RESTATED EMPLOYMENT AGREEMENT
Exhibit
10.5
RESTATED
AGREEMENT made as of the 15th day of
January, 2007 and between Xxx Xxxxxxx, an individual residing in Orlando, FL
(hereinafter referred to as "Executive") and THE AMACORE GROUP, INC.,
a Delaware corporation with offices in Tampa, Florida (hereinafter called the
"Company").
W
I T N E S S E T H
WHEREAS, the Company and Executive
wish to modify Executive’s Employment Agreement with the Company;
and
WHEREAS, the Board of Directors, at
its December 6, 2007 meeting, has approved the modifications desired;
and
WHEREAS, the parties wish to restate
the Employment Agreement so that same incorporates the modifications;
and
NOW, THEREFORE, in consideration of
the mutual covenants and agreements herein contained, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. Employment
Term, Duties and Acceptance
(a) Company hereby retains Executive
as Company's Senior Vice President of Sales and Marketing for a period of three
(3) years, commencing on the date hereof (the "Employment Period"), subject to
earlier termination as hereinafter provided, to render his services to Company
upon the terms and conditions herein contained, in such executive capacity. In
such executive capacity, Executive shall report and be responsible to the
Company's Chief Executive Officer and the Company’s Board of
Directors.
(b) Executive hereby accepts the
foregoing employment and agrees to render his services to Company on a full-time
basis in such a manner as to reflect his best efforts to the end that the
Company's operations are properly managed. In furtherance of Executive
performing the duties assigned to him under this Agreement, the Company agrees
to provide Executive with a support staff reasonably required by Executive so as
to enable him to carry out such duties subject to the Company having sufficient
capital to do so.
2. Compensation
(a) During the first year of the term
of this Agreement, Executive shall receive compensation of $30,000 per
month. This compensation may, at Executive's election, be accrued, in
whole or in part, if the Company has insufficient funds to pay
same. Executive’s compensation shall be payable in accordance with
the general payroll practices of the Company as are from time to time, in
effect, less such deductions or amounts as shall be required to be withheld by
applicable law or regulation. On each yearly anniversary date of the execution
of this Agreement (hereinafter sometimes called the "Anniversary
Date," in each yearly instance) the Board of Directors shall review the services
provided by Executive to determine the amount that Executive's salary shall be
increased for the forthcoming yearly period. Such increase shall be no less than
an amount equal to the percentage increase in the Consumer Price Index or such
other similar index reflective of the cost of living increase in the Orlando,
Florida metropolitan area from the beginning of yearly period to the end of the
yearly period with respect to the Consumer Price Index applicable to the said
metropolitan area, times Executive's base compensation in effect during the said
yearly period. The sum resulting by way of this increase to the Executive's base
compensation shall, for the then immediately succeeding period be considered the
Executive's base compensation. The Board of Directors shall also determine on an
annual (fiscal or calendar year, as the case may be) basis, the amount, if any,
of bonus or incentives to be paid to Executive. Provided, however, that
Executive shall receive a special bonus ("special bonus") in an amount equal to
one (1) percent of the Company's pre-tax profits from the preceding year (as
determined by the application of generally accepted accounting principles), up
to the first one-million dollars of such profits; plus an additional sum equal
to two, and (2) percent of the Company's pre-tax profits for all sums over
one-million dollars The special bonus shall be paid within thirty
(30) days following determination thereof, which determination shall be made as
soon as practicable.
(b) Executive shall receive a sign-on
bonus of one-million five-hundred thousand (1,500,000) shares of the Company’s
Class A common stock (the “shares”) which shares shall be issued and vested in
the Executive on the 91st day
following the execution of this Agreement. Provided, however, that
the Company may extend such issuance and vesting in the event Executive has not
generated for the Company the revenues identified in paragraphs “4.(c)” and
“5.(b)” below. In the event the Company files a form of Registration
Statement, as that term is generally understood, registering shares
of its Class A common stock at any time following the issuance of the shares to
Executive but prior to a date being one year thereafter, the Company shall, at
Executive’s request, include Executive’s shares in such Registration Statement
provided the Executive agrees to sell such shares only in accordance with the
then existing Rule 144 selling formula for shares held more than one year but
less than two years. Unless otherwise directed by the Company,
Executive agrees to sell such shares only through Mr. Xxx Xxxxxxx, a registered
broker, or through such other broker or brokerage company designated by the
Company. This provision shall survive the termination, for any
reason, or expiration of this Agreement.
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(c) Executive shall be entitled to
reasonable paid vacation time, sick leave and time to attend professional
meetings comparable to that offered the executives in comparable
positions.
(d) Executive shall be entitled
(subject to the terms and conditions of particular plans and programs) to all
fringe benefits afforded to other senior executives of the Company, including,
but not by way of limitation, bonuses and the right to participate in any
pension, stock option, retirement, major medical, group health, disability,
accident and life insurance, relocation reimbursement, and other employee
benefit programs made generally available, from time to time, by the
Company.
(e) Company shall pay or reimburse
Executive for reasonable expenses incurred in the performance of his services
under this Agreement during the Employment Period, upon presentation of expense
statements, vouchers or such other supporting documentation as may reasonably be
required.
(f) Anything contained
herein to the contrary notwithstanding, it is specifically understood that
Executive’s salary shall, until such time as the Company builds up sufficient
capital with which to pay same, be paid directly from revenues generated by
Executive and/or Xxx Xxxxxx. In this connection, it is further
specifically understood that a material inducement for the Company to enter into
this Agreement is the accuracies of the representations contained in paragraph
“5.(a) through 5.(d)” hereof. With that in mind, the parties
specifically acknowledge their understanding that if revenues produced by
Executive and/or Xxx Xxxxxx are not sufficient to pay Executive’s salary, same
shall be accrued until such time as there are sufficient funds available to the
Company from said revenues with which to pay said salaries (both accrued and
then current). Provided that with respect to the Company paying
salaries that have been accrued, the Company shall be permitted to retain 10% of
the gross revenues generated by Executive and/or Xxx Xxxxxx for purposes of
offsetting Company expenses, including travel and entertainment expenses
advanced by the Company on behalf of Executive and/or Xxx Xxxxxx, or expenses
reimbursed to Executive and/or Xxx Xxxxxx incurred in the performance of their
duties hereof.
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3. Disability
(a) Upon the disability, as defined
in subparagraph 3(b) hereof, of Executive during the Employment Period, Company
may, in its sole discretion, terminate Executive's employment; provided that if
the Company elects to so terminate Executive's employment, Executive shall be
entitled to receive, accrued but unpaid salary, expense reimbursement and
bonuses, the proceeds of any disability insurance policy plus an amount from the
Company monthly which, when added to the amount received by the Executive from
any disability policy in effect for the Executive at the time of his disability
will equal the Executive's salary for a twelve-month period following the date
of termination, as if the termination had not occurred. Such termination shall
have no effect on the Company's obligation to pay the special bonus referred to
hereinbefore. Provided, however, in the event Executive partially perform and
discharge the duties previously performed by him for Company, nothing herein
shall prevent the Executive from continuing his duties in a part-time capacity,
at a level of Compensation to be determined at that time.
(b) For purposes of this Agreement
the term "disability" shall mean Executive's inability to continue to materially
and substantially perform and discharge the duties previously required of him on
behalf of the Company for an aggregate period exceeding three (3) consecutive
months within any twelve (12) month consecutive period.
(c) In the event of a dispute between
the parties as to what constitutes a disability, such dispute shall be finally
determined by a person mutually agreed upon by Executive and Company. If a
mutually acceptable person cannot be selected, such designations shall be made
by Executive and Company each choosing a person, which person shall then
mutually select a third person (collectively called the "panel"). The panel's
determination shall be made by majority vote and such determination shall be
deemed binding and conclusive. The parties agree to fully cooperate with
whatever procedures and examinations may be required in order to allow the panel
to make its determination.
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4. Termination
of Employment
(a) (i) In the event Fifty (50)
Percent or more of the equity securities or all or substantially all of the
assets of the Company are acquired by any single person or identifiable group,
as defined by the applicable rules and regulations under the Security and
Exchange Act of 1934, as amended and in the further event that Executive's
employment is terminated, by either the Company or the Executive, within twelve
(12) months following such event, except if such termination is by reason of
"cause" (as that term is defined at paragraph 4(c) hereafter, or (ii) in the
event Executive terminates his employment by reason of the uncured breach of
this Agreement by Company ("cause"), then, on the termination date, Company
shall pay (or issue, as the case may be) to Executive a lump sum amount equal to
the aggregate of (i) accrued but unpaid salary, if any; (ii) accrued but unpaid
expenses, if any; (iii) accrued but unpaid bonuses, if any; (iv) unissued
warrants, if any; and (v) the total compensation which would have been paid to
Executive through three full years of compensation from the date of termination.
If the Executive intends to terminate his employment with the company for
"cause", the "cause" shall be specified in a written notice sent by Executive to
the Company, and the Company shall be afforded thirty (30) days or longer, if
reasonably required, to cure such breach, if such breach is capable of
being.
(b) In the event Fifty (50) Percent
or more of the equity securities or all or substantially all of the assets of
the Company are acquired by any single person or identifiable group, as defined
by the applicable rules and regulations under the Security and Exchange Act of
1934, as amended, all unvested securities and benefits attributable to the
Executive will immediately vest. In addition, with respect to any
securities of the Company or rights to securities in the Company vesting in
Executive as a result of this Article 4, the Company shall advise Executive by
written notice at least four weeks prior to the Company’s filing of one or more
registration statements under the Securities Act of 1933, as amended (or any
successor form covering securities) to be offered and sold to the public
generally, and shall, upon request of Executive, include in any such
registration statement such securities of Executive as he may
request. The foregoing shall include common stock of the Company to
which Executive may be entitled by way of his exercise of any stock options
and/or the exercise of warrants.
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(c) In the event of gross
misconduct in office by Executive in the performance of his duties hereunder
(which shall hereinafter be referred to as "Termination for Cause"), Company may
terminate this Agreement by giving two (2) weeks prior written notice to
Executive identifying the cause of termination and specifying the effective date
of such termination. If Executive is subjected to Termination for Cause, then
such "cause" shall be specified in such notice and Executive shall be afforded
thirty (30) days or longer, if reasonably required, to cure such breach, if such
breach is capable of being cured. Except if termination is pursuant to the
provisions of paragraph “4.(c)” and provided the Company has sufficient cash
reserves, on the termination date, Company shall pay to Executive the aggregate
of (i) accrued but unpaid expenses, if any; and (ii) the net salary compensation
which would have been paid to Executive through the date of termination.
Furthermore, in that event any warrants to be issued pursuant to this Agreement,
and any options granted pursuant to plans then applicable to Executive which
have not then vested shall be forfeited as of the termination
date. In the event termination results from Executive and/or Xxx
Xxxxxx not generating gross revenues for the Company in the aggregate amount of
not less than $50,000 during the first three months of the term of this
Agreement, Executive and/or Xxx Xxxxxx, collectively, shall be entitled to
receive accrued but unpaid salaries but only to the extent of 90% of the gross
revenues generated during the period prior to the effective date of
termination. Any monies remaining to be paid to Executive and/or Xxx
Xxxxxx thereafter shall be paid out of future revenues which may be received by
the Company subsequent to the termination date but, nonetheless, generated by
Executive and/or Xxx Xxxxxx during their term of employment with the
Company.
(d) Failure of the Executive to
produce the revenues and/or independent rep agreements as contained in
Executive’s representations in paragraph “5.” hereof, or the intentional failure
of said representations to be accurate as of three (3) months from the date of
the execution hereof (collectively, the “causal event”) shall give the Company
the right to terminate and/or extend the initial 90-day period on the basis of
cause (the “extended period”). During the extended period, the
Executive shall be afforded the opportunity of meeting the gross revenue and/or
independent rep agreement representations during which extended term, the
Company’s obligation to issue its common stock to Executive shall similarly be
suspended. In the event the Company elects to extend this Agreement
for the Extended Period by reason of Executive’s failure to produce the total
amount of revenues as contained in paragraph 5 hereof, but the
Executive has nonetheless produced a portion of same, the Company shall issue to
Executive such amount of the shares prorated in proportion to the amount of
revenues produced as compared to the total revenues required to be produced
pursuant to paragraph 5.
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(e) In the event Executive
resigns or is terminated as an employee of Company and any of its subsidiaries,
Executive hereby agrees that his position(s) as officer and director of the
Company shall automatically end as of the date of his resignation or termination
of employment.
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5.
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EXECUTIVE
REPRESENTATIONS
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Executive represents and warrants to
the Company that:
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(a)
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He
was formally employed immediately prior to the execution of this Agreement
by Protective Marketing Enterprises, Inc. (PME) as its Vice President of
Sales and Marketing at a gross annual salary of
$12,000;
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(b)
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He,
either alone and/or in conjunction with Xxx Xxxxxx, is in a position and
will generate gross revenues for the Company in an amount not less than
$10,000,000, annually, the source of which revenues being either current
accounts of PME or potential accounts that he had worked on for PME which
he is now in a position to “close” for the benefit of the
Company. Further, that he will generate, either alone or in
conjunction with Xxx Xxxxxx, for the Company gross revenues of not less
than $50,000 during the first 90 days of the term of this
Agreement;
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(c)
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He,
either alone or in conjunction with Xxx Xxxxxx, shall arrange for the
signing by the Company of independent sales representative agreements with
a significant number of the former approximately 2,000 independent sales
representatives of PME, a significant number being not less than 200,
which agreements will provide, in part, for the selling by such sales
representative of the Company’s products. Further, no less than
200 independent sales representatives will be committed via contract to
the Company within the first 90 days of the term of this
Agreement.
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(d)
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He
has full right, power and authority to enter into this Agreement and
perform the services and fulfill the representations contained herein free
of any further obligations to PME and/or Protective Life Corporation
(collectively, Protective).
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6. CONFIDENTIALITY
(a) Executive agrees to execute
Company's standard form of Confidentiality Agreement as prepared by Counsel to
Company.
(b) Executive's covenants contained
herein shall survive the termination or expiration of this
Agreement.
7. TERMINATION
OF AGREEMENT
This Agreement shall, in addition to
other provisions affecting termination, terminate on the occurrence of any of
the following events:
(a) Cessation of the Company's
business;
(b) Dissolution of the Company;
or
(c) The voluntary agreement of the
partieshereto.
8. NOTICES
All notices, requests, demands,
deliveries and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed, postage prepaid, registered or
certified mail, return receipt requested to the parties at the addresses (or at
such other address for a party as shall be specified by like notice) specified
on the first page of this Agreement.
9. WAIVER
The failure of either party at any
time or times to require performances of any provision hereof shall in no manner
effect the right at a later time to enforce the same. To be effective, any
waiver must be contained in a written instrument signed by the party waiving
compliance by the other party of the term or covenant as specified. The waiver
by either party of the breach of any term or covenant contained herein, whether
by conduct or otherwise, in any one or more instances, shall not be deemed to
be, or construed as, a further or continuing waiver of any such breach, or a
waiver of the breach of any other term or covenant contained in this
Agreement.
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10. GOVERNING
LAW
This Agreement shall be governed by
the laws of the Sate of Florida, which shall have exclusive jurisdiction over
any claims or disputes arising from the subject matter contained herein without
regard to any conflict of laws provision.
11. COMPLETE
AGREEMENT
This Agreement constitutes the
complete and exclusive agreement between the parties hereto which supersedes all
proposals, oral and written, and all other communications between the parties
relating to the subject matter contained herein.
12. SEVERABILITY
If any of the provisions of this
Agreement are held to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
13. EXECUTORS,
ADMINISTRATORS, SUCCESSORS AND ASSIGNS
This Agreement may not be assigned,
transferred or otherwise inure to the benefit of any third person, firm or
corporation by operation of law or otherwise, without the written consent by the
other party hereto, except as herein specifically provided to the
contrary.
14. MODIFICATION
This Agreement may only be amended,
varied or modified by a written document executed by the parties
hereto.
15. FURTHER
INSTRUMENTS
The parties hereto agree to execute
and deliver, or cause to be executed and delivered, such further instruments or
documents and take such other action as may be required to effectively carry out
the transactions contemplated herein.
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16. INDEMNIFICATION
Except for a claim, demand, suit,
action or judgment asserted by Protective against Executive and/or the Company,
in addition to any liability insurance to be provided the Executive, the Company
will indemnify Executive from any and all claims, demands, suits, actions or
judgments which hereafter may by asserted, instituted or recorded by any person,
firm or corporation for the duration of this Agreement and for a six (6) year
period following the termination of said Agreement as defined in paragraph 4.
The foregoing indemnity shall be enforceable only with respect to claims made
against Executive with respect to all expenses, losses, charges and attorney's
fees sustained or incurred by the Executive in defending any suit, action or
other proceeding brought against the Executive, directly or indirectly, arising
out of Executive's employment by Company.
17. BOARD
APPROVAL
This Agreement is subject to and
conditioned upon the approval of the Company’s Board of Directors.
IN WITNESS WHEREOF, the parties
hereto have executed this Agreement this 15th day of January, 2007.
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By:
/s/ Xxxxx X.
Xxxxxx
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By:
/s/ Xxx
Xxxxxxx
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Xxxxx
X. Xxxxxx, CEO
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Xxx
Xxxxxxx
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