EMPLOYMENT AGREEMENT
This Agreement is effective as of the 1st day of February, 2000
("Agreement") and is made by and between xXxxxxxxxxx.xxx, Inc., a Florida
Corporation ("Company"), and Xxxx Xxxxxx, a resident of the State of Florida
("Executive").
WITNESSETH:
WHEREAS, the Company desires to employ Executive in accordance with the
terms and conditions contained in this Agreement and to ensure the availability
of the Executive's services to the Company.
WHEREAS, the Executive desires to accept such employment and render his
services in accordance with the terms and conditions contained in this
Agreement.
WHEREAS, the Executive and the Company desires to enter into this
Agreement which will fully recognize the contributions of the Executive and
assure harmonious management of the Company's affairs.
NOW, THEREFORE, in consideration of the promises and the mutual
covenants set forth in this Agreement, and intending to be legally bound, the
Company and the Executive agree as follows:
1. Term of Employment
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a. Offer/Acceptance/Effective Date. The Company hereby offers
employment to the Executive and the Executive hereby
accepts employment subject to the terms and conditions set
forth in this Agreement.
b. Term. The term of this Agreement shall commence on the
date first indicated above and shall remain in effect
until February 1, 2003, a three- (3) year term. ("Term").
2. Duties.
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a. General Duties. The Executive shall serve as
President/CEO of the Company with duties and
responsibilities that are customary for such
executives including, without limitation, the overall
management/leadership and future vision of the
Company subject to the approval and ratification of
the Board of Directors of the Company.
b. Best Efforts. The Executive covenants to use his
best efforts to perform his duties and discharge
his responsibilities pursuant to this Agreement
in a competent, diligent and faithful manner.
c. Devotion of Time. The Executive shall devote
substantially all of his time, attention and energies
during normal business hours to the Company's affairs
(exclusive of periods of sickness and disability of
such normal holiday and vacation periods as have been
established by the Company).
3. Compensation and Expenses.
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a. Base Salary. For the services of the Executive to be
rendered by him under this Agreement, the Company
will pay the Executive for each of the periods
indicated below an annual base salary (the "Base
Salary") as follows:
(i) From 2/1/00 to 2/1/01, the amount of $135,200.1
(ii) From 2/1/01 to 2/1/02, the amount of $165,000.
(iii) From 2/1/02 to 2/1/03, the amount of $180.000.
1 After three months of consecutive profit the
Executive's Base Salary will be increased to $150,000
The Base Salary shall be prorated over the time
period that Executive performs services under this
Agreement in any year during this Agreement shall
terminate before December 31st thereof.
The Company shall pay the Executive his Base Salary
in equal installments no less than semi-monthly.
b. Base Salary Adjustment. The Base Salary may not be
decreased hereunder during the term of this
Agreement, but may be increased upon review by, and
at the sole discretion of, the Company's Board of
Directors.
c. Bonus. Executive shall be entitled to receive bonus
compensation in an amount as approved by the Company's
Board of Directors based upon the performance criteria
as may be established by the Compensation Committee
from time to time. Such bonuses may be paid in cash or
issued in shares of the Company's common stock on such
terms as recommended by the Compensation Committee and
approved by the Board of Directors. But, at no time may
the bonus be less then 5% of the Company's pre-tax
profit. The Executive may elect to receive the Bonus in
the Company's common stock at 90% of the current market
value.
d. Expenses. In addition to any compensation received
pursuant to Section 3, the Company will reimburse the
Executive for all reasonable, ordinary and necessary
travel, educational, seminar, trade shows,
entertainment and miscellaneous expenses incurred in
connection with the performance of his duties under
this Agreement, provided that the Executive properly
accounts for such expenses to the Company in accordance
with the Company's practices. Such reimbursement shall
include travel, lodging and food costs for Executive's
immediate family to the extent they accompany Executive
on business related travel.
e. Subsidiary and Affiliate Payments. In recognition of
the fact that in the course of the performance of his
duties hereunder, the Executive may provide substantial
benefits to the Company's subsidiaries or affiliated
companies, the Executive and the Company may at any
time and from time to time agree that all or any
portion of the compensation due the Executive hereunder
may be paid directly to the Executive by one or more of
the Company's subsidiaries or affiliated companies.
f. Additional Equity Based Incentive Compensation.
Executive shall be entitled to additional annual
equity-based incentive compensation as set forth in the
Company's Management Incentive Compensation Plan as
established by the Compensation Committee of the Board
of Directors.
4. Benefits.
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a. Vacation. For each calendar year during the Term
during which the Executive is employed, the Executive
shall be entitled to vacation (which shall accrue and
vest, except as may be hereafter provided to the
contrary, on each January 1st thereof) without loss
of compensation or other benefits to which he is
entitled under this Agreement, as follows:
(i) For calendar year 2000, 20 work days;
(ii) For calendar year 2001, 25 work days;
(iii) For calendar year 2002 and thereafter,
25 work days per year.
If the Executive is unable to take all of his
vacation days during a year for which he becomes
vested therein, then the Executive, at his sole
option, may elect to (x) carry over any unused
vacation to the next calendar year to be used solely
in that next year or (y) receive an appropriate pro
rata portion of his Base Salary corresponding to the
year in which vacation days vested.
The Executive shall take his vacation at such times
as the Executive may select and the affairs of the
Company or any of its subsidiaries or affiliates may
permit.
b. Employee Benefit Programs. In addition to the
compensation to which the Executive is entitled
pursuant to the provisions of Section 3 hereof,
during the Term, the Executive will be entitled to
participate in any stock option plan, stock purchase
plan, pension or retirement plan, and insurance or
other employee benefit plan that is maintained at
that time by the Company for its employees, including
programs of life, disability, basic medical and
dental, and supplemental medical and dental
insurance.
c. Automobile Allowance. During the term of this
Agreement, the Company shall pay Executive an
additional $600.00 per month as an automobile
allowance to be applied to any automobile expense
incurred by Executive.
d. Annual Physical. The Executive agrees to have an
annual physical examination performed by a physician
of his choice during each year of this Agreement. The
Company shall reimburse Executive for the costs of
his annual physical examination.
5. Termination.
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a. Termination for Cause. The Company may terminate the Executive's
employment pursuant to this Agreement at any time for cause upon
written notice. Such termination will become effective upon the
giving of such notice. Upon any such termination for cause, the
Executive shall have no right to compensation, bonus or
reimbursement under Section 3 or to participate in any employee
benefit programs or other benefits to which he may be entitled
under Section 4 for any period subsequent to the effective date
of termination. For purposes of this Agreement, the term "cause"
shall mean only:
(i) the Executive's conviction of a felony and all appeals
with respect thereto have been extinguished or
abandoned by the Executive;
(ii) the Executive's conviction of misappropriating assets
or otherwise defrauding the Company or any of its
subsidiaries or affiliates;
(iii)material breach by the Executive of any provision of
this Agreement.
b. Death or Disability. This Agreement and the Company's obligations
hereunder will terminate upon the death or disability of the
Executive. For purposes of this Section 5(b), "disability" shall
mean that for a period of six (6) months in any twelve-month
period, the Executive is incapable of substantially fulfilling
the duties set forth in this Agreement because of physical,
mental or emotional incapacity resulting from injury, sickness or
disease as determined by an independent physician mutually
acceptable to the Company and the Executive. Upon any termination
of this Agreement due to death or disability, the Company will
pay the Executive or his legal representative as the case may be,
his Base Salary (which may include any accrued but unused
vacation) at such time pursuant to Section 3(a) through the date
of such termination of employment (or, if terminated as a result
of a disability, until the date upon which the disability policy
maintained pursuant to Section 4(b)(ii) begins payment of
benefits) plus any other compensation that may be due and unpaid.
In the event of death or disability of the Executive, any
obligations that the Executive may owe the Company for repayment
of loans or other amounts shall be forgiven.
c. Voluntary Termination. Prior to any other termination of this
Agreement, the Executive may, on sixty- (60) day's prior written
notice to the Company given at any time, terminate his employment
with the Company. Upon such termination, the Company shall pay
the Executive his Base Salary at such time pursuant to Section
3(a) through the date of such termination of employment (which
shall include any vested and accrued but unused vacation time).
6. Restrictive Covenants.
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a. Competition with the Company. The Executive covenants and agrees
that, during the Term of this Agreement, the Executive will not,
without the prior written consent of the Company, directly or
indirectly (whether as a sole proprietor, partner, stockholder,
director, officer, employee or in any other capacity as principal
agent), compete with the Company. Notwithstanding this
restriction, Executive shall be entitled to invest in stock of
other competing public companies so long as his ownership is less
than 5% of such company's outstanding shares.
b. Disclosure of Confidential Information. The Executive
acknowledges that during his employment he will gain and have
access to confidential information regarding the Company and its
subsidiaries and affiliates. The Executive acknowledges that such
confidential information as acquired and used by the Company or
any of its subsidiaries or affiliates constitutes a special,
valuable and unique asset in which the Company or any of its
subsidiaries or affiliates, as the case may be, holds a
legitimate business interest. All records, files, materials and
confidential information (the "Confidential Information")
obtained by the Executive in the course of his employment with
the Company shall be deemed confidential and proprietary and
shall remain the exclusive property of the Company or any of its
subsidiaries or affiliates, as the case may be. The Executive
will not, except in connection with and as required by his
performance of his duties under this Agreement, for any reason,
use for his own benefit or the benefit of any person or entity
with which he may be associated, disclose any Confidential
Information to any person, firm, corporation, association or
other entity for any reason or purpose whatsoever without the
prior written consent of the Board of Directors of the Company,
unless such information previously shall have become public
knowledge through no action by or omission of the Executive.
c. Subversion, Disruption or Interference. At no time during the
term of this Agreement shall the Executive, directly or
indirectly, interfere, induce, influence, combine or conspire
with, or attempt to induce, influence, combine or conspire with,
any of the employees of, or consultants to, the Company to
terminate their relationship with or compete with or ally against
the Company or any of its subsidiaries or affiliates in the
business in which the Company or any of its subsidiaries or
affiliates is then engaged in.
d. Enforcement of Restrictions. The parties hereby agree that any
violation by Executive of the covenants contained in this Section
6 will likely cause irreparable damage to the Company or its
subsidiaries and affiliates and may, as a matter of course, be
restrained by process issued out of a court of competent
jurisdiction, in addition to any other remedies provided by law.
7. Change of Control.
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a. For the purpose of this Agreement, a "Change of Control" shall be
deemed to have taken place if any person other than the
combination of First American AMO Group, Thomson Kernaghan Group
or the Liviakis Group, including a "group" as defined in Section
13 (d)(3) of the Securities Exchange Act of 1934, as amended,
becomes the owner or beneficial owner of the Company's
securities, after the date of this Agreement, having more than
50% of the combined voting power of the then outstanding
securities of the Company that may be cast for the election of
directors of the Company (other than as a result of an issuance
of securities specifically approved by Executive and specifically
excluded from the provisions of this Section 8 by subsequent
written agreement of the Executive); provided, however, that a
Change of Control shall not be deemed to have occurred if the
person who becomes the owner of more than 50% of the combined
voting power of the Company is the Executive or any entity (or
entities) controlled by the Executive.
b. The Company and Executive hereby agree that if Executive is in
the employ of the Company on the date on which a Change of
Control occurs (the "Change of Control Date"), the Company will
continue to employ the Executive and the Executive will remain in
the employ of the Company for the period commencing on the Change
of Control Date and ending on the expiration of the Term, to
exercise such authority and perform such executive duties as are
commensurate with the authority being exercised and duties being
performed by the Executive immediately prior to the Change of
Control Date. If after a Change of Control, the Executive is
requested, and, in his sole and absolute discretion, consents to
change his principal business location, the Company will
reimburse the Executive for his relocation expenses, including
without limitation, moving expenses, temporary living and travel
expenses for a time while arranging to move his residence to the
change location, closing cost, if any, associated with the sale
of his existing residence and the purchase of a replacement
residence at the changed location, plus an additional amount
representing a gross-up of any state or federal taxes payable by
Executive as a result of any such reimbursements. If the
Executive shall not consent to change his business location, the
Executive may continue to provide the services required of him
hereunder in Pinellas County, Florida and the Company shall
continue to maintain an office for the Executive at that location
commensurate with the Company's office prior to the Change of
Control Date.
c. During the remaining Term after the Change of Control Date, the
Company will (i) continue to honor the terms of this Agreement,
including Base Salary and other compensation set forth in Section
3 hereof, and (ii) continue employee benefits as set forth in
Section 4 hereof at levels in effect on the Change of Control
Date (but subject to such reductions as may be required to
maintain such plans in compliance with applicable federal law
regulating employee benefits).
d. If during the remaining Term on or after the Change of Control
Date (i) the Executive's employment is terminated by the Company
other than the cause (as defined in Section 5 hereof), or (ii)
there shall have occurred a material reduction in Executive's
compensation or employment related benefits, or a material change
in Executive's status, working conditions or management
responsibilities, or a material change in the business objectives
or policies of the Company and the Executive voluntarily
terminates employment within sixty (60) days of such occurrence,
or the last in a series of occurrences, then the Executive shall
be entitled to receive, subject to the provisions of
subparagraphs (e) and (f) below, a lump-sum payment equal to 100%
of the Executive's current Base Salary in addition to any other
compensation that may be due to and owing to the Executive under
Section 3 hereof.
e. The amounts payable to the Executive under any other compensation
arrangement maintained by the Company which became payable after
payment of the lump-sum provided for in paragraph (d), upon or as
a result of the exercise by Executive of rights which are
contingent on a Change of Control (and would be considered a
"parachute payment" under Internal Revenue Code 280G and
regulations thereunder), shall be reduced to the extent necessary
so that such amounts, when added to such lump-sum, do not exceed
100% of the Executive's Base Salary (as computed in accordance
with provisions of the Internal Revenue Code of 1986, as amended
and any regulations promulgated thereunder) for determining
whether the Executive has received an excess parachute payment.
Any such excess amount shall be deferred and pain in the next tax
year.
f. In the event of a proposed Change in Control, the Company will
allow the Executive to participate in all meetings and
negotiations related thereto.
8. Assignability. The rights and obligations of the Company under
this Agreement shall inure to the benefit of and be binding
upon the successors and assigns of the Company, provided that
such successor or assign shall acquire or all substantially
all of the assets and business of the Company. The Executive's
rights and obligations hereunder may not be assigned or
alienated and any attempt to do so by the Executive will be
void.
9. Severability. If any provision of this Agreement is deemed to
be invalid or unenforceable or is prohibited by the laws of
the state or jurisdiction where it is to be performed, this
Agreement shall be considered divisible as to such provision
and such provision shall be inoperative in such state or
jurisdiction and shall not be part of the consideration moving
from either of the parties to the other. The remaining
provisions of this Agreement shall be valid and binding.
10. Notice. Notices given pursuant to the provisions of this
Agreement shall be sent by certified mail, postage prepaid, or
by overnight courier, or telecopier to the following address:
To the Company:
xXxxxxxxxxx.xxx
0000 Xxx 00 Xxxxx, Xxxxx 000
Xxxx Xxxxxx, XX 00000
To the Executive:
000 Xxxx Xxxxx Xxxxx
Xxxx Xxxxxx, XX 00000
Either party may, from time to time, designate any other address
to which any such notice to it or him shall be sent. Any such
notice shall be deemed to have been delivered upon the earlier of
actual receipt or four days after deposit in the mail, if by
certified mail.
11. Miscellaneous
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a. Governing Law. This Agreement shall be governed by
and construed and enforced in accordance with the
internal, substantive laws of the State of Florida
without giving effect to the conflict of laws rules
thereof.
b. Waiver/Amendment. The waiver by any party to this
Agreement of a breach of any provision hereof by any
other party shall not be construed as a waiver of any
subsequent breach by any party. No provision of this
Agreement may be terminated, amended, supplemented,
waived or modified other than by an instrument in
writing signed by the party against whom the
enforcement of the termination, amendment,
supplement, waiver or modification is sought.
c. Attorney's Fees. In the event any action is
commenced, the prevailing party shall be entitled to
reasonable attorney's fees, costs and expenses.
d. Entire Agreement. This Agreement represents the
entire agreement between the parties with respect to
the subject matter hereof and replaces and supersedes
any prior agreements or understandings.
e. Counterparts. This Agreement may be executed in
counterparts, all of which shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the Company and the Executive have executed this
Agreement as of the day and year first written above.
COMPANY: EXECUTIVE:
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Typed or Printed Name
BY: _______________________________ _____________________________
Signature
Its: ________________________________
