EMPLOYMENT AGREEMENT
This
employment agreement (this
“Agreement”), dated as of September 17, 2007 (the “Effective Date”), is made by
and between Flexpetz Holdings, Inc., a Delaware corporation (the “Company”) and
Xxxxxxx Xxxxxxxxx (the “Executive”).
Whereas,
the Executive is to be
employed as the Chief Executive Officer and Chairman of the Board of Directors
of the Company; and
Whereas,
the Company and the Executive
desire to enter into this Agreement as to the terms of the Executive’s
employment by the Company;
Now,
therefore, in consideration of the
foregoing, of the mutual promises contained herein and of other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto intending to be legally bound, hereby agree
as
follows:
1. POSITION/DUTIES.
(a) During
the Employment Term (as defined in Section 2 below), the Executive shall serve
as the Chief Executive Officer and Chairman of the Board of Directors of the
Company. In this capacity the Executive shall have such duties, authorities
and
responsibilities commensurate with the duties, authorities and responsibilities
of persons in similar capacities in similarly sized company and such other
reasonable duties and responsibilities as the Board of Directors of the Company
(the “Board”) shall designate. The Executive shall report directly to
the President of the Company.
(b) During
the Employment Term, the Executive shall use her best efforts to perform her
duties under this Agreement and shall devote substantially all of her business
time, energy and skill in the performance of her duties with the Company,
provided the foregoing will not prevent the Executive from (1) participating
in
charitable, civic, educational, professional or community affairs or serving
on
the board of directors or advisory committees of non-profit entities, and (2)
managing her own and her family’s personal investments, in each case, provided
that such activities in the aggregate do not materially interfere with her
duties hereunder. [The Executive may serve on the board of directors or advisory
committees of for-profit entities with the prior written consent of the
Board.]
2. EMPLOYMENT
TERM. Except for earlier termination as provided in Section
7, the Executive’s employment under this Agreement shall be for a five year term
commencing on the Effective Date and ending on September 17, 2007 (the “Initial
Term”). Subject to Section 7, the Initial Term shall be automatically extended
for additional terms of successive three year periods (the “Additional Term”)
unless the Company or the Executive gives written notice to the other of the
termination of the Executive’s employment hereunder at least 180 days prior to
the expiration of the Initial Term or Additional Term. The Initial Term and
any
Additional Term shall be referred to herein as the “Employment
Term.”
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3. BASE
SALARY. The Company agrees to pay the Executive an annual
salary of $120,000. The salary shall be paid in bi-weekly
installments.
4. OPTIONS. Executive
is granted the right to purchase 1,000,000 shares of the Company’s common stock
every year for five years from the date of this agreement at an exercise price
of $5.00. Options shall be fully vested upon execution of this
Agreement.
These
rights shall be considered the property of the Executive and shall no longer
bear any encumbrances or restrictions other than those relating to applicable
state and federal law. Nothing in this section shall effect or
prohibit anything else in this agreement, including but not limited to Section
7.
5. EMPLOYEE
BENEFITS.
(a) Benefit
Plans. The Executive shall be eligible to participate in any
employee benefit plan of the Company, including, but not limited to, equity,
pension, thrift, profit sharing, medical coverage, education, or other
retirement or welfare benefits that the Company has adopted or may adopt,
maintain or contribute to for the benefit of its senior executives at a level
commensurate with her positions, subject to satisfying the applicable
eligibility requirements. Company shall pay the entire cost of these
benefits.
(b) Vacation. The
Executive shall be entitled to an annual paid vacation in accordance with the
Company’ policy applicable to senior executives, but in no event less than four
weeks per calendar year (as prorated for partial years), which vacation may
be
taken at such times as the Executive elects with due regard to the needs of
the
Company.
(c) Housing
Benefit. The Executive shall be entitled to a housing
stipend in the amount of $8,000 per month for rent or mortgage payments and
associated expenses.
(d) Automobile
Benefit. The Companies shall provide Executive with the automobile of
her choice not to exceed $1,000 per month for the lease or finance payments.
Company shall also provide such expenses associated with the automobile
including but not limited to insurance, gas, repairs and
maintenance.
(e) Business
and Entertainment Expenses. Upon presentation of appropriate
documentation, the Executive shall be reimbursed in accordance with the Company’
expense reimbursement policy for all reasonable and necessary business and
entertainment expenses incurred in connection with the performance of her duties
hereunder.
6. TERMINATION. The
Executive’s employment and the Employment Term shall terminate on the first of
the following to occur:
(a) Disability. The
thirtieth day following written notice by the Company to the Executive of
termination due to Disability. For purposes of this Agreement, “Disability”
shall mean the inability of the Executive to perform her material duties
hereunder due to a physical or mental injury, infirmity or incapacity for 180
days (whether or not consecutive) during any 12 month period.
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(b) Death. Automatically
on the date of death of the Executive.
(c) Cause. Immediately
upon written notice by the Company to the Executive of a termination for Cause.
“Cause” shall mean the willful misconduct of the Executive with regard to the
business or affairs of the Company that is materially injurious to the Company.
In all cases the Executive shall have fifteen days after the receipt of written
notice thereof from the Company to cure (if curable) the circumstances giving
rise to the Cause event.
(d) Without
Cause. On the thirtieth day following written notice by the
Company to the Executive of an involuntary termination without Cause, other
than
for death or Disability.
(e) Good
Reason. On the sixtieth day following written notice by the
Executive to the Company of a termination for Good Reason. “Good Reason” shall
mean, without the express written consent of the Executive, the occurrence
of
any of the following events unless such events are cured (if curable) by the
Company within fifteen days following receipt of written notification by the
Executive to the Company that he intends to terminate her employment hereunder
for one of the reasons set forth below:
(i) any
reduction or diminution (except temporarily during any period of incapacity
due
to physical or mental illness) in the Executive’s titles or a material reduction
or diminution in the Executive’s authorities, duties or responsibilities or
reporting requirements with the Company; or
(ii) a
material breach by the Company of any provisions of this Agreement.
(f) Without
Good Reason. On the ninetieth day following written notice by the
Executive to the Company of the Executive’s voluntary termination of employment
without Good Reason (which the Company may, in its sole discretion, make
effective earlier than any notice date).
7. CONSEQUENCES
OF TERMINATION.
(a) Disability. Upon
termination of this Agreement because of the Executive’s Disability, the Company
shall pay or provide the Executive (1) any unpaid Base Salary through the date
of termination and any accrued vacation; (2) any unpaid bonus accrued with
respect to the fiscal year ending on or preceding the date of termination;
(3)
reimbursement for any unreimbursed expenses properly incurred through the date
of termination; and (4) all other payments or benefits to which the Executive
may be entitled under the terms of any applicable compensation arrangement,
plan
or program (collectively, “Accrued Benefits”).
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(b) Death. Upon
the termination of this Agreement because of the Executive’s death, the
Executive’s estate shall be entitled to any Accrued Benefits.
(c) Termination
for Cause or Without Good Reason. Upon the termination of this
Agreement by the Company for Cause, by the Executive without Good Reason, or
by
either party in connection with a failure to renew this Agreement, the Company
shall pay to the Executive any Accrued Benefits.
(d) Termination
without Cause or for Good Reason. Upon the termination of
this Agreement by the Company without Cause or by the Executive with Good Reason
and subject to the Executive’s execution (and non-revocation) of a general
release of claims against the Company and its affiliates in a form reasonably
requested by the Company, the Company shall pay or provide the Executive with
(1) the Accrued Benefits; (2) continued payment to the Executive her rate of
salary for 36 months after termination, payable in accordance with the regular
payroll practices of the Company, but off the payroll; (3) all benefits accorded
to Executive prior to termination for a period of 36 months after
termination. Payments provided under this Section 8(d) shall be in
lieu of any termination or severance payments or benefits for which the
Executive may be eligible under any of the plans, policies or programs of the
Company.
8. No
Assignment. This Agreement is personal to each of the
parties hereto. Except as provided below, no party may assign or
delegate any rights or obligations hereunder without first obtaining the written
consent of the other party hereto. The Company may assign this Agreement to
any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business or assets of the
Company.
9. Notices.
For the purpose of this Agreement, notices and all other communications provided
for in this Agreement shall be in writing and shall be deemed to have been
duly
given (1) on the date of delivery if delivered by hand, (2) on the date of
transmission, if delivered by confirmed facsimile, (3) on the first business
day
following the date of deposit if delivered by guaranteed overnight delivery
service, or (4) on the fourth business day following the date delivered or
mailed by United States registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:
If
to the Executive:
At
the address (or to the facsimile
number) shown on the records of the Company
With
a Copy to:
If
to the
Company:
Flexpetz
Holdings, Inc.
0000
X Xxxx Xxxxxx
Xxxxx
0000
Xxxxxxxxxx,
Xxxxxxxx 00000
Attention:
President
Facsimile:
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With a copy to:
Xxxxxx
&
Xxxxxx,
LLP
000
Xxxxx 0 Xxxxx
Xxxxx
000
Xxxxxxxxx,
XX 00000
Attention:
Xxxxx Xxxxxx
Facsimile:
(000) 000-0000
or
to
such other address as either party may have furnished to the other in writing
in
accordance herewith, except that notices of change of address shall be effective
only upon receipt.
10. PROTECTION
OF THE COMPANY’ BUSINESS.
(a) Confidentiality. The
Executive acknowledges that in her employment hereunder she will occupy a
position of trust and confidence. The Executive shall not, except as in good
faith deemed necessary by the Executive to perform her duties hereunder or
as
required by applicable law or legal process, without limitation in time or
until
such information shall have become public or known in the Company’ industry
other than by the Executive’s unauthorized disclosure, disclose to others or
use, whether directly or indirectly, any Confidential Information regarding
the
Company. “Confidential Information” shall mean information about the
Company, its subsidiaries and affiliates, and their respective clients and
customers that is not disclosed by the Company and that was learned by the
Executive in the course of her employment by the Company, including any
proprietary knowledge, trade secrets, data, formulae, information and client
and
customer lists and all papers, resumes, and records (including computer records)
of the documents containing such Confidential Information.
(b) Non-Competition. During
the period that the Executive is employed by the Company hereunder and for
the
one year period thereafter (the “Restricted Period”), the Executive shall not,
directly or indirectly, without the prior written consent of the Company,
provide employment (including self-employment), directorship, consultative
or
other services to any business, individual, partner, firm, corporation, or
other
entity that competes with the then businesses of the Company or its affiliates.
Nothing herein shall prevent the Executive from having a passive ownership
interest of not more than 2% of the outstanding securities of any entity whose
securities are traded on a national securities exchange.
(c) Non-Solicitation
of Employees. The Executive recognizes that he possesses and
will possess confidential information about other employees of the Company
and
its affiliates relating to their education, experience, skills, abilities,
compensation and benefits, and inter-personal relationships with customers
of
the Company and its affiliates. The Executive recognizes that the information
he
possesses and will possess about these other employees is not generally known,
is of substantial value to the Company and its affiliates in developing its
business and in securing and retaining customers, and has been and will be
acquired by him because of her business position with the Company. The Executive
agrees that, during the Restricted Period, he will not, directly or indirectly,
solicit or recruit any employee of the Company or any of its affiliates for
the
purpose of being employed by him or any other entity.
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(d) Non-Solicitation
of Customers. The Executive agrees that, during the
Restricted Period, he will not, directly or indirectly, interfere with, disrupt
or attempt to interfere or disrupt any relationship, contractual or otherwise,
between the Company or its affiliates and any of their respective customers,
suppliers, clients or vendors.
(e) Non-Disparagement. Executive
shall not, and shall not induce others to, Disparage the Company or its
affiliates or their past and present officers, directors, employees or products.
“Disparage” shall mean making comments or statements to the press, the Company’
or its affiliates’ employees or any individual or entity with whom the Company
or its affiliates has a business relationship which would adversely affect
in
any manner (1) the conduct of the business of the Company or its affiliates
(including any products or business plans or prospects), or (2) the business
reputation of the Company or its affiliates, or any of their products, or their
past or present officers, directors or employees.
(f) Cooperation. Subject
to the Executive’s other reasonable business commitments, following the
Employment Term, the Executive shall be available to cooperate with the Company
and its outside counsel and provide information with regard to any past,
present, or future legal matters which relate to or arise out of the business
the Executive conducted on behalf of the Company and its affiliates, and, upon
presentation of appropriate documentation, the Company shall compensate the
Executive for any out-of-pocket expenses reasonably incurred by the Executive
in
connection therewith.
(g) Equitable
Relief and Other Remedies. The Executive acknowledges and
agrees that the Company’ remedies at law for a breach or threatened breach of
any of the provisions of this Section would be inadequate and, in recognition
of
this fact, the Executive agrees that, in the event of such a breach or
threatened breach, in addition to any remedies at law, the Company, without
posting any bond, shall be entitled to obtain equitable relief in the form
of
specific performance, a temporary restraining order, a temporary or permanent
injunction or any other equitable remedy which may then be
available.
(h) Reformation. If
it is determined by a court of competent jurisdiction in any state that any
restriction in this Section is excessive in duration or scope or is unreasonable
or unenforceable under the laws of that state, it is the intention of the
parties that such restriction may be modified or amended by the court to render
it enforceable to the maximum extent permitted by the law of that
state.
(i) Survival
of Provisions. The obligations contained in this Section
shall survive in accordance with their terms the termination or expiration
of
the Executive’s employment with the Company and shall be fully enforceable
thereafter.
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11. Arbitration. Any
dispute or controversy arising under or in connection with this Agreement,
other
than injunctive relief under Section 11 hereof, shall be settled exclusively
by
arbitration, conducted before a single arbitrator in Ft. Lauderdale, Florida
in
accordance with the National Rules for the Resolution of Employment Disputes
of
the American Arbitration Association then in effect. The decision of the
arbitrator will be final and binding upon the parties hereto. Judgment may
be
entered on the arbitrator’s award in any court of competent jurisdiction. Each
party shall bear its own legal fees and costs and equally divide the forum
fees
and cost of the arbitrator.
12. SECTION
HEADINGS AND INTERPRETATION. The section headings used in this
Agreement are included solely for convenience and shall not affect, or be used
in connection with, the interpretation of this Agreement. Expression of
inclusion used in this agreement are to be understood as being without
limitation.
13. SEVERABILITY. The
provisions of this Agreement shall be deemed severable and the invalidity of
unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof.
14. COUNTERPARTS. This
Agreement may be executed in several counterparts, each of which shall be deemed
to be an original but all of which together will constitute one and the same
Agreement.
15. MISCELLANEOUS. No
provision of this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing and signed by the
Executive and such officer or director as may be designated by the Board. No
waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this Agreement
to
be performed by such other party shall be deemed a waiver or similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time. No agreements or representations, oral or otherwise, express or implied,
with respect to the subject matter hereof have been made by either party which
are not expressly set forth in this Agreement. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws
of
the State of Florida without regard to its conflicts of law
principles.
16. MITIGATION. In
no event shall the Executive be obligated to seek other employment or take
any
other action by way of mitigation of the amounts payable to the Executive under
any of the provisions of this Agreement, nor shall the amount of any payment
thereunder be reduced by any compensation earned by the Executive as a result
of
employment by another employer not in violation of this Agreement.
17. WITHHOLDING. The
Company may withhold from any and all amounts payable under this Agreement
such
federal, state, local and foreign taxes as may be required to be withheld
pursuant to any applicable law or regulation.
18. AUTHORITY
AND NON-CONTRAVENTION. The Executive represents and warrants
to the Company that he has the legal right to enter into this Agreement and
to
perform all of the obligations on his part to be performed hereunder in
accordance with its terms and that he is not a party to any agreement or
understanding, written or oral, which could prevent him form entering into
this
Agreement or performing all of his obligations hereunder.
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IN
WITNESS WHEREOF,
the parties hereto have executed this Agreement as of the date first written
above.
Flexpetz
Holdings, Inc.
By: Xxxxx
Xxxxxx
Title:
President
/s/Xxxxx
Xxxxxx
XXXXX
XXXXXX
/s/Xxxxxxx
Xxxxxxxxx
XXXXXXX
XXXXXXXXX
