
Attention: Chief Executive Officer
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement shall be deemed to have been given when so
delivered or three (3) days after so mailed.
10. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or unenforceability shall
not affect any other provision or any other jurisdiction, but this Agreement
shall be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein.
11. Complete Agreement. This Agreement embodies with respect to
the subject matter hereof the complete agreement and understanding among the
parties and supersedes and preempts with respect to the subject matter hereof
any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof
in any way.
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12. No Strict Construction. The language used in this Agreement
shall be deemed to be the language chosen by the parties hereto to express
their mutual intent, and no rule of strict construction shall be applied
against any party, it being understood that paragraph 6(c) contemplates that a
court of competent jurisdiction shall be entitled to "blue pencil" or conform
the express language of paragraph 6(a) if necessary in order to comply with
Florida law.
13. Counterparts. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
14. Successors and Assigns. This Agreement is intended to bind and
inure to the benefit of and be enforceable by Executive, the Company and their
respective heirs, successors and assigns, except that (x) Executive may not
assign his rights or delegate his obligations hereunder without the prior
written consent of the Company and (y) other than in connection with sale of
the Company (whether by merger, consolidation, sale of all of the Company's
stock or sale of all or substantially all of the Company's assets), the Company
may not assign its rights to Executive's services hereunder to any third party.
15. CHOICE OF LAW. ALL ISSUES AND QUESTIONS CONCERNING THE
CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
FLORIDA, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW RULES OR
PROVISIONS (WHETHER OF THE STATE OF FLORIDA OR ANY OTHER JURISDICTION) THAT
WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE
STATE OF FLORIDA.
16. Amendment and Waiver. The provisions of this Agreement may be
amended or waived only with the prior written consent of the Company and
Executive, and no course of conduct or failure or delay in enforcing the
provisions of this Agreement shall affect the validity, binding effect or
enforceability of this Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
XXXXXX XXXXXXX, INC.
By:/s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: Chief Executive Officer
/s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx
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