EXHIBIT 10.4
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into on
August 17, 2000, effective as of the Offering Date (hereinafter defined), by and
between Empire Financial Holding Company, a Delaware corporation (the
"Company"), and Xxxxxx X. Xxxxxxxxx Xx. (the "Executive").
Recitals
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A. The Executive is currently employed as an executive of the Company.
B. The Executive possesses intimate knowledge of the business and affairs
of the Company, its policies, methods and personnel.
C. The Company is currently contemplating an initial public offering of
shares of its common stock (the "Offering").
D. In contemplation of the Offering, the Board of Directors of the
Company (the "Board") recognizes and desires to assure the Company of the
Executive's continued employment in an executive capacity and to compensate the
Executive therefor.
E. The Executive is willing to make his services available to the
Company, on the terms and conditions hereinafter set forth.
Agreement
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NOW, THEREFORE, in consideration of the premises and mutual covenants set
forth herein, the parties agree as follows:
1. Employment.
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1.1 Employment and Term. The Company hereby agrees to employ the
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Executive and the Executive hereby agrees to serve the Company, on the terms and
conditions set forth herein, for the period commencing on the effective date of
the Offering (the "Offering Date") and expiring on December 31, 2004 unless
sooner terminated as hereinafter set forth. The term of this Agreement shall
automatically continue after December 31, 2004, until either the Company or the
Executive provides the other party with at least 90 days prior written notice
that the Agreement shall terminate effective on a date no earlier than December
31, 2004.
1.2 Duties of Executive. The Executive shall serve as Vice President
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Business Development of the Company. During the term of Employment, the
Executive shall diligently perform all services as may be reasonably assigned to
the Executive by the Co-Chief Executive
Officers of the Company consistent with his position, and shall exercise such
power and authority as may from time to time be delegated to the Executive by
the Co-Chief Executive Officers of the Company. The Executive will not execute
any material contracts or agreements on behalf of the Company without the
express written permission of both Co-Chief Executive Officers of the Company.
The Executive shall be required to report solely to, and shall be subject solely
to the supervision and direction of the Co-Chief Executive Officers of the
Company. In addition, the Executive shall regularly consult with and provide
information to the Co-Chief Executive Officers of the Company. The Executive
shall devote substantially all of the Executive's working time and attention to
the business and affairs of the Company (excluding any vacation and sick leave
to which the Executive is entitled), render such services to the best of the
Executive's ability, and use the Executive's reasonable best efforts to promote
the interests of the Company. It shall not be a violation of this Agreement,
after written notice to and approval of the Co-Chief Executive Officers of the
Company, for the Executive to (a) serve on civic or charitable boards or
committees, (b) deliver lectures, fulfill speaking engagements or teach at
seminars, (c) manage personal investments and (d) provide brokerage services to
certain customers of the Executive that are mutually agreed upon by the
Executive and the Company and held at the Company, so long as none of the
foregoing activities interfere with the performance of the Executive's
responsibilities as an employee of the Company in accordance with this
Agreement.
1.3 Place of Performance. In connection with his employment by the
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Company, the Executive shall be based at the Company's principal executive
offices, except for travel reasonably necessary in connection with the Company's
business.
2. Compensation.
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2.1 Draw. Commencing on the date of this Agreement, the Executive
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shall receive a draw at the annual rate of $150,000 (the "Draw") during the term
of this Agreement, with such Draw payable in installments consistent with the
Company's normal payroll schedule, subject to applicable withholding and other
taxes. The Draw shall not be refundable to the Company.
2.2 Incentive Compensation. The Executive shall also be entitled to
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receive such other bonus payments or performance compensation, as shall be
determined from time to time by the Co-Chief Executive Officers of the Company,
in their sole discretion. Such potential additional bonus payments and/or
performance compensation shall be reduced by an amount not to exceed the then
current monthly Draw payable to the Executive.
2.3 Stock Options. Simultaneously with the consummation of the
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Offering, the Executive shall be granted an option pursuant to the Company's
2000 Stock Option Plan to purchase 100,000 authorized but unissued shares of the
Company's Common Stock, $0.01 par value (the "First Option"), at a purchase
price equal to the initial public offering price in the Offering. The First
Option shall vest immediately on the date of grant. The First Option will
expire ten years from the date the hereof.
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Simultaneously with the consummation of the Offering, the Executive shall
be granted a second option pursuant to the Company's 2000 Stock Option Plan to
purchase an additional 100,000 authorized but unissued shares of the Company's
Common Stock, $0.01 par value (the "Second Option"), at a purchase price equal
to the initial public offering price in the Offering. The Second Option shall
vest immediately on the date of grant, but the Executive shall only have the
right to sell or transfer on a cumulative basis up to 20,000 shares per year
received from the exercise of the Second Option commencing on the first
anniversary of the grant of the Second Option. The Second Option will expire
ten years from the date the hereof.
3. Expense Reimbursement and Other Benefits.
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3.1 Expense Reimbursement. During the term of the Executive's
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employment hereunder, the Company, upon the submission of reasonable supporting
documentation by the Executive, shall reimburse the Executive for all reasonable
expenses actually paid or incurred by the Executive in the course of and
pursuant to the business of the Company, including expenses for travel and
entertainment.
3.2 Incentive, Savings and Retirement Plans. During the term of this
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Agreement, the Executive shall be entitled to participate in all incentive,
savings and retirement plans, practices, policies and programs applicable to
other key executives of the Company and its subsidiaries as may be in effect
from time to time.
3.3 Healthcare Benefit Plans. During the term of this Agreement, the
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Executive shall be eligible for participation in and shall receive all benefits
under healthcare benefit plans, practices, policies and programs provided by the
Company and its subsidiaries that may be in effect from time to time (including,
without limitation, medical, prescription, dental, disability, salary
continuance, employee life, group life, accidental death and travel accident
insurance plans and programs), on terms comparable to the terms offered to other
executives of the Company.
3.4 Working Facilities. During the term of the Executive's
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employment hereunder, the Company shall furnish the Executive with an office,
secretarial support and such other facilities and services suitable to his
position and adequate for the performance of the Executive's duties hereunder as
reasonably determined by the Company.
3.5 Vacation. During the term of this Agreement, the Executive shall
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be entitled to paid vacation in accordance with the most favorable plans,
policies, programs and practices of the Company and its subsidiaries as in
effect at any time hereafter with respect to other key executives of the Company
and its subsidiaries; provided, however, that in no event shall the Executive be
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entitled to less than two weeks paid vacation per year.
4. Termination.
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4.1 Termination for Cause. Notwithstanding anything contained to the
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contrary in this Agreement, this Agreement may be terminated by the Company for
Cause. As used in this Agreement, "Cause" shall only mean (i) the willful and
material failure or refusal of the
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Executive to perform the duties or render the services assigned under this
Agreement (except during reasonable vacation periods or sick leave) or other
material breach of this Agreement, which is not remedied within ten business
days after receipt of written notice from the Company, (ii) the indictment of
the Executive for any criminal act which is a felony, or (iii) a material breach
of the Executive's representation in Section 15, which is not remedied within
ten business days after receipt of written notice from the Board. The
determination of Cause for purposes of this Agreement shall only be made by the
majority vote of the Board (excluding the Executive). Upon any termination
pursuant to this Section, the Executive shall be entitled to be paid his Base
Salary to the date of termination and the Company shall have no further
liability hereunder (other than for reimbursement for reasonable business
expenses incurred prior to the date of termination).
4.2 Disability. Notwithstanding anything contained in this Agreement
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to the contrary, the Company, by written notice to the Executive, shall at all
times have the right to terminate this Agreement, and the Executive's employment
hereunder, if the Executive shall, as the result of mental or physical
incapacity, illness or disability, fail to perform his duties and
responsibilities provided for herein for a period of more than 90 days in any
12-month period. Upon any termination pursuant to this Section, the Executive
shall be entitled to be paid his Base Salary to the date of termination and the
Company shall have no further liability hereunder (other than for reimbursement
for reasonable business expenses incurred prior to the date of termination).
4.3 Death. In the event of the death of the Executive during the
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term of his employment hereunder, the Company shall pay to the estate of the
deceased Executive an amount equal his Base Salary to the date of death and the
Company shall have no further liability hereunder (other than for reimbursement
for reasonable business expenses incurred prior to the date of termination).
4.4 Termination Without Cause. The Company may terminate the
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Executive's employment under this Agreement without Cause upon giving the
Executive 90 days prior written notice of such termination. Upon termination
without Cause, the Executive shall be entitled to receive his then current Base
Salary for the then remaining term of this Agreement
4.5 Termination by Executive for Good Reason or by Resignation.
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(i) The Executive shall have the right to terminate his employment
under this Agreement at any time upon at least 90 days prior written notice to
the Company for Good Reason. For purposes of this Agreement, "Good Reason" means
(i) a material breach of the Company's obligations under this Agreement, which
is not remedied within ten business days after receipt of written notice from
the Executive, or (ii) any termination by the Executive (other than a
termination for Cause) during the three-month period following the effective
date of any "Change in Control." Upon termination for Good Reason, the Executive
shall be entitled to receive his then current Base Salary for the then remaining
term of this Agreement
(ii) The Executive shall have the right to terminate his employment
under this Agreement by resignation at any time upon at least 90 days prior
written notice to the Company.
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Upon such termination by resignation, the Executive shall be entitled to be paid
his Base Salary to the date of termination and the Company shall have no further
liability hereunder (other than for reimbursement for reasonable business
expenses incurred prior to the date of termination). Except as specifically set
forth in this Section, the Executive shall not have any additional liability or
obligation hereunder by reason of such termination.
5. Change in Control. For purposes of this Agreement, a "Change in
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Control" shall mean any of the following events:
(a) Without the prior approval of the Incumbent Board (hereinafter
defined), the acquisition (other than by or from the Company), at any time after
the date hereof, by any person, entity or "group," within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 (the "Exchange
Act"), of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 30% or more of either the then outstanding shares of
common stock or the combined voting power of the Company's then outstanding
voting securities entitled to vote generally in the election of directors;
(b) The individuals who constitute the Board as of the Offering Date
(the "Incumbent Board") cease for any reason to constitute at least a majority
of the Board, provided that any person becoming a director subsequent to the
Offering Date whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board (other than an election or nomination of an
individual whose initial assumption of office is in connection with an actual or
threatened election contest relating to the election of the directors of the
Company, as such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) shall be, for purposes of this Agreement, considered as
though such person were a member of the Incumbent Board;
(c) Without the prior approval of the Incumbent Board, approval by
the stockholders of the Company of (A) a reorganization, merger or consolidation
with respect to which persons who were the stockholders of the Company
immediately prior to such reorganization, merger or consolidation do not,
immediately thereafter, own more than 51% of the combined voting power entitled
to vote generally in the election of directors of the reorganized, merged or
consolidated company's then outstanding voting securities, (B) a liquidation or
dissolution of the Company, or (C) the sale of all or substantially all of the
assets of the Company, unless the approved reorganization, merger,
consolidation, liquidation, dissolution or sale is subsequently abandoned.
6. Restrictive Covenants.
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6.1 Confidentiality and Rights to Inventions.
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(a) Confidential Information. The Executive hereby acknowledges
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that the Executive will or may be making use of, acquiring and adding to
confidential information of a special and unique nature and value affecting and
relating to the Company and its operations, including, but not limited to, its
business, the identities of its customers and
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suppliers, its data base information, prices paid by the Company for inventory,
its business practices, marketing strategies, expansion plans, contracts,
business records and other records, trade secrets, inventions, techniques, know-
how and technologies, whether or not patentable, and other similar information
relating to the Company (all the foregoing regardless of whether same was known
to the Executive prior to the date hereof is hereinafter referred to
collectively as "Confidential Information"). The Executive further recognizes
and acknowledges that all Confidential Information is the exclusive property of
the Company, is material and confidential, and greatly affects the legitimate
business interests, goodwill and effective and successful conduct of the
Company's business. Accordingly, the Executive hereby covenants and agrees that
he will use the Confidential Information only for the benefit of the Company and
shall not at any time, directly or indirectly, either during the Term of this
Agreement or afterward, divulge, reveal or communicate any Confidential
Information to any person, firm, corporation or entity whatsoever, or use any
Confidential Information for the Executive's own benefit or for the benefit of
others.
(b) Rights to Inventions, Patents and Copyrights. The Executive shall
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promptly disclose in writing to the Company: all ideas, inventions, discoveries,
devices, machines, apparatus, methods, compositions, know-how, works, processes
and improvements to any thereof, whether or not patentable or copyrightable,
that the Executive may conceive, make, develop, invent, reduce-to-practice,
author or discover, whether solely or jointly or commonly with others, during
the Executive's employment with the Company, or within one calendar year
following the termination of the Executive's employment with the Company, which
relate to the business of the Company at the time of termination (the items
specified in this section are hereinafter collectively referred to as
"Inventions"). All Inventions are the sole and exclusive property of the
Company. The Executive shall promptly assign, transfer and set over unto the
Company, its successors and assigns, all of his rights, title and interest in
and to all Inventions, all applications for letters patent or copyrights,
foreign and domestic, which have or may be filed on such Inventions, all
copyrights, all letters patent of the United States and its territorial
possessions and all letters patent of foreign countries which may be granted
therefor, and all reexaminations and reissues of said letters patent, including
the subject matter of any and all claims which may be obtained in every such
domestic and foreign patent, the same to be held and enjoyed by the Company for
its own and exclusive use and advantage, and for the exclusive use and advantage
of its successors, assigns and other legal representatives, to the full end of
the term or terms for which said copyrights and letters patent of the United
States, territories and foreign countries are or may be granted, reexamined or
reissued, as fully and entirely as the same would have been held and enjoyed by
the Executive if the assignment had not been made. The Executive further
covenants and agrees that the Executive will, during and subsequent to the term
of this Agreement, without demanding any other consideration therefor, at any
time, upon request, execute, or cause to be executed, and deliver any and all
papers that may be necessary or desirable to perfect the title to any Invention
and to such letters patent and copyrights as may be granted therefor, in the
Company, its successors, assigns or other legal representatives, and that if the
Company, its successors, assigns, or other legal representatives shall desire to
file any subsequent or derivative application, or to secure a reissue or
reexamination of such letters patent, or to file a disclaimer relating thereto,
the Executive will upon request, sign, or cause to
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be signed, all papers, make or cause to be made all rightful oaths, and do all
lawful acts requisite for such action.
The Executive does further covenant and agree, that he will, at any
time during and subsequent to the term of this Agreement hereof, upon request,
communicate to the Company, its successors, assigns, or other legal
representatives, such facts relating to the Inventions, letters patent and
copyrights or to the history thereof, as may be known to him, and testify, at
the Company's expense, as to the same in any interference or other litigation or
proceeding in which the Executive is not a party and does not have an interest,
when requested to do so.
6.2 Nonsolicitation of Employees. While employed by the Company and
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for a period of three years thereafter, the Executive shall not directly or
indirectly, for himself or for any other person, firm, corporation, partnership,
association or other entity, attempt to employ or enter into any contractual
arrangement with any employee or former employee of the Company, unless such
employee or former employee has not been employed by the Company for a period in
excess of six months.
6.3 Non-Competition. While employed by the Company and for a period
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of three years thereafter, the Executive shall not, directly or indirectly,
whether as principal, agent, shareholder (except as set forth below) or in any
other capacity, whether or not compensation is received, engage or participate
in any activity for, be employed by, assist or have an equity interest in (other
than as a passive investor of no more than five percent with no involvement in
the management or conduct of the affairs of business of such entity) any
business or other entity which is or plans to enter into the securities
brokerage business in the State of Florida or to engage in the securities
brokerage business with customers using the Internet. The Executive acknowledges
that the provisions of this Section 6.3 are reasonably necessary for the
purposes of protecting the Company's and its subsidiaries' legitimate business
interests and goodwill. It is accordingly the intention of the parties that this
Section 6.3 be enforceable to the fullest extent permissible under applicable
law. The Executive agrees, however, that in the event any restriction or
limitation of this Section 6.3, or any portion thereof, shall be declared or
held to be invalid or unenforceable by a court of competent jurisdiction, then
such restriction or limitation shall be deemed amended to substitute or modify
it, as either or both may be necessary, to render it valid and enforceable.
6.4 Equitable Relief. It is recognized and hereby acknowledged by
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the parties hereto that a breach by the Executive of any of the covenants
contained in this Article 6 will cause irreparable injury to the Company's and
its subsidiaries' legitimate business interests and goodwill and that such
injury would not be adequately compensated by monetary damages. Accordingly, the
Executive recognizes and hereby acknowledges that the Company and any of its
subsidiaries shall be entitled to specific performance of any of the provisions
of this Article 6 and an injunction from any court of competent jurisdiction
enjoining and restraining any violation of any or all of the covenants contained
in this Article 6 by the Executive or any of his affiliates, associates,
partners or agents, either directly or indirectly, and that such right to
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injunction and specific performance shall be cumulative and in addition to
whatever other remedies the Company or its subsidiaries may possess.
6.5 Books and Records. All books, records, and accounts relating in
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any manner to the customers or clients of the Company, whether prepared by the
Executive or otherwise coming into the Executive's possession, shall be the
exclusive property of the Company and shall be returned immediately to the
Company on termination of the Executive's employment hereunder or on the
Company's request at any time.
7. Governing Law; Venue. This Agreement shall be governed by and
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construed in accordance with the laws of the State of Florida without
application of any conflicts of laws principles, and any proceeding contemplated
by Section 6.4 or to enforce any arbitration award contemplated by Section 12
shall be heard in the state or federal courts located in Seminole County,
Florida. The parties hereto hereby consent to personal jurisdiction in such
venue and waive any claim or argument that such venue is inconvenient or
improper.
8. Notices: Any notice required or permitted to be given under this
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Agreement shall be in writing and shall be deemed to have been given when
delivered by hand or three days after being deposited in the United States mail,
by registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Company: Empire Financial Holding Company
0000 Xxxx Xxxxx Xxxx 000
Xxxxxxxx, Xxxxxxx 00000
Attention: Board of Directors
With a copy to:
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Xx. Xxxxxxx X. Xxxxxxx
Xxxxxxxxx Traurig, P.A.
0000 Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
If to the Executive: Xxxxxx X. Xxxxxxxxx Xx.
000 X. Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxx, XX 00000
or to such other addresses as either party hereto may from time to time give
notice of to the other in the aforesaid manner.
9. Successors.
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(a) This Agreement is personal to the Executive and without the prior
written consent of the Company shall not be assignable by the Executive other
than the transfers of benefits hereunder by will or the laws of descent and
distribution.
(b) This Agreement shall inure to the benefit of, be enforceable by
and be binding upon the Company's successors and assigns.
(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place.
10. Severability. The invalidity of any one or more of the words,
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phrases, sentences, clauses or sections contained in this Agreement shall not
affect the enforceability of the remaining portions of this Agreement or any
part thereof, all of which are inserted conditionally on their being valid in
law, and, in the event that any one or more of the words, phrases, sentences,
clauses or sections contained in this Agreement shall be declared invalid, this
Agreement shall be construed as if such invalid word or words, phrase or
phrases, sentence or sentences, clause or clauses, or section or sections had
not been inserted. If such invalidity is caused by length of time or size of
area, or both, the otherwise invalid provision will be considered to be reduced
to a period or area, which would cure such invalidity.
11. Waivers. The waiver by either party hereto of a breach or violation
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of any term or provision of this Agreement shall not operate nor be construed as
a waiver of any subsequent breach or violation.
12. Arbitration. Except as set forth in Section 6.4, any controversy
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between the parties regarding this Agreement and any claims arising out of this
Agreement or its breach shall be required to be submitted to binding
arbitration. Either party shall have the right to commence arbitration
proceedings. The arbitration proceedings shall be conducted, by a panel of
three arbitrators, pursuant to the Commercial Arbitration Rules of the National
Association of Securities Dealers (NASD). The arbitration shall be conducted in
Seminole County, Florida and the arbitrator shall have the right to award actual
damages and attorney fees and costs, but shall not have the right to award
punitive, special, exemplary or consequential damages against any party. The
parties shall hold any award resulting from such proceeding or settlement in
connection therewith in strict confidence, unless the disclosure of such award
or settlement is required by law.
13. Damages. Nothing contained herein shall be construed to prevent the
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Company or the Executive from seeking and recovering from the other damages
sustained by either or both of them as a result of its or his breach of any term
or provision of this Agreement.
14. No Third Party Beneficiary. Nothing expressed or implied in this
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Agreement is intended, or shall be construed, to confer upon or give any person
(other than the parties hereto
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and, in the case of Executive, his heirs, personal representative(s) and/or
legal representative) any rights or remedies under or by reason of this
Agreement.
15. Conflicts With Other Agreements. The Executive represents to the
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Company that the Executive's execution and performance of this Agreement does
not violate the provisions of any employment, non-competition or other agreement
to which the Executive is a party or by which the Executive is bound.
16. Indemnification. The Company agrees to promptly execute and deliver
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to the Executive an Indemnification Agreement in substantially the same form as
utilized for the Chairman of the Board, it being agreed that the Company will
use its best efforts to ensure that such agreement will provide for mandatory
indemnification and advancement of expenses to the fullest extent permitted by
law.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
COMPANY:
EMPIRE FINANCIAL HOLDING COMPANY
/s/ Xxxxxxx X. Xxxxx
By:-------------------------------
Xxxxxxx X. Xxxxx
Witnessed by: Co-Chairman of the Board
/s/ Xxxxxx [illegible]
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/s/ Xxxxx X. Xxxxx
By:-------------------------------
Xxxxx X. Xxxxx
Co-Chairman of the Board
EXECUTIVE:
/s/ Xxxxxx X. Xxxxxxxxx Xx.
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Xxxxxx X. Xxxxxxxxx Xx.
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